Proposed Medicaid reg for BBA provisions includes a few surprises
Proposed Medicaid reg for BBA provisions includes a few surprises
HCFA has some expensive suggestions for your programs
The proposed federal regulation implementing the Medicaid provision of the Balanced Budget Act (BBA) of 1997, issued late last month, contains many requirements that plans and states already meet, as well as a few surprises. However, the proposed regulation could change significantly in response to public comment, which the Health Care Financing Administration is soliciting until Nov. 30.
One of the surprises is a proposal requiring Medicaid plans to complete a health assessment of every enrollee within the first 90 days of membership, which coincides with the 90-day period during which a member may disenroll without cause. Pregnant women and members with complex medical needs would have to be assessed sooner, within a time period to be established by each state.
While some states have been required under their waivers to complete health risk assessments, the practice generally has been restricted to special-needs populations. This is the first broad-based requirement for health assessments and likely will present difficult logistical and financial problems for many states and plans, experts say.
"A lot of states have managed care programs that focus on the traditional Aid to Families with Dependent Children population," Lewin Group vice president Terry Savela said. "This is a significant new burden for states and plans. It could be an administrative nightmare to monitor and a significant fixed cost that you can’t recover from if the member disenrolls."
In general, the proposed regulation reflects HCFA’s desire to provide specificity on Medicaid requirements and standards while fulfilling the Clinton administration’s promise of more flexibility and control for the nation’s governors. For instance, the proposal mandates that states have some type of quality assessment and improvement system of their own choosing. The mandated features, according to the reg, look and feel a lot like Quality Improvement System for Managed Care (QISMC), the system that HCFA itself helped to design. While QISMC is mandatory for Medicare plans, it is optional for Medicaid plans.
The regulation’s prescriptive sections generally reflect certain congressional "hot buttons" that were pushed last summer during discussions of the BBA, such as the provisions governing emergency services, acknowledged Sally K. Richardson, director of HCFA’s Office of Medicaid and State Operations.
For instance, health plans would not be able to dispute emergency room bills if the member’s symptoms initially appeared to but ultimately did not constitute an emergency. A plan would have one hour from the time it is contacted to approve or deny the provision of post-stabilization services.
Failure to respond incurs penalty
If the plan fails to respond or cannot be reached for approval, the plan must pay for the care, according to the proposed regulation. The plan also would not be able to challenge the determination of the attending physician or practitioner regarding whether the member is "sufficiently stabilized for transfer or discharge."
Such a provision could undercut a plan’s ability to control emergency room utilization, generally the most costly proportion of the overall cost of providing care to plan participants.
The proposed regulation also requires that women in Medicaid managed care plans be allowed direct access to "women’s health specialists" for routine care, and prohibits plans from imposing "gag" clauses in physicians’ contracts.
Another significant new provision affects plans in rural areas. The proposed regulation gives states the authority to mandate a program even if only one health plan is available to beneficiaries, provided the member can switch physicians within the plan. The sticking point comes when the law says members have the option of going out of the network for services not provided by the network, or when a provider "is not part of the network but has an existing relationship with the beneficiary."
This provision could lead to a plan having to include virtually every area provider in its network or being put at unlimited financial risk because it won’t be able to anticipate or manage out-of-network services, Lewin senior manager Lisa Chimento said.
The whole question of what constitutes a rural area also is up for debate, according to HCFA’s proposal. The agency provides three possible definitions and asks which (or another altogether) might be most appropriate.
The Lewin analysts also noted that plans that do not operate with a gatekeeper model, or any that are offering "open access" options, will have to move closer to a primary care physician model. Under the new regulation, plans would be required to "provide each enrollee with an ongoing source of primary care . . . and a health care practitioner who is primarily responsible for coordinating the enrollee’s overall health care."
The proposed rule also has a modified form of a lock-in enrollment period. Currently, members can disenroll at any time without giving cause. Under the proposed rule, members may leave without cause only in the first 90 days of membership. If they do enroll in another plan, members get another 90-day "try-out" period to see how it fits them.
Many states are exempted
States with 1115 and 1915b waivers issued before Aug. 5, 1997, will not have to comply with the BBA provisions in general except in instances where the regulation addresses an area that the waivers do not. Ms. Richardson acknowledged that the exemption affects a large number of states but said Congress’ intention was to permit the various demonstrations allowed under the waivers to continue.
Another requirement sure to catch plans’ attention is the proposed requirement that managed care organizations (MCOs) have in place "procedures designed to guard against fraud and abuse," including a system to report suspected violations to the state Medicaid agency, HCFA and the Office of Inspector General. The reporting mechanisms would have to address potential violations by the MCO itself, subcontractors or enrollees.
The proposal acknowledges that meeting this requirement will require MCOs to expend "additional resources and procedures" to be able to detect and report suspected fraud and abuse.
The proposal does not clarify whether plans must have a full-blown compliance plan, as Medicare plans and hospitals are expected to have. Ms. Richardson said the proposal gives states the flexibility to impose a specific reporting system of their choosing.
Changes ahead for PCCMs
Primary care case management (PCCM) programs and other forms of managed care plans, such as HMOs, generally will be subject to the same standards pertaining to access, enrollment and disenrollment, and referrals to other providers. This provision is likely to cause states to modify their PCCM programs, which generally have fewer and less strict standards than HMOs.
With the exception of those prepaid health plans (PHPs) specifically exempted by Congress, PHPs are considered to be MCOs and subject to the same requirements as HMOs, according the proposal. A PHP thus would be required to be licensed by its state as a risk-bearing entity, which usually involves obtaining an HMO license. Some four million Medicaid beneficiaries are enrolled in PHPs, Ms. Richardson said.
Because the regulation was issued as a proposed rule, a comment period is allowed, after which a new regulation will be published with implementation dates. At press time, the National Association of State Medicaid Directors (NASMD) had no formal statement on the regulation, but planned to submit comments by Nov. 30.
Texas Medicaid Director Linda Wertz, vice chairwoman of NASMD’s executive committee and a member of its managed care technical assistance group, said Medicaid directors planned to have a series of phone calls to discuss the regulations, with the goal of presenting a draft to the executive committee by early November. She added that she expected that "a number" of states will independently submit comments to HCFA.
Contact Ms. Richardson at 410-786-3870, Ms. Savela and Ms. Chimento at 703-218-5500, and Ms. Wertz at 512-424-6517.
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