Featured Health Business Daily Story, Sept. 19, 2012
Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care.
Action on integration initiatives for Medicare-Medicaid dual eligibles heated up late last month as CMS approved a capitated Massachusetts proposal as the first state program for its massive Financial Alignment Demonstration and Ohio picked the health plans for its proposed initiative. Moreover, California, which already had chosen the plans for its previously submitted proposal to CMS (MAN 4/12/12, p. 5), tells MAN it expects to complete a Memorandum of Understanding (MOU) with the agency by the end of this month.
But the movement at both the federal and state levels has not been enough to prevent grumbling, by some health plans hoping to participate in the initiatives, about delays in establishing and disseminating key information about the capitation rates to be paid in the program. Those plans say they need the capitation data before they can finalize networks serving the initiatives and meet the aggressive startup dates being targeted by the states.
Grumbling notwithstanding, there is clear evidence that the duals initiatives are moving forward, albeit a bit more slowly than in CMS’s original timetable, despite criticisms this summer from provider groups and some congressional Democrats about the rapid pace of developing the programs and their potential huge size (MAN 7/19/12, p. 1).
The foremost example of the progress is the approval by CMS Aug. 23 of Massachusetts’ proposed duals initiative. The program pays “integrated care organizations” (ICOs) that could be headed by either providers or health plans a prospective, risk-adjusted blended global rate for a continuum of services. Massachusetts was a logical candidate for the first go-ahead since it submitted a proposal early and had support from some provider and patient-advocacy groups. But it did have to agree in the MOU with CMS to delay the start of its initiative to April 1, 2013, from the originally proposed Jan. 1 for voluntary enrollment and to July and October 2013 for assigned members.
Like many of the other 25 proposals awaiting action by CMS’s Federal Coordinated Health Care Office (commonly known as the duals office), the Massachusetts initiative would use a passive-enrollment model, with duals allowed to opt out of the demonstration. The program would cover about 110,000 duals, and all ICOs in the state would “include Medicare-Medicaid enrollee participation in their governance structure,” HHS said in the approval news release.
The Massachusetts MOU states that participating plans would have to furnish, either directly or via subcontracts, all required services including expanded and enhanced offerings such as additional dental care, “under a capitated model of financing.” Moreover, “CMS and the Commonwealth shall jointly select and monitor the Participating Plans,” the MOU notes. And participating plans “will have full accountability for managing the integrated blended capitated payment to best meet the needs of Enrollees according to Individualized Care Plans,” the document states.
The signing of the Massachusetts MOU is “a very good sign” for progress on duals initiatives in other states, Joe Moser, director of government affairs for the Medicaid Health Plans of America (MHPA) trade group, tells MAN. He notes that the capitation aspects in the Massachusetts program are similar to those in numerous other state proposals, even though there is also some fee-for-service (FFS) in it. The Massachusetts ICOs clearly are “managed care entities” that could be headed by health plans as well as provider organizations, and the amount of capitation in the program is more significant than is the amount of FFS, Moser adds.
While approvals by the duals office of state initiatives are trailing the timeline it established early this year for those decisions, Moser points out, it is “not uncommon” for such kinds of tough negotiations and decisions involving states to be protracted. MHPA, he asserts, is “optimistic” that the process is “moving forward, albeit not quite at the pace we hoped.”
At the state level, there seems little evidence of a slowdown. Ohio, for instance, on Aug. 27 selected the health plans that would serve its proposed capitated duals initiative, which is awaiting CMS approval. Appeals by some of the 10 health plans that had applied to Ohio to participate resulted in only minor changes in the preliminary scores the state had posted in July for its region-by-region evaluation of plan applications (MAN 7/19/12, p. 1), so the plans earning the highest scores chose the maximum of three regions in which they are allowed to participate.
This resulted in the selection of three insurers (UnitedHealth Group, CareSource and Centene Corp.’s Buckeye Community Health Plan) for the most populous Northeast region and two plans for each of the other six regions. Aetna Inc., which actually scored highest in the Northeast region, instead would serve the Northwest, Southwest and Central regions, in which it also scored in the top two. United also would serve the East Central and Northeast Central regions, and Ohio chose Molina Healthcare, Inc. to serve the Southwest, West Central and Central regions, all of which it led in the scoring. The state picked Buckeye to also serve the Northwest and West Central regions, and CareSource to also participate in the East Central and Northeast Central regions. The CareSource participation would be under the 900,000-member plan’s alliance with Humana Inc. that was unveiled March 20 (MAN 3/29/12, p. 1).
The proposed start date for the first regions in the program is April 1, 2013, but that is contingent on CMS’s agreement in an MOU as well as concurrence regarding the not-yet-known payment rates in the initiative. One securities analyst, Christine Arnold of Cowen & Company, estimates that MCOs responsible for both the Medicare and Medicaid portions of the Ohio duals could be paid a hefty $2,800 per member per month for this extremely costly population.
California still is in the “development process” on the capitation rates for its proposed initiative, but expects to have the rates by late October or early November, Jane Ogle, deputy director, health care delivery systems, at the state’s Department of Health Care Services (DHCS), tells MAN. She attributes the long rate process partly to the complexities resulting from the need for risk adjustment and risk corridors.
What the capitation rates will be is “the first question plans ask” the department regarding the duals initiative, says Ogle. “They would have liked it a year ago.” DHCS understands that plans need to know the rates in order to finalize their network arrangements for the initiative, she says, but determining them takes time, and plans “understand the process.”
Similarly, while California and some health plans picked for the initiative would prefer that enrolled duals have a “lock-in period” before they opt out, the state is moving ahead based on the assumption that there won’t be one in light of statements to that effect by duals office Director Melanie Bella, Ogle says. The plans themselves are “all over the place” on the subject of the lock-in period, she reports, with some not even seeking one.
Ogle tells MAN that California is working with the duals office on a “daily basis” about the MOU and expects to have it finalized by the end of September. She rejects the suggestion that there have been delays in the process, instead characterizing the duals office as “very thoughtful and methodical.” The state’s planned June 2013 start for the program is “still on track,” Ogle asserts, with an “extensive stakeholder [consultation] process now drawing to a close” and focusing on implementation.
Among those stakeholders, of course, are providers, and Ogle says many “individual providers” have not been “as much up to speed” on the proposed duals initiative, including how they’ll get paid in it. She reports that DHCS therefore has devoted a lot of resources to increasing their knowledge, including via a call with 122 physicians in the evening of Aug. 28.
Ogle professes not to have concerns about plans’ ability to establish adequate networks for the initiative. A bigger concern, she says, even in a state with a long history with HMOs and PPOs, is individual providers — including some primary care physicians — who have never dealt with managed care and don’t know what to expect in the initiative.
© 2012 by Atlantic Information Services, Inc. All Rights Reserved.
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