7/26/2016 - - PDF document

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• Andy Ranck, CPA

Kathy Haley, CFE, CCA, COC

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• Managed Care Overview
• Managed Care Organization (MCO) Monitoring
• Encounter Data
• Medical Loss Ratio
• Other Monitoring (Program, Financial, etc.)
• Medicaid Managed Care Rule
• Summary and Questions

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The term managed care or managed health care is used in the United States to describe a variety of techniques intended to reduce the cost of providing health benefits and improve the quality of care ("managed care techniques"), for organizations that use those techniques or provide them as services to

• ther organizations ("managed care organization" or

"MCO"), or to describe systems of financing and delivering health care to enrollees organized around managed care techniques and concepts ("managed care delivery systems").

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• Managed Care Organizations (MCOs)
• Comprehensive benefit package
• Payment is risk6based/capitation

Primary Care Case Management (PCCM)

• Primary care case managers contract with the state

to furnish case management (location, coordination, and monitoring) services

• Generally, paid fee for service for medical services

rendered plus a monthly case management fee

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• Prepaid Inpatient Health Plan (PIHP)
• Limited benefit package that includes inpatient hospital
• r institutional services (example: mental health)
• Payment may be risk or non6risk

Prepaid Ambulatory Health Plan (PAHP)

• Limited benefit package that does not include inpatient

hospital or institutional services (examples: dental and transportation)

• Payment may be risk or non6risk

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State MCO Provider Provider

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• !"#"!!

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• 12
• Runs 5 miles a day
• No medical issues
• Favorite food = broccoli
• What’s exercise?
• Diabetic
• Congestive Heart Failure
• Favorite food = McD’s

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• !!$!

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• Encounter Data
• What is Encounter Data?
• Why is it important?
• How is it used to monitor MCOs?
• Examples

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• Encounter data are the records of

services delivered to Medicaid beneficiaries enrolled in managed care plans that receive a capitated, per6 member6per6month payment.*

• These records allow the Medicaid

agency to track the services received by members enrolled in managed care.

• The Managed Care Organization

(MCO) submits the claims to a data warehouse designated by the state.

* http://medicaid.gov/medicaid6chip6program6information/by6topics/data6and6 systems/downloads/medicaid6encounter6data6toolkit.pdf

• ENCOUNTER

+

Adjudication*/ Payment information from MCO:

• Received date
• Paid/Denied status
• Paid date
• Paid amount (incl.

any interest paid)

• MCO claim number
• ther information

as requested by the state

=

Claim Form information:

(from physician, facility or pharmacy visitE similar to FFS)

* adjudication – the process of deciding whether to pay or deny a submitted claim

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• States are required by CMS to store the

encounter data in a data warehouse.

• Many states outsource this process to a

third6party (typically to their Fiscal Agent Contractor).

• A contractor selected to design,

develop, and maintain the claims processing system (Medicaid Management Information System)

The Managed Care Organization electronically submits the claims data and payment information to the data warehouse.

A Medicaid Management Information System (MMIS) is the claims processing system used by the Fiscal Agent Contractor (FAC) to adjudicate conventional Medicaid claims. MCO submitted encounters are typically loaded into this system and assigned a unique claim identifier.

• Ideally, the MMIS encounter

data should reflect what is in the Managed Care Organization’s claims data.

• Managed Care

Organizations are required to submit claims data information based on contract requirements and companion guides into the MMIS or data warehouse.

Per cms.gov, a companion guide is documentation used “to clarify, supplement and further define specific data content requirements to be used in conjunction with” standard electronic data submission requirements.

MCO Claims MMIS

• There are countless potential issues related to encounter submissions

9we can’t cover all of them. We’ll cover three of the most common ones:

• 1. MISSING ENCOUNTERS
• 2. DUPLICATED ENCOUNTERS
• 3. MISSING/ INCOMPLETE/ INCORRECT DATA ELEMENTS

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• Encounter claim is not submitted to MMIS.
• Encounter claim is submitted but rejected by MMIS and either is not or cannot be re6worked and re6submitted successfully.

How it can happen?

• Missing paid encounters
• Missing denied encounters
• Missing voids for previously submitted, paid encounters

Examples:

• Inaccurate or incomplete picture of the services members are receiving (or not receiving).
• Inaccurate or incomplete picture of provider reimbursements (or denials).
• Increased difficulty evaluating MCO and vendor compliance.
• Potentially inaccurate information used for capitation rate setting, federal reporting, program management, etc.

Why is this a problem?

• Encounter claim is submitted successfully to MMIS multiple times; MMIS does not identify and reject subsequent

encounter(s) as duplicate(s).

• An adjustment of a previously submitted encounter claim is not correctly submitted as an adjustment but as a new, original

encounter claim. How it can happen?

• See next slide.

Examples:

• Potential over6statement of the services members are receiving.
• Potential over6statement of provider reimbursements.
• Increased difficulty evaluating MCO and vendor compliance.
• Potentially over6stated MCO services and expenses used for capitation rate setting, federal reporting, program

management, etc. Why is this a problem?

• !

Encounter claim is submitted successfully to MMIS multiple times; MMIS does not identify and reject subsequent encounter as duplicate An adjustment of a previously submitted encounter claim is not correctly submitted as an adjustment but as a new, original encounter claim (Ewhich may later be correctly adjusted)

* Confirmed by MCO in the Encounter Reconciliation Reports. Project discussed in later slides.

$0 6$15.22

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• Encounter claim is submitted without data element(s) necessary for certain analyses;
• Encounter claim is submitted with accurate data element value(s) but MMIS does not or cannot capture and store the information;
• Encounter claim is submitted with data element value(s) that is inaccurate.

How it can happen?

• Missing/ incomplete MCO received and paid dates;
• Instances of MCO paid amount & interest submitted on encounters that differs from what was actually paid – MCOs submit incorrect amounts or

MMIS has a different interpretation than MCOs’ encounter submissions.

Examples:

• Inaccurate or incomplete picture of the services members are receiving (or not receiving).
• Inaccurate or incomplete picture of provider reimbursements (or denials).
• Increased difficulty evaluating MCO and vendor compliance.
• Potentially inaccurate information used for capitation rate setting, federal reporting, program management, etc.

Why is this a problem?

• Techniques to identify and minimize the impact of encounter submission issues are generally .

They must be revisited as part of ongoing monitoring efforts. We’ll cover two approaches that are most helpful:

• 1. RECONCILIATION – Completeness of encounters successfully submitted
• 2. VALIDATION – Accuracy of elements compared to MCO/ provider data
• Section 438.818 E Enrollee encounter data of the Rule says that “States

must ensure that enrollee encounter data is validated for accuracy and completeness as required under §438.242 before submitting data to CMS” (the Medicaid Statistical Information System).

• The reconciliation determines the completeness of an MCO’s encounter

data in comparison to the related financial payments and recoupments the MCO (or its delegated vendor) made to providers in a period.

• Completeness is important in the encounter data because the data may

be used for: Managing Plans. Calculating Capitation Rates (per Member per Month). Reporting to the Federal Medicaid Statistical Information System (MSIS). Other Program Oversight Purposes.

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• Analyze completeness of encounters successfully

submitted to MMIS

• Myers and Stauffer currently performs encounter

reconciliations that compare

• to !

.

• This comparison is completed on a monthly basis and in

aggregate over a rolling 246month period. A report is issued every other month.

• This type of analysis can, depending on criteria used:
• Identify missing claims, particularly where amount paid >$0.
• Identify problems with reported payment dates and

amounts.

• Identify some missing/ incomplete/ inaccurate data elements

used as additional criteria or stratification for the analysis.

Sum

• f CDJ

Transactions Sum of Encounter Claims

Total Encounter Claim Payments Total CDJ Transactions Completion Percentage =

• On6site visits with the plans (corporate and local)

as well as with their delegated vendors. Gain an understanding of the claims data flow. Gain an understanding of processes, protocols, data security, etc. Discuss plan’s actions that address quality of service for its members.

• Review of sample data from the plan’s internal

claims systems and data warehouses.

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• Two sample months of data from each step in the claims

process (from initial claims submissions, to adjudication, to payment, to MMIS submission). The claims are requested from multiple points in the MCO’s system (e.g., adjudication system, payment system, data warehouse) so that we can test whether claim data elements change as they flow through the MCO’s different systems.

• Comparison of the sample data to the encounter data.

Completion analysis by claim type/delegated vendor. Accuracy analysis on specific fields.

"

• Accuracy of particular encounter data

elements when compared to the same MCO, vendor and/or provider data elements.

• One of the ways that Myers and Stauffer

provides encounter validation services to our clients is through on6site visits and related claim reviews.

• This type of analysis can, depending on

criteria used:

• Identify inaccurate/ incomplete claim data

elements such as diagnosis codes, surgical codes, modifiers, etc.

• Identify different payment information ($ and

dates).

• Identify some types of missing claims.

MCO Dx code These should be the same! Encounter Dx code

#

Activity 1 – Review State Requirements Activity 2 – Review MCO’s Capability Activity 3 – Analyze Electronic Encounter Data Activity 4 – Review of Medical Record Activity 5 – Submission of Findings

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"#

Duplication of members – concurrent and overlapping enrollment periods among Medicaid programs. Potential risk exists which could impact capitation payment and rates. Voided Encounters For example, if an original claim for $100.00 was voided, we would expect the submitted void encounter to reflect 6$100.00, resulting in $0.00 paid. In the 75 void example with the same

• riginal encounter amount of $100.00, the void encounter shows

+$100.00, instead of 6$100.00, showing total paid of $200.00 for that encounter. Because MMIS excludes the 75 from analyses, it is our understanding that the original $100.00 would still be present in the resulting calculation and potentially overstating any analyses utilizing encounter data.

State Medicaid Division MMIS

MCOs, Vendors (and their providers)

$%

Eall of the parties involved in encounter submissions when trying to identify and address encounter data issues. "#

• Determining mandatory

data elements on encounters.

• Companion guides

updates.

• Enforcement of mandatory

data elements reporting.

• Identifying and

implementing system changes to accommodate necessary data reporting.

• Identification and

correction of mis6submitted encounters (incl. duplicates and missing voids).

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• Medical Loss Ratio (MLR)
• What is MLR?
• Rule Implications
• Example Results from Examinations

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• The Affordable Care Act requires health insurance issuers to

submit data on the proportion of premium revenues spent on clinical services and quality improvement, also known as the Medical Loss Ratio (MLR). It also requires them to issue rebates to enrollees if this percentage does not meet minimum

• standards. MLR requires insurance companies to spend at

least 80% (individual and small group markets) or 85% (large group markets) of premium dollars on medical care, with the review provisions imposing tighter limits on health insurance rate increases. If they fail to meet these standards, the insurance companies will be required to provide a rebate to their customers, which started in 2012.

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• A MCO's MLR is the ratio of the numerator (line 18) to the

denominator (line 7).

• The numerator of a MCO's MLR for an MLR reporting year

must be the MCO's incurred claims plus the MCO's expenditures for activities that improve health care quality. The numerator of an MLR reporting year shall include Total Medical Expenses defined as follows:

• Incurred claims
• Plus MLR Expense Addition Adjustments
• Minus MLR Expense Reduction Adjustments as applicable:

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• The denominator of a MCO's MLR must equal the MCO's capitation

payments received from state Medicaid department. The denominator of an MLR reporting year shall include Total Capitation Revenue less premium taxes unless a deduction for community benefit expenditures is taken, less the Health Insurance Provider Fee (HIPF). Premium taxes and HIPF are excluded because they are all considered pass6through administrative costs and including reimbursement for them would adversely affect ratios.

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• Medical Loss Ratio (MLR)
• Prior to May 6, 2016, Medicaid and CHIP are the only health

benefit coverage programs to not utilize a minimum MLR for managed care plans.

• Rates must be set such that, using the projected revenues and

cost for the rate year, the entity would achieve an MLR of as least 85% (CMS recommended minimum threshold), but not exceed a maximum threshold that would account for reasonable administrative cost.

• Deadline must be within 12 months of the end of the MLR reporting

year.

• Medical Loss Ratio (MLR)
• The calculation of the MLR for Medicaid Managed Care is the sum
• f the incurred claims, expenditures on activities that improve

health care quality (HCQI), and activities specified under §438.608(a)(1) through (5), (7), (8), and (b) (subject to the cap in §438.8(e)(4)), divided by the adjusted premium revenue collected, taking into consideration any adjustments for enrollment (credibility adjustments).

• Plans must provide an attestation when submitting the report that

gives assurance that the MLR was calculated in accordance with the standards in the section.

• Related Party Vendors 6 Any profit margin included in costs

for related party administrative agreements should be excluded.

• We have encountered some issues when trying to drill down to the

amounts paid by the related party vendors to the service providers.

• Pharmacy has been the main focus since the amount expensed is

general high dollar.

• Generally, the MCOs will have an administrative expense account

for pharmacy and one or more pharmacy accounts for the pharmacy expenses paid. How and where amounts are booked depend on the contacts with the related party.

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&

• Focus on compliance and access to care
• Common findings:
• Unapproved system edits
• Noncompliance with adjudication timeframe requirements
• Improper handling and classification of appeals and grievances
• Clinical decision making
• Lack of oversight of downstream entities
• Results
• Validation and Civil Monetary Penalties
• https://www.cms.gov/Medicare/Compliance6and6Audits/Part6C6and6Part6D6

Compliance6and6Audits/ProgramAudits.html 44

&

• Program Oversight
• From our experience, development of a tool or

reporting that is required to be submitted by the MCO, at least quarterly, and reviewed by state agency staff or contractors.

Fiscal Oversight

• Appropriate claiming/classification of managed care

program expenses on the CMS664

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• What is being reviewed?
• Managed Care Oversight
• Program Integrity – Provider Networks
• Appeals and Grievances

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• On April 25, 2016, CMS issued a final rule on managed care

for Medicaid and CHIP (published in the Federal Register on May 6, 2016). The rule is over 1,400 pages. First Update to the Medicaid Managed Care regulations since 2002. Provisions of the rule will be implemented:

• In phases
• Over three (3) years
• Beginning July 1, 2017
• Seeks to modernize the Medicaid managed care regulations

to reflect changes in managed care delivery systems.

• Align the rules governing Medicaid managed care with other health

benefits programs.

• Strengthen actuarial soundness payment provisions.
• Promote the quality of care.
• Strengthen efforts to reform delivery systems.
• Ensure appropriate beneficiary protections.
• Implement statutory provisions.
• Modernize the Medicaid managed care regulations. continued
• Enhance policies related to program integrity.
• Implement provisions of the Children’s Health Insurance

Program (CHIP) Reauthorization Act of 2009.

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• Setting Actuarially Sound Capitation Rates

Establishes actuarial soundness standards. Establishes rate development standards. Payment provisions.

• Modernizes Regulatory Requirements

Clarifies state monitoring standards

• Administration and

management

• Grievance and appeal

systems

• Claims management
• Enrollee materials and

customer services

• Finance, including medical

loss ratio reporting

• Marketing
• Systems, including encounter

data reporting

• Medical and utilization

management

• TOEDO ITEMS FOR STATES

Significant changes to the MCO contract. Regulatory changes. MLR – Establishing minimum percentage, rate setting considerations, reporting format, potential payment of remittances for failure to meet MLR minimum. Expanded Actuarial Services. Quality Rating System. Increased transparency.

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• TOEDO ITEMS FOR STATES

Establishing Network Adequacy Standards for specified provider types. Independent audits of encounter and financial data. Enhanced oversight of downstream entities. Enhanced federal oversight.

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• Medicaid enrollment in comprehensive MCOs

increased by 24 percent 66 from almost 35 million in 2013 to 43.3 million in 2014.1

• MCO monitoring is being mandated by the

Medicaid managed care rule.

• 1 CMS Medicaid Managed Care Enrollment and Program Characteristics, 2014,

Mathmatica Policy Research, Spring 2016 54

• Andy Ranck

Kathy Haley aranck@mslc.com khaley@mslc.com Direct 410658164555 Direct 317684669521 Cell 443622665976 Cell 317631564392