The KanCare Transition Kansas Association of Counties Annual Conference November 13, 2012

The KanCare TransitionKansas Association of Counties

Annual ConferenceNovember 13, 2012

Martie RossPershing Yoakley & Associates, PC

Page 2November 13 , 2012

Prepared for Kansas Association of Counties

What Is Medicaid?• Federal-state program to provide care for vulnerable

populations– State determines program structure within specified standards– Approved State Plan

• Shared cost– $2.8B total; $1.1B SGF (KS FMAP = 56.5%) – 18% of SGF– 2nd largest state expenditure



What Is Medicaid?• ≈ 300,000 Kansans covered

– Children, pregnant women, adults with children ≤ 30% FPL ($5600/year for family of four)

• 2/3 of beneficiaries, but only 25% of cost• Primarily in managed care (capitated payment to private insurance

company)– Elderly and persons with physical/mental disability

• 1/3 of beneficiaries, but more than 75% of cost• Medicaid pays almost 50% of long-term care costs for elderly • Primarily in fee-for-service (state pays providers directly)



KanCare

• Governor Brownback’s plan for reforming Kansas Medicaid program

• Announced in Nov. 2011; effective on Jan. 1, 2013• Achieve $853 million ($368M SGF) over five years

5-year Total

Savings FY13 FY14 FY15 FY 16 FY 17

All Funds 29,060,260 113,513,129 198,041,997 235,439,877 277,004,864 853,060,127

SGF 12,522,066 48,912,807 85,336,296 101,451,043 119,361,396 367,583,609



Savings• Does not reduce eligibility• Does not reduce covered services• Does not reduce provider payments• Savings achieved through outcomes-focused,

person-centered care coordination model





Four Pillars of Health Reform

Focus on wellness and prevention

Focus on quality of care

Promote clinical integration

Promote community-based

solutions



Big Picture – Track 1 • Contract with 3 MCOs to run Medicaid program for

per-member fixed rate• Move (nearly) all Medicaid beneficiaries to managed

care• Establish safety net care pools

– Large public teaching hospital; border city children’s hospitals; uncompensated care; CAHs

• Develop Medicaid off-ramps (pilot projects)



Big Picture – Track 2• Global waiver• Per capita block grant with performance

standards (quality measures)• “Ready to move forward as early as 2015”



Role of MCOs• State’s contract with MCO impose standards of

performance and oversight• MCOs create provider networks to deliver services to

their members– MCOs’ provider contracts establish terms of service delivery

and payment



MCO Selection and Network Development

• State has contracted with three for-profit, national health insurance companies – Sunflower State Health Plan (Centene)– AmeriGroup (to be acquired by WellPoint)– United HealthCare

• State-approved standard provider agreement and provider manuals (and any future changes)

• MCOs to have provider networks in place by 11/01/12



MCO Selection and Network Development

• Beneficiaries to receive auto-enrollment notice from State in November– Equal distribution?

• Beneficiary may change MCO within first 45 days, annually thereafter– Federal waiver

• MCOs assume administrative duties on 01/01/13 (non-medical services for developmentally disabled delayed to 01/01/14)



Provider Network Requirements• Must provide statewide coverage for all services • Must include sufficient number of providers to meet

specified access to care requirements• Must include PCPs, pharmacies, and hospitals located

in every county in which members reside• Must offer contract to all FQHCs, RHCs, and CAHs• Must make “every effort” to permit member to continue

with current provider



Provider Network Requirements• Hospital

– Usual and customary transport time (≤ 30 in urban areas)

• Emergency Care– Immediate at the nearest available facility regardless of

network or MCO contract

• PCP – 30 miles/minutes (rural), 20 miles/30 minutes (urban);

patient load ≤ 2500 for physician or ≤ 1500 for mid-level; ≤ 3 weeks for regular appointments, 48 hours for urgent; wait times ≤ 45 minutes



MCOs and LHDs

• MCOs to make “reasonable effort” to subcontract with providers receiving Title V or Title X funding– Maternal & child health; family planning; STDs, TB; WIC

• MCOs to coordinate with LHDs “to ensure prevention and limit the spread of” STDs/TB– Contracts with LHDs must include language “regarding the

coordination of care and reporting of” STDs and TB• MCOs “expected to subcontract or coordinate” with

LHDs regarding WIC program (referrals and information sharing)



Provider Network Management• Must credential network providers per NCQA guidelines• Must maintain State-approved provider manual• Must maintain compliance program• Must satisfy timely claims processing requirements• Must maintain utilization management program

• Establish prior authorization procedures– No PA for “emergency services”

• Establish and disseminate written review standards



Network Provider Payments• State-published fee schedule sets minimum rates for

network providers– Initial fee schedule = current Medicaid FFS rates– Primary care add-on payments (?)– MCO may pay less than minimum if opportunity for

incentive payments (e.g., quality scores)• Alternative payment arrangements only if proposed

by network provider and approved by State



Out-of-Network Providers• MCO must provide member access to OON provider if

“appropriate services” not available from network providers

• State will consider OON provider appeals regarding whether service is medically necessity, is an emergency, or is an appropriate screening



Out-of-Network Provider Payments • Hospitals and nursing facilities entitled to 3 reasonable

offers; OON paid 90 percent of FFS rates– Other providers not afforded same protection

• OON services negotiated on single-case arrangements– OON providers cannot balance bill beneficiaries



Person-Centered Coordinated Care• Demonstrated care coordination capabilities

– Use of HIT/HIE– Track preventive care services for each member– Address misuse of ERs– Program to reduce hospital readmissions

• Initial health risk assessment– Done by “appropriate health care professionals”– Specified elements– Information shared among providers and with the State

• Annual physical exams and/or health education



Person-Centered Coordinated Care• Health literacy• Value-added services• Advanced directives• Care management for high-risk, high-service

utilizers, and other high-cost Members • Case management, disease management,

discharge and transition planning



Health Homes• ACA appropriates additional monies to states to

establish Medicaid “health homes”• Similar to medical home, but greater emphasis on

community and social services resources• MCO requirements

– Members with diabetes and/or mental illness assigned to health homes by 01/01/14

– Members with other chronic diseases assigned to health homes by 01/01/15



Home and Community-Based Services• Kansas is No. 6 in percentage of seniors living in nursing

homes• KanCare forces transition away from institutional care

and toward services provided in individuals’ homes and communities

• Outcome measures will include lessening reliance on institutional care



Pay for Performance: P4P• RFP lists operational measures for Contract Year 1;

initial quality measures for Years 2 and 3 • State withholds 3 to 5% percent of total payments

until operational/quality thresholds are met • Quality thresholds increase each year to encourage

continuous quality improvement• RFP “encourages the adoption of innovative,

evidence-based provider payment mechanisms that incorporate performance and quality initiatives”



The Kentucky Experience• Transition began in November 2011• Similar fixed-rate MCO contracts• Between 11/11 and 02/12, State paid MCOs

$708 million, MCOs paid out $420 million• Patient and provider complaints



Auditor’s Recommendations• Agreed-upon metrics for measuring and

reporting timeliness of payments– Monitoring and corrective action plans

• Use of automated systems • Well-defined appeals process• Consideration of relevant information prior to

denying claims



LHD Opportunities• Specific LHD programs identified in RFP• Beneficiary enrollment facilitation• Specific services (e.g., immunizations)• Care coordination services• Initial health risk assessments (EPSDT)• Primary care• Partnerships with local providers



Medicaid Expansion• Starting in 2014, state that expands Medicaid eligibility

to 133% FPL will receive higher FMAP for newly eligible– 100% in 2014-16; 95% in 2017; 94% in 2018; 93% in 2019; 90%

in 2020+ – Administrative costs still 50/50

• Coverage must be at least as good as the minimum essential health benefits available through Exchanges



SCOTUS ACA Decision

Majority No. 1 (Justices Roberts, Scalia, Kenney, Thomas, and Alito): Congress lacks authority under Commerce Clause to impose individual mandate.

Majority No. 2 (Justices Roberts, Ginsburg, Breyer, Sotomayor, and Kagan): Congress has authority under Taxing and Spending Clause to impose penalty on persons without health insurance coverage.



SCOTUS ACA DecisionMajority No. 1 (+ Justices Breyer and Kagan): Congress lacks authority to withhold all Medicaid funding for state that does not expand Medicaid coverage.

Majority No. 2 Entire ACA does not fall due to unconstitutionality of Medicaid expansion penalty.



Medicaid Expansion“No, Thanks”

• 365,000 uninsured in Kansas (13.3%)• 141,000 eligible under Medicaid expansion • 38,000 between 100-133% FPL eligible for exchange

subsidies• 103,000 left out if Kansas opts out



Medicaid ExpansionImpact on Hospitals

• Less-than-expected decline in uncompensated care• Reductions in disproportionate share payments

– Medicaid DSH reduced 50% by 2019oHHS has not yet published methodology

– Medicare DSH reduced 75% in 2014 (with some amount returned based on documented uncompensated care)

Martie RossPershing Yoakley & Associates

[email protected](913) 232-5145

mailto:[email protected]

Documents

The KanCare Transition Kansas Association of Counties Annual Conference November 13, 2012