The Use of Private Insurance to Support Part C Systems Ron Benham Andrew Gomm Maureen Greer NECTAC/ITCA Finance Seminar August 14-16, 2006.

The Use of Private Insurance to Support Part C Systems

Ron Benham

Andrew Gomm

Maureen Greer

NECTAC/ITCA Finance SeminarAugust 14-16, 2006

State System of Payments

Non-Substitution of Funds (Section 640)(a)– Funds provided under section 1443 of this title may not be

used to satisfy a financial commitment for services that would have been paid for from another public or private source, including any medical program administered by the Secretary of Defense, but for the enactment of this subchapter, except that whenever considered necessary to prevent a delay in the receipt of appropriate early intervention services by an infant, toddler, or family in a timely fashion, funds provided under section 1443 of this title may be used to pay the provider of services pending reimbursement from the agency that has ultimate responsibility for the payment.

Sec. 303.12 Early intervention services

. a) General. As used in this part, early intervention services means services that--... (3) Are provided—...(iv) At no cost, unless, subject to Sec. 303.520(b)(3), Federal or State law provides for a system of payments by families, including a schedule of sliding fees; and…

Sec. 303.520 Policies related to payment for services.

(a) General. Each lead agency is responsible for establishing State policies related to how services to children eligible under this part and their families will be paid for under the State's early intervention program.; and

Sec. 303.520 Policies related to payment for services.

(b) Specific funding policies. A State's policies must—

– (1) Specify which functions and services will be provided at no cost to all parents;

– (2) Specify which functions or services, if any, will be subject to a system of payments

(i) Information about the payment system and schedule of sliding fees that will be used; and

(ii) The basis and amount of payments; and

– (3) Include an assurance that-- (i) Fees will not be charged for the services that a child is

otherwise entitled to receive at no cost to parents; and

Sec. 303.520 Policies related to payment for services.

(c) Procedures to ensure the timely provision of services. – No later than the beginning of the fifth year of a

State's participation under this part, the State shall implement a mechanism to ensure that no services that a child is entitled to receive are delayed or denied because of disputes between agencies regarding financial or other responsibilities.

Sec. 303.527 Payor of Last Resort

… Funds under this part may be used only for early intervention services that an eligible child needs but is not currently entitled to under any other Federal, State, local or private source.

Use of Private Insurance

Accessing the family’s private insurance

coverage for covered Part C services

Family Co-Pay or Deductible

Paying insurance premiums for Part C

enrolled children

States’ Use of Private Insurance

2003 Survey – 20 states indicated they utilized private insurance as a fund source

2005 Annual Performance Report – 17 states reported the receipt of revenue from private insurance totaling $52.7 million (Range $35M – 12,000)

Today’s Presentation

Two states who will address:

– Development of Insurance Legislation

– Challenges and Opportunities of Fund

Expansion

– Impact on Families

Early Intervention and Third Party Payers in Massachusetts

A progressive partnership serving infants and toddlers with developmental concerns

Ron Benham, MA Department of Public HealthNECTAC/ITCA Fiscal Seminar

August 14-16, 2006

Early Intervention & Third Party Payers in Massachusetts

1. Definition2. Eligibility3. Overview of Current System4. Passage of Early Intervention Legislation – 19835. Medicaid Participation – 19856. Mandated Insurance Coverage – 19907. What Works

1. Definition

Early Intervention is a comprehensive, community-based program of integrated developmental services which uses a family centered approach to facilitate the developmental progress of children between the ages of birth and three years whose developmental patterns are atypical, or are at serious risk to become atypical through the influence of certain biological or environmental factors.

Definition, continued

Early Intervention services are focused on the family unit, recognizing the crucial influence of the child’s daily environment on his or her growth and development. Therefore, Early Intervention staff attempt to work in partnership with those individuals present in the child’s natural environment, which may include settings other than the child’s home. The program seeks to support and encourage the caregiver’s growth toward independence in planning for the child’s continuing and changing needs.

2. Eligibility

Children with a diagnosis known to result in developmental delay

Children evaluated and found to have a developmental delay of 25% in one domain based upon their age

Children at risk of developmental delay

3. Overview of Current System

All services are purchased through community agencies (38 agencies)

Agencies bill insurers and MassHealth (Medicaid) directly

Department of Public Health payor of last resort

$83 million for direct services in FY’05; 28,xxx children served

Overview, cont.

62 Early Intervention providers Range of disciplines in each program Transdisciplinary service model

4. Passage of EI Legislation - 1983

Required statewide service system Established Public Health as lead agency Required development of service standards Required Medicaid participation

Who Pays: Direct Service Only, FY’05 (Excludes Specialty Program for Children with Autism or Children who are Blind)

State appropriation $ 25.4 M Third party 38.9 M Medicaid 18.2 M

5. Medicaid Participation – 1985

Reimbursement model changed from cost reimbursement to unit based

Currently 7 reimbursable services & current hourly rates:– Home Visits $ 73.80– Center Individual 61.88– Community Based Group 28.32– EI Only Group 21.56– Parent Group 27.68– Screening 86.24– Assessment 99.00

DPH serves as gatekeeper to Medicaid

6. Mandated Insurance Coverage – 1990

Bill introduced in 1986 Legislation passed in January 1990 Law took effect in April 1990 Fully in effect April 1991 “Medically Necessary” criteria Service costs capped

– $5,200 yearly/$15,600 aggregate

7. What Works

Vision, Commitment, Persistence Positive, cooperative working relationship with

insurers and Medicaid Insurance/Health Plans with Early Intervention

coordinators work best Insurers did not strongly oppose increase in cap to

$5,200 annually, effective 7/1/04 Joint efforts related to billing/claims submission Ongoing identification of systemic problems,

programs, payors

New MexicoFamily Infant Toddler Program

Private Health Insurance

Legislation

Background

NM Primary funding sources– State General Funds– Medicaid– IDEA Part C grant

Sporadic use of family fees Historic billing of Health Plans – but most

providers had given up

Funding challenge

Over 100% growth in children / families served in 5 years (2000 – 2005)

Average annual growth of ~16% Flat Federal Part C funding Rate study in 2003 recommended increase

to rates to meet costs Challenge to access State General Funds to

match growth

Initial steps Decision by ICC to look for other sources of

funding 2004 Legislature passed a Joint Memorial to

study the feasibility of billing private health insurance

HJM 38 Committee included parents, providers, 3 major health plans, Insurance Division; Dept of Health and Medicaid

Input from two other States – Massachusetts and Connecticut

Joint Memorial results Brought health plans to the table Various options considered Report presented to Health & Human Services

Committee Report identified potential for ~$3 million

revenue Health plans recognized the minimal impact to

premiums Health plans saw “writing on the wall” for

legislation and got behind the idea of an annual cap

NM’s Insurance Statute

Introduced by Legislator (who’s on the ICC) Language for bill submitted by ICC members Testimony provided by families & providers Recommendations of the HJM utilized in

testimony Passed the first session it was introduced!

Features of legislation

Early Intervention must be provided by provider agencies certified by the Dept. of Health

IFSP is considered plan of care Can not effect the families lifetime benefit

cap $3,500 annual cap (after which the

Department of Health picks up all costs)

Implementation

Consultation from Massachusetts Initial meeting with health plans, Insurance

Division, EI provider agencies, families Monthly meetings with 3 major health Plans Collecting health insurance information from

families Contract with billing agent to process third party

claims

Decisions / agreements

Department of Health will submit claims (rather than 33 providers)

Contracted agency will submit claims Health plans will not charge co-pays or deductibles

Health plans will not have certify FIT Provider agencies

Health plans will not conduct prior auth. Health plans will allow back billing to July 01st

Work ahead

Decide whether to require families to allow access to the insurance plan and if they choose not to whether to levy a fee

Develop MOUs with health plans that would cover issues like no co-pays or deductibles

Clean-up legislation that clarifies that this benefit does not apply to specific plans (dental, vision, long term care ins. etc.)

Collect the $$$