Managed Care Organization
for the delivery of Managed Long-Term Care
in Selected Service Areas (Milwaukee County)
RFP # 1645-DLTC-SM
Proposals due October 31, 3:00 pm
Questions and Answers for RFP 1645-DLTC-SM
1. Why did the Department issue the RFP for Milwaukee County at this time?
Did the State receive a readiness statement prior to issuing the RFP?
In various discussions with county officials, the Department indicated nine months
lead time would be needed to complete the procurement and certification processes.
When senior county officials indicated their plan is pointing toward beginning
enrollment of all Family Care target groups by the second quarter of 2009, the
Department worked backwards from that planned date to determine the appropriate
date to release the RFP.
2. Was any entity notified prior to August 15, 2008 when the RFP would be issued?
No.
3. Why were the amendments to the RFP issued?
The first amendment was to clarify information related to Medicare Special Needs
Plans given the anticipated expiration of the federal moratorium on certification of
these plans. The second amendment was to extend the timeline on submission of the
RFP.
4. What is the deadline for requesting an extension of the proposal submission due
date of October 31, 2008?
As the time allowed between the release of this RFP and the due date for responses is
already longer than has been allowed for any other expansion RFP, no further
extension will be considered.
As stated in Sections 1.23 and 2.3 the due date for this RFP is October 31, 2008 at
3:00 p.m.
5. Sections 1.4 and 5.4 appear to conflict as it relates to a county-run operation.
Please explain.
Section 1.4 is correct when it states that organizationally separate means the ADRC
and MCO may report to the same county board, but may not be operated by the same
county agency.
There was a mistake in Section 5.4 and it has been amended on VendorNet to match
Section 1.4.
6. Amendment III to the RFP states “Organizationally separate means that while
the ADRC and the MCO may report to the same county board, they may not be
operated by the same county agency.” What is the definition of “agency?”
In this context, “agency” means a department of county government.
7. For 2010 Partnership, will proposers be selected per RFP #1645-DLTC-SM and
certified in 2009 or will there be another RFP issued in 2009 for a 2010 contract?
In response to RFP 1645, the Department will be considering proposers that want to
offer Partnership but do not yet have the necessary Medicare contracts. If evaluators
determine these organizations may move on to certification, the Department will need
to complete the certification process in 2009 and, if all necessary conditions are met,
including obtaining the necessary Medicare contracts, the Department will contract
with these organizations to provide services in 2010. Federal regulations require that
the State contract for Partnership providers must be in place by October 1, 2009 for
the associated Medicare Special Needs Plans to begin operating on January 1, 2010.
The Department does not anticipate issuing another RFP in 2009 for a 2010
Partnership contract.
8. How will the Milwaukee County Partnership contract awarded under this RFP
work with the Milwaukee County Partnership contract awarded under RFP
#1625-DLTC-SM?
RFP 1625 was issued because the purchasing authority for Partnership as it now
exists in Milwaukee and Dane Counties was expiring. To continue to offer
Partnership services in those counties, another RFP process needed to occur to meet
state procurement requirements to conduct a competitive solicitation for new
contracts.
The current RFP (RFP 1645) is necessary to expand the Family Care programs in
Milwaukee County.
Successful proposers who responded to RFP 1625 will continue to provide services as
specified in the contracts that resulted from that RFP. For provision of services to
expanded target groups, the proposers will need to successfully respond to this RFP
(RFP 1645).
9. In previous RFPs the scoring was given by section. Why was that not done here?
How will points be allocated within each of the three sections of the RFP?
Earlier versions of this RFP had six divisions in the scoring criteria, as opposed to the
three that appear in this RFP. This occurred because RFP 1645 was restructured from
earlier versions to simplify the numbering system, and for better organization of
material. We consider the current arrangement of the RFP to be more logical and it
will be used with any future expansion RFPs.
As stated at the proposer’s conference call, the summary scoring given under Section
3.3 meets the procurement requirements.
10. Why is there a difference in point totals for the Milwaukee RFP as opposed to
RFPs for other entities?
Earlier RFPs had a total of 1,000 points. This RFP has a total of 1,025. One
additional question was added to this RFP regarding the separation of the ADRC and
the MCO which required additional points. Also, points are no longer being given
11. What is the Department doing to ensure the impartiality and objectivity of the
evaluation committee?
Each evaluation committee selected by the Department must consist of at least three
or more members that possess specific knowledge or skills essential to the RFP
evaluation. One of these members must be from outside the agency conducting the
procurement and, if possible, one member should be from outside state government.
To provide guidance to committee members on procurement rules and processes, the
RFP procurement manager is a non-scoring committee member.
Once chosen, committee members are required to sign an “Assurance of Compliance
with Procedures and Ethical Guidelines for Proposal Evaluation” form which
requires, among other things, that committee members certify that they do not have a
substantial bias in favor of, or against, any proposing organization or company that
would not allow them to evaluate all proposals fairly and impartially. A copy of this
form is posted on VendorNet.
12. What is the specific federal authority for separating the managed care
organizations and the aging and disability resource center?
The federal authority is contained in 42 CFR 438.810. This federal requirement was
also added to state law in s. 46.285 Wis. Stats.
Currently, the Department is required by CMS to utilize an enrollment consultant to
meet the federal requirement for separation of the MCOs and the ADRCs. When the
ADRC and MCO are not operated by the same county agency, the Department will be
able to eliminate the enrollment consultant services.
13. Could the Department offer two MCOs a Family Care contract in Milwaukee
County?
On what basis will the DHS decide whether to contract with more than one
entity?
The Department may offer two or more MCOs the opportunity to proceed to the
certification phase of the procurement. An MCO that successfully completes
certification would be offered a contract.
The basis for offering an MCO the opportunity to proceed to certification would
involve several factors, including:
1) A recommendation by the RFP evaluation committee that the proposer move to
certification.
2) The Department’s interest in mitigating the risk of a single MCO experiencing
financial or program quality problems that might necessitate withdrawing its
contract. Having more than one MCO would ensure that if one organization
cannot continue for whatever reason, consumers could still be supported by
another qualified organization.
3) The Department’s interest in offering consumers a choice of managed care
providers, as well as service providers, which is a core goal of Family Care.
Because one MCO’s provider network may include providers not included in
another network, consumers would have more choices, not only of care managers,
but also service providers.
On the other hand, it may be that one or more MCOs have too few enrollments to be
financially viable. As noted in the RFP, it is the Department’s estimate that an MCO
must have at least 1,500 enrollees to mitigate this risk. If an organization were to fall
below that threshold, the Department would give consideration to withdrawing that
contract. Because the Department must consider whether the MCO is too small to be
viable, the business plans submitted with the proposals are evaluated to determine
whether the organization’s business plan is likely to result in success.
14. On what basis will the DHS decide the enrollment capacity to be given to each
winning contractor? For example, if more than one qualified organization
submits a proposal, will the highest scorer, which will be “chosen first”
according to section 3.2 receive the entire number of enrollees that it proposed,
followed by the next highest scorer receiving its proposed number of enrollees,
and so forth, until the total number of potential enrollees is reached?
This question is based on the erroneous assumption that the Department assigns
enrollees to the managed care organizations. Enrollment itself is voluntary.
Potential enrollees first go to an aging and disability resource center where all options
for obtaining services, including the option of IRIS, the self-directed supports waiver,
are discussed with them. In expansion areas, the Department is relying on current
county waiver case managers to provide this options counseling for those
transitioning from the home and community-based waivers. Potential enrollees then
make their own decision regarding whether or not they want to enroll in a program
and, if so, what specific program or MCO to enroll in if a choice of programs is
available.
15. If more than one bidder is selected to serve Milwaukee County, will the
capitation payment be the same for each managed care organization?
No, capitation rates reflect the acuity of that organization’s enrollees, based on the
functional screen. Where two managed care organizations enroll Family Care
members, the organization that enrolls a larger share of those individuals with
significant needs can expect to receive a higher rate.
16. Describe the process the Department envisions for expanding service areas (see
sections 1.11 and 1.12).
How will DHS implement service area expansion if it does not issue another
RFP?
Possible expansion of service areas is discussed in Section 1.11 which states:
“Contracts awarded as a result of this RFP process may be amended at a later date to
include additional service areas.”
Once the MCO is under contract, the Department has the option to expand the service
area covered by the MCO. This option could, for example, be exercised if an existing
MCO experienced failure. To assure health and safety, the Department could allow
expansion by an organization that had already been certified as a Family Care MCO.
17. Section 1.13 of the RFP states: “DHS reserves the right to amend contracts with
certified MCOs operating in one or more service areas to provide the Family
Care benefit(s) in additional service areas if it is determined that this is
necessary to meet the obligations of the Department in providing access to
adequate choice of providers, and to long-term care services for all eligible
individuals.”
a) What factors will be considered in that determination regarding the
“obligations of the Department” to assure choice of providers and access to
services for all eligible individuals?
b) Who will determine these factors in regards to the “obligations of the
Department” to assure choice of providers and access to services for all
eligible individuals?
c) How will adequate choice be measured?
d) If the contracted entity’s provider network is certified as adequate to meet
the needs for all eligible individuals in the service area, can the contracted
entity rely upon this certification to maintain the then existing number of
contracted entities in the service area for business planning purposes?
This language has always been included in expansion RFPs. The Department must
have a means of making sure frail individuals who are depending on the Family Care
benefit for services are kept safe.
Please see our response to question 16 for a partial answer.
The circumstances being considered when provider network was included in the
language of Section 1.13 might be situations such as a dramatic change in the
composition of an MCO’s provider network or the population an MCO is serving
after the provider network is originally certified.
18. In previous submissions, there were entire RFPs marked proprietary. Why
were these proposals not discarded?
What is marked proprietary is not a criterion for acceptance or rejection of a proposal
by the Department.
Please see Section 3.5 of the RFP where it is stated that any proposal designated as
entirely confidential will be considered public information. Designation of proprietary
information relates only to how much of the proposal may be shared with the public
once the procurement process is completed.
19. Do proposers need to simply meet standards, or exceed standards to be given the
entire amount of points available?
The benchmark given to the evaluators for “Excellent” is: “The response convinces
you that the proposer can definitely accomplish all the purposes stated in the question
in a highly competent manner. The evidence is so convincing that it is difficult to
imagine how the proposer could improve in this area.”
The benchmark for “Good” is defined as: “The response adequately meets all of the
requirements and establishes a solid basis for the project.”
Within the categories of “Excellent” and “Good” there is a sliding scale of points.
For instance, an evaluator may be able to award between 36 and 50 points for
Excellent and between 21 and 35 points for Good.
20. What constitutes evidence of notice in Sections 6.4, 6.5 and 6.6?
All three of these sections specify that the proposer should include a copy of one
letter sent to the organizations for notification, as well as a list of other organizations
the proposer has contacted by letter.
21. What constitutes a response to Section 6.7?
Examples of a response might be, but are not limited to, a list of stakeholder outreach
activities including the date of these activities, copies of press releases announcing
meetings, or agendas from meetings.
22. What timeframes are expected for the involvement of stakeholders mentioned in
Section 6.7?
Section 6.7 talks about the involvement of stakeholders “in the development of this
proposal.” As stated, the Department is talking about stakeholder involvement prior
to the point at which a proposal is submitted. Please note that the next section
(Section 6.8) is asking about future involvement of stakeholders.
23. In reference to Section 6.7, do meetings with stakeholders need to be open to the
public and include necessary notices?
The Department does not have requirements for meetings conducted by proposers. A
successful proposer must meet the conditions of the RFP which are that the proposer
must provide evidence of the involvement of consumers, advocates, service providers
etc. in the development of this proposal.
24. Are the factors described in 5.14 the only criteria DHS uses to determine
whether a provider network is “adequate?” If not, how else is “adequacy”
defined?
Will the DHS ensure that contractors create provider networks that maximize
consumer choice; include all qualified service providers in the network, and
offer all qualified service providers the chance to compete on an equal footing
for consumers? Is so, will this be evaluated in the selection of a contractor and
set in the terms of the contract or how else will the DHS accomplish these goals?
Please see http://DHFS.wisconsin.gov/LTCare/StateFedRegs/FC-RC-CMO-
contracts.htm which will take you to the Health and Community Supports Contract
used for Family Care. Within that contract, the provider network requirements are
detailed in Article VI.
25. In the event that only a new contractor is selected and the current CMO is not
re-selected, current provider agencies could potentially not be allowed into the
new CMO provider networks, resulting in a potential loss of business and loss of
jobs or change in working conditions for the workers of those consumers. For
the evaluation of the contractors, or in the period of planning the
implementation before the effective date of the contract, does DHS evaluate how
the proposer will address the possibility that in such an event, large numbers of
workers will lose their jobs, have to look for new ones, and may experience
major changes in their working conditions, including potential loss of union
representation? If so, what will the DHS do or require of contractors to ensure
that the transition does not result in such a disruption in the lives of the workers
and consumers they serve?
As stated in Appendix 5 of the RFP, there are over 2,500 clients on the waitlist for
waiver services in Milwaukee County. It is expected that this expansion of Family
Care coverage will, within 24 months, eliminate the wait list. With more clients
getting services, there will be a need for more service providers.
The Department’s previous experience with new MCOs replacing a home and
community-based waiver program is that, because of the intensive work necessary to
establish a network, the new MCO normally seeks contracts with the same providers
that the waiver program used for its first year of operation.
As mentioned in the response to question 24, information regarding the provider
network is contained in Article VI of the Health and Community Supports Contract.
26. Section 1.5 is unclear. It states that every proposer must offer at a minimum
Family Care. Does this mean you will only accept proposals to offer Family
Care?
Please confirm that proposers are required to offer the Family Care benefit but
are not required to offer a Family Care plan.
In a county where Family Care is currently provided, why must an applicant
provide Family Care in order to apply to provide Partnership?
After stating that proposers must plan to offer at the least the Family Care benefit,
Section 1.5 then instructs the reader to access
http://DHFS.wisconsin.gov/LTCare/Generalinfo/Benpackage.htm
That website takes the reader directly to a list of services/items included in the Family
Care benefit package.
The intent of that section is to say that every proposer must offer at least the services
included in the Family Care benefit. Partnership offers all the services included in
Family Care, plus acute and primary services.
In a county where Family Care is currently provided, an applicant does not need to
offer Family Care. They may offer Family Care Partnership.
27. Regarding the Readiness Template (beginning on page 30), please provide
specific, detailed clarification as to what is meant by:
“Strategies to learn management techniques.”
The readiness template is included with all expansion RFPs as a guide for any
successful proposer that will be advancing to the certification process. It was written
for all organizations that might apply, including those that may not have functioned as
a managed care organization in the past. Consequently, it includes phrases like
“strategies to learn management techniques.” This phrase would apply to a newly
formed organization that does not have a management structure in place and needs to
consider training for newly hired managers.
28. What assistance, if any, is available from the Department in developing
proposals?
As stated in Section 2.7 the Department will provide assistance regarding the RFP
guidelines, and will clarify any ambiguity, error, omission or discrepancy found in the
text. The question and answer process is designed to accomplish these goals.
The Department does not provide further assistance to anyone in responding to RFPs.
29. Section 3.2 states: “A proposer may not contact any member of the evaluation
committee regarding this RFP except as authorized in advance in writing by the
Procurement Manager. “
If a proposer is authorized by the Procurement Manager to contact any member
of the evaluation committee, how will other proposers be notified that such
authorization has been granted to another proposer?
The Procurement Manager screens any requested contact to determine whether the
information being sought is relevant to the RFP. (The Office of Family Care
Expansion is still conducting business with possible proposers on day-to-day
operations.) If the question being asked is relevant to the RFP, the question and the
answer will be published on VendorNet so that all potential proposers have the same
information.
The sole purpose of questions going through the Procurement Manager is to ensure
that the RFP process remains transparent and equitable.
30. Looking at the calendar of events contained in Section 1.23 when will the
following events take place?
DHS decides how many entities with which it will contract.
RFP will result in identification of organizations with which the Department
may contract (as referenced in 1.11). Is this the same as the Nov. 5
Announcement of Intent to Award?
The Department will decide how many MCOs, and which specific MCOs, will
proceed to the certification phase of the procurement based on the evaluation
committee report and scoring (see Section 3.2 of the RFP) and other factors as
described in our response to question 13. Once the Department has made that
decision, the announcement of intent to award will be made. Only after successful
completion of certification will a contract be offered.
DHS negotiates the enrollment capacity to be given to each contractor.
As stated in the answer to question 14, DHS does not do this.
Proposers are notified that they have “the potential” to meet the necessary
standards (as referenced in 1.15). Is this the same as being notified of the intent
to be awarded, the event on Nov. 5th?
Yes.
Capitation rate for each selected proposal is set.
Minimally 30 days before the contract is offered to organizations that have completed
certification.
DHS certifies that the provider network is adequate.
This occurs during certification.
Contract is signed between the contractor and DHS.
This depends on the length of time it takes for the MCO to meet certification
requirements.
31. Please confirm that all target populations can be enrolled in the same MA-SNP
institutional subset.
What the Department knows is that current Partnership sites offering both Family
Care and Family Care Partnership are serving all of the target groups in both
programs.
Questions specific to SNP institutional subsets should be addressed to CMS.
32. Which dual eligible SNP categories will the Partnership eligibles fit in: QMB,
QMB+, SLMB, SLMB, Medicaid only, QI, QDWI?
Partnership eligibles must be eligible for full-service Medicaid.
33. Has DHS determined whether Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA), CMS 4131-F and 4138-IFC issued 9/15/08 and
the CMS 4131-P issued 5/16/08 will affect DHS’ dual eligible SNP requirements
for Partnership?
Partnership organizations must comply with all applicable Medicare regulations.
DHS does not believe MIPPA will affect the Partnership Medicaid contract or
program operations.
34. Will all Partnership plans, new and existing, be required to have the same type
of dual eligible SNPs for 2010?
Yes.
35. Has CMS approved the 1915c waiver for the Family Care and Partnership
programs yet? If not, what is the impact on the MCOs?
Family Care and Partnership are operating under an approved 1915 c waiver through
12/31/09.
36. Will only the selected proposers under this RFP be offered the opportunity to
participate in Family Care Plus?
No. Family Care Plus is a future option and the Department is currently doing
nothing more than determining the level of interest in this potential benefit.
37. Please confirm that the service area for the RFP is limited to Milwaukee County.
As stated in Section 1.11, the service area for this RFP is Milwaukee County only.
38. What is the status of the Milwaukee County Board resolution to expand Family
Care and Partnership?
State law at s. 46.28(1g) (b) Wis. Stats. requires that before expansion of Family Care
can occur in any part of the state that would cause the total number of individuals
covered to exceed 29% of the state’s adult population, the Department must seek
approval of the proposed contract(s) from the Legislature’s Joint Finance Committee.
The submission to the Joint Finance Committee must be accompanied by a
demonstration from any county in which DHS proposes to expand Family Care that it
consents to the administration of Family Care in the county. DHS has interpreted this
demonstration to mean that written consent to the administration of Family Care in
any county may be provided by a county board of supervisors, a county executive
delegated authority to consent to expansion, by a county board of supervisors, or a
county administrator delegated authority to consent to expansion by a county board of
supervisors.
Furthermore, the statute requires that when DHS submits contracts and county
demonstrations of consent, it also submits a written statement from each county
stating the county’s proposal for use of any savings in local contribution to long-term
care that the county experiences due to the expansion of Family Care. Each county
must also recognize that under s.46.281(4), Wis. Stats., the county will make its
required county financial contribution.
Most county boards have complied with the requirements of sections 46.281(1g) (b)
and 46.281(4) Wis. Stats. by promulgating a single resolution that consents to both
the administration of Family Care in the county and the county’s required financial
contribution, including within the language of the resolution a proposal for use of any
savings the county experiences.
DHS generally submits requests to expand Family Care to the Joint Finance
Committee approximately 60 days in advance of the planned effective date for
contracts with MCOs to serve any expansion counties. This schedule allows for a 24
day passive review and a 45 day extended review period, if needed, by the
Committee. Therefore, counties need to plan ahead to obtain the required
documentation to provide for the Department’s request to the Joint Finance
Committee. The Department has not yet received any of the required documentation
for Milwaukee County.
39. What is the benefit of requiring proposers to serve all target populations when
the needs of and expertise required for each population are so different?
The Department wants to ensure that enrollment in a Family Care program is equally
available to individuals from all three of the target groups.
As stated in Section 5.5. of the RFP, an organization may submit a proposal that does
not include all target groups if they also include a letter of intent from another entity
showing that this other entity will be serving the additional target groups.
40. What are the circumstances home and community-based waiver services will
continue to be available from fee-for-service providers if someone who is eligible
does not choose to enroll in Family Care?
One result of expanding the Family Care programs to all target groups will be to
eliminate the need for the traditional home and community-based waivers, e.g. COP
and CIP, within 24 months of the Family Care contract start date.
Individuals who do not enroll in the Family Care programs have the options of
remaining in the Medicaid fee-for-service system, which would not give them access
to the waiver services, or enrolling in the new IRIS program which would give them
access to both fee-for-service card services and waiver services. IRIS is a home and
community-based waiver program limited to individuals who want to self-direct their
own care.
41. Please confirm that persons at the non-nursing functional capacity level are not
eligible for Family Care or Partnership.
Persons at the non-nursing home level of care are eligible for Family Care. The
Family Care Partnership program does not accept individuals at the non-nursing
home level of care.
42. Please provide a copy of the scoring tool and the instructions to be provided to
scorers.
The evaluation criteria included in Section 3.3 of the RFP provides the general basis
for selection and weight assigned to the requirement areas. The more detailed scoring
tool used by evaluators, which includes benchmarks, will be available after the letters
of intent to award have been issued.
43. Is it possible for one agency to submit two proposals?
Yes, it is possible. Language has been added to the RFP as Section 2.6.1. This new
language has been published on VendorNet as Amendment IV.
44. Does “other anticipated revenue” for 3-year budget projections include revenue
from other lines of business such as commercial, Medicare Advantage or other
insurance/non-insurance products?
Yes.
45. Please provide the specific level of detail required for the budget template.
The 36-month budget/business plan should provide full detail of revenues, by revenue
source, and expenses, by type of service category and administrative expense
category. This information should be provided for each of the 36 months, with totals
provided by calendar year. The plan should also include the monthly enrollment
projections, by target group, and the assumed monthly capitation amounts expressed
in per member per month terms, that was used to arrive at the monthly capitation
revenues. All key assumptions should be fully detailed in the accompanying
narrative.
46. In the readiness template regarding re: cost allocation plan. Please specify
what you are looking for in the allocation of administrative costs. Is this specific
to care management or something else? If something else, please specify.
The Department makes no assumption that a proposer offers only Family Care
services; it could be an entity that has other operations besides Family Care. In this
case, it is necessary to describe how shared costs are allocated across all
programs/services and to describe what is/are the cost driver(s) for that allocation.
More specifically, this plan is a narrative description of how costs are allocated to the
various programs/services which are shared across the organization. This must
include, but is not limited to, care management services, and it could also include
other services that are provided “internally” by the MCO to Family Care membership.
This plan must also include allocations related to services that are provided
“externally” to other entities and/or programs with other funding sources.
47. In the readiness template under methodology of analyzing risk. What
specifically are you asking for?
NOTE: While a proposer may wish to understand what will be reviewed and
required during the certification process, addressing the content of the readiness
template that is used for MCO certification is not a requirement in responding to the
fiscal requirements of this RFP.
The ability to understand and manage risk is critical to the overall fiscal health and
stability of any managed care operation. The proposer should describe staff skills,
analytical tools, and/or specific methods that will be used to evaluate and manage
that risk during the first three years of its operation. In other words, in assembling
its three-year business plan, the proposer should discuss the manner in which it
anticipates it will understand and manage the inherent risk. The specific risks the
MCO expects to face should be articulated, and the proposer should describe its
quantification/evaluation of these risks. This discussion should include very
specific areas of focus, where the MCO plans to predict and/or evaluate the risk, the
frequency of this review, as well as the process for communicating the risk
evaluation results to senior management, in order to inform the organization’s
decision making. In the context of managed long-term care, some of these risks
might be, for example, deviation from historical cost trends, the handling of outlier
claims, or the impact that new entrants into the program will have on the MCO’s
underlying cost structure.
48. Define “maintenance of solvency protection” which appears in the readiness
template.
NOTE: While a proposer may wish to understand what will be reviewed and
required during the certification process, addressing the content of the readiness
template that is used for MCO certification is not a requirement in responding to the
fiscal requirements of this RFP.
There are solvency requirements described in the DHS contract that mandate
minimum funding levels but do not speak specifically to management practices, or
processes, that ensure those requirements will be met, or exceeded, and that the
MCO can remain fiscally strong. Therefore, beyond simply demonstrating that
these minimum funding levels will be met, the proposer should describe all policies
and procedures that will ensure the ongoing solvency of the organization. This
should include analytical review, cash requirement projections, and/or cash
management policies. These issues must be fully described in the development of
the proposer’s three-year business plan.
49. Section 1.16 states that funding will be offered in the form of a capitated
payment for each person enrolled. Have any previous entities entering into a
contract subsequent to an RFP for the delivery of managed long-term care in a
selected service area received any additional funds such as start-up funds or
funds for any other purpose for the implementation of the MCO? If yes,
please provide detailed information regarding funds provided.
There is an expectation that an MCO will use accumulated surplus, or other
available capital, to invest in the expansion of Family Care. To date, start-up
funding has been provided in very limited instances, when a public MCO did not
have the capacity to invest in the regional expansion of Family Care because there
had not been sufficient surplus accumulated from prior years’ operations. The
appropriateness of this funding approach is determined on a case-by-case basis. It
requires a full review of the MCO’s accumulated surplus, and the submission of a
very detailed start-up expense proposal, itemized by individual line item and the
month in which the cost will be incurred, in order to be considered for funding.
Full disclosure of a proposer’s financial position, including that of related
parties/companies, is also required in order to be considered. The Department has
worked with its actuarial firm on this approach and believes that including up to 2%
of an actuarially sound capitation rate in start-up funding will be permissible when
no other capital is available to an MCO. This approximate level of funding has
been provided to the Southwest Family Care Alliance and Western Wisconsin
Cares.