AHCA Managed Care Webinar: Tools for State Executives

Transcription

1 AHCA Managed Care Webinar: Tools for State Executives October 29, 2014 AHCA Managed Care Toolkits The Reimbursement & Legal Affairs team is in the process of updating AHCA s Medicaid managed care toolkit and educational materials for members This webinar is the first installment in AHCA s toolkit update, and will provide an overview of Medical Loss Ratio (MLR) requirements, the Duals Demonstrations, and Antitrust Guidelines 1

2 Agenda Duals Demonstration Issue Brief (Narda Ipakchi) Medical Loss Ratio Issue Brief (Narda Ipakchi) Antitrust Guidelines Document (Virginia Burke & Jim Miles) Q&A Duals Demonstration Issue Brief 2

3 Dual Eligible Population Characteristics Total Dual Eligibles in the United States 1 Full Duals Partial Duals Dual Eligibles as % of Medicare and Medicaid Populations and Spending, Duals Non-Duals 26.8% 73.2% 81% 66% 86% 66% 19% Medicare Population 34% Medicare Spending 14% Medicaid Population 34% Medicaid Spending In 2009, dual eligibles had higher hospitalization rates than those with only Medicare (28% vs. 18%) Full-benefit duals represented a higher share of combined spending than partial benefit duals ($238.5 billion vs. $33.5 billion) Total Medicaid spending for dual eligibles in 2009 was $110 billion Total Medicare spending for dual eligibiles in 2009 was 162 billion Sources: 1. CMS Medicare Medicaid Coordination Office. Medicare-Medicaid Dual Enrollment from 2006 through February MedPAC MACPAC. Data book: Beneficiaries dually eligible for Medicare and Medicaid. December 2013 The ACA Jumpstarted Duals Activity Created new Federal Coordinated Health Care Office (within CMS) Referred to as Medicare-Medicaid Coordination Office (MMCO) or Duals Office Purpose is to integrate Medicare and Medicaid benefits and to better coordinate care for dual eligibles Mission includes eliminating regulatory conflicts between Medicare and Medicaid that impede continuity of care Created Center for Medicare and Medicaid Innovation (CMMI), which is directed (among other initiatives) to permit states to test and evaluate models to fully integrate care for dual eligibles HHS given broad authority to waive Medicare and Medicaid requirements relating to consistency among states, payments, and actuarial soundness HHS also may expand any model of care that reduces spending without reducing quality or that improves quality without increasing cost Demos involving duals may be approved for 5 years (instead of normal 3) Source: Kaiser Family Foundation, Affordable Care Act Provisions Relating to the Care of Dually Eligible Medicare and Medicaid Beneficiaries (2011). Accessible at: 3

4 Financial Alignment Initiative Two Models Envisioned Fully Integrated Capitated Model Two contracts to govern program Memorandum of Understanding (MOU) between state and CMS Three-way contract among CMS, State & Medicare Medicaid Plan (MMP) MMP receives payments from State & CMS State and CMS must be guaranteed savings proportional to relative amounts paid Managed Fee for Service (FFS) Single contract between State and CMS Payments to providers remain FFS Retrospective savings through coordination of benefits Medicare savings net of increased federal Medicaid costs CMS explains the difference between FFS and Capitated models at: Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination- Office/Downloads/Financial_Models_Supporting_Integrated_Care_SMD.pdf(2011) *Several states that proposed the capitated model have withdrawn from the demonstrations. Fully Integrated Capitated Model Federal Government Contract Between Federal Government, State Government, and Health Plan State Governments Health plan receives blended capitation with payment streams from state and federal governments Health Plan Physicians Hospitals Rx Drugs Long Term Care Other Services Dual Beneficiary 4

5 Demonstration Participation (October 2014) WA NH MT ND VT ME OR ID WY SD MN WI MI NY MA RI CA NV UT CO NE KS IA MO IL PA OH IN WV VA KY NJ CT DE DC MD NC AZ NM OK AR TN SC TX LA MS AL GA MOU signed with CMS to implement financial alignment demonstrations (12 states) AK FL Proposal pending with CMS (8 states) HI Proposal withdrawn (6 states) Not Participating (24 states and DC) Source: CMS Financial Alignment Initiative Website: Coordination/Medicare-Medicaid-Coordination- Office/FinancialAlignmentInitiative/FinancialModelstoSupportStatesEffortsinCareCoordination.html Key Issues Payment Adequacy Unclear whether rates to MMPs will be sufficient to cover full array of Medicare and Medicare services; rates may be less than existing MA plans serving duals because of newly imposed cost savings targets. Appropriate Level of Care Demos encourage a shift or rebalancing of institutional LTSS to HCBS, which may increase financial risk for MMPs; dual eligible HCBS participants with multiple chronic conditions have avoidable hospitalization rate 2x higher than those using NF benefits State and Plan Experience Limited state and plan experience with duals population, particularly those requiring LTSS; infrastructure and policies would require significant modifications to meet the complex needs of the dual eligible population Passive Enrollment Although passive enrollment may increase participation, it may be difficult to accurately place beneficiaries in plans that meet their individual needs Network Adequacy Current provider networks likely do not meet demonstration standards, requiring plans to expand networks to serve beneficiaries with complex needs will be critical to developing and maintaining comprehensive networks. 5

6 Medical Loss Ratio Issue Brief MLR Defined Medical Loss Ratio (MLR) refers to the share of premium revenues that a health plan is required to spend on patient care and quality improvement activities as opposed to administration and profit Higher MLR suggests higher proportion of expenditures on medical care, in theory, in higher consumer value Language used to define medical costs is vague and often open to interpretation The ACA created the first federal uniform minimum MLR standards Small group employer plan: 80% Large group employer plan: 85% MA plan: 85% The ACA standard does notapply to Medicaid MCOs, however, some states have incorporated their own MLR standards into their Medicaid managed care contracts. 6

7 States with Minimum MLR Requirements October 2010 MLR standards ranged from 80 to 93 percent among 11 states with MLR requirements Source: Kaiser Family Foundation. Quick Take: Medicaid MCOs and Medical Loss Ratio (MLR) Requirements Corrective Actions for Failure to Meet Medicaid MCO MLR Requirements Vary Across States State/Program Arizona Long Term Care System Florida Statewide Medicaid Managed Care Program Illinois Integrated Care Program New Jersey 2013 Medicaid Managed Care Contract New Mexico Centennial Care Texas Uniform Managed Care Terms and Conditions Washington Basic Health and Healthy Options Minimum MLR Care management a medical expense? Refund/or sanctions for non-compliance? Other Profit Cap? 85% Yes State may sanction No 85% Yes CMS to determine corrective action 88% No Refund required No 80% Yes State may impose liquidated damages 85% Yes Refund required Yes Plan specific Admin Expense Cap Unknown Refund required Yes 83% No Refund required No No No Source: HMA Analysis of State MLR Contracting Requirements. 7

8 Seven of Ten States with Duals Demos Have Target MLR Requirements State CA IL MA MI NY OH SC TX VA WA No MLR requirement (risk corridors) 85% Target MLR No MLR requirement (risk corridors) 85% Target MLR 85% Target MLR 90% Target MLR 85% Target MLR Financial Alignment Initiative MLR Requirement Experience Rebate to State/CMS based on net income before taxes; State/CMS will set administrative cap on administrative expenses that can be used to calculate net income before taxes 90% Target MLR 85% Target MLR Policy Considerations MLR requirements can protect providers by ensuring that plans allocate an appropriate level of funds to health care services. Providers in states transitioning to managed care, planning to impose a new minimum MLR requirement, or revise an existing requirement should consider urging the state to: Impose a minimum MLR requirement of at least 85 percent with welldefined criteria for what qualifies as a medical expense Put in place adequate health plan reporting requirements and robust state oversight to ensure health plan compliance Incorporate a refund requirement into health plan contracts to allow the state to recoup excess administrative expenses and profit Consider imposing a separate limit on profits or profit sharing Particularly important in situations where managed care is being implemented for the first time as new utilization controls under managed care could otherwise result in larger than expected profits. 8

9 Antitrust Guidelines Antitrust Laws for Long Term Care Associations Like We Don t Have Enough to Worry About 9

10 Antitrust Laws protect COMPETITION Health Care Providers as Competitors Compete on Price Compete on Quality And the World Will be a Better Place For You and Me Just Wait and See Competitors? Us? Who are your competitors? Generally, you sell the same or similar services or products to consumers. Consumers choose among you and your competitors, when they seek a product or service. (e.g. long term care) Consider the distance that consumers will travel (giving them the benefit of the doubt). Services need not be identical so long as a consumer might substitute one for the other. 10

11 It doesn t matter if your intentions are good. It doesn t matter if you don t know it s against the law. It doesn t matter if the payer is grinding you into dust. Some Actions are Per Se Illegal Engage in these actions and you have violated the law: PRICE FIXING GROUP BOYCOTT MARKET ALLOCATION 11

12 Per Se Illegal Action #1: Price Fixing You cannot enter into agreements with your competitors on pricing. You are supposed to be competingwith them, not colludingwith them. Do not engage in discussions on prices, payments, or anything else that could be considered to bear on what you are paid. Actions that violate this prohibition: Agreements among competitors on minimum payment levels Agreements among competitors on maximum payment levels Agreements among competitors on discounts or rebates Agreements among competitors that result in increased prices paid by the managed care organization. Per Se Illegal Action #2: GROUP BOYCOTT So, we re all agreed then? 12

13 If you agree with your competitors to split up the market, you re no longer competing with each other. Per Se Illegal Action #3: MARKET ALLOCATION Example: I ll only take patients from Hospital A, And you only take patients from Hospital B. It s not just geographic markets. One orthopedist only does left knees; The other only does right knees. They can charge what they like. No competition on price for knee surgery. Other Actions Will Be Assessed Under a Rule of Reason May ook,if there Health Care Providers are supposed to be competing with each other, not entering into agreements with each other. Agreements among competing providers may be OK if: They don t fall into the Per Se Illegal category; and They have procompetitive benefits that outweigh their anti competitive effects. Joint ventures, affiliations, networks... 13

14 PENALTIES Criminal Prosecution Conviction of a Felony Huge Fines Imprisonment Civil Damages Injured Parties can Sue You Triple Damages, plus Attorney s Fees Liability Insurance Doesn t Ordinarily Cover these Losses BUT DON T PANIC There is no need for competitors to shun each other at meetings and conferences, or to dissolve all trade associations. Competitors can be colleagues so long as they still compete vigorously against each other. Antitrust laws have been around for decades, and doctors and hospitals have been complying with them practically since health insurance was invented. Use a consumer viewpoint. Consumers want their insurance premiums (or taxes, in the case of Medicaid/Medicare) to be as low as possible, and so want their health plans (or their government) to get the best prices. If a collaboration with a competitor will interfere with that, then it s probably a problem. 14

15 Relevance to Trade Associations When Competitors Come Together: No discussions about how to deal with a particular commercial payer No discussions about prices or pricing policies If it s not legal to make an agreement about it, then it s not OK to discuss it When the conversation strays into such topics, make other members aware and pull the discussion back on track. It is OK to discuss: Payment rates that are set by regulation, instead of negotiation. Questions and Discussion 15

16 Appendix Activities Included in Patient Care/Quality Outcomes Definition Activities to improve health outcomes Activities to prevent hospital readmissions Efforts to improve patient safety, reduce medical errors and lower infection and mortality rates. Wellness and health promotion activities Enhancements to health care data to improve quality, transparency, and outcomes and support meaningful use of health information technology. Activities Excluded in Patient Care/Quality Outcomes Definition Concurrent and retrospective utilization review Fraud prevention activities beyond the scope of those activities that recover incurred claims Provider network management activities Provider credentialing Marketing expenses Administration costs associated with enrollee or employee incentives Clinical data collection without any subsequent analysis Claims adjudication expenses 16