Transcript Massachusetts PCA Fiscal Intermediary Services

Workers’ Compensation Insurance
Coverage in the
Massachusetts Personal Care Attendant
(PCA) Program
US DHHS/ASPE sponsored Government and
Vendor F/EA Workshop
November 1, 2007
Presented by Lois Aldrich, MS, LCSW
Director of Community Services,
MassHealth Office of Long Term Care
Executive Office of Elder Affairs
Today’s Presentation
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Overview of the MassHealth PCA program
- Fiscal Intermediary (FI) Services (Vendor F/EA
services)
Provision of Workers’ Compensation Insurance in the
MassHealth PCA Program
Lessons Learned
Contact Information
1
Overview of the MassHealth PCA
Program
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Massachusetts Medicaid state plan service
Consumer- directed since inception in 1970’s
- Surrogates allowed since 1980’s
28 Personal Care Management (PCM) Agencies
- Performance based contracts with MassHealth
- PCMs provide assessment and evaluation; intake and
orientation; functional skills training
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3 Fiscal Intermediaries (FI)
- Performance based contracts with MassHealth
- FIs provide PCA payroll services on behalf of all “Option
One” PCA consumers
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FY 2000
Consumers
FY 2007
%
Increase
5,401
15,084
179%
12
28
131%
4
3
-25%
10,402
69%
$98,297,017
21,824
( July 1, 2007)
$265,092,508
169%
FI admin costs
$3,379,285
$8,106,178
133%
PCM agency costs
$3,800,798
$10,754,785
178%
$8.87
$10.84
22%
$10.03
$12.28
22%
PCM Agencies
FIs
PCAs
PCA payroll
PCA hourly wage
PCA hourly rate
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Overview (continued)
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19% of consumers are under 22 years old
55% are between the age of 22 and 64
26% are 65 years old or older (fastest growing
population)
62% of consumers have surrogates
3,314 new consumers began receiving services in FY
2007
PCA regulations amended March 1, 2006 to allow
family members, except legally responsible relatives,
to be paid as PCAs. 2,000 family members hired as
PCAs since September, 2006.
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Fiscal Intermediary (FI) Services
Consumer
Payroll
SubContractor
Investigative
Authorities
Surrogate
PCAs
Fiscal
Intermediary
Workers’
Compensation
State &
Federal tax
Authorities
PCM
Agency
Mass
Health
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Fiscal Intermediary Services (continued)
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The FIs operate as Vendor Fiscal/Employer Agents
under Section 3504 of the IRS code and IRS Revenue
Procedure 70-6 and as modified by Proposed Notice
2003-70
FI model began with 4 FIs in 1999, 3 now operating
Performance based contracts with MassHealth
FI services include:
- Customer Service
- Administrative functions
- Payroll
- Contract Management
- Financial Management
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Fiscal Intermediary Services (continued)
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FI payroll functions
- Receiving, reviewing and processing PCA
timesheets
• Pay period is every two weeks
• Over 10,000 timesheets processed weekly
- Withholding, filing and paying federal and
state income tax withholding and employment
taxes and issuing IRS Forms W-2*
- Facilitating resolution of tax issues
* FIs subcontract with a reporting
agent to peform these tasks
Fiscal Intermediary Services (continued)
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Issuing PCA checks to consumers, including
providing a “check stub” identifying hours worked
and rate of pay *
- Direct deposit available for PCAs
Purchasing workers’ compensation insurance
* FIs subcontract with a reporting
agent to perform these tasks
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Workers’ Compensation (WC)
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Background
Key Players and Their Roles
Challenges in Securing WC Coverage
MA-specific 0918 Classification Code
Workers’ Compensation Insurance Data
Lessons Learned
Contact Information
9
Background
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Massachusetts General Laws c. 152 requires all
employers to provide workers’ compensation (WC)
insurance coverage to employees.
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Workers are covered by WC insurance if they are injured
on the job or contract a work-related illness.
- Workers’ compensation insurance pays for any necessary
medical treatment related to the injury, and also pays partial
compensation for lost wages, after the first five days of
disability.
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Background (continued)
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MassHealth FI contract requires FIs to purchase WC
coverage for each PCA consumer.
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PCA consumers are the common law employers of
their workers
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FIs purchase WC for all “Option One” consumers
through single insurance broker and insurance carrier
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Background (continued)
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All Option One consumers are covered immediately
upon enrollment with FI.
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WC rate is based on per $100 of payroll and applies
to payroll for whole program during coverage period
(Feb.1- Jan. 31).
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Payroll estimates are provided by FIs at beginning of
coverage year; audit is conducted at end of coverage
year to reconcile any differences.
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Premium paid 2/1/06-2/1/07: $3,849,000 (averages
$286 per policy)
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Key Players
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Workers’ Compensation Rating and Inspection
Bureau of Massachusetts (WCRIB)
Division of Insurance (DOI)
Division of Industrial Accidents (DIA)
Hub International New England, LLC ( insurance
broker)
Atlantic Charter (insurance carrier)
3 Fiscal Intermediaries
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Key Players (continued)
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Workers’ Compensation Rating and Inspection
Bureau of Massachusetts (WCRIB)
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Private, non-profit association of insurers that is
licensed by the Massachusetts Division of
Insurance as a rating organization for workers’
compensation insurance in Massachusetts (since
1915).
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Collects policy, claims and financial data from all
carriers licensed to sell WC insurance in Mass.
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Key Players
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(continued)
Files rates, classifications, and rating plans with
the Division of Insurance on behalf of member
insurers.
Acts as WC statistical agent and Assigned Pool
Risk Administrator for the Division of Insurance.
Acts as coverage verification entity for the
Department of Industrial Accidents.
Issues experience modifications and classification
rulings for employers.
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Key Players (continued)
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Massachusetts Division of Insurance (DOI)
- Oversees insurance market in Massachusetts
- Serves as consumer representative in hearings on the
appropriateness of rates filed by insurance industry
- Collects and analyzes data
- Reviews rates filed by the WCRIB and other insurance
entities
- Approves, disapproves or limits rate filings and
classifications
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Key Players (continued)
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Division of Industrial Accidents (DIA)
- Administers Massachusetts’ WC system
- Ensures employers meet the requirements of M.G.L. c. 152
- Ensures prompt and fair compensation to victims of
occupational injuries and illness
- Provides dispute resolution of workers’ compensation cases
through due process and adjudication
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Key Players (continued)
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Hub International New England, LLC
- Broker for all Option One PCA consumers in the
MassHealth PCA Program
- Secured a voluntary WC insurance carrier for program
- Represents the buyer (MassHealth, FIs, and each PCA
consumer) in coordinating all aspects of services for the
program
- Calculates pricing of WC in PCA program based on data
supplied by FIs
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Key Players (continued)
- Processes enrollments and disenrollments
- Coordinates audit at end of each coverage period
- Attends claims reviews with Atlantic Charter on open
active claims
- Supplies MassHealth with rate information and summary
reports for overall program
- Monitors any changes coming out of the WCRIB and
informs MassHealth of such changes
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Key Players (continued)
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Atlantic Charter
- Voluntary workers’ compensation insurance carrier for all
Option One PCA consumers in the MassHealth PCA
program
- Writes WC insurance policies for consumers policyholders
- Pays WC claims for consumer policyholders
- - Provides data to WCRIB
•
Massachusetts specific code 0918 is currently used solely by MA
Medicaid PCA program
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Key Players (continued)
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Fiscal Intermediaries
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Inform Hub when consumers enroll or disenroll
Provide Hub and Atlantic Charter with historical payroll
information as needed
Provide Hub with annual estimates of payroll at beginning
of coverage period
Provide Hub with final payroll figures at end of coverage
period to complete and reconcile WC audit
Provide feedback on individual cases as needed
Pay WC premiums as calculated by Hub on monthly basis
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Challenges in Securing WC Coverage
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Exposure and risks unknown
No experience history
No applicable job classification code
Qualifications, training, knowledge, skills and
proficiency of PCAs not known
Hiring practices not clearly defined
Insurer cannot physically look at risk involved (such
as stairs in home, whether or not consumer is on 2nd
floor, equipment used, etc.)
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Mass-Specific 0918 Classification Code
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Developed by WCRIB in 1999
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Rate is per $100 of payroll, subject to manual rates
Division of Medical Assistance (MassHealth) and
Executive Office of Health and Human Services
advocated with WCRIB and DOI to assign a new
code specific to work performed by PCAs
- Government administered program providing consumerdirected services to disabled population and distinct from
home health
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Mass-Specific 0918 Classification Code
(continued)
- Needed to collect data and establish experience ratings
specific to PCA program
- Size of exposure was considerable (over 6,000 workers)
- Needed to ensure that all PCAs were covered
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Concerned about the potential of 5,000 applications
being submitted to the risk pool (WCRIB administers
risk pool)
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Mass-Specific 0918 Classification Code
(continued)
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FIs agreed one insurance broker for whole program
would work most efficiently.
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FIs contacted C.J. McCarthy Insurance (now Hub
International) to find the best carrier(s) for the PCA
program.
- C.J. McCarthy successfully marketed to First Return, then
to Atlantic Charter when First Return went out of business.
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Mass-Specific 0918 Classification Code
(continued)
Domestic Workers—Inside—Physical Assistance
Applies to domestic workers who provide physical assistance
in activities of daily living to the elderly or to persons who are
convalescent, acutely or chronically ill, or physically or
mentally disabled. For purposes of assigning code 0918,
physical assistance in activities of daily living shall mean the
performance of one or more of the following functions:
physically assisting a household member with…… In
addition to providing physical assistance with activities of
daily living, a domestic worker properly assignable to this
new classification may also perform functions such as
cooking, laundry, shopping, housekeeping, providing
transportation or assistance with paperwork or reading.*
* WCRIB Circular letter # 1824
issued July 13,1999
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Mass PCA Program Workers’
Compensation Insurance Data
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Premium Development
Historic Rates
Claims History
Ad hoc Reports
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WC Data: Premium Development
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The WC premium is calculated by Hub International
prior to beginning of new coverage period, based on
estimated payrolls provided by the FIs for the coming
year.
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WC Data: Premium Development
(continued)
Example (2006-2007)
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Estimated payroll:
Total policies:
Average payroll per policy:
$16,783 X .76 (WCRIB rate)
+ additional WC costs ($158)
$286 X 12,900
$216,500,000
12,900
$16,783
$128 per policy
$286 per policy
$3,689,400
total annual
premium
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WC Data: Premium Development
(continued)
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PCA program rate = $1.704 per $100 payroll
- Total annual / premium total payroll
- Incorporated into the MassHealth PCA hourly rate
paid to the FIs
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WC Data: Historic Rates
Year
Cost
per
Policy
$378
WCRIB Program PCA Payroll Audited
Rate
Rate
Premium
00-01
01-02
02-03
03-04
$445
$455
$281
$278
.94
.94
.79
.79
$2.000
$2.000
$1.740
$1.690
$96,400,000
$119,385,000
$145,270,000
$173,000,000
04-05
05-06
06-07
$328
$307
$286
.89
.89
.76
$1.777
$1.696
$1.704
$192,345,000 $3,417,000
$213,654,000 $3,623,000
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$225,878,000 $3,849,000
992000
$2.000
$74,300,000 $1,485,000
$1,928,000
$2,387,000
$2,527,000
$2,923,000
WC Data: Claims History
Year
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
TOTAL
Claims
70
51
68
82
69
74
69
73
556
# PCAs
Covered
10,402
12,476
12,670
16,418
17,135
19,116
21,824
Incurred
$340,015
$330,779
$401,332
$738,100
$349,622
$796,287
$788,329
$882,421
$4,626,885
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WC Data: Ad hoc Reports
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Ad hoc reports are provided upon request.
 Multiple claims filed by PCAs for same consumer
- Possible training issue
- Possible need for skills training
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Multiple claims filed by PCA for different
consumers
Common reasons for filing claim
- Car accidents, lifting
- Pre-existing medical condition of PCA
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Lessons Learned
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Assign a specific job classification code for work
performed by PCAs
Establishes ratings based solely on experience for work performed
by PCAs
- Loss ratios are easily documented
- Premium basis per payroll, not per capita
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Use one insurance broker and one carrier to provide
WC coverage for the whole program
- Regular accountability to MassHealth and to rating bureau on all
WC data
- All consumers have coverage for their PCAs immediately upon
enrollment in PCA program
- Carrier tracks claims activity; identifies trends/patterns/issues
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Lessons Learned (continued)
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Calculate annual premium based on estimated payroll
for whole program, not individual employers
- Streamlines payment and billing of WC
- Annual audit ensures premiums paid accurately reflect
payroll
- Ensures timely WC coverage for all consumers
- Facilitates establishment of MassHealth hourly rate for
PCA
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Incorporate FI WC responsibilities into FI contract
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Contact Information
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Workers’ Compensation Rating and Inspection
Bureau (WCRIB)
101 Arch St.
Boston MA 02110
617-439-9030
www.wcribma.org/mass
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Contact Information (continued)
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Massachusetts Division of Insurance
One South Station, 5th floor
Boston MA 02110-2208
617-521-7794
www.mass.gov
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Contact Information (continued)
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Massachusetts Department of Industrial Accidents
600 Washington St. 7th floor
Boston MA 02111
617-727-4900
www.mass.gov/dia
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Contact Information (continued)
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Hub International New England, LLC
299 Ballardvale St.
Wilmington MA 01887
John Riley, Sr. Vice President
978-661-6648
[email protected]
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Contact Information
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Fiscal Intermediaries
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Cerebral Palsy of Massachusetts (CPMA)
43 Old Colony Ave.
Quincy MA 02170
Larry Spencer, FI Manager 617-479-7443 X 111
Stavros Center for Independent Living
210 Old Farm Rd.
Amherst MA 01002
Seren Derin, FI Manager
413-253-4236
North Shore ARC (NSARC)
6 Southside Rd.
Danvers MA 01923
Vade Mohammed, FI Manager
978-762-8307
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Contact Information (continued)
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MassHealth Office of Long Term Care (OLTC)
1 Ashburton Place
Boston MA 02108
 Lois Aldrich, Director of Community Services
617-222-7440
[email protected]
 Judith Nest-Pasierb, Program Manager
617-222-7431
[email protected]
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