Transcript Making Every Dollar Count: Effective Strategies for Using

Making Every
Dollar Count:
Effective Strategies for
Using Ryan White CARE
Act Funds and Third
Party Reimbursement in
an Era of Diminished
Resources
Julia Hidalgo, ScD, MSW, MPH
Positive Outcomes, Inc.
Harwood MD
www.positiveoutcomes.net
[email protected]
(443) 203 - 0305
Planning Committee
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Aubrey Arnold
Gayle Corso
John Eaton
Theresa Fiano
William Green
Deidre Kelly
Syd McCallister
AHCA
 Heidi Fox
HRSA HAB Project
Officers
 Johanne Messore
 Yukiko Tani
TPR Trainers
 Curt Degenfelder
 Marilyn Massick
 Michael Taylor
Ground Rules
 I do not represent
HRSA, CMS, or AHCA
 Let me know if you do
not understand
 We can share our
feelings at the end of
each section
 You will be rewarded for
staying awake
 Shut off your electronic
devices
 A 15 minute break
means 15 minutes!
Overview of Today’s Session
 Overview of financing, third party reimbursement
(TPR), and eligibility determination
 Train the trainer approach
 Materials on the POI website
 Please follow-up by email with additional questions
 Topics covered
 HRSA’s payer of last resort (PLR) policies
 Changes on the horizon that make it increasingly important
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for CARE Act grantees and subgrantees to address
financing and eligibility determination issues
TPR
Participating in Florida Medicaid, commercial insurance,
and managed care systems
Estimating your program’s costs
Marketing your program’s services
Eligibility determination
What is third party reimbursement?
Patient
1st Party
$
services
Insurer
Medicaid
Medicare
3rd Party
Provider
2nd Party
$
TPR is receiving payment from a source other than the patient for
services provided to patients by a provider. This other source is
the “third party.”
CARE Act Payer
of
Last Resort
Policies
CARE Act Has Three
Principal Fiscal Requirements
 Matching Funds
 Title II Match
 ADAP Match
 ADAP Supplemental Match
 Maintenance of Effort (MOE)
 Payer of Last Resort (PLR)
Three CARE Act Fiscal Requirements
By Title and Part F
Fiscal
Title I
Requirement
Title II
State Match
Funds*
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State ADAP
and ADAP
Supp Match
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Title III
Maintenance
of Effort
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Payer of
Last Resort
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DRP = Dental Reimbursement Program
Title IV
Part F,
DRP
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Title II Matching Fund Requirement
 Introduced in the 1990 CARE Act authorization
 State Title II programs must match a percentage
of Federal funds received under the CARE Act
with State funds or expenditures
 Applies only to Title II grantees with > 1% of the
US AIDS cases reported for the two most recent
fiscal years
 The match rate started at 16.66% in 1990 and
increased to 33.33% in 1994
 The required matching fund rate has not been
increased since the CARE Act 1990 authorization
 Requirement cannot be waived if a State is unable
to maintain its match rate
Maintenance of Effort (MOE) Requirement
 Introduced in the 1996 CARE Act reauthorization
 Grantees are required to maintain a level of HIV
expenditures for services at an amount that is equal
to the levels of such expenditures for the preceding
year
 The MOE provision under Title I, II, III, states that
the Secretary “shall not make a grant under this
subsection if doing so would result in a reduction of
State funding allocated for such purposes”
 Federal funding can be decreased but not directly
due to a reduction in other Federal funds, including
reduction in CARE Act funds received by Title I, II,
or AETC grantees
HAB PLR Policies
 Are CARE Act grantees or sub-grantees required to
bill?
 If you provide services that are eligible for TPR and you charge
anyone, you must have a system to bill and collect from third
parties
 You must identify potential TPR sources for each client, refer
them for eligibility determination, set up billing systems, bill all
available TPR sources, and negotiate the best reimbursement
rates possible
 While Medicaid eligibility is pending you may use grant dollars
but you must bill retroactively
 Pay and chase
 Does HAB support the reduction of a grant award to
their contractors due to increased TPR?
 No, HRSA discourages this; preferring that you use the
revenue to expand and/or enhance HIV services
Who is the payer of last resort (PLR)?
 HAB considers the CARE Act
to be the payer of last resort
 Services that must be
reimbursed by any private or
public payers should be
determined before CARE Act
funds are used to pay for care
 It is unclear which CARE Act
Title should be considered the
payer of last resort among
CARE Act programs
HAB PLR Policies
 Must an agency credit their HIV unit’s budget for TPR
or can they retain the funds?
 Your organization must report the amount of the
reimbursements to the HIV/AIDS unit and to return
or credit those funds to the HIV program
 How can funds received from TPR be used?
 The funds must be used to pay for HIV services to
the populations
 Since TP payment is typically less than submitted
charges, should the grantee or contractor bill for
their actual costs?
 CARE Act funds cannot be used to “balance bill”
 Try to negotiate the best possible rate with
insurers
HAB PLR Policies
 How can our program become a
Medicaid provider?
 Check the State Medicaid website
or contact the State Medicaid
Program directly
 Help can also be obtained from
CMS’s Regional Office:
www.cms.gov/about/regions
 Can CARE Act funds be used to pay
to prepare to become a Medicaid
provider?
 Yes, capacity development funds
may be used for this purpose
 The Title I Planning Council must
allocate capacity development
funds
HAB PLR Policies
 What must we do to meet the qualifications to
be a provider if our employees do not meet
Medicaid credential requirements and we
provide Medicaid covered services?
 If you do not charge for the covered service or
seek TPR, there is a waiver provision
 Otherwise, careful attention should be paid to
staffing a program with quality of care and
reimbursement implications in mind
 Your program should evaluate the costs and
benefits of adjusting your staff mix over time to
assess if staffing changes would be beneficial in
the long term to ensure quality of care
HAB PLR Policies
 Can a grantee require a contractor to become a
Medicaid provider even if the service provided is not
covered by Medicaid?
 No
 If a client is enrolled in Medicaid, can CARE Act
funds be used to pay for case management?
 If your State Medicaid Plan covers the type of case
management that you provide, Medicaid should pay for
those services
 To find out if case management is covered see:
www.cms.gov/medicaid/tollfree.asp
 To obtain information about your State’s State Medicaid Plan
see: www.cms.gov/medicaid/stateplans/map/asp
 If the case management services provided by your agency
are not covered, then the services may be paid for using
CARE Act funds
Sliding Fee Scale
CARE ACT specifies the following sliding fee scale for
clients with an income:
 < 100% of FPL may not be charged for service
provided under the grant
 > 100% of FPL must be charged for services based
on a schedule that is available to the public
 > 100% and < 200% of FPL, the provider will not, for
any calendar year, impose charges in an amount
exceeding 5% of the client’s annual gross income
 > 200% and < 300% of FPL, the provider will not, for
any calendar year, impose charges in an amount
exceeding 7% of the client’s annual gross income
 > 300% of FPL, the provider will not, for any calendar
year, impose charges in an amount exceeding 10% of
the client’s annual gross income
Sliding Fee Scale
 If a CARE ACT grantee or subgrantee charges
for its services, it must do so on a sliding fee
scale or a schedule available to the public
 CARE ACT grantees or subgrantees may use
their discretion, in the case of clients subject
to a charge, to assess the amount of the
charge, including imposing only a nominal
charge for the provision of service
 The grantee or subgrantee must take into
consideration the medical expenses of clients
in assessing the amount of the charge
Challenges to Applying a Sliding Fee Scale
 The ceiling on out-of-pocket payments requires
a high level of documentation of paid bills
 Clients have difficulty maintaining records
 Some providers do not have the ability to
collect and account for cash
 A problem in small and large institutions
 In large organizations, out-of-pocket payments
are often not applied to the budget of the HIV
program nor does the accounting system
separately identify out-of-pocket revenue
generated by the HIV program
PLR Policies: An Example of
Enforcement Challenges
“This is a partial list of providers who receive Title III
support from us. I'm sorry, but I don't feel that I can
send you all our referral providers, as they may or may
not know the funds paying their fees are from Ryan
White. It is up to the patient to disclose to another
provider, and often, that means the provider may chose
not to provide services. This has happened on
numerous occasions, so please understand it would
not be in our patients' best interests to have you
contact all the providers we use.”
A Title III Grantee
PLR: Participation in TPR
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Almost all CARE Act medical providers participate in
Medicaid and other payers
 Some are locked out of Medicaid managed care
plans who will not contract with them
Some CARE Act providers funded for mental health
and drug treatment services are not licensed and do
not employ licensed supervisors or line staff
 Not eligible for participation in Medicaid
 May employ contractors that bill directly with no
revenue returned to the program
Some Medicaid programs have a moratorium on new
provider numbers for certain provider categories
Some CARE Act providers cannot afford credentialed
personnel that would provide billable services
PLR: Participation in TPR Systems
 Managed care plans have considerable requirements that
CARE Act providers may not meet
 24/7 staffing, HIPAA compliance, staff credentialing,
quality assurance, electronic claims submission,
reporting, risk bearing
 Considerable infrastructure investment is commonly
required for HIV providers to become ready for
participation in managed care
 Case management and psychosocial support providers
may not provide a billable service
 Do provide a billable services but are not sufficiently
credentialed
 Some providers may not be aware that they provide a
billable service
 Becoming a participating provider is likely to represent
some costs; often not covered by CARE Act capacity
building funds
PLR: TPR Issues
 Many CARE Act providers are unaware of their per unit of service
cost
 Tend to accept payments that are well below their actual costs
 Commonly have little bargaining power with insurers
 Personnel costs are reported to be rapidly rising
 Unionized organizations are bound by collective bargaining
 Grantee unit cost payments may be less than program costs
 Visits to HIV care providers tend to be relatively long and laborintensive
 Volume is insufficient to generate increased marginal revenue
 Insolvency is increasing among HIV clinics
 In the past, parent institutions were willing to support
administrative staff and related costs or absorb uncompensated
costs
 Many of HIV programs report their institutional support has
eroded rapidly as broader financial pressures increase
 An increasingly hostile environment is reported
PLR: Billing Systems
 Many providers receiving CARE Act funds have
inadequate billing systems
 In large systems, their billing systems do not separately
account for HIV program revenues or expenses
 Some staff are not adequately trained, credentialed, or
supervised
 Newer or small providers often try to build rather than buy
billing staff capacity
 Evidence of coding insufficiency resulting in lower payments
 Do not research and resubmit rejected claims
 CARE Act providers are reluctant to require payment
from self-pay patients
 No collections process in place; even when patients have
income
 Billing systems are not set up to do “pay and chase”
 Billing software, hardware, and training/re-training
represent significant operating costs
PLR: Billing Systems
 In some healthcare markets, CARE Act providers may
potentially bill numerous payers
 Payers vary in their mechanisms for provider
networks, covered benefits, and the amount that they
will pay
 Prior authorization and standing order requirements
must be addressed to ensure payment
 Payments may be slow, with claims commonly
rejected at first submission
 This level of complexity is quickly outstripping the
capacity of even relatively sophisticated providers
 HIV clinics tend to offer non-covered services
 Prevention, medication education, adherence
counseling
Can veterans be required to receive services at a VA
medical center?
 In 2004, HAB clarified their policy about providing
CARE Act services to HIV+ veterans who are also
eligible for VA benefits: http://hab.hrsa.gov/law/0401.htm
 CARE Act providers
 May not deny services, including
medications to veterans who are otherwise
eligible for the CARE Act
 Should inquire if an individual is a veteran
and enrolled at the VA
 Should be knowledgeable about VA
medical benefits, including medications
 Must coordinate health care benefits for
veterans
Why do some veterans receive care outside the VA?
 Concerns about quality in the VA system
 Even if enrolled for VA health care, a veteran does
not have to use the VA as their exclusive health care
provider
 The VA has limited resources and is
funded each year by Congressional
appropriations
 The VA encourages veterans to retain
existing health insurance
 While veterans cannot be required to seek their care
in the VA, CARE Act programs can provide a valuable
service in making HIV+ veterans aware of VA
services available procedures for getting VA care
and helping them navigate care systems to secure
HIV care
What are the eligibility criteria for veterans to
receive services from the VA?
Eligibility for most veterans health care veterans is
based on active military service in the Army, Navy,
Air Force, Marines, or Coast Guard (or Merchant
Marines during World War II), and other criteria
VA health care benefits are not just for those who
served in combat or have a service-connected injury
or medical condition
Not all veterans are eligible for VA benefits
 In recent years, VA eligibility
requirements have become
increasingly strict
Can CARE Act grantees or
subgrantees contract to provide
services to the VA?
Yes, individual VA facilities or any of the
21 regional Veterans Integrated Service
Networks can contract with other
agencies or groups to provide care to
veterans
Usually, this occurs when a specific
service is not available in the VA
system or when providing the service
through a contract is more
economical for the VA
For clinical services, the VA must
identify a need, develop a “scope of
work,” and then obtain bids for the
cost of providing the services
EFFECTIVE
ELIGIBILITY
DETERMINATION
Determination: Pieces of the Puzzle
 Vast array of entitlement and
discretionary programs that HIV+
clients might be eligible for today
and tomorrow
 Things change!
 Eligibility criteria (the short list)
 Geographic residency, US citizenship,
legal residency status, age, race (Native
Americans), gender, previous financial
contributions by client, employment,
employer, preexisting medical condition,
disability, employability, income, assets,
HIV serostatus, CD4 count, annual or
lifetime utilization of benefits, criminal
convictions
 Knowing how to complete the
paperwork, document claims, and
making sure clients follow through
Determination: Pieces of the Puzzle
 Disability claims are taking longer than
ever to be processed
 Many State and federal entitlement
programs have had layoffs or working with
inexperienced staff
 SSA HIV policies are under review
 Legal services must be available to
pursue claims
 Front-loaded intake and assessment at
entry in care, without re-determination
on a regular basis
 There is ineffective communication
between care providers about eligibility
“triggers”
 Loss of employment, inpatient admission,
change in clinical condition
Challenges to Effective Determination
The Entitlement, Discretionary, and Commercial System
 State and local discretion in the implementation of federal policy
 Lack of coordination of eligibility criteria and other federal, State,
and local policies: payer of last resort
 Whose client are you?
 Varying opinions about application of policies: “HRSA said”
 Significant contraction of public benefits due to the economy,
erosion of the tax base, competing demands, shifts in priorities
 Unwillingness of the commercial sector to take responsibility
 Loss of personnel in local and State government to operate the
system
 Culture differences between HIV care systems and entitlement
and discretionary systems
Challenges to Effective Determination
AIDS Service Organizations and HIV Clinical Providers
 Tend not to maximize resources available in other
systems
 Assume that case managers are “handling it”
 Assume somebody else will take care of determination
rather than coordinating efforts
 Often take a passive approach to determination and do
not make the system work for clients proactively
 Take the attitude “don’t ask, don’t tell,” giving the
clients the impression that there is a free lunch
 Providers are often unaware that clients are already enrolled
or eligible for care
 Do not coordinate applications for benefits
 Flood the system with completed forms to “see what sticks”
Challenges to Effective Determination
AIDS Service Organizations and HIV Clinical Providers
 Front-load the intake and assessment at entry in care and do not
effectively re-determine clients on a regular basis
 There is ineffective communication between care providers about
eligibility “triggers”
 Loss of employment, inpatient admission, change in clinical
condition
 Assume that clients’ disability claims should only be HIV-related
 Case managers are commonly used to conduct eligibility
determination
 Training and retraining of case managers regarding eligibility
determination is often limited
 There are competing demands for their time and turn-over is
growing
Challenges to Effective Determination
The Client or Patient
• Many providers assume that the client will be able to
navigate the system
– Assume the ability to read and complete forms
• Other providers assume that the client cannot navigate
the system when they can
• Determination processes that rely on clients are
commonly doomed
– Paperwork is not the highest priority when you are trying to
survive
• Clients are commonly not informed that providers rely
on their ability to be paid for their work
• Concerns about discrimination and stigma may result
in lack of complete disclosure
Determination: “Best” Practices
 Collaboration between policymakers to establish
policies and procedures that coordinate benefits
 Systematic assessment of the eligibility determination
processes among HIV providers
 Centralize intake in EMAs or other jurisdictions
 Review organizational policies and procedures to
determine what is actually being done in your program
to determine clients
 Talk to your staff, review insurance status data, and review
client records
 Develop continuous quality improvement (CQI) to improve
determination
 Identify entitlement and discretionary programs for
which there are barriers to enrollment
 Document the problem and establish ongoing processes for
resolution
Determination: “Best” Practices
 Establish processes to fast track applications
and to train public and commercial claim
assessment staff regarding HIV disease
 Routinely monitor changes in entitlement and
discretionary programs that impact eligibility
and adjust accordingly
 Fund and employ trained eligibility determination workers
 Broker roles and responsibilities among medical providers, case
managers, eligibility determination workers, and legal aid
providers to reduce duplication of effort and maximize enrollment
 Make sure that clients receive the maximum benefit to which they
are legally entitled
 Communicate with clients that to continue to operate, your
program must have revenue
On the horizon…
Deficit Reduction Act
 Proof of Medicaid beneficiaries claiming U.S.
citizenship:
http://www.cms.hhs.gov/MedicaidEligibility/05_Proo
fofCitizenship.asp
 Further Medicaid reforms
Immigration legislation
On the horizon…
CARE Act Reauthorization
Track using Thomas at http://thomas.loc.gov/
 Core service requirements
– 75% of Titles I, II, and III funds must be allocated to core
medical services
– HHS shall waive this requirement if there is no ADAP wait list
and core medical services are available to all HIV+ individuals
 Severity of need adjustment
 Moves to three-tiered Title I funding
 Eliminates “double counting” by Title I and Title II
 Moves to HIV name reporting as formula funding basis
What is the definition of primary medical care?
Primary Medical Care (HR 5009 and S2339)
 Medication, prescription drugs, diagnostic tests,
visits with physicians and medically credentialed
health care providers, oral health, treatment for
psychiatric conditions, and treatment for other health
care conditions directly related to HIV/AIDS infection,
and health insurance premiums, co-payments, and
deductibles
 Does not include case management for non-medical
services or short-term transitional housing
What is the definition of primary medical care?
S2823
 Core Medical Services Outpatient and ambulatory health
services, ADAP treatments, AIDS pharmaceutical
assistance, oral health care, early intervention services,
health insurance premium and cost sharing assistance
for low-income individuals, home health care, hospice
services, home and community-based health services
(except homemaker services), mental health services,
substance abuse outpatient care, medical case
management (including treatment adherence services)
 Support Services A grantee, subject to the approval of
the HHS Secretary, may provide support services
 Such as respite care for individuals with HIV/AIDS, outreach
services, medical transportation, nutritional counseling,
linguistic services, and referral for health care and support
services for individuals with HIV/AIDS
 Needed to achieve medical outcomes which are related to the
medical outcomes for HIV+ individuals
Florida Medicaid Reform
 Authorized by FL Legislature in May 2005
 Waiver was submitted to CMS in October
2005
 Waiver was approved by CMS in 2005
 Approved by the FL Legislature in December
2005
 Roll out will begin in Duval and Broward
 Enrollment throughout FL by July 2008
What Florida Medicaid Reform Will Not Do
 Reform will NOT change who receives Medicaid
 Eligibility does not change
 Reform will NOT “cut” the Medicaid budget
 The budget will continue to grow each year
 Reform is NOT correlated with Medicare Part D
 Florida will NOT limit medically necessary services
for pregnant women
 Florida has NOT asked to waive Early and Periodic
Screening Diagnosis and Treatment (EPSDT) for
Children
 Children will be able to access all medically necessary
services
 Florida will NOT increase beneficiary cost sharing
requirements
What Florida Medicaid Reform Will Do
 Increase access to appropriate care
 Benefits that better meet recipients’ needs
 Access to services not traditionally covered
by Medicaid
 An opportunity to provide choice and control
to recipients in regard to health care
decisions
 Ability to earn credit to pay for non-covered
services
 Bridge to private insurance
Key Elements of Medicaid Reform
 New Options/Choice
 Customized Plans
 Opt-Out
 Enhanced Benefits
 Financing
 Premium Based
 Risk-Adjusted Premium
 Comprehensive and Catastrophic Component
 Delivery System
 Coordinated Systems of Care (PSN and HMOs)
 HMOs are capitated
 Provider Service Networks (PSNs) are FFS for up
to three years, then capitated
What will change with Medicaid reform?
 A roll-out of mandatory enrollment for most assistance
categories (e.g. TANF, SSI), with full implementation slated for
July 2008
 Comprehensive choice counseling by an independent
enrollment broker
 Counseling will be provided in person, by phone, in writing, or
through the media, with Internet-based enrollment offered
 Detailed information will be provided to enrollees
 Eligible enrollees must chose a plan
 New enrollees will receive only emergency services until they enroll
or are “auto-assigned” to a plan
 Enrollment broker must employ a culturally diverse counseling staff
 Florida State University will offer a Choice Counselor Certificate and
develop outreach materials
 Education needs will dramatically change
 Recipients will need to understand differences in the benefit
packages plans offer
 Information on opting out of a Medicaid plan will be provided
Customized Benefit Packages
 Plans may vary amount, duration, and scope of
certain services for non-pregnant adults
 Certain services must be provided at or above
current coverage levels
 Other services must be provided to meet
sufficiency standards for the population
 Remaining services must be offered, but amount,
scope and duration are flexible
 Reform plans can enhance any service above
current levels
 Reform plans can add services not currently
covered
Customized Benefit Packages Required at Least to
Current Limits
 Physician and
physician extender
services
 Hospital inpatient care
 Emergency care
 EPSDT and other
services to children
 Maternity care and
other services to
pregnant women
 Transplant services
 Medical/drug therapies
(chemo, dialysis)
 Family planning
 Outpatient surgery
 Laboratory and
radiology
 Transportation
(emergent and nonemergent)
 Outpatient mental
health services
Additional Required or New Benefits
Required for sufficiency
 Hospital outpatient services
 Durable medical equipment
 Home health care
 Prescription drugs
Required to be offered, but amount, scope and duration are flexible
 Chiropractic care
 Podiatry
 Outpatient therapy
New or expanded benefits
 Over-the-counter drug benefit from $10-$25 per household, per month
 Adult preventative dental, including x-rays, cleanings, and fillings
 Newborn circumcisions
 Acupuncture/medicinal massage
 Additional adult vision: < $125 per year for upgrades such as scratch
resistant lenses
 Additional hearing: < $500 per year for upgraded digital, canal hearing aid
 Home delivered meals for a period of time after surgery, providing
nutrition essential for proper recovery for elderly and disabled
Medicaid Reform Plans And Networks: Broward & Duval
Applicant
Plan Type
County
Access Health
FFS PSN
Broward & Duval
Amerigroup FL
Prepaid Health Plan HMO
Broward
FFS PSN
Broward
FL NetPass
HealthEase Health Plans of FL
Prepaid Health Plan HMO
Broward & Duval
Humana Medical Plan
Prepaid Health Plan HMO
Broward
Preferred Medical Plan
Prepaid Health Plan HMO
Broward
Shands Jacksonville (First
Coast Advantage)
FFS PSN
Duval
South FL Community Care
Network
FFS PSN
Broward
Total Health Choice
Prepaid Health Plan HMO
Broward
United Healthcare of FL
Prepaid Health Plan HMO
Broward & Duval
Vista Healthplan of South FL
Prepaid Health Plan HMO
Broward
Wellcare of FL (Staywell Health
Plan of FL)
Prepaid Health Plan HMO
Broward & Duval
How will impact of Medicaid reform on HIV+ enrollees?
 HIV+ enrollees must chose a plan
 HIV+ enrollees identified in Medicaid claims files may be autoassigned to a plan agreeing to provide HIV enhanced benefits or
be assigned to a general plan and have to ask to be move to a
plan with the enhanced HIV benefits  stay tuned
 All plans can access an enhanced capitated monthly payment that
adjusts for the higher cost of HIV
 Protease inhibitors and other HIV medications are included in
the HIV/AIDS capitation rates
 Plans will be required to meet HIV access standards which are
being developed now
 Home and community-based waiver services will be “carved out”
of the covered benefits package
 PAC Waiver clients can continue to receive their services
through that program
 Plans must provide case management directly or by contract
 The HIV disease management program will be phased out in
counties as the Medicaid reform roll-out is implemented
Proposed Per Member Per Month Capitated AIDS, HIV, TANF and
SSI Rates: Duval and Broward
Rate
Enhanced Rate
TANF* & SSI Rates
Duval County
General Rate 21-54 YOA
$201 - $783
AIDS
$2,174
HIV
$1,078
AIDS (Dual Enrolled)
$179
HIV (Dual Enrolled)
$73
Broward County
General Rate 21-54 YOA
$199 - $903
AIDS
$3,253
HIV
$1,584
AIDS (Dual Enrolled)
$365
HIV (Dual Enrolled)
$223
* Rate for TANF female enrollees
Stay Tuned for New Medicaid
Reform Developments
• http://ahca.myflori
da.com/Medicaid/
medicaid_reform/
Capitated
And Fee for
Service
Contracting
Roles In Commercial Insurance and
Managed Care Systems For CARE Act
Grantees And Providers
 Contracting as a network provider
 Forming alliances with plans to provide
grant-funded services through linkage
agreements
 Advisors regarding program planning,
development, clinical standards and
service delivery
 Becoming a managed care plan
 Advocacy and monitoring
Why participate?
 Enhance the quality, accessibility,





coordination, and continuity of care for HIV+
enrollees
Ensure your agency’s ability to access HIV+
enrolled in managed care plans so your
agency can offer them grant-funded
prevention and psychosocial services
Improve your agency’s likelihood of
financial survival
Diversify your agency’s client and income
base
Influence governance and policy making
process within managed care plans
Adopt sound business practices used by
managed care plans to improve your
agency’s products and more efficiently use
scarce resources
Why managed care plans may be
disinterested in your agencies
participation in their network…
Adverse selection. Attracting members who are
sicker than the general population.
 This results in higher than budgeted expenses for


the plan
MCOs may avoid enrolling individuals who are
sicker than the “average” patient
Some MCOs may avoid enrolling HIV+ individuals
because of their relatively high treatment cost
Managed Care Elements
 Combines financing and delivery systems
 Patients receive a defined benefits package
 Patients usually select or are assigned a primary
care provider (PCP)
 PCPs act as a gatekeeper who determines access
to specialists, hospital care, and other services
 Clearly defines patient populations, modify their
care seeking behavior, and predict their care use
and costs
 Identifies and minimizes financial risk while
maximizing profitability
 Identifies high risk and high cost patients
 Organizes systems of care that achieve these goals
 Payment is typically paid on a prospective,
capitated basis, but FFS payments may be made
for some services
MCO Functions
 MARKETING
 MEMBERSHIP ACCOUNTING






 Group billing, contracts, enrollment, and PCP assignment
NETWORK OPERATIONS
 Provider credentialing and contracts
MEMBERSHIP SERVICES
 Education and grievances
CLAIMS ADMINISTRATION
MIS
FINANCE
 Budget projections and capitation rates
UTILIZATION MANAGEMENT AND QUALITY
ASSURANCE
HMO And Other Managed Care Models
 Staff: Physicians are HMO employees
 Group: Physicians are members of a single or multi-specialty
group practice that contracts with the HMO
 IPA: Either the physician contracts directly with the HMO or
through a physician corporation
 Network: HMO contracts with group practices, IPA-physician
corporations, and/or with individual physicians
 Point of Service (POS): HMO offers members the option to
receive services from non-MCO providers at a reduced rate of
coverage
 Preferred Provider Organization (PPO): A system that contracts
with providers at discounted fees; members may seek care from
non-participating providers, but at higher co-pays or deductibles
 Integrated Service Network (ISN): A collaboration of either PCP
(horizontal) or primary, specialty, and inpatient providers
(vertical) for managed care
 Physician Hospital Organization (PHO): legal entity between
hospital and physicians to contract with MCOs
What is capitation?
 A reimbursement method for health and associated
services in which a provider is paid a fixed amount
 Payment is usually monthly for each member
served
 Payments occurs without regard to the actual
number or services provided to the member
 Capitation is a:
 Means for payment for expected services
 Budgeting tool
 Management tool
 Cost control tool
Monthly Capitation
Utilization x Cost
= PMPM
12 months x 1,000 members
Utilization = number of units of service for each benefit for
1,000 members
Cost = average cost per unit of service
PMPM = per member per month capitation payment
Assumptions Underlying
Capitation Rate Setting
 Covered and excluded services are clearly defined
 The average utilization rate per service is known or can
be accurately projected
 If the average utilization rate varies by population
group, their rates are known or can be projected
 The cost per service is known and is unlikely to vary
during the contract period
 Administrative costs are accurately defined (i.e., there
are no hidden costs) and adjustment can made in the
PMPM for those costs
 Can additional revenue (i.e., grant income) be used to
supplement the PMPM
 Discounts may be taken for “efficiency”
Utilization Management
 Prior or pre-authorization (e.g., expensive or
commonly over-used services)
 Medical necessity, contracted facility, cost-effectiveness
 Referrals
 Part of gate-keeper function of PCP
 Concurrent reviews
 Is the ongoing service too long and can other services be
substituted?
 Formularies
 Open versus closed formularies, generics, cheapest delivery
system
 Claims review
 Appropriateness review
 Provider selection and profiling
Risk Protection Strategies
 Stop Loss / Reinsurance
 Establishes an upper limit on annual health care costs for an
individual member
 Aggregate stop loss sets an upper limit for members
 Managed care plans usually purchase reinsurance
 Providers can negotiate stop loss with the plan
 Risk Corridors
 Establishes a “ceiling” and “floor” of risk
 Loss greater than the predetermined amount is reimbursed
(e.g., 10% over costs)
 Profit greater than the predetermined ceiling is returned to the
plan
Organizing HIV Services in Managed Care
Settings
 Training and experience of clinical staff and their willingness to
treat HIV+ patients
 Ability to rapidly disseminate new therapeutic approaches and
provide on-going training
 Contractual relationships with HIV specialists and social
support programs
 Up-to-date quality assurance programs
 Attitudes of other patients treated in same settings and
communities in which services are provided
 Adequacy of capitation rate setting system to cover current and
anticipate future HIV costs
 Confidentiality, disclosure, and privacy
 Case finding and outreach
 If your organization is negotiating with plans, make sure that
they have considered the unique clinical needs of your patients!
Network Standards
 Availability of HIV-experienced PCPs and specialists
 Standing referrals to specialists
 HIV-experienced clinician should be gate-keeper
 Role of HIV-experienced clinician in developing and
implementing care plan
 Use of multi-disciplinary teams
 Identifying HIV-experienced clinician to be responsible for care
coordination
 Continuity standards for referrals
 Adequacy of network capacity to assure delivery of covered
benefits (e.g., panel sizes)
 Accessibility standards
 Travel time, appointment scheduling time, visit wait time, 24 hour
coverage by a “real person,” geographic coverage, culturally
acceptable services and providers
 Fiscal solvency
Network Member Selection Criteria:
Choosing Your Partners
 Established provider network
 Geographic coverage
 Sufficient capacity and
accessible services
 Acceptable marketing,
enrollment, grievance, and
disenrollment procedures
 Established quality
assurance program
 Fiscal solvency
 Established administrative
and governance structure
 Meets State licensure criteria
How can we limit risk in capitation contracting?
 Request risk adjusters in payment


(e.g., active IDUs)
Define precise boundaries between
clinic services and other physicians’
care, to avoid “dumping”
Use internal distribution structures
which align individual and group
incentives
 Request demographic risk adjusters in payment
 Obtain historical usage data on the population to be
served or from a “comparison group”
 Gain experience with small-scale contracts
 Ensure that adequate termination options exist
 Make sure health plan is a reliable business partner
How can we find out which managed care plans operate
in our HIV program’s service area?
COMMERICAL HMOS
Dually regulated by AHCA and
the Department of Financial
Services
– AHCA monitors quality of
care-related issues
– DFS monitors financial and
contractual issues
– To become a commercially
licensed HMO, an
organization must receive a
health care provider
certificate from AHCA and a
certificate of authority from
DFS
A list of plans by county is
available at:
http://www.floir.com/mc/is_mc_i
ndex.htm
MEDICAID PLANS
Regulated by the AHCA Bureau
of Managed Health Care
A list of plans is available at:
http://www.fdhc.state.fl.us/MCH
Q/Managed_Health_Care/MHM
O/index.shtml
Assessing
Your
Program’s
Costs
Several Approaches Are Used to
Estimate Unit Cost
 “Grant-funded costs” = Total budgeted amount /
the number of estimated units to be provided
 Negotiated payment rates based on documented
direct and indirect costs
 Rates based on grantees’ rate setting
 Relative value units (RVUs)
 RVUs measure the intensity of services based on the
level of skill involved, the duration of the service, and
the facility and overhead support required
 For medical services, we use RVUs from the Resource
Based Relative Value System (RBRVS)
TACT
 HAB Technical Assistance Costing Tool (TACT) is designed for
clinics and individual medical providers who want to identify
the costs of delivering health care services to HIV + patients
 TACT reports provide cost analyses for internal clinic financial
management for third-party reimbursement
 A MS Excel-based software tool with a data-entry sheet and two
printable reports
 The design allows users to customize the type of service
categories, define the patient population, and enter financial
and utilization data on the Input worksheet tab
 TACT shows costs as per member per month and per unit of
service for ambulatory, inpatient, and ancillary services
 Find TACT at:
 http://www.hrsa.gov/TACT/manual/TactManualTOC.html
TACT
 TACT calculates and reports costs for each type of medical care
that your clinic provides
 The calculations are done two ways:
 FFS cost (the estimated cost of one unit of care, for example
an office visit)
 Per-member-per-month cost (the estimated cost of providing
all care to one individual during an average month)
 To use TACT, you need to determine:
 Annual member months, which is the number of individuals
to whom you provide care times twelve
 Annual member utilization of service for each care type
provided, or how much service is provided
 Total annual cost of providing each care type
Relative Value Units (RVUs) Approach
 RVUs measure the intensity of services based on the
level of skill involved, the duration of the service,
and the facility and overhead support required
 For medical services, RVUs are derived from the
Resource Based Relative Value System (RBRVS)
 An RVU scale assigns numerical values to the
intensity of procedures:
– Example: a basic office visit for an existing patient (CPT
code 99211) has an RVU of .56*, which indicates a low
intensity of the procedure. A surgical procedure such as a
complicated nephrectomy (CPT code 50225) has an RVU of
31.79, indicating the high intensity of the service. This
suggests that the nephrectomy requires almost 57 times
more effort in terms of time, skill, and resources than a
basic office visit.
Components Of RVUs
There are three components of medical RVUs:
 Work - measures the provider skill and effort required to
complete the service; Work RVU for a 99213 = .67
 Overhead - measures the overhead resources required
to complete the service; Overhead RVU for a 99213 =
.69
 Malpractice - measures the malpractice risk associated
with the particular procedure. Malpractice RVU for a
99213 = .03
Total RVU for a 99213 = .67+.69+.03 = 1.39
Evaluating Support Services
 RSM McGlandrey has expanded the use of RVUs to
HIV enabling/supportive services
 Example: case management, health education,
interpretation, service coordination,
transportation, and volunteer services
 This approach can help your program to evaluate a
range of issues associated with the provision of
enabling services, including:
 What enabling services are being provided?
 What resources are required?
 What can we do with this information?
Potential Applications
Utilize Fee Schedule to Negotiate/Evaluate
Reimbursement
 Determine if FFS rates offered by payors cover the
costs of providing services
 Agencies can either negotiate individually using their
own fee schedule or using a group of agencies’
global fee schedule
 The global fee schedule developed reflects the costs
of providing services at your agency
 Individual fee schedules reflect your program costs
of providing services
 Compare the amount of funds awarded by CARE Act
grantees with the cost of providing services
 Compare capitation rates proposed by payers with
the cost of providing care
Potential Applications
Monitor Patterns of Care
You can modify the tracking forms to capture patient
information and then use as a basis to monitor enabling
services provided to patients
This would allow you to track the care provided to patients
and ensure that is consistent with their condition/diagnosis
Use Taxonomy to Track Enabling Services on an
Ongoing Basis
You can input the taxonomy of services into your MIS to
track services provided here forward
This approach allows you to monitor utilization, consider
carving-out grant-funded programs/services, and seeking
separate funding sources to cover the costs of providing
services
Potential Applications
Use RVUs to Track Provider Productivity
RVUs, rather than patient visits, are rapidly becoming
the standard for measuring provider productivity
 This is especially important for HIV/AIDS providers,
where the patients are by definition of high and
varying medical complexity
 RVUs for enabling services can be used to
measure the productivity of non-physician staff
Step 1: Develop standard coding methodology and
Daily Service Tracking Form
 McGlandrey staff with your agency to identify and define the
enabling and medical services performed by providers
 Enabling services were defined at the unit level, with standard
durations and provider types for all SHN services
 A standard coding system was assigned to each enabling
service
 A Daily Service Tracking Form is developed for each provider
type, listing the codes and duration for the services performed
by that specific provider
 Each form included blank columns for tracking the
frequencies of service performed and patient ID number,
as well as blank lines for provider name and date
Step 2: Perform one-month time study of
services performed
 For a four-week period, front-line staff track all
enabling services performed using the Daily Service
Tracking Form
 It is usually necessary to use the form because MIS
do not capture frequency of services performed
 The one-month time study is the minimum length
of time necessary to capture a representative
sample of services
 The CPT codes provided during the time study
period are taken from your MIS and combined with
the enabling services provided to form the basis of
the Unit Cost per Service Analysis
Step 3: Developing RVUs for Enabling Services
 Since enabling services are not assigned a CPT
code, none of the RVU scales, including RBRVS,
have corresponding RVUs
 Thus, McGlandrey develops RVUs for the unique
enabling services provided by your agency
Step 4: Calculating a Cost Factor for each RVU and a
Cost per Service
 Results of the time study are used to calculate a cost
per RVU
 Includes both the enabling services tracked using the Daily
Service Tracking Form and services data your MIS
 McGlandrey calculates the cost per RVU by
 Multiplying each service code’s frequency by its RVU to
calculate a weighting factor
 Adding the weighting factors for all services to arrive at total
RVUs
 Dividing the total organizational costs by the total number of
RVUs to derive a cost per RVU
 Multiplying cost per RVU by each service’s RVU to arrive at a
cost per service
Sample Findings - Service Activity
 On average, about 2.56 enabling services were provided per
patient visit
 The distribution of total medical and enabling services provided to
patients during the time study period is as follows:
Number of Services
1-2
3-5
6-10
11-74
% of patients receiving services
51%
27%
12%
9%
 The maximum number of enabling RVUs provided to any one
patient during the time period was 35.23
 The cost of providing these enabling services to this patient was
approximately $1,685
 On average, providers performed about 4.2 enabling services per
day
Findings - Service Costs
 A cost schedule is developed by calculating the
average cost per service
 Costs for the most frequently performed services are:
Service
99215
CT002
RN001
CM023
CM008
90782
SS002
CM020
99233
CM010
Description
Cost
Office/Outpatient visit, est.
$129.17
Case Report for clinical trial
24.40
Nursing triage - telephone
17.22
Individual Supervision
46.88
Follow-up on entitlement
17.22
Injection (SC)/(IM)
5.26
Entry to social service organization
17.70
Pharmacy refills - nurse
13.87
Subsequent Hospital Care
103.33
Transportation to Offsite Provider
14.35
Effective
Marketing to
Managed Care and
Commercial
Insurance Plans
Developing Your Marketing Plan
 Understand the plans’ obligation to the
Medicaid Program, employers, or others
 Determine their “corporate objectives”
 Are they looking for cost-effective providers?
 Do they need providers in your geographic area?
 Do they need HIV-experienced providers?
 What has been their attitude toward other
community-based providers?
 Do they currently serve HIV/AIDS patients?
 What is their track record?
Developing Your Marketing Plan
 What is your product?
 How many plan members could benefit from your
product?
 Will your product attract new members to the plan?
 How much does your product cost?
 Will the plan have to pay for your product (e.g.,
grant-funded service)?
 Are you willing to share some financial risk with the
plan?
 What distinguishes your product from that of
another provider?
 Will your product enhance the plan’s network?
 Will your product help meet Medicaid’s benefits,
network, access, or quality assurance standards?
Developing Your Strategy
 Form a network of HIV care
providers to present a united
front
 Minimize unnecessary competition
 Identify effective individuals to
negotiate with plans
 Present a positive corporate
image
 Minimize negative perceptions of
managed care plans
 “The costume makes the man”
 Prepare marketing materials that
present a positive business
image
What you are selling…
We have experience in
 Delivering clinical services that reflect the state-of-the
art of HIV care
 Delivering clinical and psychosocial services to hardto- reach populations
 Managing behavior to achieve positive clinical and
psychosocial outcomes
 Avoiding or reducing psychosocial crises that reduce
adherence to clinical regimens
 Delivering culturally sensitive and appropriate
services
 Working in an integrated network of clinical and
wraparound services
 Delivering cost-effective services through low
overhead
Example of Effective Marketing Materials

Prototype materials developed by
three integrated HIV care networks




Central Pennsylvania
Michigan
Staten Island/Lower Brooklyn New York
http://www.gwhealthpolicy.org/cihcn_p
ublications.html
Effective
Management
Strategies:
Improving Your
Bottom Line
Overview
 Essential functions to expedite
payment:
 Pre-Visit Activities
 Patient Visit Activities
 Post-Visit Activities
 Management Activities
Pre-Visit Activities: Scheduling Staff
 Allow sufficient time for each visit
 Determine reason(s) for visit (e.g, general checkup,
physical examination, referral, follow-up)
 Remember that new patients consume more
registration, financial counseling, health records and
provider staff time
 Collect patient demographic and insurance
information
 At minimum, patient name, address, and
telephone number (if any), insurer’s name
(including any secondary payer(s) and patient’s
insurance identification number(s)
 Verify insurance coverage
 Ensure that coverage extends through visit date
 Determine and secure required pre-authorizations
Pre-Visit Activities: Scheduling Staff
 Determine need for financial counseling
 Inform patient regarding the basic visit fee and any
outstanding balance from prior visit(s)
 Instruct uninsured patients to bring documentation
needed to apply for sliding fee discount
 Educate patient regarding your payment policy
 Example: payment, including applicable
deductible or co-payment, is expected on date of
service
 Establish a payment schedule and monitor patient
adherence
 Schedule time with “financial counselor,” as
necessary
Pre-Visit Activities: Scheduling Staff
 Develop, maintain, and always consult log of
chronic “no show” patients before assigning
appointment times
 Inform negligent patients about their history, the
preparation required for each visit and, therefore,
the importance of either keeping or calling to
cancel appointments
 Double book chronic “no shows” and/or slot
them at the end of the day
 Confirm patient appointments, if possible, prior to
visit (e.g., day before)
 Re-schedule cancelled appointment slots
immediately
Patient Visit Activities
 Registration staff should:
 Instruct patients to sign-in at registration desk
upon arrival
 Pull health record, with attached pre-populated
encounter form or create record for new
patient
 Number and, as appropriate, complete prepopulated encounter form
 Collect basic visit fee, co-payment or
deductible give patient a receipt for payment
 Transport completed encounter form and
record to assigned exam room
Patient Visit Activities: Registration Staff
 Review completed encounter form to determine if
rendered service was beyond that originally
anticipated and warrants additional patient payment
 Communicate balance due to the patient, collect
additional fee and issue payment receipt, as
appropriate
 Or inform patient that bill will be sent and payment is
expected prior to or upon next visit
 Schedule follow-up visit, as specified by provider
 Count, batch and send completed encounter forms
to the billing department along with a signed and
dated cover transmittal sheet indicating the
numbers or number sequence of included
encounter forms
Patient Visit Activities: Providers
 Complete encounter forms
 Legibly make entries and sign health
records
 Assign appropriate procedure code(s)
 Return same to Registration
Patient Visit Activities:
Financial Counselors
 Review the patient’s financial status for eligibility for
health insurance coverage (including CARE Act)
 Provide patients with enrollment forms and assist
them to complete the forms if necessary
 If a patient must go to the local Medicaid or other
programs to enroll, provide them with the address
 Counsel patients about which insurance plans your
clinic participates with, especially during open
enrollment or mandatory Medicaid managed care
enrollment
 On-site Medicaid eligibility determination workers
may be out-stationed to your clinic to do on-site
determinations
Post-Visit Activities:
Billing/Collections Staff
 Audit each Encounter Form batch for consistency
with the cover transmittal sheet and note exceptions
 Sign, date and return each transmittal sheet to
Registration noting any exceptions (i.e., missing or
incomplete encounter forms)
 Return a copy of all incomplete Encounter Forms to
Registration noting the unique identifier on the
corresponding transmittal sheet
 Retain signed transmittal sheets until all included
bills are either paid or written off
 Write off of patient accounts should be made only
by authorized personnel in accordance with
Board established policy
Post-Visit Activities:
Billing/Collection Staff
 Understand payer bill submission
requirements and payment
timeframes
 Generate bills within 48 hours of
rendering care using the CMS1500
or CMS1450 (UB92), as appropriate
 Submit bills to third party payers,
preferably electronically to expedite
payment
Post-Visit Activities:
Billing/Collection Staff
 Review Remittance Advices within 48 hours of
receipt to:
 Ensure that payer received all submitted bills
 Identify pended and denied claims Resubmit bills
that did not appear on received Remittance
Advices within 48 hours of realization
 Correct and resubmit pended and denied bills within
48 hours of notification
 Attach copy of Explanation of Benefits (EOB)
form sent by primary payer
 Conduct periodic reviews of pended and denied
bills to identify common underlying operational
problems
Post-Visit Activities:
Billing/Collection Staff
 Resolve common operational problems causing
pended and denied bills
 Resolution could require procedural changes,
staff re-education, systems modifications
and/or payer communications
 Reconcile Remittance Advices to checks within
48 hours of receipt
 Post payments to patient accounts and bill
secondary payer, as appropriate, within 48 hours
of receipt
Management Activities
 Develop and maintain a detailed billing and collections
policies and procedures manual that delineates
procedural differences for each payer
 Revise job descriptions accordingly
 Assign responsibility and with timeframes for completion
 Educate staff as to newly-defined policies, procedures, job
functions and regulatory changes
 Monitor staff adherence to defined policies and procedures
 Establish electronic funds transfer with each payer, as
available, to enhance organizational cash flow
 Or, define procedures to ensure timely bank deposits (i.e.,
within 24 hours of receipt) and identify the responsible
party(ies)
 They should not be a biller
Management Activities
 Establish a liaison with each third-party payer
 Conduct periodic (e.g., quarterly) meetings with a provider
representative from each payer to resolve problem bills and
payment issues and to clarify regulatory and and claims
adjudication changes
 Define the content, format and production frequency and
distribution points of accounts receivable management reports
(e.g., Days in A/R, Dollars in A/R)
 Periodically (e.g., semi-annually) engage the services of a
certified Coder to review sample health records to ensure
adequate documentation and appropriate coding practices
 Particularly important for small organizations where
providers frequently also perform coding function
 Educate providers, as appropriate
Management Activities
 Review service charges, encounter forms, procedure
codes (e.g. CPT), and staff job descriptions at least
annually to determine the need for modification
 Train staff (i.e., scheduling, registration, provider,
information technology and billing and collections)
regarding resulting changes
 Get input from front and back office staff to develop
and refine policies and procedures
 Consider outsourcing billing and coding functions
 Follow patient flow through your system to identify
potential for improvement
 Spend time in your waiting room!
Questions
And
Discussion