Nebraska DHHS Medicaid and Long-Term Care

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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


February 18, 2014


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



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?


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



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


Rate Development

Lessons Learned

 Set rates consistent with how the program will be


 Identifying Nursing Facility population  Identifying Waiver population

 How will members transition into different populations?

Rate Development

Rate Setting Overview

Base Medical Claims Costs



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


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


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


 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)


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


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


Rate Development

Rate Setting Overview: Sample Rate Structure


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




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