HCFA Waiver Letter
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DEPARTMENT OF HEALTH & HUMAN SERVICES Health Care Financing Administration Center for Medicaid and State Operations = Family and Children= s Health Programs Group Division of Integrated Health Systems 7500 Security Boulevard Baltimore, Maryland 21244-1850 Ms. Feather O. Houstoun Secretary Department of Public Welfare P.O. Box 2675 Harrisburg, Pennsylvania 17105 Dear Ms. Houstoun: This letter is to inform you that the Health Care Financing Administration (HCFA) is approving the Commonwealth of Pennsylvania=s request to modify its HealthChoices waiver for the Southwest Zone to include the previously approved HealthChoices waiver in the Southeast Zone and request renewal for a 2-year period. Approval of the State’s request would result in one consolidated waiver instead of separate waivers which currently exist. This approval is authorized under Sections 1915(b)(1), (2), (3) and (4) of the Social Security Act (the Act), and provides for the waiver of the following Sections of Title XIX of the Act: Section 1902(a)(1) Statewideness, 1902(a)(10)(B) Comparability of Services, Section 1902(a)(23), Freedom of Choice, and 1902(a)(30), Upper Payment Limits. This waiver allows the Commonwealth of Pennsylvania to require Medicaid beneficiaries eligible for the HealthChoices managed care waiver program to be mandatorily enrolled to fully capitated, risk comprehensive Managed Care Organizations (MCO) or Prepaid Health Plans (PHP) which will be responsible for providing, prior authorizing, or making referrals for all medically necessary and appropriate primary care, behavioral, specialty, and rehabilitation services. Medicaid beneficiaries eligible for mandatory enrollment in the HealthChoices program include Temporary Assistance for Needy Families (TANF), TANF-related, Supplemental Security Income (SSI), and SSI-related and some other related Medical Assistance beneficiaries. In consultation with States, we are reviewing the Federal regulations at 45 CFR Part 74 and policies related to the open procurement process for Medicaid contracts. We may issue new policy or regulations, and if so, would reevaluate the Medicaid contracting process, prospectively, in light of the changes. We would notify all States about the changes. Under authority of Federal regulations at 42 CFR 430.30(h)(2)(ii), this approval is for the 2-year period effective December 19, 1999 through December 18, 2001, contingent upon the following Conditions of Approval. Conditions of Approval: 1. The Department of Public Welfare will ensure that contracts with the physical health managed care organizations (PH-MCO) and their subcontractors, the behavioral health managed care organizations (BH-MCO), counties, and their subcontractors, and the independent enrollment assistant (IEA) are consistent with the assurances provided to HCFA in the approved waiver. The PH-MCO, county contracts, behavioral health contracts, and any county subcontracts with managed care entities under this waiver will be submitted to HCFA for prior approval, i.e., at least 30 days before implementation. No Federal financial participation (FFP) will be allowed, or claimed, for the operation of an MCO contract unless the contract has been approved by HCFA. Furthermore, FFP will also be contingent upon the contracts operating in compliance with the terms and conditions of the waiver. 2. The Department of Public Welfare must ensure that each PH-MCO, county or behavioral health contractor has an adequate provider network in place to meet the health care needs of all recipients including special population groups. Beginning April 1, 2000, and annually thereafter, the Department must report to the HCFA regional office the specific situations in which access requirements approved under this waiver and the contracts are not met based upon its comprehensive analysis of the MCOs’ networks as of the previous January 1. For any such specific situation, the Department will report the corrective actions under way, and update that report at six-month intervals until the problems are resolved. If any new MCO contracts are implemented prior to the expiration of this waiver, the Department must notify the HCFA regional office whether access requirements approved under this waiver and the contracts are met 30 days before the first date services are to be furnished under those contracts. For any requirements that are not being met by any plan, the Department must report the actions being taken by the plan to come into compliance. 3. In order to allow sufficient time for the Department and its contractors to prepare for the enrollment process, PH-MCO and county contracts, and any county subcontracts with managed care organizations, must be signed by both parties and in place at least 30 days prior to the beginning of the process, unless the Department can satisfactorily demonstrate that the enrollment process will not be affected by a delay in the signing of the contract(s). The IEA contract must be signed by both parties and in place at least 60 days prior to the beginning of the enrollment process. 4. The Department of Public Welfare will ensure that recipients have accurate information concerning their rights to complain about, formally grieve, and appeal decisions by a PH-MCO, a county and/or its subcontractor, or the Commonwealth. The Commonwealth will process requests for fair hearings arising under the waiver according to Federal regulations at 42 CFR 431, Subpart E. 5. The Department of Public Welfare will affirm to HCFA in writing, separately for each new PH- MCO or county for behavioral health, that the PH-MCO or the county and, if applicable, its subcontractor, is prepared to implement and operate the waiver program consistent with the assurances specified in the waiver. The Department will make this affirmation no less than 10 days prior to the date that the contractor begins furnishing services. Also, the Department will provide the HCFA regional office with the results of its readiness reviews prior to the date that the contractor begins furnishing services. 6. To assist HCFA in monitoring the waiver, the Department of Public Welfare will provide the following information: • Reports of the External Quality Review Organization on the annual external quality assurance reviews of the PH-MCOs and BH-MCO counties/ subcontractors. • HEDIS reports concerning each PH-MCO. • Annual member satisfaction survey data pertaining to each PH-MCO and BH-MCO county/subcontractors. • Indicators for monitoring the operations of PH-MCOs and BH-MCOs, counties/ subcontractors (enclosed). HCFA and the Department of Public Welfare shall agree on the final indicators to be collected by February 15, 2000. • An annual report on the timeliness of HMO claims payments that describes each HMO’s performance against contracted standards and actions taken, i.e., sanctions and corrective actions. – by February 15, 2000 for the preceding calendar year, and every year, thereafter. 7. The Department of Public Welfare will ensure the safe transition into HealthChoices of those individuals with special health care needs who are currently under a plan of treatment for a medical condition. At a minimum, DPW must allow persons whose providers are not in a MCO=s network to continue to receive services from these providers until the MCO can safely transition these persons into a plan of care within the MCO=s network. DPW must also ensure that providers and members are informed of the process for requesting that a plan of treatment be continued. 8. The Department of Public Welfare must ensure that the counties maintain separate fiscal accountability for Medicaid funding under the waiver apart from mental health and substance abuse programs funded by State, county, and/or other Federal program monies. Further, the Commonwealth must ensure that where Federal Medicaid rules are applicable under the waiver, the counties do not supplant Federal Medicaid requirements with local program requirements for mental health and substance abuse programs. 9. The Department of Public Welfare will have the organizational capacity necessary to manage and monitor the HealthChoices waiver for access, quality, consumer satisfaction and cost. 10. The Department of Public Welfare will implement and coordinate any waiver of the Federal upper payment limit (UPL) in cooperation with HCFA according to the procedures enclosed with this letter. 11. Payments for Medicare cost-sharing amounts by the PH-MCOs, counties and/or behavioral health contractors will be made consistent with the policy in HCFA=s August 18, 1998, letter to the Department of Public Welfare on this subject. 12. Within 1 month of the waiver approval, please submit information that describes how the upper payment limit was developed for individuals with AIDs or symptomatic HIV enrolled in the 1915(c) waiver. The information should include a list of Medicaid state plan and 1915(c) home and community based waiver services and associated costs used to construct the UPL, and how those services and costs are accounted for in the State's UPL submission. Special Needs Terms and Conditions 1. The State will submit to HCFA on an annual basis the number of children participating in the waiver who are included in categories 1, 3, 4, and 5 of the BBA’s definition of special needs children. Identification through either aid code analysis or manual review is acceptable. With respect to those children in category 5 of the BBA definition, the State will provide to HCFA by February 28, 2000 a workplan and timeframes regarding the identification of these children. 2. The State will review complaints and grievances and track those cases involving children identified in categories 1, 3, 4, and 5 of the BBA definition of children with special health care needs. (A manual review is acceptable.) On an annual basis, the State will report to HCFA the number of complaints and grievances for these groups, and submit an analysis, stratified by group, of type and number of complaints and grievances filed, and their resolution. 3. The State will submit to HCFA on an annual basis the number children identified in categories 1, 3, 4, and 5 of the BBA definition who voluntarily disenroll from a physical health MCO, and the number of children in those categories that voluntarily change providers within the behavioral health MCO. 4. With respect to quality of care, the State will conduct a study which will stratify its analyses such that outcomes for children in categories of 1, 3, 4, and 5 of the BBA definition are discussed and addressed. Or, the State may perform a quality study that focuses solely on children in categories 1, 3, 4, and 5 of the BBA definition. Also, no more than six months after the renewal of this program, the State will provide to HCFA a workplan and timeframes regarding the its anticipated surveys, which will supplement current performance measures for special needs children. 5. The Core Teams will conduct ongoing monitoring with respect to the adequacy of the MCOs’ execution of the requirement for an assessment and implementation of a treatment plan for BBA-defined special needs children based on that assessment. The State will report to HCFA on the results of this monitoring on a basis no less than annually. Approval of the renewal of the HealthChoices waiver is contingent upon the Commonwealth of Pennsylvania=s arranging for an independent, comprehensive evaluation of the waiver program, to be submitted 3 months prior to the end of the waiver period, with special emphasis on beneficiary access to quality health care and the terms and conditions indicated above. I look forward to working with you in meeting the conditions of approval and wish you success in the operation of the HealthChoices waiver program. Sincerely, Mike Fiore Director cc: Director, CMSO, HCFA Regional Administrator, Philadelphia INDICATORS FOR MONITORING HEALTHCHOICES - PH-MCO OPERATIONS Enrollments/Disenrollments 1. Number of enrollments to the MCO. 2. Number autoassigned to the MCO. 3. Number of disenrollments by reason for request. (Categories as discussed with State) 4. Number of members’ autoassigned to a PCP. 5. Number of members who changed PCPs. 6. Total number of current enrollees in the MCO. 7. Description and disposition of each involuntary disenrollments requests Financial Information 8. Inventory of received but unpaid claims and incurred but not reported claims (number and amount). 9. Income statement (expenditures for medical costs, administrative costs, loss ratio) Inquiries and Complaints 10. Number and type of telephone complaints and inquiries by the State and Benefits Consultant about the MCO. (Categories as discussed with state) Member and other (provider, etc.) Included in this will be data from the clinical sentinel function. 11. Number and type of telephone inquiries and complaints received by the CO (Categories as discussed with state). Member and provider. 12. Number of grievances filed. 13. Number of requests for expedited grievances. 14. Median length of time for processing expedited grievances INDICATORS FOR MONITORING HEALTHCHOICES - BH-MCO OPERATIONS The following data should be reported separately for each county: 1. Enrollees: Number eligible and number enrolled, as of report date. 2. Providers: The number (by type) of providers participating in the waiver. The same data should be provided for providers participating in FFS immediately prior to the waiver. The latter data will be used for comparison purposes. 3. PHP/County Claims Workload Data: Provider claims inventory including claims received, processed and opening/closing pending counts during the reporting period by bill type (reported by number of claims). 4. Payment for Services: Provider payments by type of service during the reporting period and year to date. 5. Payment Denied: Dollar amount of provider claims by type of service denied during the reporting period and year to date. 6. Prior Authorization: Requests received, approved, and denied by type of service during the reporting period. 7. County/PHP Financial Reports 8. Monthly Capitation Payment Amounts 9. Recipient Complaints and grievances: Number received, completed and pending during the reporting period. 10. Provider Complaints: Number received, completed and pending during the reporting period. Federal Upper Payment Limit Exception Procedures for HealthChoices Waiver 1. The Federal upper payment limit (FUL) for specific PHP/MCO contracts is waived during the 2 years of the waiver. This waiver is contingent upon the requirement that aggregate actual expenditures for the 2-year waiver period will not exceed the maximum expenditures allowed by the application of the FULs to such contracts. FFP will not be available for expenditures which exceed the aggregate FUL. Definitions: Aggregate expenditures: The total actual expenditures paid to the HealthChoices contractors for the 2-year waiver period. Aggregate FUL: The sum of the FULs applicable to the individual contracts for both years of the waiver. 2. The FULs must be re-calculated annually and submitted to the Regional Office for approval before or at the same time the PHP/HMO contracts are submitted. 3. For each year of the waiver, all PHP/MCO contracts must be submitted to the Regional Office for prior approval. At that time DPW will identify which contracts, if any, have an exception to the FULs and explain the scope of the exception. Further, DPW will project the total expenditures for the contracts submitted to HCFA and estimate whether or not this amount will exceed the aggregate FULs for the contracts over the 2-year waiver period. 4. On a quarterly basis, DPW will provide the Regional Office with actual expenditure data for each contract and the maximum allowable expenditure for each contract as allowed by the FUL. This data will be prepared as described in DPW=s letter to HCFA dated August 18, 1998, (see page 4, item III). These reports should be submitted with the quarterly HCFA-64 reports and cross-walked to same. 5. DPW and HCFA staff will meet as needed to exchange information and validate data when deemed necessary to ensure that expenditure targets designed to keep actual expenditures within the aggregate FULs are met. 6. At the end of the 2-year waiver period, DPW will prepare a final report for HCFA demonstrating whether or not aggregate expenditures are less than or equal to the aggregate FULs.