The Integration of Acute and Long Term Care Services: Rate ...

Commonwealth of Virginia

Department of Medical Assistance Services

Acute & LTC Integration: Phase IIData Book Development and Capitation Rates

*connectedthinking

September 24, 2007

Agenda

Acute & LTC Data Book: Regional Model Phase II

General ApproachData

•DMAS FFS Data•Medallion II Health Plan Data / FY 2008 Rates as appropriate•Considerations and Limited or Missing Data•Data to be Included in Acute and LTC RFP

Development of Acute & LTC Rates: Regional Model Phase II Federal Requirements: CMS Checklist for Actuarial Soundness Rate CellsAdjustmentsIBNR and TrendManaged Care Assumptions

Slide 3DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Data Book Development – General Approach Acute LTC Integration: Regional Model Phase II

• Present historical data to allow potential health plans to review cost and utilization of services of the A & LTC covered populations

• Consider variation in circumstances based on • Aid category• Waiver category• Acute Care vs LTC services• Geography

• Will not project Medicaid cost and utilization. Health plans to “estimate a reasonable cost” for providing care to the covered population based on market circumstances, plan efficiencies, and state policy goals

Commonwealth of Virginia Department of Medical Assistance Services

Slide 4DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Detailed Data Book Development – Sources of Data• DMAS Fee For Service Data

• Historical base: FY 2005 and FY 2006• Separation of Acute care and LTC service categories• Only current source of waiver population and LTC data

• Health Plan Medallion II Data for Medicaid Only Aged Blind and Disabled• Historical base: FY 2005 and FY 2006• Acute care service categories• Rates already developed and published for FY 2008

• PACE Pilot Programs• Historical base: FY 2005 and FY 2006• Compared costs of those in Nursing Home vs Home and Community Based

Waiver• Rates in development

• DMAS has provided• Detailed eligibility category instructions• List of Acute care and LTC service categories

Commonwealth of Virginia Department of Medical Assistance Services

Slide 5DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Detailed Data Book Development – Sources of Data

• External Sources• May need to look to other programs to estimate costs and utilization

for some services- Care Management- Best practice / effective use of alternative LTC services

Commonwealth of Virginia Department of Medical Assistance Services

Slide 6DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Data Book Development – Detailed ReportsAcute LTC Integration: Regional Model Phase II

• Geographic Location• Statewide• Rollout geographies defined by DMAS

- Tidewater, Richmond, Northern, Surrounding counties, Rural

• Populations in Regional Model Phase II • Medicaid Only Aged Blind and Disabled (All Ages – PCCM)• Medicaid-Medicare Dual Eligible• New Admission Nursing Home Clients• Home and Community Based Waiver Clients

- Elderly and Disabled with Consumer Direction- AIDS waiver

• Populations to be added later: Home and Community Based Waiver- Mental Health/Mental Retardation, Day Support, Developmental

Disabilities, and Alzheimer’s

Commonwealth of Virginia Department of Medical Assistance Services

Slide 7DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Overall Process – Acute LTC Data Book Development

Historical FFS Data Summary & Cleaning

Commonwealth of Virginia Department of Medical Assistance Services

Historical Cost and Utilizationby eligibility category, demographic/waiver grouping, service category, and region

Eligibility and Service Summary

List of DMAS Program Changes

Review by DMAS

Include in Acute LTC RFP

Slide 8DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Data Sources – Acute and LTC integration Data Book

• Calculate eligible member months• Verify claims through date sensitive person-level merge with eligibility file

Commonwealth of Virginia Department of Medical Assistance Services

DMAS Eligibility File

DMAS FFS Invoice Data

Supplemental and / or Missing Data

• Historical data for recent two year period: FY05-FY06 claims• Paid data for acute and LTC services• Medicaid Only ABD - PCCM• Medicare- Medicaid Dual Eligible Crossover Claims• Waiver services for Consumer Directed and AIDS

• FY 2008 rates: Medallion II ABD for Acute Care and PACE• Provide detail for selected service categories - therapy, vision?• Nursing home costs will be imputed from comparable populations • Mandatory with opt-out provisions; Unknown selection effect

Slide 9DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

DMAS FFS Historical Adjustments

The historical FFS data will reflect changes in payment rates, covered services, and any other programmatic and policy changes.

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• List of adjustments• Detail information for each adjustment

Slide 10DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

DMAS Fee for Service IBNR and Trend

Data book will report the estimated completeness of the claims

Will not include trend factors at this time

• Incurred But Not Reported Claims values can be calculated using a variety of actuarially accepted methods

• Historical trend can be calculated using a least-squares regression model or other actuarially accepted methods

• Any adjustments will consider variation by eligibility category and claims type

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• Level of detail to be determined

Slide 11DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Administrative Cost Allowance

DMAS guidelines for an acceptable administrative cost allowance have

not been determined. • Current Medallion II admin allowance is 8.9%• Current PACE admin allowance is 12%• Will consider covered services, population, total estimated health care

costs

Commonwealth of Virginia Department of Medical Assistance Services

Slide 12DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Medallion II FY 2008 Rates –

Show cost experience for different population groups

Not a direct match to ALTC population, but useful as a point of comparison

MCO data used to develop FY 2008 rates for Medallion II

Public report issued May 2007

Medicaid Only Aged Blind and Disabled

Acute Care Services Only

Includes “Managed Care” Adjustments• Reflects MCO regional utilization, payment rates, and administrative

efficiencies• Adjusted for anticipated DMAS policy and program changes• Administrative cost reflects all Medicaid and FAMIS LOS

Base Rates and Risk Adjusted Rates

Medallion II regions differ from proposed ALTC Integration regions

Commonwealth of Virginia Department of Medical Assistance Services

Slide 13DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

PACE Pilot FY 2008 Rates –

Show cost experience for Nursing Home and Nursing Home eligible seniors

Not a direct match to ALTC population, but useful as a point of comparison

DMAS FFS data used to develop FY 2008 rates

Rates near completion

Dual vs Non Dual Nursing Home Eligible• Includes most of the Home and Community Based Waiver population

Acute Care, Long Term Care and Medicare Crossover Services

Includes “Managed Care” Adjustments

• Assumes managed care savings• Adjusted for anticipated DMAS policy and program changes• Administrative cost developed based on financial review of Pre-PACE Do not Risk Adjust rates

Uses Medallion II regions which differ from proposed ALTC Integration regions

Commonwealth of Virginia Department of Medical Assistance Services

Slide 14DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Development of Acute and LTC Rates Acute LTC Integration: Regional Model Phase II

Federal Requirements: CMS Checklist for Actuarial Soundness

Adjustments

IBNR and Trend

Managed Care Assumptions

Commonwealth of Virginia Department of Medical Assistance Services

Slide 15DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Federal Requirements for Medicaid Managed Care:CMS Checklist requires rates be certified by an actuary

The checklist provides guidance for “actuarial soundness”:

• Use appropriate data for the population to be covered

• Payment rates should be differentiated to reflect known variation

• Use cost neutral data smoothing techniques where appropriate

• Encounter data or FFS experience data can be used for the rate development

• Must account for differences in utilization rates between FFS and MC when FFS data are used

• Include appropriate levels of health plan administrative costs

• Reflect programmatic changes in the contract period

• An upper and lower bound in rates may be developed

Commonwealth of Virginia Department of Medical Assistance Services

Slide 16DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Acute and LTC Integration:Rate Development

Rates must meet criteria for actuarial soundness

Rates must meet criteria for “cost effectiveness” in waiver submission• Total cost for each eligibility group must be equal to or less than the cost of providing the

services to the enrolled population in the absence of the program / under the current Medicaid FFS program

Commonwealth of Virginia Department of Medical Assistance Services

Slide 17DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Acute and LTC Integration:Medicaid Eligibility Groups / Rate Cells

Medicaid Eligibility Groups / Rate Cells not yet determined

Rate cells under consideration

Medicaid Only – Disabled Under 65

Medicaid Only – Aged and Disabled 65 and Over

Medicare – Medicaid Dual Eligible

Other

Waiver Population

PCCM

Must evaluate for regional differences and eligible population size/credibility

Commonwealth of Virginia Department of Medical Assistance Services

Slide 18DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Adjustments

For Acute care services, adjustments used in Medallion II rate setting may be used as guidelines for anticipated policy changes

For LTC and waiver services, guidance to be developed in conjunction with DMAS

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• List of expected policy changes• Detail information for each adjustment

Slide 19DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

IBNR and Trend

For Acute care services, IBNR and Trend used in Medallion II rate setting may be used as guidelines for anticipated policy changes

For LTC and waiver care services, PwC will ultimately develop assumptions through collaboration with DMAS and potential bidders

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• Level of detail to be determined

Slide 20DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Managed Care Adjustments

For Acute care services, Medallion II rate setting may be used as guideline for expected improvements in cost and utilization

For other services, PwC will ultimately develop assumptions through collaboration with DMAS and potential bidders

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• Level of detail to be determined

Slide 21DMAS Integration of Acute and LTC ServicesPricewaterhouseCoopers

September 2007

Risk Adjustment

Not anticipated at this time• Acute Care Risk Adjustment

• CDPS or DxCG risk adjuster is not a good fit for the dual eligible population• No Medicaid Only PCCM population in Tidewater or Richmond• Medicaid Only HCBS Waiver population very small / issue of credibility

• Investigating LTC risk adjustment • Need data changes to develop further

Commonwealth of Virginia Department of Medical Assistance Services

Information from DMAS to be included in RFP:

• Not Applicable

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