Managed LTC in Wisconsin. Procurement, Contracting and Rate Setting.

Transcription

1 Managed LTC in Wisconsin Procurement, Contracting and Rate Setting

2 Choices for people with long-term care needs Fee-For-Service LTC Family Care Managed LTC managed long-term care system Card Services only Card Services IRIS Self Directed Services waiver Family Care Medicaid only Long-Term Care Partnership/PACE Medicaid & Medicare Long-Term Care and Acute & Primary Care

3 Choices in Family Care Expansion ADRC provides information and enrollment counseling that is the key to informed consumer choice ADRC

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5 Wisconsin LTC Model Managed LTC is built on philosophy and values of community based care All current managed care organizations are public and non profit agencies Target groups include frail elders, adults with physical and developmental disabilities Person centered, outcome based care management

6 Procurement Legacy HCBS system LTS provided by 72 counties Planning grants made to planning consortia groups of counties and their chosen partners Request for proposal (RFP) process initiated when planning consortia ready Proposals accepted from public, non profit and forprofit entities Proposal evaluation takes into account proposers ability to manage home and community based care

7 Contracting Proposers that are successful in the RFP process can attempt to be certified: Capacity and readiness to provide the benefit 1) Interdisciplinary Care Management Team 2) Adequate network of providers 3) Systems capability Permitted by OCI as financially ready to accept risk DHS contracts only with certified MCOs Contract meets Medicaid managed care regs and DHS performance expectations fidelity to the person centered outcome based model /FC RC CMO Contracts.htm#cmo

8 Medicaid Managed Care: Overview Managed Care is designed to better align financial incentives with desired outcomes, such as: Increased access to and quality of care Increased cost efficiency of care FFS Payment for Service Rendered Incentives to: Perform more services Perform Higher cost services Managed Care Payment for Healthcare Management Incentives to: Reduce spending Increase preventive services Manage chronic conditions Improve long term health costs 8

9 Medicaid Managed Care: Actuarial Soundness Rates that are Actuarially Sound are rates that allow for contracting with sufficient numbers of providers to ensure access to care and allow MCOs to remain financially sound throughout the contract period without earning excess or unreasonable profits While there are no definitive criteria for determining actuarial soundness for Medicaid managed care programs, CMS has issued a checklist that provides guidance on how the rates are developed 9

10 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans Setting capitation rates is a collaborative process between the State, the contracted actuary, and participating MCOs The certifying Actuary is responsible for a number of actuarial calculations ultimately used for setting rates 10

11 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans Sources for baseline data include: MCO Encounter data FFS data Eligibility records Capitation payment records Baseline data may include experience extending over a 1 to 3 year period. An appropriate data period depends on the size and accuracy of underlying data and on program stability 11

12 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans The historical data are adjusted to reflect changes in payment rates, covered services, and any other anticipated programmatic and policy changes The State provides a list of adjustments and detailed information for each adjustment 12

13 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans Incurred But Not Reported factors are applied to complete claims IBNR factors are calculated using actuarially accepted methods Trend rates are applied to reflect changes in payment levels and utilization between the data and contract period Considerations for trend rates include: Encounter/FFS experience Industry experience Budgeted provider increases Known policy changes that may affect utilization patterns Actuarial judgment 13

14 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Rates are set by rate cell, or groupings of age, gender, eligibility, and geographic regions When appropriate, an adjustment for health status is calculated Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans 14

15 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates Managed Care Equivalent rates are set by applying all adjustments to the baseline data An MCE is the certifying actuary s best estimate for an Actuarially Sound rate Rates within a defined range around the MCE can also be considered Actuarially Sound. State determines final Capitation rates and contracts with health plans 15

16 Other Rate Adjustments Expansion phase in (Family Care only): The intent of this adjustment is to recognize what, if any, significant cost variation exists between an expansion population's fee for service costs and the estimated costs implied using the regression models The expectation is that the MCOs will continue their efforts to better manage care Further adjustments could be made based on an evaluation of the MCO s business plans 16

17 Medicaid Managed Care: Rate Setting Process Collect data and establish baseline historical costs Calculate various policy and data adjustments Trend and IBNR adjustments Calculate risk adjustments Establish final Managed Care Equivalent (MCE) rates State determines final Capitation rates and contracts with health plans Based on the Actuarially Sound rates, the State ultimately selects a capitation rate while recognizing budget and policy constraints PwC certifies the final capitation rates as Actuarially Sound and produces a comprehensive rate report detailing the rate setting process Finally, CMS must approve the final capitation rates as well as the contracts between the State and participating MCOs 17