Evercare SelectArizona Long Term Care System

(ALTCS)

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Arizona Long Term Care System (ALTCS)

Comprehensive Capitated Model

Elderly and Physically Disabled (EPD) Population

Developmentally Disabled Population

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ALTCS

Medicaid program designed to provide nursing facility and home based services to Arizona residents:

Are at risk of institutionalization Have income and resources below the program limits Meet additional program requirements.

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ALTCS Objectives

Prepaid, capitated approach through public/private partnership.

Integrate health services by bundling acute, long term care and behavioral health services.

Pre-admission screening process to identify those who are at-risk for institutionalization.

Full continuum of services: HCBS to NF Ensure members are placed in the least restrictive,

most cost effective care. PCP/case managers coordinate care.

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ALTCS Services

Institutional Care Home and Community Based Services Behavioral Health Acute Medical Care Services

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PotentialALTCSMember

Chart 3AARIZONA LONG TERM CARE SYSTEM

EligibilityFinancial

andMedical

ALTCSProgram

Contractor

PCP / CaseManager

HCBS

AlternativeResidential

Settings

Nursing Facility

ICF/MR(DD only)

Hospice

Acute CareServices

CaseManagement

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Elderly & Physically Disabled Population

85% of the EPD population are dual eligibles Average age of an EPD eligible member is 72 years of

age. Approximately 2% of the EPD population are members

under the age of 21. Largest growing EPD population segment - 19-64 Average length of time (duration) in the ALTCS

Program - 2.8 years Less than 1% of the EPD population are ventilator

dependent.

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ALTCS Acute Care Services

Ambulatory Surgery & Anesthesiology Audiology Behavioral Health Chiropractic Services Dental Dialysis Early and Periodic Screening, Diagnosis and

Treatment Emergency Services Eye Examinations/Optometry

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ALTCS Acute Care Services

Family Planning Health Risk Assessment and Screening Hospital Immunizations Laboratory Maternity Medical Supplies, Durable Medical Equipment,

Orthotics and Prosthetic Devices Physician

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ALTCS Acute Care Services

Podiatry Prescription Medications Primary Care Provider Radiology and Medical Imaging Rehabilitation Therapy Respiratory Therapy Transplants Transportation Triage/Screening and Evaluation

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ALTCS Long Term Care Services

Adult Day Health Care Attendant Care Behavior Management Services Emergency Alert System Environmental Modifications Group Respite Habilitation Home Delivered Meals Home Health Services

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ALTCS Long Term Care Services

Homemaker Hospice Partial Care Personal Care Private Duty Nursing Respite Care

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ALTCS Institutional Settings Nursing Facility Institution for Mental Disease Inpatient Psychiatric Residential

(members under 21)

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ALTCS HCBS Alternative Residential Settings

Assisted Living Facilities Adult Foster Care

Assisted Living Home

Assisted Living Center

Alzheimer’s Treatment Assistive Living Facilities

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ALTCS HCBS Alternative Residential Settings

Behavioral Health Settings Behavioral Health Level I

Behavioral Health Level II

Traumatic Brain Injury Treatment Facility

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Capitation

AHCCCS pays program contractors prospectively on a

capitated, per member per month basis.

Capitation rates are blended rates which include:

nursing facility,

HCBS,

acute medical services,

behavioral health services,

case management and administrative costs.

Statewide average rate is $2,344 (as of October 1, 2000).

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Development of ALTCS Capitation Rates

Information used in rate development: PC financial statements Encounters Inflation factor - Data Resource Institute (DRI)

ALTCS Reinsurance covers partial reimbursement of acute inpatient services and limited outpatient services beyond an annual deductible

ALTCS data sources (including PC reported financial information). Private sector data sources Inflation factor - Data Resource Institute (DRI)

An independent actuarial firms establishes actuarially sound rates or rate ranges

Competitive bids Rates/rate ranges are established each new bid year

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Nursing Facility $3,272.04 X 50.00% = $1,636.02

HCBS Home $1,043.74 X 36.50% = $380.97

HCBS Community $1,327.96 X 13.50% = $179.27

Acute Care $415.35

Case Management $74.97

Administration/Profit $189.95

Risk/Contingency* $38.46

Share of Cost* ($312.26)

*Set by AHCCCS. Share of Cost will be fully reconciled.

CRCS SUMMARY

Capitation Rate Components

Net Capitation $2,602.74

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Type of Placement% of

PlacementPer Diem

CostPer Diem Placement

Level One 44.0% X $99.02 = $43.57

Level Two 42.2% X $111.44 = $47.03

Level Three 5.2% X $135.44 = $7.04

Wandering Dementia 7.4% X $118.45 = $8.77

Subacute 1.2% X $245.00 = $2.94

Total (100%): 100.0% Subtotal: $109.34

Less Medicare/TPL Per Day: ($1.84)

Nursing Facility Per Diem-Net: $107.50

Conversion from Per Diem to Per Month:X 30.4375

Nursing Facility PMPM: $3,272.04

NURSING FACILITY

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Type of Service Annualized Units per

1000 Members Unit Cost PMPM Cost

Attendant Care 696,041 X $12.10 = $701.84

Homemaker 18,782 X $17.94 = $28.08

Personal Care 87,350 X $18.48 = $134.52

Home Delivered Meals 26,009 X $7.50 = $16.26

Respite 12,428 X $7.50 = $7.77

Adult Day Health Care 57,545 X $6.35 = $30.45

Home Health Nurse 17,882 X $77.19 = $115.03

Home Health Aide 3,493 X $33.67 = $9.80 $1,043.74

Less Medicare/TPL Per Day:Less Medicare/TPL: $0.00

Nursing Facility Per Diem-Net:HCBS Home PMPM: $1,043.74

HCBS HOME

Subtotal Home-based Services:

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Type of Service Annualized Units per

1000 Members Unit Cost PMPM Cost

Adult Care Home/Assisted Living Home 96,549 X $51.22 = $412.10

Assisted Living Centers 67,875 X $60.13 = $340.11

Adult Foster Care 118,853 X $50.11 = $496.31

TBI/Behavioral Health 11,981 X $350.00 = $349.43

$1,597.96Less Reinsurance: ($270.00)

Less Medicare/TPL Per Day:Less Medicare/TPL: $0.00

Nursing Facility Per Diem-Net:HCBS Community PMPM: $1,327.96

HCBS Community

Subtotal Community-based Services:

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Category of Service Annualized Units per 1000 Members Unit Cost

PMPM Cost

Hospital Inpatient Days 1,745 X $1,039.14 = $151.11Hospital Outpatient Visits 2,945 X $568.35 = $139.48Emergency Room Visits 739 X $345.69 = $21.29Primary Care 10,511 X $66.16 = $57.95Specialists 57,949 X $28.74 = $138.79Surgical Services 1,275 X $285.45 = $30.33Prescription Drugs 58,426 X $30.80 = $149.96Behavioral Health:

a. Inpatient 43 X $704.84 = $2.53b. All Other 3,450 X 77.63 = $22.32

Subtotal $713.75Other Costs

Laboratory, X-ray, Medical Imaging $7.73Hospice $3.18Durable Medical Equipment (DME) and Oxygen $23.90Therapy $4.58Transportation -- Emergency $15.92Transportation -- Non-Emergency $29.57Miscellaneous $0.00

Subtotal, Other Costs $84.88Less Reinsurance ($44.00)Less Medicare/TPL ($339.28)

Total Acute Care Capitation Rate PMPM: $415.35

ACUTE CARE

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Estimated Number of ALTCS Clients 315

Nursing Facility Placement Distribution (Set by AHCCCS) 50.00%

Case Manager Base Pay $36,490.00Case Manager Supervisor Base Pay $44,120.00Employee Related Expense % 25%Institutional Clients/Case Manager 120.0HCBS Clients/Case Manager 48.0Case Manager/Supervisor Ratio 7.0CM FTEs per Vehicle 1.0Vehicle Cost per Mile $0.345Vehicle Miles per Day 80Vehicle Days per Year 260

4.6$209,532.42

0.7 $36,192.19

Vehicles Required: 5.3

Vehicle Costs: $37,674.00

Total Annual Case Management Cost: $283,398.61Case Management PMPM: $74.97

Case Management Supervisor Salary and ERE:

CASE MANAGEMENT

Case Management FTEs Required:Case Management Salary and ERE:Case Management Supervisor FTEs Required:

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Risk Adjusters

Geographic - by County Medicare - imbedded in the rate Placement

Nursing Facility HCBS - Community HCBS - Home

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Risk Sharing

HCBS Placement Reconciliation - annual Placement - point in time Share of Cost

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HCBS Placement Reconciliation

ALTCS recoups capitation if PC’s HCBS placement percentage exceeds estimate:

HCBS % over budget Recoupment0 - .5 percentage pts. 0% of capitation overpayment.51 - 1.99 percentage pts. 20% of capitation overpayment2 or more percentage pts. 30% of capitation overpayment

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HCBS Placement Reconciliation

ALTCS adds capitation if PC’s HCBS percentage is below estimated:

HCBS % under budget Additional0 - .5 percentage pts. 0% of capitation underpayment.51 - 1.99 percentage pts. 20% of capitation underpayment2 or more percentage pts. 30% of capitation underpayment

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Placement AdjustmentMaricopa County Only

AHCCCS adjust placement percentages to provide incentives for appropriate placement in HCBS settings.

AHCCCS adjust capitation prospectively on a quarterly basis. For every 1% increase/decrease in placement percentage:

Acute Care will increase/decrease .5% Case Management will increase/decrease .85%

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Share of Cost

Members are required to contribute toward the cost of their care based on their income and type of placement.

Monthly capitation payment incorporates an assumed deduction for the share of cost (SOC).

Program Contractor is responsible for collecting the SOC or delegating to the nursing facilities.

Assumed SOC is fully reconciled to actual SOC annually.

AHCCCS will recoup or refund the difference.

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Reinsurance

Reinsurance is a stop-loss program provided for the

partial reimbursement of covered medical services

beyond an annual deductible.

AHCCCS is self-insured for the reinsurance program.

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Reinsurance Prior to Oct. 1, 2001

Regular Reinsurance - acute inpatient hospitalizations

Statewide Plan Deductible Deductible

Enrollment w/Medi A w/o Medi A Coinsurance

0 - 1,999 $ 5,000 $ 9,000 75%

2,000 + $12,000 $20,000 75%

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Reinsurance Prior to Oct. 1, 2001

Reinsurance Types without Deductibles and with Coinsurance Percentages

Catastrophic Reinsurance Hemophilia - 85% vonWillebrand’s Disease - 85% Gaucher’s Disease - 85%

Transplants - 85% High Cost Behavioral Health/Traumatic Brain Injury -

75%

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Reinsurance Effective Oct. 1, 2001

Reinsurance will cover both inpatient and all

outpatient services including pharmacy.

Catastrophic reinsurance - limits program contractor’s

expenses to $97,500 per catastrophic case.

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Eligibility

Mandatory v. Voluntary Member Issues Adverse Selection Critical Mass

Eligibility Determination Financial Medical / Functioning

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Capitation

Cohorts Broad v. Narrow

Larger bands Movement between categories Risk Placement

ABD At Risk Duals

Actuarial Conservative approach Acute LTC Annual Change

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Benefit Design

Behavioral Health HCBS Facility COB

Payer last resort Health Plan updates CM advocacy

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Risk Adjustment / Reconciliation

Placement SOC Reinsurance Duals Data

Placement Encounter / Utilization Financials

Negotiation v. Bid