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.
By James Gutman, Managing Editor
February 14, 2013 Volume 19 Issue 3
As the CMS duals office’s huge Financial Alignment Demonstration (FAD) moves into its implementation phase, it must deal with a host of difficult structural and functional issues, including payment rates, benefits and appeals processes. Resolving them is taking a Herculean effort by the duals office and states, especially since this kind of large-scale Medicare-Medicaid integration never has been done before. And dealing with those issues accounts for some of the delays now worrying health plans and states about the FAD.
While the vast majority of the would-be participants in the FAD are sticking around and praising the efforts of CMS’s Medicare-Medicaid Coordination Office (MMCO) to resolve the difficult issues, a few of them have decided they would be better off pursuing duals integration outside the FAD. Tennessee, for instance, in a Dec. 21 letter to the MMCO, asked to “withdraw” its proposal to participate in the demo largely because of worries regarding “the methodology by which plans would be reimbursed under the FAD model.”
The four-page letter from TennCare Director Darin Gordon goes out of its way to “recognize and appreciate the tremendous burden undertaken by the small, but incredibly capable and dedicated team” at the duals office. But given specific time factors confronting the state as well as potential conflicts between state laws and the FAD structure, Gordon said Tennessee may focus instead on strengthening agreements with Medicare Advantage dual-eligible Special Needs Plans and requiring “that all Medicaid MCOs also become D-SNPs in all counties of their Medicaid plan’s operation.” This is somewhat similar to an approach New Jersey is taking.
Tim Engelhardt, director, models and demonstrations in the MMCO, expresses understanding about Tennessee’s decision and notes that the duals office never expected that the FAD would be the best option for each state. The office tried but was unable to find policy agreement with Tennessee for the program, Engelhardt tells MAN, and is continuing to work outside the FAD with Tennessee and several other states to serve duals better.
Regarding issues cited by Tennessee and health plan executives surrounding payment rates, which still aren’t known as of nearly five months after Massachusetts received the first approval for an FAD initiative (MAN 9/6/12, p. 1), Engelhardt says that state and later-approved Ohio will have much of the final rate information by late this month.
He notes that the rates have to be built from multiple components. These include the national average MA bid amounts from last year and county Medicare fee-for-service costs that plans already know from the MA bid process, and in Massachusetts’ case the impact of the one-year Sustainable Growth Rate physician fee-schedule fix agreed to in the fiscal-cliff postponement law in January. The very few FAD demos now slated to start this year will use county data for 2013, while those beginning next year will use county data for 2014 that won’t be known till this spring, he adds.
“We’ve built the entire rate-setting based on what payers would have paid in the absence of the demo,” says Engelhardt. Moreover, he points out, CMS has only part (i.e., for Medicare amounts) of the rate-setting role, while states are responsible for “building” the Medicaid components.
Separate Medicare, Medicaid Checks Continue
One Massachusetts health plan executive expressed surprise to MAN that the state’s FAD initiative will include getting separate checks for Medicare and Medicaid. But Engelhardt says this has been known for a year and is occurring because that’s the world these models are evolving from. While there will be multiple checks, he tells MAN, there’s no more incentive to cost shift from one program to the other as there is today. This will help, he suggests, as big investments are made in home care and other key services. Assuming the right kinds of incentives are in place, it shouldn’t matter to a plan if there are one or two checks to pay for services if the plan makes investments in community services that achieve savings on more expensive institutional care, he says.
Rhys Jones, vice president, Medicare policy and market development in Amerigroup Corp.’s specialty products group, voices sympathy for the duals office’s difficulties in such efforts, stressing that “they’re forging new ground.” However, he also says that the resulting slow process is causing difficulties for Amerigroup and others as they seek to line up providers for the initiatives. When providers ask how much they will be paid under the demo, Jones tells MAN, “we have to say we don’t know.”
The issues for health plans, he explains, revolve around the feasibility of doing everything an FAD state applicant wants, including offering supplemental benefits to the duals, without knowing that they can afford all this. Since it is not feasible to pay providers more than previously under such a scenario, the best that Amerigroup can do is take a “pragmatic approach” and “offer to maintain the status quo” on paying them.
The supplemental benefits are a particular issue, and one noted in Tennessee’s withdrawal letter. Gordon in this letter expressed the concern that demo plans must compete with D-SNPs and MA plans but have “additional constraints” those plans don’t have, including “quality withholds” from payments they receive.
Jones said Jan. 29 at a duals panel moderated by MAN’s managing editor at the World Congress’ Business of Medicare Advantage conference in Arlington, Va., that Amerigroup doesn’t want to see beneficiaries lose any benefits they have now. If they do as a result of “really significant” new care-coordination responsibilities for plans and the possibility that administrative savings won’t be large, he explains in a follow-up interview, they could become resentful and use their rights to opt out of the FAD.
This raises the question, noted Jones at the conference, of “if we build it, they will come, but how many will stay?” The answer, he readily acknowledges, may relate to what kind of program duals were in before joining the FAD. If they were in Medicare Advantage prior to the demo and lose benefits such as dental and vision care in the demo, they may not stay, he asserts, saying that dropout rates could be in the double digits in such cases.
Engelhardt, though, suggests that as shown by the current ongoing readiness review in Massachusetts, where a “remarkable benefit package” will be offered, this is unlikely to happen. The Massachusetts package, he says, includes new behavioral health benefits and better dental coverage, and notes that “what we call supplemental benefits is different from what Medicare Advantage calls supplemental.” Indeed, basic Massachusetts benefits in the FAD will include many that MA plans regard as supplemental, Engelhardt says.
That said, he also concedes that there is uncertainty about opt-out rates. This, though, according to Engelhardt, is true as well in MA, where plans don’t have the advantage they do in the FAD of passive enrollment. While the MMCO doesn’t want opt-outs, as the Massachusetts readiness review shows, plans should feel an incentive to build robust provider networks and deliver great customer service, he says.
Protracted Appeals Process Worries Plans
Another issue cited by both Tennessee and Jones is potentially unwieldy appeals processes under the FAD. Based on what the duals office has said regarding the Massachusetts Memorandum of Understanding, Gordon said in the letter, plans will have to follow “the more generous standards” in Medicaid compared with Medicare for filing and resolving appeals.
While CMS at the beginning of the FAD process envisioned a single appeals process for all demo members, the agency’s guidance last fall “steps back from that” in favor of a process that’s “kind of status quo,” says Jones. If there is a service denied, he explains, an enrollee must follow the appeals process associated with the legacy benefit (Medicare or Medicaid), thereby keeping in effect a process that has proved difficult for both enrollees and plans. He adds that the Medicaid process has a “maintenance of benefits” provision so that if a beneficiary uses this in his or her appeal of, for instance, a plan decision to cut back the number of nurse visits from three to one, the enrollee can keep the three until the full process of appeals is completed. While this often is “not that big a deal,” he concedes, it could become more of one in the FAD particularly since long-term care is included.
But Engelhardt contends that CMS is changing the appeals process to streamline and consolidate it. The process leverages both Medicare and Medicaid features, he asserts, since “our first priority is beneficiary protection.” Similarly, for Massachusetts, an enrollee can continue to see his or her previous provider till the later of 90 days or when a care process is fully in place, he says.
Adds Engelhardt: “The best way to serve this population is not business as usual in some cases.”
View the TennCare withdrawal letter by visiting the Feb. 14 From the Editor entry at www.aishealth.com/newsletters/medicareadvantagenews.
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