Moving to Medicaid Managed Care. David C. Marshall, Esq. Steven M. Montresor, Esq. Latsha Davis & McKenna, P.C.

Transcription

1 Moving to Medicaid Managed Care David C. Marshall, Esq. Steven M. Montresor, Esq. Latsha Davis & McKenna, P.C.

2 Introduction Considerations Prior to Entering Into Contract Negotiations Potential Contract Issues Potential Operational Issues Question and Answer 2

3 MLTSS Shift from fee-for-service to a capitated managed care model Managed care contracts define the post-acute provider s relationship with the MCO. Under Pennsylvania's model, the Department of Human Services contracts with the MCO and pays them a fixed monthly fee per beneficiary for assuming financial risk for the delivery of services; MCO's may attempt to pass some of this financial risk to the post-acute provider. Payment methodology/risk sharing/value based purchasing 3

4 Continuity of Care Requirements Each MCO must initially include in its networks all willing and qualified LTSS service providers in their service region. The any willing provider requirement will apply during the first eighteen months of each phase of implementation. If a participant chooses to transfer from one MCO to another, the participant will continue to have access to all existing LTSS providers and must continue to receive any LTSS services in his or her service plan for 60 days from the date of the transfer or until a new person centered service plan is developed by the new MCO, whichever is later. 4

5 Quality Assurance MCO s must maintain a quality management program. The program will include elements such as member feedback, provider monitoring, MCO infrastructure supporting the quality management program, critical incident reporting, risk assessment and mitigation, among other things. DHS will administer the quality management and utilization management components of this program. MCO's must engage in provider profiling activities. Profiling must occur at least annually and the MCO must use the results to identify areas for improvement, establish improvement goals, and develop incentives to motivate providers to improve performance on profiled measures. 5

6 MCO Contracts Variation from MCO to MCO. The following are typical considerations and issues in MCO contracting. However, not all issues appear in all MCO contracts. 6

7 Pre-contract Considerations Will contractual rates be adequate? Determine your existing rates and determine costs for providing services Tracking costs versus payment rates is important to educate the MCO about the adequacy of rates in relationship to the cost of care for negotiation either during the term of the contract or upon renewal. 7

8 Considerations Regarding the MCO Should you enroll with all MCO's in your region? Research the MCO Can you call other providers to discuss claims processing, timeliness of payments, and other administrative benchmarks? 8

9 General Contract Issues Be wary of vague language. Signing a contract is an indication that you understood the terms and conditions of the contract. The agreement will likely say as much. If there are vague or ambiguous terms and provisions, seek clarification and revision. Incorporation The contract will likely incorporate by reference the MCO's policies, procedures and manuals. A provider should obtain written copies of all these documents and review them in advance of entering into the agreement. 9

10 General Contract Issues, cont. Identify the parties correctly If the MCO is a national entity, but a local subsidiary is providing the services, then ensure that you are contracting with the local entity. Be sure that your facility properly lists its operating entity. Are consolidation or merger plans in your future? Is there an assignment provision that you have to take into consideration? (Ex: advance notice, unilateral vs. bilateral, consent) Definitions Definitions should be reviewed thoroughly. Often, the definitions of key terms are given minimal attention until there is a dispute, and only then does the provider become aware of exactly what it has committed itself to. 10

11 General Contract Issues, cont. Covered services/benefits A provider is mandated to provide certain services to its residents under OBRA and state licensure law. An issue could arise if the MCO requires a provider to furnish services in addition to those required under the Medical Assistance program without increasing the reimbursement rate to cover those additional costs. The definition of covered services should include any health care services, equipment and supplies that are required by federal and state law to be provided to a Medical Assistance recipient. 11

12 Payment Rates - What Is the Rate? Average MA per diem for the facility for the last 4 quarters, plus applicable supplemental payments. Need a provision that guarantees the 36 month floor established by DHS; MCO may not adjust the rate downward from the 4 quarter average for the first 36 months, absent agreement by SNF. 12

13 What Is In the Rate? Define what is included within the rate and what is not. Part B Ancillaries (Therapy, Lab, Transportation Services) Transportation Services Included in rate, per DHS Disproportionate Share DME Ventilator Nursing Facility Provider Assessment Supplemental Payment Confirm that these payments are either included in your base rate (in which case, the base rate will need to be higher than the 4 most recent quarter average) or that you can separately bill DHS. 13

14 Indemnification Clauses Indemnification clauses shift liability, typically requiring a provider to defend the MCO in a lawsuit and reimburse the plan for any losses, including attorney fees and costs, arising out of or in connection with the acts or omissions of the provider. Possible negotiating points: make the indemnification clause mutual eliminate the clause altogether 14

15 Insurance Providers generally carry professional liability insurance, general liability insurance, and directors and officers insurance. What coverage does the provider currently carry, and in what amounts? What insurance will the MCO require the provider to carry? Will the coverage be in excess of current state law? 15

16 Hold Harmless Clauses Hold harmless provisions are designed to protect participants from such practices as billing the participant for covered services. Hold harmless provisions are designed to survive the termination of the agreement. Such provisions are triggered when a plan becomes insolvent. Generally require a facility to agree that it will not bill, charge or collect from a plan member for any covered services for any reason, including insolvency of the Plan. 16

17 Hold Harmless - PA Law Enrollee hold harmless language which survives the termination of the health care provider contract regardless of the reason for termination, and includes the following: A statement that the hold harmless language is construed for the benefit of the enrollee. A statement that the hold harmless language supersedes any written or oral agreement currently in existence, or entered into at a later date, between the health care provider and enrollee, or persons acting in their behalf. If the provider contract is a contract that affects plan enrollees, language to the following effect: In no event including, but not limited to, non-payment by the plan, plan insolvency, or a breach of this contract, shall the provider bill, charge, collect a deposit from, seek compensation or reimbursement from, or have any recourse against the enrollee or persons other than the plan acting on the behalf of the enrollee for services listed in this agreement. This provision does not prohibit collecting supplemental charges or co-payments in accordance with the terms of the applicable agreement between the plan and the enrollee. 28 Pa. Code

18 Most Favored Nations Clauses May require a provider to report to the MCO any other contract or arrangement under which the provider renders care at a discounted rate, differential or other allowance which is more favorable than the payment by the MCO. MCO would then be entitled to that lower rate. Suggestions for negotiation points: Why is this clause necessary? Eliminate from the contract Possible antitrust implications 18

19 Clean Claim Clauses Review the term clean claim in the contract to ensure it is not overly broad. For example, if the definition simply indicates that a clean claim is a claim meeting the requirements as set forth in the MCO s policies and procedures, that definition is arguably vague and overbroad. PA law defines a clean claim as one that has no defect or impropriety. A defect or impropriety shall include lack of required substantiating documentation or a particular circumstance requiring special treatment which prevents timely payment from being made on the claim. 40 P.S A clean claim does not include claims from a healthcare provider under investigation for fraud or abuse regarding that claim. 19

20 Prompt Payment Pennsylvania law requires a clean claim to be paid within 45 days of receipt of the clean claim. Interest is at 10% per annum for failure to pay within the statutorily mandated time. 40 P.S Review contract to determine whether there is a prompt payment clause. If not, attempt to negotiate one. Use the state law requirement as the basis for the payment term. Watch AR s carefully to determine whether the prompt payment requirements are being met by the MCO. 20

21 Unilateral Amendment Clauses These types of clauses may allow the plan to change a clause in the contract at any time without any notice or with minimal notice, and with no input or consent needed from the provider. Suggestions for negotiation: Revisions to the contract must be by mutual assent Limit revisions to those necessary to comply with applicable laws or regulations or any order or directive of the Department of Human Services Prohibit revisions to the contract relating to rates or services absent mutual consent after notice MCO Perspective: need flexibility to facilitate changes 21

22 Unilateral Offsets A clause that typically allows a MCO to make retroactive adjustments to reimbursement for reasons such as claims payment errors, data entry errors, capitation errors and incorrectly submitted claims. Be wary of clauses that do not place any limit on the MCO s ability to engage in this practice. For example, require there to be written notice with supporting documentation, set a time limit, and define the process for appealing the offset and resolving the dispute. Typically, the offset would not be stayed while the provider pursues its appeal/grievance procedure if it disagrees with the MCO s determination, and there is probably no entitlement to interest if the provider is successful at the end of the process. 22

23 Accreditation/Credentialing Does the Agreement reference credentialing processes that are not spelled out in the context of the document? Ex.: Provider shall comply with Plans credentialing and recredentialing process. Overly broad provisions potentially subject the Provider to arbitrary decisions by the plan that it no longer meets the credentialing criteria. Issue: Delays in the credentialing process. Risk: Untimely credentialing decisions. Mitigation: Define the time limit for credentialing determinations. Providers likely have to certify the accuracy of credentialing information. Failure to report any changes is likely grounds for termination. 23

24 Approval/Credentialing of Subcontractors Some MCO s reserve the right to approve subcontractors the Provider uses to fulfill its obligations under the agreement. Ex.: Plan shall have the right to approve any subcontractor the Provider uses to fulfill its obligations in this Agreement. Every Provider subcontract shall provide that it is terminable with respect to Members by Provider upon Plan s request. Suggestions for negotiation: Sometimes the contract that is used is a template for all types of providers, such as hospitals and physicians. Limit the MCO s ability to regulate the facility subcontractors Revise provision to remove discretion and ensure that the provider has the responsibility to verify all applicable certifications and licenses are required to maintained by the subcontractor. Further, assure that the provider shall have sole liability for services provided to the Plan s enrollees. 24

25 Subcontractors If the MCO is inflexible on this point, add a provision that the MCO may not unreasonably limit the facility s ability to contract with subcontractors, and obligate the provider to assure that subcontractors must comply with the pertinent provisions of the agreement. Credentialing 25

26 Release of Records Examine the contract to determine how medical records are released to the MCO. Issue: Imposition of production and retention obligations without any additional reimbursement for these costs. Issue: An affirmative requirement to obtain consent to release records to the MCO after the participant has been discharged. Possible solutions: Define who has the obligation of obtaining authorizations. Reasonably limit the records a plan can access; avoid overly broad provisions that would encompass proprietary records and data The cost of copying records can be burdensome; set forth a reasonable charge for copying records Review to determine when an MCO can access records and limit to regular business hours with at least 48 hours advance notice Obtain indemnification for release of records and confidential information 26

27 Evergreen Clauses Typical clause would create an automatic renewal unless either party gives written notice of its intent of nonrenewal in a contractually determined time frame. The problem with this approach is that it prevents providers from renegotiating rates on an annual basis unless you can accomplish the renegotiation before renewal. Possible solution: a provision requiring good faith renegotiation of rates upon notice to the other party 27

28 Term and Termination Does the Agreement provide for not for cause terminations? Can the provider terminate or just the MCO? What is the term of the Agreement? What are the for cause bases for termination? Ex.: Some contracts allow the MCO to terminate the agreement when it reasonably suspects the provider of regulatory noncompliance. Does this encompass survey results? Mitigate risk: limited, further define it, or eliminate it. For example, limit termination to instances of fraud. Further, make sure the Agreement specifies the review process for termination of the Agreement. 28

29 Appeals Per the draft agreement between DHS and the MCO s, an MCO must develop, implement and maintain a provider dispute resolution process which provides for informal resolution of provider disputes at the lowest level and a formal process for provider appeals. Further, per the draft agreement, "The resolution of all issues regarding the interpretation of Department approved Provider Agreements must be handled between the two (2) entities and shall not involve the Department; therefore, Provider disputes and appeals are not within the jurisdiction of the Department s BHA. MCO s will be required to have a mechanism in place for provider appeals in disputes related to payment issues, quality management and utilization management sanctions, adverse credentialing and recredentialing decisions, and provider terminations. What happens after MCO Administrative process is completed? Arbitration/Judicial Review. 29

30 Data Sharing Increasing in importance The ownership of data may not be addressed by the contract. A problem may arise when the provider believes its claims data is owned by the provider and the MCO then uses that data for some other purpose. If possible, define ownership of this data. Will the provider own this data? Will the provider and the MCO have equal access? Keep in mind that the plan needs access to data in order to accurately calculate medical loss ratios, for example. 30

31 Conclusion Define and prioritize your negotiation objectives. What leverage do you have to negotiate changes? Questions and answers 31