Nebraska DHHS
Medicaid and Long-Term Care
Implementation of Managed Long-Term
Services and Supports (MLTSS)
Steve Schramm
Tim Doyle, FSA, MAAA Zach Aters, ASA, MAAA
Optumas
February 18, 2014
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Discussion Outline
Care Management Overview
Rate Development
Four Determinants of Risk
Actuarial Considerations for Managed Long Term Care Rate Setting Overview
Lessons Learned
Questions?
Care Management Overview
What is Care Management?
Service delivery system in which Managed Long Term Services and Supports Organizations (MLTSSOs) receive a monthly capitated (per member) payment to provide services to members
Goals of Care Management
Promote client choice in services and settings Better coordinate all health care services Increase access to care in all settings Efficiently use financial resources
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Four Determinants of Risk
Program Design – How?
How is the program structured?
Target Population – Who?
Who will enroll in the program?
Benefit Package – What?
What type of services will be offered?
Service Delivery Network– Where?
Where will services be delivered?
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Rate Development
Actuarial Considerations
Recognize the goal of the Nebraska program
Right Services in Right Location at the Right Time Best Outcome for Members
Define eligible populations
Aged, Blind, and Disabled
Nursing Facility Population Waiver Population Katie Beckett Program Population Community Well (non-nursing home certifiable)
Rate Development
Actuarial Considerations
Include necessary waivers
Consider waiver wait lists
Determine rate structure
Blended vs. Tiered
ADL Considerations
Develop annual rates
Review and adjust rates each year to reflect most up-to-date experience, trend, and programmatic changes
Important in the first few years of a new program to rebase at least every year until the risk of the population is reflected in the program data
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Actuarial Considerations
How will the MLTSS program interact with current programs?
Physical Health Behavioral Health
Two MLTSSOs for clients to choose from
MLTSSOs are required to accept “any willing provider” of LTSS during first year of the program
MLTSSOs will be held to quality and performance standards, and rewarded as such
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Rate Development
Lessons Learned
Set rates consistent with how the program will be
operationalized
Identifying Nursing Facility population Identifying Waiver population
How will members transition into different populations?
Rate Development
Rate Setting Overview
Base Medical Claims Costs
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Policy/ Program Changes Non-Medical Loading=
Final Capitation Midpoint Rate Medical Trend+
Rate Setting Overview: Base Data
CMS Checklist states that base data for utilization and cost
should be relevant to the Medicaid population and only
include services covered under the State Plan
Multiple years utilized to establish credibility and stability
Data adjusted for large claims and outliers
Benchmark summarized data to State reports
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Rate Development
Rate Setting Overview: Base Data
Data adjusted for Incurred But Not Reported (IBNR) claims
Data adjusted for copays
Review age/sex rating cohorts for appropriateness
CMS requires cohorts established to group similar risk and enhance predictability
Data review to observe relationships between cost, age and sex Rebase every year until the program is mature and constantly reviewing
the experience
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Rate Development
Rate Setting Overview: Medical Trend
Estimates change in service cost over time due to differences
in practice patterns, technology, utilization, case mix and
inflation
Used to project costs from the midpoint of the base period to
the midpoint of the contract period
Rate Setting Overview: Medical Trend
Several sources used to determine trend
Health care economic indices, such as Consumer Price Index and Global Insight
Trends exhibited in the encounter, FFS, and financial data Trends in other state Medicaid programs (adjusted for Nebraska)
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Rate Development
Rate Setting Overview: Policy/Program Changes
Historical Changes
Changes in benefits, eligibility or fee schedule captured in the historical base data
Prospective Changes
Changes in the program that were not captured in the base data but will be implemented prior to or during the contract period
Nursing Facility fee schedule changes are typically one of the more impactful program changes
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Rate Development
Rate Setting Overview: Non-Medical Loading
Non-Medical Load (NML) – 2 Major Components
Administration
Review requirements in contract Review financial administrative experience Leverage our experience in other Medicaid programs
Profit/Risk/Contingencies/Reserves
Discuss profit objective with State
Leverage our experience in other Medicaid programs
Also Need to Ensure NML complies with State Medical Loss
Ratio (MLR – percent spent on claims) requirements
Rate Setting Overview: Other Adjustments
CMS requires the actuary to review the data regionally to
determine if rates should be specific to locality
Will perform a regional analysis to compare to current regions
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Rate Development
Rate Setting Overview: Sample Rate Structure
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Cohort Dual Status Utilization Unit Cost PMPM
Nursing Facility1 Dual Nursing Facility2 Non-Dual
HCBS Waiver1 Dual
HCBS Waiver2 Non-Dual
Community Well Dual
Community Well Non-Dual
1The Nursing Facility Dual and HCBS Waiver Dual cohorts will be
blended together
2The Nursing Facility Non-Dual and HCBS Waiver Non-Dual cohorts will be blended together