Managed LTC in Wisconsin Procurement, Contracting and Rate Setting - - PowerPoint PPT Presentation

Managed LTC in Wisconsin Procurement, Contracting and Rate Setting

http://www.dhs.wisconsin.gov/LTCare/INDEX.HTM

Family Care

managed long-term care system

Fee-For-Service LTC

Card Services

• nly

Card Services IRIS Self– Directed Services waiver

Choices for people with long-term care needs

Partnership/PACE

Long-Term Care and Medicaid & Medicare

Family Care

Medicaid only Acute & Primary Care Long-Term Care

Managed LTC

ADRC

Choices in Family Care Expansion

ADRC provides information and enrollment counseling that is the “key” to informed consumer choice

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

Procurement

• Legacy HCBS system – LTS provided by 72 counties
• Planning grants made to planning consortia – groups
• f counties and their chosen partners
• Request for proposal (RFP) process initiated when

planning consortia ready

• Proposals accepted from public, non‐profit and for‐

profit entities

• Proposal evaluation takes into account proposers’

ability to manage home and community based care

• http://www.dhs.wisconsin.gov/ManagedLTC/

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

• http://www.dhs.wisconsin.gov/LTCare/StateFedReqs

/FC‐RC‐CMO‐Contracts.htm#cmo

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

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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

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

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Medicaid Managed Care: Rate Setting Process

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

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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

Medicaid Managed Care: Rate Setting Process

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

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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

Medicaid Managed Care: Rate Setting Process

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

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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

Medicaid Managed Care: Rate Setting Process

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

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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

Medicaid Managed Care: Rate Setting Process

Rates are set by rate cell, or groupings of age, gender, eligibility, and geographic regions When appropriate, an adjustment for health status is calculated

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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

Medicaid Managed Care: Rate Setting Process

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.

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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

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

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Medicaid Managed Care: Rate Setting Process

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

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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