Managed Care and Telehealth

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2 State Medicaid Best Practice Managed Care and Telehealth January 2014 This document was made possible by Grant #G22RH from the Office for the Advancement of Telehealth, Health Resources and Services Administration, DHHS. None of the information contained in the State Best Practice Series or in this document constitutes legal advice. The information presented is informational and intended to serve as a reference for interested parties, and not to be relied upon as authoritative. Your own legal counsel should be consulted as appropriate.

3 State Medicaid Best Practice Managed Care and Telehealth State Policy Trends in Medicaid Managed Care and Telehealth Medicaid managed care plans provide care to over 50 percent of Medicaid beneficiaries across the country. 1 Forty-seven states and the District of Columbia have some type of Medicaid managed care model. 2 Often these models have the flexibility to cover more services not generally provided under traditional fee-for-service coverage. This flexibility has allowed states to customize their Medicaid programs for certain populations or services. Some states offer comprehensive risk-based coverage, while others include limited benefit coverage. Many states have models designed for a particular population or benefits such as long term care, chronic care management, mental health, or primary care. Some states require Medicaid enrollees to enroll in a managed care organization (MCO) plan, while others make enrollment voluntary. States intending to implement a Medicaid managed care plan must either submit a state plan amendment, or apply for a waiver of certain federal Medicaid standards to provide Medicaid services through managed care delivery systems. Over the years, states have increasingly used these options to create payment and delivery models involving capitated payments to provide better access to care and follow-up for patients, and also to control costs. Also, the variety of payment methods and other operational details among Medicaid managed care arrangements is a useful laboratory for devising, adapting and advancing long-term optimal health delivery. The Affordable Care Act offers states new financing and flexibility to expand their Medicaid programs, as well as to integrate Medicare and Medicaid coverage for dually eligible beneficiaries ( duals ). Telehealth and alternative payment plans will be important items for states to consider as they implement these new options and look for innovative models to combat the growing cost of healthcare. In particular, fully enabling and appropriately reimbursing Medicaid MCOs to use telehealth for improving care, access, cost and quality can provide immediate benefits. Some telehealth opponents claim that including such a benefit that will increase costs for health plans. However, states that have approved telehealth have had no such experience. In fact, the use of telehealth for early diagnosis and treatment, care coordination, and prevention has proven telehealth to be a cost-effective delivery method that supports innovation, rather than being a driver of costs. 3 MCOs experimenting with innovative delivery models including medical homes and dualeligible coordination have incorporated telehealth as a feature of these models especially because it helps to reduce costs related to emergency room use and hospital admissions. It also improves timely access and care coordination. Given the fact that MCOs already have established provider networks incorporating telehealth into these models is often a less disruptive option. Some states have also incorporated telehealth as integral parts of their innovative service delivery models. For example, Illinois has included the coverage of telemonitoring as a value added service supporting its primary care-behavioral health integrated model for older adults and adults with disabilities that have ongoing health conditions. 4 Page 1

4 In some more progressive Medicaid managed care markets, such as Georgia, the use of telehealth by MCOs has been used to further collaborate and integrate behavioral health care within the Patient Centered Medical Home (PCMH). Increasing access to behavioral health services for the Medicaid population is a critical need and can be integrated within the PCMH more effectively via the application of telehealth. Similar to fee-for-service coverage under Medicaid, state telehealth policies vary in scope and application. One of the biggest challenges facing telemedicine adoption is the lack of reciprocity and reimbursement parity for services provided via telehealth vs. traditional in-person services. Under a managed care plan unless such coverage is already a part of the contract, each provider must negotiate their own terms for coverage and rate setting. It is also common for MCOs to exclude certain services from their contracts as a means to curb costs. As a result, telehealthprovided services are sometimes carved out of the list of covered options. While certain procedures and care are not applicable to delivery via telehealth, where services are contractually obligated and care can be provided via telehealth, reimbursement should be congruent with traditional in person care. Some states merely mirror Medicare s policy or include somewhat similar geographic and originating site requirements. Nebraska statutes authorized coverage and reimbursement for Medicaid and Medicaid managed care health care services delivered via telehealth in However, the Medicaid agency imposes a 30 mile distance requirement for telehealth coverage if the beneficiary has access to comparable health services. 5 Such restrictions needlessly restrict beneficiary access to the benefits of telehealth services. State Policy Best Practices To improve patient access to healthcare through telehealth expansion, ATA has analyzed enacted state telehealth policies and highlighted those respective states with the best policy models for managed care coverage of telehealth services. These best practice models can be used as benchmarks for other states considering new or revising existing telehealth policies. ATA examined enacted laws, published fiscal notes and bill reports, published regulations, and Medicaid provider manual guides for the states with Medicaid coverage in managed care plans. ATA also reviewed state issued reports and clinical programs demonstrating quality and costeffective telehealth deployment and utilization. The criteria used to identify states with model policies regarding managed care covered telehealth include: Inclusive definitions of technology with little to no restrictions on the types of technology approved for use in a clinical service Geographic area served Applicable health services and conditions Provider eligibility Reimbursement and rating methodology Level of coverage and affected health care plans. Page 2

5 This report will focus only on comprehensive and limited benefit managed care models. It will not focus on the Program for All-inclusive Care (PACE) or primary care management program with fee-for-service reimbursement. State Policy Best Practices The following information identifies notable policies from four states: Kentucky, New Mexico, New York, and Virginia. Kentucky In 2000, Kentucky lawmakers mandated coverage and reimbursement for Medicaid and Medicaid managed care health care services delivered via telehealth. Although lawmakers estimated a 5-10 percent increase in physician payments due to the new policies, they enacted the law believing that it would have the potential to reduce Medicaid costs by reducing travel related costs reimbursed by Medicaid. 6 The state has steadily covered telehealth-provided services under Medicaid, managed care, and the children s health insurance program (CHIP) for over a decade. With regards to Medicaid managed care, the statute declares that: The Cabinet for Health and Family Services and any regional managed care partnership or other entity under contract with the cabinet for the administration or provision of the Medicaid program shall provide Medicaid reimbursement for a telehealth consultation that is provided by a Medicaid-participating practitioner who is licensed in Kentucky and that is provided in the telehealth network established in KRS 194A.125(3)(b). The cabinet shall establish reimbursement rates for telehealth consultations. A request for reimbursement shall not be denied solely because an in-person consultation between a Medicaid-participating practitioner and a patient did not occur. 7 Although the statute mandates managed care organizations to cover telehealth-provided services, regulations do not require MCOs to reimburse the same amount for telehealth-provided services as compared to fee-for-service telehealth encounters. 8 However, the MCO may choose to reimburse the same amount as fee-for-service encounters. Telepresenters are not required at the spoke/originating site unless requested by the hub/distant site provider. The rules also state that telehealth consultations should be provided to the same extent and with the same coverage policies and restrictions as in-person services. Kentucky Medicaid will reimburse providers who use interactive two-way video for medically necessary services. Transmission costs are not reimbursable. Unlike other states that reimburse for telehealth-provided services, providers eligible for reimbursement under Kentucky s Medicaid program must send a written request to become an approved member of the Kentucky Telehealth Network. Covered telehealth consultations are required to have a referral by another health care provider. Telehealth-provided services covered in a setting not considered a mental health center include physical health evaluation or management consultations, mental health evaluations, individual or Page 3

6 group therapy, pharmacologic management, mental health diagnostic interview examination, and individual diabetes self-management training. Eligible providers for telehealth vary for each service but include licensed clinical social workers, licensed dietician, licensed marriage and family therapists, licensed professional clinical counselor, occupational therapists, optometrists, physical therapists, physicians, physician assistants, psychologists, registered nurse, and speechlanguage pathologists. 9 Covered telehealth services delivered by providers directly employed or agents of a community mental health center include psychiatric and psychological diagnostic interview examinations, pharmacologic management, group and individual therapy, mental health evaluations or management emergency services, and mental health assessments. 10 In July 2013, Kentucky issued rules expanding the coverage of telehealth-provided services. Although the changes do not authorize the use of alternate technologies (e.g., remote patient monitoring and store-and-forward), Medicaid beneficiaries will have access to a broader list of providers and telehealth-provided services including telerehabilitation services: Occupational therapy evaluation or treatment provided by an occupational therapist who is employed by a physician, home health agency, or nursing facility; Physical therapy evaluation or treatment provided by a physical therapist who is employed by a physician, home health agency, hospital outpatient department or nursing facility; Speech therapy evaluation or treatment provided by a speech-language pathologist who is employed by a physician, home health agency, hospital outpatient department or nursing facility; Neurobehavioral status exam provided by a psychiatrist, physician, or psychologist; Mental health evaluation or management service, individual or group psychotherapy, and medication management provided by a psychiatrist, a physician, APRN, psychologist, licensed professional clinical counselor, licensed clinical social worker, licensed marriage and family therapist; and Individual medical nutrition therapy consultation services provided by a licensed dietitian or certified nutritionist. 11 The telehealth provider must use the GT modifier when submitting a claim for reimbursement. 12 The provider must also obtain written informed consent from the patient before the telehealth encounter. However, the requirement is waived in emergency situations if the patient is unable to provide this information or the legally-authorized representative is unavailable. 13 Providers must also develop protocols and guidelines which ensure that the electronic transmission of information is HIPAA compliant, secure, and encrypted. 14 New Mexico New Mexico Medicaid regulations stipulate that MCOs operating in the state shall cover and may not delete telehealth services from the list of covered services outlined in the benefit package. 15 The telehealth-provided services covered are the same as fee-for-service. Telehealth-provided services are covered at the same rate of in-person services. Page 4

7 All services are covered to the same extent the service and the provider are covered when not provided through telehealth. 16 The following medically necessary health services are covered when using real-time interactive audio-video technology to facilitate a school-based telehealth encounter: consultations, evaluation and management services, individual psychotherapy, pharmacologic management, psychiatric diagnostic interview examinations, and individual medical nutrition services. Medicaid also covers an extensive list of providers, including school-based health centers, who are eligible for reimbursement of telehealth-provided services if they are licensed in the state and enrolled as a Medicaid provider: (1) physicians licensed to practice medicine or osteopathy; (2) podiatrists; (3) facilities licensed as diagnostic and treatment centers by the New Mexico department of health (DOH), community mental health centers, core service agencies, hospitals, rural health clinics, school-based health centers, and federally qualified health centers; services performed in these facilities must be furnished by individual practitioners who are enrolled as providers; (4) certified nurse practitioners and registered nurses may provide services in collaboration with a physician or as independent providers within the scope of their practice; (5) certified physician assistants; (6) nurse midwives licensed by the board of nursing as registered nurses and licensed by the department health as certified nurse midwives; (7) pharmacist clinicians; (8) individuals licensed as clinical nurse specialists may provide services in collaboration with a physician or as independent providers within the scope of their practice; (9) psychologists (Ph.D., Psy.D. or Ed.D.) licensed or board eligible as clinical psychologists; (10) licensed independent social workers (LISW) licensed by the New Mexico board of social work examiners, licensed professional clinical counselors licensed by, and marriage and family therapists licensed by New Mexico counseling and therapy practice board; (11) registered dietitians or nutrition professionals when furnishing services within the scope of their practice as defined by state law under the direction of a licensed physician; (12) Indian health service and tribal 638 facilities; (13) physical therapists; (14) occupational therapist; or (15) speech pathologists. 17 Unlike other states, New Mexico has an expanded list of qualified originating sites where the patient can be located for a telehealth encounter including the home and school. Qualified originating sites include: (1) office or clinic of a physician or other practitioner; (2) hospital; Page 5

8 (3) critical access hospital; (4) rural health clinic; (5) federally qualified health center; (6) community mental health center or core service agency; (7) school-based health center; (8) Indian health services and tribal 638 facilities; (9) ambulatory surgical or treatment center; (10) skilled nursing facility; (11) residential treatment center; (12) home health agency; (13) diagnostic laboratory or imaging center; (14) rehabilitation or other therapeutic health setting; or (15) eligible recipient s residence. Although New Mexico does not include geographic or distance limitations as a condition for reimbursement, only certain originating sites are eligible for a facility fee reimbursement. New York A telehealth originating-site communication system fee is covered if the eligible recipient was present at and participated in the telehealth visit at the an originating-site located in a health professional shortage area (HPSA); a county not classified as a metropolitan statistical area (MSA); a primary medical care health professional shortage area for physicians, nurse practitioners, and physician assistants; primary behavioral health care professional shortage area for psychiatrists and clinical psychologists; a medical specialist shortage area for non-primary care medical specialties; an IHS or tribal 638 facility, a federally qualified health center or rural health clinic or a federal or state telemedicine demonstration project area. 18 New York State is restructuring their Medicaid program and transitioning Medicaid populations to managed care in phases. The state has developed a number of capitated plans that cover telehealth-provided services. Their new managed care plan provides comprehensive health care services to enrollees. Most Medicaid-only enrollees are required to enroll in the managed care plans. Home video conferencing and remote patient monitoring are outlined and covered in managed care contract under home health services (Section c of the Public Health Law). Home telehealth services are covered when provided by a certified home health agency. The agency and its specific technology must be pre-approved by the Department of Health. Prior approval and proof that the service is medical necessary must be submitted to the managed care contractor as a condition for reimbursement. Additionally, an in-person risk-assessment, conducted by the telehealth provider is required before the initiation of services. 19 Patient eligibility for home telehealth is determined by conditions or clinical circumstances including but not limited to congestive heart failure, diabetes, chronic pulmonary obstructive disease, wound care, polypharmacy, mental or behavioral problems limiting self-management, and technology-dependent care such as continuous oxygen, ventilator care, total parenteral nutrition or enteral feeding. 20 Page 6

9 Covered services include: monitoring of patient vital signs; patient education; medication management; equipment management; review of patient trends and/or other changes in patient condition necessitating professional intervention; and other activities deemed necessary and appropriate according to the plan of care. Medicare-Medicaid dual eligible adults residing in New York City and some nearby counties are required to enroll in the state s managed long term care plan. The state has contracted with the Medicaid managed care and managed long term care plans to cover home telehealth, but prior authorization is required. Home health agencies will now receive a bundled payment for the home health visit, and the base rate includes home telehealth and equipment installation. New York also attempted a smooth transition of patients from fee-for-service to managed longterm care plans by requiring the managed care plans to honor the 90 day continuity of care requirements and reimburse for telehealth services that beneficiaries were already receiving under fee-for-service. This initiative applies to partial and fully capitated managed care plans. 21 New York has also established a Federal-State partnership to implement the CMS Medicare- Medicaid Financial Alignment Initiative Demonstration to better serve dually eligible people. Under this model, the fully integrated and capitated plans will be required to provide for Medicare and Medicaid-covered services, as well as additional items and services including telehealth. 22 This initiative was developed under the ACA s newly authorized innovative payment and healthcare delivery models for Medicare-Medicaid dual eligibles. 23 Virginia Virginia Medicaid operates with the assistance of the CMS Medicare-Medicaid Financial Alignment Initiative Demonstration. The state s approved plan waives Medicare geography and technology restrictions and allows telehealth coverage for duals in both urban and rural areas, and also permits the use of video conferencing, store-and-forward and remote patient monitoring. Virginia aims to evaluate the effect of an integrated care and payment model on serving both community-based and institutional populations. Under the 3 year demonstration, Virginia will test a capitated payment model for Medicare and Medicaid-covered services to alleviate the fragmentation and improve coordination of services for Medicare-Medicaid enrollees, enhance quality of care, and reduce costs for both the federal government and the state. Of the eight states in this dual eligible demonstration, New York and Virginia are the only states that authorize participating health plans to cover and reimburse for telehealth-provided Medicare and Medicaid services. Beneficiaries eligible for participation in the program must be 21 years and older at the time of enrollment, entitled to benefits under Medicare Part A, enrolled under Medicare Parts B and D, and receive full Medicaid benefits including those enrolled in the Elderly or Disabled with Consumer Direction (EDCD) Waiver (e.g., Individual and Family Developmental Disability Support, Intellectual Disabilities, Day Support, Technology Assisted Waiver, and Alzheimer s Assisted Living waivers) and those residing in nursing facilities. Page 7

10 Other conditions apply that leave some beneficiaries ineligible for participation including, but not limited to, those enrolled in a hospice program, Money Follows the Person program, PACE or participating in the Independence at Home demonstration. Telehealth activities will be further outlined in a three-way contract involving CMS, VA Medicaid, and the participating plan. 24 Additionally participating plans shall be allowed to: use and reimburse telehealth for Medicare and Medicaid services as an innovative, cost effective means to decrease hospital admissions, reduce emergency department visits, address disparities in care, increase access, and increase timely interventions; encourage the use of telehealth to promote community living and improve access to behavioral health services; use telehealth in rural and urban settings and reimburse for store and forward applications; and cover remote patient monitoring. The conditions for telehealth-provided coverage under this capitated plan exceed that of VA s fee-for-service. Currently under the Medicaid fee-for-service plan remote patient monitoring and store-and-forward are not allowed technologies in order to achieve coverage or reimbursement for telehealth-provided services Model Medicaid Policy Considerations Based on state best practices, ATA suggests the following provisions for policymakers and health care stakeholders in developing Medicaid managed care policies to fit their needs. Coverage of services delivered via telehealth, which includes the use of real-time audio and video, store-and-forward technology, and remote patient monitoring, under contracted Medicaid managed care plans should be required to the extent that the services would be covered if they were provided through in-person consultation. Telehealth services should be covered while the patient is at any location and the health care provider at any other location. Provider eligibility should be open-ended to those who can meet performance criteria. An important aspect would be reporting of performance, outcomes and patient satisfaction. Moreover, the health care provider should be allowed to establish a patient-practitioner relationship virtually, without the need of a prior referral or in-person encounter. Model policies for Medicaid managed care plan coverage of telehealth should include contractual requirements such as: o Definitions of technology with little to no restrictions on the types of technology approved for use in a clinical service; o Unrestricted geographic coverage areas or patient settings; o Coverage and reimbursement for telehealth-provided services to the same extent that in-person services are already covered including mental and behavioral health, CHIP, and long-term care, as well as Medicaid expansion plans created under the ACA; Page 8

11 o Actuarially-sound rates for MCOs covering optional or mandated telehealth services; o Eligible telehealth providers such as physicians (MD and DO), physician assistants, nurse practitioner, registered nurse, certified midwives, clinical nurse specialists, psychologists, marriage and family therapist, licensed social worker/clinical counselor, physical therapist, occupational therapist, speechlanguage pathologist, registered dietitian/nutritional professional, or diabetes/asthma/nutrition educator; and o Allowances for innovative payment and service delivery models to improve care coordination and quality outcomes such as health homes, medical homes, accountable care organizations (ACOs), chronic care management, dual eligible initiatives, incentives to reduce hospital admissions/readmissions, and the development of specialty or medical condition-based networks. 1 Medicaid Managed Care: Improving Patient Care and Achieving Cost Savings for States. America's Health Insurance Plans (AHIP). 2 Medicaid Managed Care Enrollees. Kaiser Family Foundation State Policy Toolkit. American Telemedicine Association Certificate of Coverage. Illinois Integrated Care Program for Seniors and Persons with Disabilities. Health Alliance Medical Plans, Inc. July Nebraska Revised Statute to Commonwealth of Kentucky State Fiscal Note Statement HB 177. General Assembly Regular Session 7 Kentucky Revised Statues (KRS) KAR 3:170. Telehealth consultation coverage and reimbursement. 9 Ibid. Section Ibid. Section Ibid. Section Ibid. Section Ibid. Section Ibid. Section New Mexico Administrative Code Section (NMAC) and FF 16 NMAC Section Ibid. Section Ibid. 19 New York State Medicaid Managed Care Model Contract (Appendix K-21). August 1, New York Consolidated Law Service Public Health Sec MLTC Policy Memo. Office of Health Insurance Programs Division of Long Term Care. September 4, Memorandum of Understanding Between CMS and the State of New York Regarding a Federal-State Partnership to Test a Capitated Financial Alignment Model for Medicare-Medicaid Enrollees. 23 Section 2602 of the Patient Protection and Affordable Care Act (Pub. L ) 24 Memorandum of Understanding Between CMS and the Commonwealth of Virginia Regarding a Federal-State Partnership to Test a Capitated Financial Alignment Model for Medicare-Medicaid Enrollees. 25 VA Dept. of Medical Assistant Services., Medicaid Provider Manual, Physician/Practitioner Manual, Covered Services and Limitations, Chapter V, p.19 (April 4, 2011). 26 VA Dept. of Medical Assistant Services., Medicaid Provider Manual, Physician/Practitioner Manual, Covered Services and Limitations, Chapter IV, p.20 (April 2, 2012). Page 9