Medicaid Managed Care Things Just Got Tougher for the MCOs Jud DeLoss & Laura Ashpole September 10, 2015
AGENDA 1. Background on Medicaid Managed Care 2. Applicable Federal Regulations & Impact 3. Parity & Medicaid Managed Care 4. Tips for Working with MCOs 2
BACKGROUND Until the early 1990s, most Medicaid beneficiaries received coverage through fee-for-service arrangements Health care providers were paid for each service rendered Payment dependent on the quantity of care (instead of quality) Government operated and oversaw 3
ENTER MANAGED CARE Illinois Medicaid Reform Act of 2011 Required 50% of Medicaid population to be enrolled in coordinated care by Jan. 2015 Initially focused on most complex, expensive clients Incentivized innovative program design integrated approach to primary care/hospital/behavioral, with collaboration among providers Measured quality and health outcomes Infused risk and performance into reimbursement Became more sophisticated in monitoring care coordination entities, MCOs 4
THE NEW NORMAL 275 MCOs operating in 38 states Affordable Care Act extends coverage Newly-eligible adults enrolled in MCOs Ability to utilize Medicaid funding to purchase MCO coverage on the exchanges Number of Americans covered by MCOs increased by 9.3 million Number on fee for service decreased by 300,000 43.5 million Americans receive Medicaid MCO coverage 66% of all Medicaid beneficiaries Up from 59% last year 5
INCREASED COVERAGE = INCREASED PROBLEMS State-imposed Medicaid MCO sanctions Aetna: 4 actions in 3 different states Centene: 2 actions in 2 states Molina: 6 actions in 3 states UnitedHealth Group: 11 actions in 7 states WellCare: 3 actions in 2 states Wellpoint: 8 actions in 4 states Illinois sanctions Family Health Network: barred based on 10 th percentile scores Harmony Health Plan/WellCare: barred based on 10 th percentile scores 6
BIG PICTURE IN ILLINOIS Last 4 years represent largest transformation in health care in Illinois Approx. 2.2 million people enrolled in Medicaid managed care in Illinois 1.4 million people enrolled in just the last year Medicaid expansion under the ACA State expanded Medicaid to 500,000 people Expansion didn t begin until Jan. 1, 2014 Relying largely on MCOs to serve newly eligible adults Lots of CHANGE and FAST 7
IMPACT FOR PROVIDERS Behavioral healthcare providers must now contract with MCOs in order to treat Medicaid beneficiaries and be reimbursed for those services Not the same as contracting with a single entity (HFS) Medicaid has QUICKLY and SIGNIFICANTLY changed from the perspective of providers 8
IMPACT FOR PROVIDERS 10 different Medicaid MCOs in Illinois contracting with behavioral healthcare providers Each MCO has different procedures for: Authorizations Billing Covered services Contracting & credentialing 9
SPECIFIC PROBLEMS ENCOUNTERED Many MCOs have not worked with behavioral healthcare providers before Many MCOs don t cover certain behavioral healthcare services Many MCOs are using template contracts for general medical providers which are not applicable to behavioral healthcare Providers are having to educate MCOs about behavioral healthcare While simultaneously reviewing contracts, getting credentialed, submitting claims and fighting denials MCOs not reimbursing on a timely basis MCOs limiting networks to very few providers 10
ATTEMPTED SOLUTIONS Meetings between HFS, MCOs and behavioral healthcare providers MCOs have attempted to answer providers questions Much confusion still exists and many questions remain unanswered Some MCO practices continue to violate the law HFS has attempted to act as an intermediary between MCOs and behavioral healthcare providers Relationship is foreign to all parties 11
NEED FOR ADDITIONAL OVERSIGHT Medicaid MCOs regulated by both the federal government and the states Additional oversight needed in Illinois as Medicaid managed care becomes the norm State needs to enforce federal requirements State needs to decide on its own state-specific requirements for Medicaid MCOs MCOs that violate the law need to be held accountable at least eliminated from the managed care program 12
Federal Medicaid Managed Care Regulations 13
ENTER FEDERAL GOVERNMENT States design, administer, and oversee their own Medicaid managed care programs within minimum federal requirements set forth in federal Medicaid law and further elaborated in regulations Federal Medicaid regulations last updated in 2002 Sets forth state responsibilities and requirements related to: Enrollee rights and protections Quality assessment and performance improvement (including provider access standards) External quality review Grievances and appeals 14
UPDATED MEDICAID MANAGED CARE REGULATIONS June 1, 2015: proposed rule issued to revise and update the 2002 Medicaid managed care regulations Addresses the following: Alignment with rules governing other plans Beneficiary transitions between Medicaid MCOs, Medicare Advantage plans and qualified health plans Standard contract provisions Rate setting Beneficiary protections Access issues 15
ALIGNMENT WITH OTHER HEALTH CARE COVERAGE Aligns appeals and grievances rules among Medicaid managed care plans, Medicaid Advantage plans and private insurance plans Would help eliminate confusion among beneficiaries Would decrease inefficiencies for health insurance issuers Incorporate ACA s medical loss ratio standard IADDA is recommending a behavioral healthcare specific medical loss ratio standard be adopted in additional to ACA s general medical loss ratio standard 16
RATE SETTING Would ensure that capitation rates set for Medicaid managed care programs are actuarially sound and based on reasonable expenditures on covered medical services for enrollees Would rely on medical loss ratio data in setting capitation rates 17
IMD EXCLUSION Would permit Medicaid managed care entities to receive a capitation payment from the state for an enrollee aged 21 to 64 that spends a portion of the month for which the capitation is made as a patient in an IMD so long as: the facility is a hospital providing psychiatric or substance use disorder (SUD) inpatient care or sub-acute facility providing psychiatric or SUD crisis residential services, and the stay in the IMD is for less than 15 days in that month IADDA has recommended allowing payments for stays in an IMD lasting up to 30 consecutive days 18
BENEFICIARY PROTECTIONS Would ensure appropriate beneficiary protections and enhance policies related to program integrity Would establish standardized enrollment guidelines to: Promote accurate and timely information to beneficiaries about their managed care options Enable and encourage active beneficiary choice periods for enrollment Allow states to conduct intelligent default enrollments into a managed care plan when necessary Would require states to develop and implement a beneficiary support system to provide support before and after managed care enrollment Would establish standards to ensure that MCOs, PIHPs, and PAHPs employ utilization management strategies that adequately support individuals with ongoing or chronic conditions or who require long-term services and supports 19
OTHER MODERNIZATIONS Would require states to establish network adequacy standards for behavioral healthcare providers Time and distance standards for access to behavioral healthcare services Would promote quality of care and strengthen efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries 20
OIG Report on State Standards For Access To Care In Medicaid Managed Care 21
NETWORK ADEQUACY Standards for Distance or Time Between Providers and Enrollees Residences 32 states require Illinois does not for either primary care or specialists Standards for Maximum Number of Days an Enrollee Should Have to Wait for an Appointment 31 states require Illinois allows up to 35 days for routine primary care, 1 day for urgent care and no standard for routine specialist care Standards for minimum number of providers based on number of enrollees 20 states require Illinois allows up to 2,000 enrollees per primary care provider and no standard for specialists 22
Mental Health Parity and Addiction Equity Act as Applied to Medicaid Managed Care Organizations 23
PARITY & MEDICAID MANAGED CARE April 10, 2015: proposed rule issued on the application of the federal Mental Health Parity and Addiction Equity Act (MHPAEA) to Medicaid MCOs, Children s Health Insurance Plans and Alternative Benefit Plans Would make states responsible for ensuring entire package of Medicaid services for managed care enrollees complies with parity, regardless of whether the services are delivered in a MCO, fee-for-service Medicaid, or other delivery arrangement Enrollees must have access to a set of benefits that meets the federal parity requirements under MHPAEA Applies if MH/SUD state plan services are provided to MCO enrollees through a PIHP, PAHP, or under Medicaid fee-for-service (because such services are carved out of the MCO contract scope) 24
COVERED SERVICES & RATES States would be required to ensure compliance with parity even if that means covering services beyond the scope of those outlined in the state Medicaid plan Would require development of actuarially sound rates for MCOs, PIHPs and PAHPs that provide MH/SUD services May take into account the cost of providing services beyond those specified in the state plan which are necessary for the MCO, PIHP or PAHP to comply with parity Would simplify analysis of parity compliance by eliminating the in-network and out-of network distinctions for the inpatient and outpatient classifications 25
OUT-OF-NETWORK COVERAGE If a provider network is unable to provide necessary services covered under the contract to a particular enrollee, the MCO, PIHP or PAHP would be required to cover these services out-of-network for the enrollee as long as the MCO, PIHP or PAHP is unable to provide them in-network Would become a non-quantitative treatment limitation under parity Providing access to out-of-network providers for MH/SUD benefits in any classification would have to use the same processes, strategies, evidentiary standards, or other factors as are used in providing access to out-of-network providers for medical/surgical benefits within the same classification 26
IMPACT FOR PROVIDERS Generally mirrors federal parity law prohibiting plans from applying financial requirements or treatment limitations to MH/SUD benefits that are more restrictive than those imposed on substantially all medical/surgical benefits of a similar kind No aggregate lifetime or annual dollar limits on MH/SUD services provided by Medicaid MCOs Comparable financial requirements and treatment limitations on MH/SUD benefits and medical/surgical benefits Co-pays, deductibles Medical necessity determinations Prior authorization requirements Standards for empaneling providers in insurance networks Fail-first policies Restrictions based on geographic location, provider specialty or facility type 27
CMS Guidance on 1115 Demonstration Projects and SUD Services Delivery 28
CMS GUIDANCE ON SUD SERVICE DELIVERY July 27 CMS letter to state Medicaid directors outlining a new initiative for demonstration projects specific to SUD treatment under Section 1115 Goal to enable states pursuing significant transformation of their SUD service delivery systems to: Better identify individuals with a SUD in the Medicaid population Expand access to SUD treatment Increase SUD treatment provider capacity Deliver effective SUD treatment Utilize quality metrics to measure the success of SUD treatment 29
CMS GUIDANCE ON SUD SERVICE DELIVERY CMS explicitly recognized complete SUD package will need inpatient and residential levels of care Often are provided in facilities meeting the definition of an institution for mental disease (IMD). Commonly referred to as the IMD Exclusion Section 1115 demonstration projects, states may receive FFP for short-term acute SUD treatment rendered in an IMD provided they meet the program requirements specified in CMS letter CMS defines such short-term acute SUD treatment eligible for FFP to include both inpatient and residential services 30
Update to Illinois Parity Act 31
ILLINOIS PARITY LAW UPDATES Governor Rauner issued amendatory veto of HB 1 Rep. Lou Lang, HB 1 s sponsor, filed motion to override AV HB 1 would: Broaden the applicability of the State s more stringent parity requirements to Medicaid MCO plans, managed care community networks and Medicaid Alternative Benefit Plans Strengthen enforcement of parity in Illinois Require the Department of Insurance to implement a number of parity education initiatives Impose annual reporting requirements on insurance plans, including MCOs, in an effort to ensure greater transparency 32
Practical Guidance for Working With MCOs 33
TIPS FOR WORKING WITH MCOs Carefully review MCO contracts before signing and propose revisions Refer to contract provisions in holding MCOs accountable Know the general legal requirements applicable to MCOs APPEAL benefit denials that violate the law (verbally & in writing) Notify HFS of significant issues with MCOs Make sure you have the FACTS and documentation Continue to attend meetings with MCOs and HFS and voice your concerns DOCUMENT, DOCUMENT, DOCUMENT 34
EMPHASIZE QUALITY OF CARE State uses a set of national quality measures to assess each MCO HFS has already sanctioned two MCOs Family Health Network and Harmony Health Plan for not meeting quality criteria If you see quality of care issues, raise them HFS is concerned about this and will take action against MCOs 35
EDUCATE & APPEAL Continue to educate MCOs on behavioral healthcare as best you can Know that IADDA is educating MCOs behind the scenes as well Keep lines of communication open with HFS To some extent, HFS needs to be educated on behavioral healthcare as well DOCUMENT issues with MCOs and provide documentation to HFS Further expand upon issues raised during HFS MCO Focus Group meeting Rely on IADDA and legal counsel for assistance in appealing benefit denials with MCOs and making appeals to HFS Take advantage of MHPAEA and Parity laws 36
MAKING THE CASE FOR REIMBURSEMENT In contrast to fee-for-service, in managed care environment, the less care provided, the more payments retained by the MCO Provider payment rates are increasingly a matter of MCO policy rather than states Medicaid fee schedules Emphasize the following with MCOs: High occurrence of MH/SUD issues among Medicaid beneficiaries, especially the newly eligible adult population MCOs need to ensure they are covering care that addresses these CHRONIC issues Covering community-based MH/SUD treatment is cheaper than paying for care in hospitals, jails, or other settings Willingness to discuss quality of care measures for behavioral healthcare providers and other ways to incentivize quality care 37
PAY ATTENTION TO PROVIDER NETWORKS MCOs are also responsible for establishing provider networks that are adequate to meet the needs of their enrollees Robust access to care is ESSENTIAL Notify IADDA if you think an MCO is violating access standards Examples: narrow networks, errors in provider directories Violations of network adequacy standards are actionable in court Look to MHPAEA, Illinois Parity and Illinois access standards 38
QUESTIONS & COMMENTS Jud DeLoss gdeloss@ Laura Ashpole lashpole@