managed care contracting from a position of …€¦ · adam j. falcone, esq. partner managed care...
TRANSCRIPT
Adam J. Falcone, Esq.Partner
MANAGED CARE CONTRACTING FROM A
POSITION OF STRENGTH!
December 11, 2019
Greater Columbia Accountable Community of HealthFor Training Purposes Only – Does Not Constitute Legal Advice
Federal Grants Practice Group. We help clients through pre- and post-award matters, such as financial and program requirements, procurements, property issues, termination and enforcement, as well as how best to prepare for and respond to government reviews, audits, and cost disallowances.
Health Law Practice Group. We advise on legal issues arising under the Public Health Service Act (HRSA and SAMHSA grant programs), the Social Security Act (Medicare and Medicaid programs), Fraud and Abuse Laws (Anti-Kickback Statute, Stark Self-Referral Law, and False Claims Act), Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Regulations, Federal Tort Claims Act (FTCA), antitrust laws, and tax-exempt law.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 2
FELDESMAN TUCKER LEIFER FIDELL LLP
A boutique law firm based in Washington, DC with 50 years of experience in the intersection of healthcare and federal grants law.
• Focused on Essential Community Providers
• Knowledge of Federal Health Care Law and Policy
• Counseling to Litigation: We’ve Got You Covered
3
PRESENTER: ADAM J. FALCONE
• Partner in Feldesman Tucker Leifer Fidell’s national health law practice group.
• Counsels health centers, behavioral health providers, and provider networks on a wide range of health law issues, including fraud and abuse, reimbursement and payment, and antitrust and competition matters.
• Began his legal career in Washington, D.C. as a trial attorney in the Antitrust Division’s Health Care Task Force at the U.S. Department of Justice.
• Served as Policy Counsel for the Alliance of Community Health Plans, representing non-profit and provider-sponsored managed care organizations before Congress and the Executive Branch.
• Received a B.A from Brandeis University, an M.P.H. from Boston University School of Public Health, and a J.D., cum laude, from Boston University School of Law.
Contact information [email protected] 202.466.8960
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
AGENDA
Part 1: The P.E.N. Strategy for Managed Care Contracting
1) Prepare for Managed Care Contracting
• Assessing Regulatory Leverage, Market Power, and Timing
• Participating in Value-Based Payment (VBP) Methodologies
2) Evaluate Managed Care Contracts
3) Negotiate with MCOs
Part 2: Key Terms and Legal Protections
Part 3: Participating or Forming Provider Networks
• Types of Provider Networks
• Accountable Care Organizations
• Federal Antitrust Law and Negotiating Jointly
44© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
DISCLAIMER
• This training is provided for general informational and educational purposes only and does not constitute legal advice or opinions.
• The information is not intended to create, and the receipt does not constitute, an attorney-client relationship between attorney and participant.
• For legal advice, you should consult a qualified attorney.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 5
PART 1
The P.E.N. Strategy for Managed Care Contracting
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 6
WHO HAS AN ADVANTAGE?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 7
BOTH.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 8
MANAGED CARE CONTRACTING
A strategy is simply a plan of action for accomplishing an objective.
9© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CONTRACTING STRATEGY
Before you sign, use the P.E.N!
Prepare
Evaluate
Negotiate
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 10
STEP 1: PREPARATION PHASE
A party that recognizes its
strengths has an advantage in achieving its objectives.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 11
IDENTIFY YOUR STRENGTHS
Assess Leverage
Compete Based on
Value
Increase Leverage or Value
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 12
ASSESSING LEVERAGE: LEGAL
Possible Leverage Points:– Participation: MCO is required to include me in its provider network– Coverage: MCO is required to cover (all of) my services– Payment: MCO is required to pay me a specific rate
Sources of Leverage: Federal Medicaid laws or regulations State insurance laws and regulations MCO’s contract with the State Medicaid agency (“Model Contract”) Insurance Exchange regulations and rules
Hint: Key terms to look for: “provider network”, “network adequacy”, “network service”, “payment”, “network contracting requirements,” and “minimum network standards”.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 13
WASHINGTON STATE MODEL CONTRACTEssential Behavioral Health Providers
Network Requirements – Section 6.2.5
• The Contractor must incorporate the following requirements when developing its behavioral health network.• The Contractor shall establish and maintain contracts with providers determined by HCA to be Essential
Behavioral Health Providers (EBHP): • Certified residential treatment providers• DBHR-licensed community MH agencies• DBHR-certified CD agencies• DOH-certified MAT providers• DBHR-certified opiate substitution providers• DOH-licensed and DBHR-certified free-standing inpatient, hospitals or psychiatric inpatient facilities that
provide evaluation of treatment services• DOH-licensed and DBHR certified detox facilities• DOH-licensed and DBHR certified residential treatment facility for crisis stabilization services• Certified wraparound and intensive services (WISe) provider• Office-based opioid treatment qualifying providers operating under a DATA waiver
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 14
WASHINGTON STATE MODEL CONTRACTPayment to FQHCs/RHCs
Payment to FQHCs/RHCs – Section 5.21.2
• Each FQHC/RHC is entitled to its specific, full encounter rate for each qualifying encounter as outlined in the Medicaid State Plan and in accordance with Section 1902(bb) of the Social Security Act.
• The full encounter rate shall be at least equal to the Prospective Payment System (PPS) rate specific to each FQHC/RHC and applies to FQHCs/RHCs reimbursed under the Alternative Payment Methodology (APM) rate methodology and to FQHCs/RHCs reimbursed under the PPS rate methodology.
• To ensure that each FQHC/RHC receives its entire encounter rate for each qualifying encounter, the Contractor shall pay each contracted FQHC/RHC in one of two ways: (1) Pay the specific monthly enhancement payment amount to the FQHC/RHC (within 30 days) in addition to payment of claims for service made at standard rates paid to the FQHC/RHC; or (2) Pay a monthly capitation rate for services and pay the specific monthly enhancement payment amount to the FQHC/RHC (within 30 days).
Payment for Mental Health Encounters – Section 5.22.1• The Contractor is required to contract with at least one FQHC/RHC in their service area if the FQHC makes such a
request.• The Contractor must not pay a FQHC or RHC less than the level and amount of payment the Contractor would pay
non-FQHC/RHC providers for the same services.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 15
WASHINGTON STATE MODEL CONTRACTNon-Participating Providers
Payment for Services by Non-Participating Providers – Section 5.18• The Contractor shall limit payment for Emergency Services furnished by any provider who does not have a
contract with the Contractor to the amount that would be paid for the services if they were provided under HCA’s Medicaid Fee-For-Service (FFS) program.
• Except as provided herein for Emergency Services, the Contractor shall coordinate with and pay a Non-Participating Provider that provides a service to Enrollees under this Contract no more than the lowest amount paid for that service under the Contractor’s contracts with similar providers in the State.
• For purposes of this subsection, “contracts with similar providers in the State” means the Contractor’s contracts with similar providers to provide services under the Managed Care program when the payment is for services received by a Managed Care Enrollee.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 16
WASHINGTON STATE MODEL CONTRACT
Enrollee Choice of PCP/Behavioral Health Provider
Enrollee Choice of PCP/ Behavioral Health Provider – Section 10.5
• The Contractor must implement procedures to ensure each Enrollee has a source of primary care appropriate to their needs.
• The Contractor shall allow, to the extent possible and appropriate, each new Enrollee to choose a participating PCP or behavioral health professional.
17© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
ASSESSING LEVERAGE: MARKET POWER
Leverage Points:– MCO has no alternative providers in market if it does not contract with me– MCO cannot meet network adequacy requirements without me
Understand Your Market What organizations (if any) furnish similar services to me? For each of my services, what percent of the market do I serve as compared to other
organizations?
Hint: Fewer providers = Greater leverage– Assess breadth and scope of services– Analyze market share– Consider brand and reputation
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 18
ASSESSING LEVERAGE: TIMING
Leverage Points:– MCO is establishing new provider network or product.– MCO faces critical deadlines in order to enter marketplace by a certain date.
Stay Informed: • State timelines• Managed care entities• Your trade and professional associations• Your peers
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 19
COMPETING ON VALUE
• Enhances your negotiating position because you can offer something of greater value than you competitors in the marketplace.
– Sometimes referred to as “competitive advantage”
Identify Value Assess Value Communicate Value
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 20
HEALTH CARE SERVICES MARKET
Managed Care Organization
Provider
Provider
Provider
SellerBuyer
21© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
IDENTIFYING VALUE
Self-Assessment Questions: Can you deliver greater value (potential cost-savings) to the MCO?
Adherence to prescription drug treatment Reduction in ER visits or preventable hospitalizations Reduction in total expenditures for cost of care
For any of the above, can you quantify the savings?
Get Answers! Collect data and report on quality measures Access data on total costs of care for your patients
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 22
IDENTIFYING VALUE
Self-Assessment Questions: Are you willing to incur some downside financial risk that would
otherwise fall upon the MCO?• Capitated payment for the provision of services furnished by your
organization• Bundled payments or case rates for specific diagnoses or conditions• Shared savings and losses for total costs of care
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 23
COMPETING ON VALUE
Communicate Your Value!
Marketing materials that communicates the value you offer to MCOs
In-person meetings with MCOs to describe cost and clinical outcomes
Participation at conferences that highlight your achievements
Informal networking events
Community events
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 24
INCREASE LEVERAGE OR VALUE
Collaborations with other providers through joint ventures or integrated provider networks may increase leverage in the
marketplace, enhance your value, or both, thereby improving your negotiation position.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 25
INTEGRATED CARE MODELS
Joint Venture
•Contractual relationships (e.g., affiliation)
•Joint governance committee
Partial Integration
•Joint ownership or joint control of new legal entity (e.g., IPA, ACO)
Full Integration
•System owns hospitals and employs salaried physicians
26© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 26
INTEGRATED CARE DELIVERY MODELS
• Referral Arrangement
• Co-location Agreement
• Purchase of Services
• Merger
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
Primary Care
Provider
Behavioral Health
Provider
Joint Venture
27
INTEGRATED CARE FINANCING MODELSPROVIDER NETWORKS
IPA
Behavioral Health Provider
Behavioral Health Provider
Primary Care Provider
ACO
FQHC
Behavioral Health Provider
Hospital
Management Services Organization
DD/ID
DD/ID
DD/ID
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 28
VALUE-BASED PAYMENT METHODOLOGIES
• Value-Based Payment (VBP) generally refers to activities that move away from traditional fee-for-service (FFS) payment system, which rewards volume, to alternative payment models that reward high-quality, cost-effective care.
• Nearly 40 percent of state Medicaid directors surveyed in 2016 reported plans to expand VBP arrangements in following year.
• CMS aims to move 50% of Medicare FFS payments into alternative payment models by 2018.
• Today, most VBP arrangements in Medicaid support only providers of physical health services. (Center for Health Care Strategies, June 2017)
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 29
VALUE-BASED PAYMENT ARRANGEMENTS
• Who serves Medicaid’s highest cost patients? The case for VBP arrangements that support behavioral health providers can be made, given that:
• Spending for individuals with a behavioral health diagnosis is nearly four times higher than for those without.*
• 20 percent of Medicaid enrollees who have a behavioral health diagnosis account for almost half of total Medicaid expenditures.*
• VBP in Medicaid holds promise to improve quality and slow growth if it were routinely extended to Medicaid behavioral health providers.
*Medicaid and CHIP Payment and Access Commission. “Chapter 4: Behavioral Health in the Medicaid
Program — People, Use, and Expenditures. Report to Congress on the Medicaid and CHIP.” June 2015.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 30
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 31
ALTERNATIVE PAYMENT MODELS
The Health Care Payment Learning & Action Network (HCP-LAN) was created to drive alignment in payment approaches across the public and private sectors of the U.S. health care system.
The HCP-LAN created a common framework for adoption and measurement of VBP across all payer types (Medicare, Medicaid, and Commercial).
The APM Framework was “refreshed” in 2017, removing subcategory 2D and establishing a new subcategory 4C.
The Alternative Payment Model (APM) Framework provides a continuum of payment models.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 32
ALTERNATIVE PAYMENT MODELS
Category 1: FFS payments not linked to quality. • FFS payments are based on the number and units of service provided, without linkages to, or adjustments for,
provider reporting of quality data, or performance on cost or quality data.
Category 2: FFS payments linked to quality and value. • FFS payments are adjusted based on other factors, such as infrastructure investments, whether providers report
quality data (pay-for-reporting),and/or performance on cost and quality metrics (pay-for-performance).
• Category 2A (Foundational Payments): Payments for infrastructure investments that can improve the quality of patient care, even though payment rates are not adjusted in accordance with performance on quality metrics.
• Category 2B (Pay for Reporting): Positive or negative payment incentives to report quality data.
• Category 2C (Pay-For-Performance): Payments that reward providers that perform well on quality metrics and/or penalize providers that do not perform well, thus providing a significant linkage between payment and quality.
Note: Washington State Health Care Authority’s definition of VBP starts with Category 2C.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 33
ALTERNATIVE PAYMENT MODELS
Category 3: Alternative payment models based on FFS.• Payments are based on FFS, but provide mechanisms to more effectively manage services. Providers must meet
quality metrics to share in cost savings, and payments are based on cost performance against a target. Models may include:
– Category 3A (APMs with Shared Savings): Also referred to as “upside” risk, providers must meet a total-cost-of-care target for some/all services for an attributed set of patients. If actual costs are below projections, providers may keep some savings if quality measures are met.
– Category 3B: • APMs with Shared Savings and Downside Risk. Also referred to as “upside” or “downside” risk respectively, providers must meet a
total-cost-of-care target for some/all services for an attributed set of patients. If actual costs are below projections, providers may keep some savings if quality measures are met, or if actual costs are above projections, providers must compensate payors for a share of the losses.
• Bundled or episode-based payments. A single payment to providers for all services needed to treat a given condition (e.g., maternity care) or to provide a given treatment (e.g., hip replacement). Providers receive an inclusive payment for a specific scope of services to treat an “episode of care” with a defined start and endpoint (e.g., case rate for six months of SUD recovery services).
Note: Washington State Health Care Authority’s definition of VBP includes all Category 3 arrangements.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 34
ALTERNATIVE PAYMENT MODELS
Category 4: Population-based payments.• Payments are structured to encourage providers to deliver coordinated, high-quality
care within a defined budget.
• Category 4A (Condition-Specific Population-Based Payments): Providers are accountable for quality and cost, receiving per-member per-month payments for a specific condition or defined scope of practice.
• Category 4B (Comprehensive Population-Based Payments): Providers are accountable for quality and cost, receiving per-member per-month (or percent of premium) payments for all of the individual’s health care needs.
• Category 4C (Integrated Finance & Delivery Systems): Also involve comprehensive population-based payments but involve organizations that integrate financial and care delivery systems.
Note: Washington State Health Care Authority’s definition of VBP includes all Category 4 arrangements.
MEDICAID VBP LANDSCAPE
• Payment Reforms. States are using MCO contracts as a vehicle to increase the number of providers paid under VBP arrangements. Such approaches include requiring MCOs to:
• Adopt standardized VBP model to reimburse providers (Minnesota, Tennessee)• Make a specific percentage of provider payments through approved VBP
arrangements (Arizona, Pennsylvania, South Carolina, New York State)• Participate in a multi-payer VBP alignment initiative (Tennessee)• Launch VBP pilot projects under state oversight (New Mexico, Minnesota)
• States may also adjust payments to MCOs based on quality metrics and efficiencies to drive behavioral health outcomes and advance integrated models.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 35
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 36
APM NATIONAL LANDSCAPE
Source: Bailit Health, “State Medicaid Approaches for Defining and Tracking Managed Care Organizations Implementation of Alternative Payment Models”, February 2018.
State LAN Category in MCO Contract
Arizona 2C or higher
California 2, 3, & 4 in 2018
New York 3A or higher
South Carolina 2C or higher
Virginia “Emphasis” on 3 and 4
Washington 2C or higher
WASHINGTON STATE VBP LANDSCAPE
• Health Care Authority (HCA) has set a goal that 90% of state-financed payments to providers will be in APM Categories 2C-4B by 2021.
• Between 2017-2021, HCA is withholding a percentage of MCO’s monthly premium based on performance in the following areas:
– Provider Incentives Target (Percentage of payments in VBP arrangements in APM Categories 2C or higher that are directly conditioned on meeting quality and financial metrics)
– VBP Arrangements Target (Percentage of provider payments that must be in the form of VBP arrangements in APM Categories 2C or higher)
– Quality Improvement Score (Withholds that reward improvement and achievement of targets for seven quality measures)
– Challenge Pool Incentives (Unearned VBP incentives from managed care premiums will be available to reward plans that meet exceptional standard of quality and patient experience based on subset of measures)
• Washington’s 1115 DSRIP (Medicaid Transformation Project) incentive funding is tied to specific performance metrics and APM Categories 2C and above
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 37
VBP OPPORTUNITY FOR BEHAVIORAL HEALTH
Practice Pointers. Serving Medicaid’s highest cost patients, behavioral health agencies should recognize their value to MCOs in managing the total costs of care and leverage HCA financial incentives with MCOs.
Behavioral health agencies should:
1) Educate MCOs on the business case for VBP arrangements for populations with a behavioral health diagnosis.
2) Identify (and promote!) specific VBP arrangements in APM Categories 2C and higher that will achieve HCA targets / quality scores, assisting MCO recover premium withholds
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 38
VBP: ACCESS TO CLAIMS INFORMATION
Providers need timely, accurate and usable data to be successful in VBP arrangements.
– Timely receipt of patient health information related to emergency room visits, hospitalizations, and physical health care is essential for performing well on P4P incentives and managing the total costs of care of the attributed population.
Practice Pointers. A provider’s terms of participation in VBP arrangements should contain language that requires the MCO to furnish to the provider the necessary claims information related to a patient’s use of services (or provide access to integrated databases), patient risk scores, and prior authorization requests on a real-time basis.
– Ideally, the contract would specify the type of data that the provider is entitled to receive, the timeliness of such data, and the frequency in which the MCO must provide the data to the provider.
– If the MCO fails to meet its data sharing obligations, the provider should be held harmless from any loss of revenue arising from unearned payment withholds or downside financial risk.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 39
SIDEBAR: PATIENT CONFIDENTIALITY LAWS
• A Covered Entity may disclose protected health information (“PHI”) for the treatment activities of any health care provider (including providers not covered by the Privacy Rule).
– Covered Entities include health care providers who transmit health information in an electronic form as well as health plans (e.g., health insurers, state Medicaid programs)
– “Treatment” generally means the provision, coordination, or management of health care and related services among health care providers or by a health care provider with a third party, consultation between health care providers regarding a patient, or the referral of a patient from one health care provider to another.
– Note: Disclosures for treatment purposes do not need to abide by the “Minimum Necessary Standard” and can disclose all of a patient’s PHI.
• Generally, 42 CFR Part 2 restricts disclosure and use of substance use disorder records which are maintained in connection with the performance of a federally-assisted Part 2 program.
– Unlike HIPAA, patient consent is required even for disclosures for the purposes of treatment.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 40
VBP PERFORMANCE MEASURES
• To facilitate participation in multiple VBP arrangements, providers should seek performance measures that have standard definitions and methodologies for calculating scores (e.g., HEDIS measures). Ideally, the Medicaid measure sets and incentives would align with those used by Medicare and commercial payers.
• Providers should be familiar with the performance measures applicable to MCOs (particularly Medicaid MCOs), understand the financial rewards available to MCOs (if any), prioritize internal operations to score high on those performance measures, and leverage those results for favorable VBP arrangements with MCOs.
Practice Pointers:
– A provider’s terms of participation in VBP arrangements should contain clear language regarding the population of patients subject to the performance measures, the definitions and methodology for calculating scores, and the financial rewards available.
– The MCO should not be permitted to change the performance measures (or methodology) after they have been established for any given performance year, at least without the provider’s consent.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 41
VBP PERFORMANCE MEASURES
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 42
• Comprehensive Diabetes Care - Poor Hb A1c Control (>9%)
• Comprehensive Diabetes Care - Blood Pressure Control (<140/90)
• Controlling High Blood Pressure (<140/90)• Antidepressant Medication Management –
Effective Acute Phase Treatment• Antidepressant Medication Management -
Effective Continuation Phase Treatment (6 Months)
• Childhood Immunization Status - Combo 10• Well-child visits in the 3rd, 4th, 5th and 6th years
of life• Medication Management for people with Asthma:
Medication Compliance 75% (Ages 5-11)
• Medication Management for people with Asthma: Medication Compliance 75% (Ages 12-18)
• Alcohol and Drug Treatment (Service) Penetration• Substance Use Disorder Initiation• Substance Use Disorder Engagement• Mental Health Treatment (Service) Penetration
2019 Quality Measures in Apple Health Contracts (Fully Integrated Managed Care)
• To connect payment to quality of care and to value, HCA is withholding 1.5 percent of a MCO’s monthly premium.
• 75% of that withhold can be earned back based on achieving targets for the following quality measures:
VBP: P4P REWARDS AND SHARED SAVINGS
P4P Rewards/Upside-Only VBP Arrangements. A provider is not placed at financial risk to participate in APM Category 2C (P4P bonus only) and 3A (upside-only shared savings) VBP incentive arrangements.
– Even if the provider does not qualify for incentive payments, participation in those arrangements may “kick-start” internal delivery changes and partnerships with other providers to qualify for future payments.
Practice Pointers. During negotiation of contracts (and contract amendments!) with MCOs, providers should affirmatively request participation in an MCO’s VBP arrangements to maximize overall reimbursement.
– If an MCO is not willing to permit participation in VBP arrangements at the point of contracting, a provider should seek language that entitles the provider to participation at a future date, upon meeting eligibility requirements, or otherwise.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 43
VBP: P4P PENALTIES AND SHARED RISK
P4P Penalties / Downside Risk VBP Arrangements. A provider is placed at financial risk to participate in APM Category 2C (P4P penalties only) and 3B (upside and downside shared savings) VBP incentive arrangements. Providers should generally exercise caution in entering such arrangements as they could result in significant risk to the organization’s financial health.
Practice Pointers. When negotiating the terms of participation in any VBP arrangement that involve financial penalties or downside financial risk, the provider should add language that limits or mitigates any such penalties or downside risk.
– If the contract imposes a financial penalty on the provider, the provider should negotiate language that creates a ceiling on the penalty as a fixed dollar amount or percentage of total payments received from the MCO.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 44
VBP: P4P PENALTIES AND SHARED RISK
(continued)
Practice Pointers. When negotiating the terms of participation in any VBP arrangement that involve financial penalties or downside financial risk, the provider should add language that limits or mitigates any such penalties or downside risk.
– If the provider enters a downside shared risk arrangement, the provider should negotiate language that limits financial losses to a percentage of total payments or the benchmark.
– If the provider is participating in a VBP arrangement that involves financial penalties, the provider should negotiate a provision that allows financial losses incurred in one year to be paid back to the MCO by financial gains earned in subsequent years.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 45
POPULATION-BASED VBP ARRANGEMENTS
Attribution Methodology. The basis by which the MCO attributes patients to a population under a VBP arrangement. Possible attribution methods might include populations based on an enrollee’s:
– Geographic area (e.g., counties)– Specific behavioral health diagnoses – Receipt of services from a behavioral health agency (e.g., clients) – Receipt of health home services– Receipt of primary care services
Prospective Attribution. If attribution of patients is prospective, providers should recognize that the population of patients attributed to the provider may:
– Include patients who have not visited the provider during the current performance year; and
– Include patients who have received services from the provider but who were actually assigned to a different provider.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 46
POPULATION-BASED VBP ARRANGEMENTS
(continued)
Practice Pointers. To avoid surprises related to the attributed patient population, a provider should:
• Request that the MCO generate a list of attributed patients based on prior year’s data so that the provider can learn how many and which patients would have been attributed to the provider under a VBP arrangement.
• Negotiate a provision that requires the MCO to provide a list of the attributed patient population at least 90 days prior to the start of the performance period for the VBP arrangement.
• Negotiate a provision that requires the MCO to provide monthly or quarterly patient rosters of attributed patients for the current performance year as well as the right to confirm or reject individuals attributed to the provider against the provider’s own records within 60 days of receipt of the patient rosters.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 47
VBP CONTRACT TERM
• Providers should be aware that there may be a separate contract term that applies to VBP arrangements.
• In practical terms, the contract term reflects the amount of time that the provider is committing to participate in the VBP arrangement.
• Provider Pointer. When initially contracting with an MCO, it may be desirable for the term of the VBP arrangement to be shorter (e.g., one year)– possibly without automatic renewal--so that the provider can re-negotiate any problematic terms of participation in VBP arrangements.
• In any VBP arrangement, providers should seek contract language that permits them to receive payment of any earned payment incentives for completed performance periods prior to termination of the participation agreement, even if the payment incentives have not been distributed prior to termination.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 48
VBP TERMINATION
• If participation in a VBP arrangement involves financial risk, the provider may wish to include contract language that permits the provider to terminate its participation in the VBP arrangement if the provider is incurring (or is likely to incur) financial penalties under the arrangement.
• Contracts can typically be terminated “for cause” or “without cause”.
– For cause. The situations that constitute cause will be listed in the contract, e.g., breaches of material terms of the contract.
• Practice Pointer: The provider may want to add other circumstances that would permit participation in the VBP arrangement to be terminated for cause, e.g., the MCO modifies the performance measures or methodologies.
– Without cause. In some contracts, a party may also terminate without cause after providing written notice to the other party.
• Practice Pointer: Contracts that contain termination without cause provisions mean that, from a practical perspective, the term of the contract is the notice period. This may be a desirable mechanism to exit the VBP arrangement if necessary.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 49
VBP AMENDMENTS
• Amendment provisions are particularly crucial in VBP arrangements because the clinical, operational, and financial environments in which the parties operate are subject to constant change.
Practice Pointer. Determine whether there is a specific amendments clause that applies to participation in VBP arrangements.• Any amendments clause to VBP arrangements should offer the right to the provider to opt-out
but if the amendments clause permits the MCO to amend unilaterally the terms of participation in a VBP arrangement, then the provider should negotiate language that permits the provider to terminate its participation in the VBP arrangement.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 50
STEP 2Evaluate The Contract
1. Negotiate the timeframe for review 2. Assemble your contract review team
– Establish a “point person” and review team lead – Assign areas of contract review to team members based on their
expertise 3. Assemble documents
– Obtain entire proposed contract from MCO, including all referenced and incorporated documents
– Do not assume MCO knows your scope of services!– Obtain other documents necessary to understand legal obligations (for
example, in Medicaid managed care, the MCO’s contract with the State)
51 © 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 51
EVALUATING THE CONTRACT
4. Assess the MCO’s Operational Performance
Considering past performance of the MCO is crucial. If possible, gather information about past experience of the provider with this MCO:
– Did the MCO meet its payment obligations on time?– Was the basis for denied claims reasonable?– Did the MCO give the provider a role in the development of policies, such as
utilization review?– Was the MCO responsive to the provider’s requests?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 52
EVALUATING THE CONTRACT
5. Assess the MCO’s Financial Stability
Evaluate the MCO’s background and fitness. If possible, the provider should examine the following elements of the MCO’s operation:
– Financial stability and strength– Administrative record– Operational methods– Structural framework
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 53
EVALUATING THE CONTRACT
6. Review the Contract* Do you understand what all provisions mean? What provisions disadvantage your organization from a financial, clinical,
operational, or legal perspective? Are responsibilities for each party clearly stated and all terms defined? Does the contract include all of the relevant appendices and exhibits? Have you reviewed any policies, procedures and documents referenced in
the contract? Have you reviewed any references to statutes, codes, regulations to know
what they say? Does signing the contract reflect sound business judgment?
*See Part 2 of these slides!
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 54
WHAT’S TO EVALUATE?
• Scope of Services• Covered Services• Subcontracting Arrangements• Credentialing• Access/Quality Standards• Utilization Management• Regulatory Penalties• Reimbursement Rates• Waiver of Co-Payments and
Deductibles• Prompt Payment• Governing Law
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 55
• Payment Suspension• Overpayment Recoupment• Retroactive Disenrollment• Appeals • Dispute Resolution• “All Products” Clauses• Term and Termination• Breach and Cure• Post-Termination Responsibilities• Amendments
EVALUATING THE CONTRACT
56
7. Identify and Prioritize Issues
Categorize each issue as follows:
Red: Critical issues that without addressing you cannot afford to proceed because the risks (not just financial) are unacceptable for the organization
Yellow: Significant issues that should be addressed before proceeding because they create undesirable risks for the organization
Green: Issues that ideally would be addressed prior to proceeding to reduce potential risks
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
STEP 3: NEGOTIATE MANAGED CARE CONTRACTS
57
Your idea of negotiation?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WHAT’S NEGOTIATION?
58
Reframe negotiation as discussion aimed
at reaching agreement.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
GETTING TO YES
Fisher, Roger; Ury, William; Patton, Bruce (2011) [1981]. Getting to Yes: Negotiating Agreement Without Giving In (3rd ed.). New York: Penguin Books.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 59
NEGOTIATING LOGISTICS
60
Preliminary questions• Who will be negotiating?
• A team?• An individual?
• How will issues be negotiated?• In writing?• By phone?• In person?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NEGOTIATING THE CONTRACT
61
occurs when one or both parties get stuck in ensuring that they win on
their positions, regardless of whether the overall goal is attained occurs when parties take extreme
positions in the expectation that they will have room to bargain down
A common error is bargaining over positions.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NEGOTIATING THE CONTRACT
62
Respond with questions, rather than statements
Respond specifically to the MCO’s
concerns
Develop options for mutual gain and
generate a variety of possibilities
Look for zones of agreement and areas of overlap
Focus on underlying interests
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NEGOTIATING TIPS
Educate: Do not assume that the MCO’s representative understands your concerns.
Learn: Respond with questions, rather than statements, and respond specifically to the MCO’s concerns
Voice options for mutual gain and generate a variety of possibilities before deciding what to do
Insist that resulting provisions be based on some objective standard
State the importance of maintaining an ongoing relationship
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 63
NEGOTIATING THE CONTRACT
If you did not resolve all of the critical issues to your satisfaction, consider:
– whether this one MCO contract is essential to your operations
– whether the risks of contracting outweigh the risks of not contracting with the MCO
– whether you can terminate the contract early in the event that the financial or legal harm becomes too great to bear
– whether you have any other options for achieving a better outcome, i.e., using an agent for negotiations
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 64
NEGOTIATING CONTRACTS: KEY POINTS
Have a Plan! (Even if not my plan!)
• Step 1: Don’t Underestimate the Value of Preparation• Regulatory requirements, market power, and timing are critical levers in
negotiation• Position to compete on value and participate in value-based payment
arrangements
• Step 2: Evaluate the contract critically and realistically• Work as a team to understand contract provisions• Determine highest priority issues and implications
• Step 3: Negotiate firmly but kill them with kindness
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 65
PART 2
Key Terms and Legal Protections
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 66
SCOPE OF SERVICES
MCOs typically contract with a range of providers, each of which furnishes a subset of the full range of services that the MCO is responsible for covering on behalf of the payer.• The scope of services section of the contract specifies which covered plan services
the provider is responsible for providing.• Test for under-inclusiveness: Does the scope of services describe all of the
services you furnish? • Test for over-inclusiveness: Does the scope of services describe any services you
do not furnish?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 67
COVERED SERVICES
68
Distinguish your scope of services from the enrollee’s
covered services (i.e., the services available under the
enrollee’s benefit plan).
Services must fall within bothCovered Services and Scope of Services in order to receive
payment from an MCO.
Often enrollees have different benefits plans; not every
service falling in the provider’s scope of service under the contract is covered under a particular enrollee’s benefit
plan.
Determine whether there are any significant coverage limitations that apply to
services you provide
The contract should make clear that the provider may treat
enrollees as private-pay patients for purposes of
providing non-covered services.
Review the documentation requirements to bill a patient
for non-covered services.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HOW SERVICES ARE PROVIDED
69
•Limitations on which types of clinicians may provide certain services
•Limitations on the provider’s ability to arrange for services through subcontract
The contract should clearly state any limits on how services can be provided by the provider, including:
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
TIMELY CLAIMING RULES
70
MCOs typically require the submission of claims no more than 90 days after the date of service.
•Determine whether state law or other obligations on the MCO dictate a longer claims filing period.
Review the proposed contract for provisions concerning the consequences of late claim submission
•Negotiate for a provision that makes MCO denial of late claims discretionary rather than mandatory
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Timely Claiming Rules
Claims Payment Standards – Section 9.12• The Contractor shall allow providers 365 days to submit claims for services provided this
Contract unless the provider has agreed or agrees to a shorter timely filing timeframe in their contract with the Contractor.
71© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Timely Claiming Rules
2.3 Billing LimitationTimely Claiming Rules• The Contractor must waive the timeliness rule for processing a claim and prior authorization
requirements when HCA program integrity activities result in recoupment of an improperly paid claim HCA paid but should have been paid by the Contractor.
• The servicing provider must submit a claim to the Contractor within 120 days from HCA’s notification of improper payment.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 72
PROMPT PAYMENT RULES
73
Just as the MCO has an interest in timely claims submission, a provider has an interest in timely payment.
•A “clean claim” is a claim, received by a MCO for adjudication, that requires no further information, adjustment, or alteration by the provider of the services, or by a third party, in order to be processed and paid by the MCO. It does not include a claim from a provider who is under investigation for fraud or abuse, or a claim under review for medical necessity.
•Providers should seek to have prompt pay rules, including any automatic interest provisions, written into the provider agreement.
•Providers should have right to receive a written explanation for all denied claims and the information that is needed by the MCO to process the claim for payment.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Prompt Payment / Denied Claims Protections
74
Claims Payment Standards – Section 9.12• The Contractor shall meet the timeliness of payment standards specific for health carriers in WAC
284-170-431.• To be compliant with payment standards, the Contractor shall pay or deny 95% of clean claims
within 30 calendar days; 95% of all claims within 60 calendar days; and 99% of clean claims within 90 days of receipt.
• A “clean claim” is a claim that can be processed without obtaining additional information from the provider of the services.
• The date of receipt is the date the Contractor receives the claim from the provider.• The date of payment is the date of the check or other form of payment.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE LAWPrompt Payment / Denied Claims Protections
WAC 284-170-431 - Provider contracts—Terms and conditions of payment.
(1) Every participating provider and facility contract shall set forth a schedule for the prompt payment of amounts owed by the carrier to the provider or facility and shall include penalties for carrier failure to abide by that schedule.
(2) Minimum payment standards:(i) 95% of clean claims paid within 30 days and 95% percent of all claims shall be paid or denied within 60 days.
(3) Any carrier failing to pay claims within that time period shall pay interest of 1% per month on undenied and unpaid clean claims until paid. The carrier shall add the interest payable to the amount of the unpaid claim without the necessity of the provider or facility submitting an additional claim.
(4) Denial of a claim must be communicated to the provider or facility and must include the specific reason why the claim was denied. If the denial is based upon medical necessity or similar grounds, then the carrier upon request of the provider or facility must also promptly disclose the supporting basis for the decision. For example, the carrier must describe how the claim failed to meet medical necessity guidelines.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 75
CORRECTION OF OVERPAYMENTS & UNDERPAYMENTS
76
MCO contracts typically allow the MCO to recoup
overpayments (excess payment by the MCO to the
provider)
• Determine whether there are any limits on the MCO’s timeframe for recouping overpayments from a provider.
Contracts commonly permit the MCO to recoup an overpayment by offset;
the MCO subtracts the overpayment from any
amounts due to the provider
• Determine whether the contract requires the MCO to provide notice of the alleged overpayment (and afforded the provider an opportunity to appeal the determination) prior to offset.
• Determine whether the contract permits the provider to dispute underpayments within a time frame that is equal to the time frame that a MCO may recoup overpayments.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Recoupments of Overpayments
5.5 Recoupments• HCA shall recoup premium payments and retroactively terminate enrollment of an individual
Enrollee with duplicate coverage, who is deceased prior to month of enrollment, who retroactively has their enrollment terminated, who is an inmate of a correctional facility, who is residing in an IMD for more than 15 days, and when an audit determines that payment is in error.
• The Contractor may recoup payments made to providers for services provided to Enrollees during the period for which the HCA recoups premiums for those Enrollees.
• If the Contractor recoups such payments, providers may submit appropriate claims for payment to the HCA through its FFS program, if the Enrollee was eligible for services and if the provider was enrolled in the FFS program.
77© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE CODE
Recoupments of Overpayments - Exception
WAC 284-43-2000 - Health care services utilization review—Generally.
• (4) Each issuer when conducting utilization review must:• (h) Not retrospectively deny coverage for emergency and nonemergency care that
had prior authorization under the plan's written policies at the time the care was rendered unless the prior authorization was based upon a material misrepresentation by the provider or facility;
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 78
DISPUTE RESOLUTION PROCESS
79
The contract should contain a streamlined, expedited process for claims disputes, and a more
elaborate process for other disputes
The contract should use a graduated, step-by-stepdispute resolution process
Informal negotiation
Mediation
Arbitration (binding) or judicial remedies The contract should not require the provider to
exhaust an appeals process within the MCO before resorting to other measures
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
“ALL PRODUCTS” CLAUSES
80
MCOs frequently pay providers at different rates for various lines of business (private commercial insurers, Medicare Advantage, Medicaid.)
An “all-products” clause requires the provider to participate in all products (and rates) offered by the MCO (both currently and prospectively)
Providers should have the ability to opt-out of any new products offered by the MCO.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE CODE
Participation in Non-Medicaid Products
RCW 48.39.020 - Payor may require provider to extend payor's medicaidrates—Limitations.• A payor may require a health care provider to extend the payor's medicaid rates, or some
percentage above the payor's medicaid rates, that govern a health benefit program administered by a public purchaser to a commercial plan or line of business offered by a payor that is not administered by a public purchaser only if the health care provider has expressly agreed in writing to the extension.
• For the purposes of this section, "administered by a public purchaser" does not include commercial coverage offered through the Washington health benefit exchange.
• Nothing in this section prohibits a payor from utilizing medicaid rates, or some percentage above medicaid rates, as a base when negotiating payment rates with a health care provider.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 81
COLLECTING PATIENT COST-SHARING
82
As in traditional Medicare and Medicaid, the provider is responsible for collecting cost-sharing (copayments, coinsurance, and deductibles) required under the terms of the enrollee’s plan.
Under MCO contracts, providers are at financial risk for the collection of any cost-
sharing amounts.
Practice Pointer: Determine applicable cost-sharing amounts, particularly deductibles,
applicable to MCO product lines.
Practice Pointer: Cost-sharing should be collected at the time of the visit, either before
or after services are rendered.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WAIVER OR REDUCTION OF COST-SHARING
83
In many cases, the MCO does not permit a provider to reduce or waive the amount of cost-sharing owed by a patient.
• Providers should seek a modification that allows it to waive or reduce cost-sharing amounts for individuals who qualify under the provider’s charity care policy, if any.
• Providers should be aware that a routine practice of discounting or waiving these obligations for all patients should be avoided, as it opens the provider up to potential liability on numerous fronts.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
REGULATORY PENALTY PROVISIONS
84
Some contracts hold a provider liable for any
fines or penalties assessed against the
MCO by a state or federal regulatory agency that result
from a provider’s non-compliance with a
requirement under the contract or provider
manual.
•Under these provisions, providers will be liable even if:•MCO was unaware of the non-compliance, took no steps to
monitor the provider, or correct the provider’s non-compliance.•Provider did not act negligently but made good faith efforts to
comply.•Providers do not have authority to appeal or dispute the regulatory
agency’s fines or penalties against the MCO.•Providers should avoid incurring liability for fines or penalties
assessed against MCO.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
ACCESS STANDARDS
85
Access standards define the required level and availability of care from a patient-centered perspective, including:
required hours and days of operation (including evening
and weekend business hours)
after-hours coverage and on-
call coverage when a designated health care professional is
unavailable
maximum waiting times for
establishing an appointment for
various categories of services
maximum waiting-room times
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
ACCESS & APPOINTMENT STANDARDS
86
Appointment Standards - Section 6.9• Emergency services must be available 24 hours a day, seven days a week.
• Urgent, symptomatic office visits shall be available from the Enrollee’s primary care, behavioral health, or another provider within twenty-four (24) hours. An urgent, symptomatic visit is associated with the presentation of medical or behavioral health signs that require immediate attention, but are not emergent.
• Non-urgent, symptomatic (routine care) shall be available from an enrollee’s PCP or another provider within ten (10) calendar days, including behavioral health services from a behavioral health provider. A non—urgent, symptomatic visit is associated with the presentation of medical signs not requiring immediate attention.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
LICENSURE – CONTRACT PROVISIONS
87
Notice
• MCO contracts typically require that provider report any loss of licensure immediately to MCO
• Providers should seek to avoid contract provisions that require that the provider report to the MCO whenever a clinician is in danger of losing license (e.g., under investigation), as divulging information at that stage could be a liability risk
Consequence
• Failure to maintain licensure is in some contracts grounds for immediate termination
• Loss of licensure by one clinician should not trigger immediate termination, so long as provider has continuing capacity to perform
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CREDENTIALING – TIMING
88
Most MCO contracts provide for credentialing at the outset of the contract and at regular intervals (e.g., every three years) • MCO credentialing of a practitioner must be effective on the date of service in order for the provider to receive
payment for services to an MCO enrollee• MCOs may provide a maximum timeframe for completion of credentialing (usually around 30 days), but only
upon the MCO’s receipt of a “complete application” • Practice Pointer: Delay new practitioner’s start date until credentialed by at least one MCO
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
DELEGATED CREDENTIALING
89
Some providers have succeeded in negotiating a “delegated credentialing” relationship (i.e., the provider performs credentialing on behalf of the MCO, under MCO’s oversight)
MCO saves costs; provider gains control over timing
Delegated credentialing typically requires provider to use national standards (e.g., National Committee for Quality Assurance)
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Credentialing Protections
90
Section 9.14 – Provider Credentialing
• The Contractor’s credentialing and recredentialing program shall include:
• A process for provision credentialing that affirms that:
• The practitioner may not be held in a provisional status for more than sixty (60) calendar days; and
• The provisional status will only be granted one (1) time and only for providers applying for credentialing the first time.
• A detailed description of the Contractor’s process for delegation of credentialing and recredentialing.
• The Contractor shall have a process for notifying providers within 15 calendar days of the credentialing committee’s decision.
• The Contractor shall have a process and criteria for assessing and reassessing organizational providers.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
UTILIZATION MANAGEMENT
91
UM programs are relevant to behavioral health providers because:
• MCOs often impose prior authorization or visit limits for behavioral health services• MCOs often require authorization before ordering certain drug screening tests• MCOs increasingly require prior authorization before a provider may refer patients
for rehabilitative services
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
“MEDICAL NECESSITY”
92
The contract should specify all services that will be subject
to UM
The core function of the UM program is to ensure that
the MCO pays for only those services that are “medically
necessary”
Involves a determination of whether the service is necessary and appropriate for the patient’s
symptoms, diagnosis, and treatment
The definition of “medically necessary” in the MCO contract is
of critical importance to the provider and the enrollee
Many MCO contract definitions of “medically necessary” state that
services may not be provided primarily for the convenience of the
patient or the provider
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
UTILIZATION MANAGEMENT Contract Provisions/Provider Manual
93
MCO contract provisions or manual should specify:
Documents that the provider must submit to the MCO for the review
Special procedures for obtaining emergency authorization for services
The grievance / appeal procedure available to contest the denial of prior authorization (by either the enrollee or the provider on the enrollee’s behalf)
Whether under any circumstances the provider may obtain payment when the criteria for prior authorization were met, but the provider failed to timely request prior authorization.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE MODEL CONTRACT
Utilization Management and Authorization
Utilization Management and Authorization – Section 11
• The Contractor shall maintain a list of all behavioral health services requiring prior authorization by the Contractor and submit to the HCA annually and publish this list on its website.
• The Contractor shall require authorization decisions for behavioral health services made by US licensed behavioral health professionals.
• A physician board-certified or board-eligible in General Psychiatry or Child Psychiatry;• A physician board-certified or board-eligible in Addiction Medicine, a subspecialty in Addiction
Psychiatry or by ASAM;• A licensed, doctoral level psychologist; or• A pharmacist, as appropriate.
• The Contractor shall ensure that any behavioral health actions must be peer-to-peer – that is, the credential of the licensed clinician making the decision to authorize service in an amount, duration or scope that is less than requested must be at least equal to that of the recommending clinician.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 94
WASHINGTON STATE MODEL CONTRACT
Utilization Management and Authorization
Level of Care Guidelines– Section 11.1.25
• The Contractor shall develop and implement UM protocols, including policies and procedures and Level of Care Guidelines for behavioral health services that are specific to Washington State Levels of Care, consistent with the HCA”s medical necessity criteria and comply with federal and state party requirements.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 95
CONTRACT TERM
96
When initially contracting with an MCO, the provider may want to limit the term of the contract to one year without automatic renewal (“evergreen”) provisions
Contracts generally state how long the contract will be in
force (term) and the procedures for renewing or terminating the
contract
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
TERMINATION
97
Contracts can typically be terminated “for cause” or
“without cause”
The situations that constitute cause will be listed in the contract, e.g., breaches of material terms of
the contract
Sometimes a party may terminate without cause after providing notice to the other
party
Recognize that when contracts may be terminated without cause,
the notice period becomes the effective term of the contract.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
AMENDMENTS
98
•Amendment provisions are particularly crucial in MCO contracts, because the clinical, operational, and financial environments in which the parties operate are subject to constant change.
•Determine whether the amendments clause applies solely to the contract itself or also includes documents incorporated by reference, such as “program attachments”, “payment exhibits”, and the MCO’s policies and procedures
Scope
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
AMENDMENTS
99
•Immediate amendment: Notice (only for regulatory or statutory changes)•Auto-amendment: Notice and right to opt-out (non-regulatory amendments)•Written amendment: Notice and Consent (signed by both parties)
Provider Rights
•Providers might consider proposing the right to amend the contract.
Initiator
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
WASHINGTON STATE CODE
Material Amendments
RCW 48.39.010 - Notice of material amendments to contract—Failure to comply.
• A third-party payor shall provide no less than sixty days' notice to the health care provider of any proposed material amendments to a health care provider's contract with the third-party payor.
• Any material amendment to a contract must be clearly defined in a notice to the provider from the third-party payor as being a material change to the contract before the provider's notice period begins.
• The notice must also inform the providers that they may choose to reject the terms of the proposed material amendment through written or electronic means at any time during the notice period and that such rejection may not affect the terms of the health care provider's existing contract with the third-party payor.
• A health care provider's rejection of the material amendment does not affect the terms of the health care provider's existing contract with the third-party payor.
• A failure to comply with the terms of subsections (1), (2), and (3) of this section shall void the effectiveness of the material amendment.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 100
INDEMNIFICATION
101
•A party is “indemnified” if, by virtue of a contract provision, it avoids assuming responsibility for another party’s acts or omissions arising out of performance of the contract
•Indemnification clauses should apply to both parties
Indemnification provisions state which party to a contract bears
the risk (and liability) for certain events or acts of third parties
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
INDEMNIFICATION
102
•to the MCO for coverage decisions, selection of providers, utilization management activities, compliance with state and federal insurance laws, and other acts within its control.
•to the provider for professional medical judgment (including malpractice claims), medical record documentation requirements, accurate claims submission, and other acts within the provider’s control
The contract should allocate
responsibility:
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
PART 3
Participating or Forming Provider Networks
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 103
Behavioral Health
Primary care
Hospitals
ACCOUNTABLE CARE ORGANIZATION (ACO)
104© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
Health Services Marketplace (of the future?)
Managed Care Organization
ACO 1
ACO 2
ACO 3
ACCOUNTABLE CARE MARKETPLACE?
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 105
106
• Combination of one or more hospitals, physician groups (primary care and specialty), and other providers
• Local accountability
• Financial incentives to meet quality benchmarks or cost-savings
• Shared governance structure
• Formal legal structure that allows organization to receive and distribute payments to participating providers
• Leadership and management structure that includes clinical and administrative systems
• Performance measurement
BASIC FEATURES OF THE ACO
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
PROVIDER LEADERSHIP
“The concept of ACOs is an entirely new paradigm– giving healthcare providers the responsibility and appropriate incentives to improve outcomes and giving them the flexibility to design the most efficient and effective way to do so.”
– Harold Miller, “How to Create Accountable Care Organizations, “Center for Healthcare Quality & Payment Reform, September 2009.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 107
108
ACO GROWTH BY CONTRACT TYPE
8 8 10 3362
182 183
295 296 296 297
418 418
418
523
76 78 88
173196
212 230266 285
316341
381416
463528
84 86 98
206258
394 413
561 581612
638
799834
881
1051
0
200
400
600
800
1000
1200
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
# of
ACO
Con
trac
ts
Government Commercial Total
SOURCE: Muhlestein, Leavitt Partners
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
Includes ACO partners with sufficient claims to measure year-over-year trend
-
--
- -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-ACO 1 ACO 2 ACO 3 ACO 4 ACO 5 ACO 6 ACO 7ACO 1 ACO 2 ACO 3 ACO 4 ACO 5 ACO 6 ACO 7
BLUE SHIELD OF CALIFORNIA ACO RESULTS
Data paid through 12/13Comparison of baseline (pre ACO) to
most recent completed ACO contract period
1 trend as of Feb 2013
-
-
Includes ACO partners with experience through CY 2013
Nearly $300 Million saved
> $40 PMPM
Source: K. Miranda, Blue Shield of CA, DOJ/FTC Workshop
109 109© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
Patient Centered Medical Home
Specialists
ACO
ACCOUNTABLE CARE ORGANIZATION: IN THEORY
Behavioral Health
Providers
Rehab and LTCPrimary Care
Providers
Hospitals
Specialists
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 110
Primary Care Providers Hospital
ACOACOs may actually feel more like this.
ACCOUNTABLE CARE ORGANIZATION:IN REALITYHuman Services
Agencies
Rehab and LTCBehavioral Health
Specialists
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 111
ACO FINANCIAL INCENTIVES
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 112
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 113
PROVIDER NETWORKS
Many terms have been given to describe different types of provider-led entities:• Independent Practice Association (IPA)• Management Services Organization (MSO)• Administrative Services Organizations (ASO)• Clinically Integrated Network (CIN)• Accountable Care Organization (ACO)• Group Purchasing Organization (GPO)
Note: Some of these terms may only be used when approved by regulatory agencies.
FUNCTIONS OF PROVIDER NETWORKS
Shared Support Services
IT Support for Electronic Health Record (EHR)
Health Information Exchange (HIE)
Credentialing practitioners; exclusion/debarment background checks
Third-Party Billing
Managed Care Contracting
Marketing network of health care providers/agencies
Facilitating managed care contracting
Negotiating contracts
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 114
115
CAUTION: ANTITRUST RISKS
In general, providers must make independent, unilateral decisions on
contractual terms and negotiate separately in order to comply with state
and federal antitrust laws.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
ANTITRUST LAWTHE SHERMAN ACT (15 U.S.C. §1)
• Purpose: To promote competition and protect consumers, not competitors.
• Prohibits anti-competitive activities (i.e., agreements) among private, competing businesses, that unreasonably restrain competition
• Enforced by both the U.S. Department of Justice (Antitrust Division) and Federal Trade Commission (FTC) as well as private parties
116© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
ANTITRUST LAWTHE SHERMAN ACT (15 U.S.C. §1)
• Price fixing• Market allocation• Concerted refusals to deal• Boycotts
Per-Se Illegal Agreements
• Do not discuss (with other providers) the reimbursement rates currently offered or paid by MCOs.
• Do not discuss (with other providers) whether you plan to accept or seek certain rates in the future.
Compliance Tips:
117© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
ANTITRUST LEGAL STANDARDS
118
Per-Se Illegal (e.g., price-fixing, market allocation)
• The joint activity of the network is likely to produce significant efficiencies that benefit consumers and
• Price agreements by the network providers are reasonably necessary to realize those efficiencies.
“Rule of Reason” test determines whether lawful if:
• DOJ/FTC Statements of Enforcement Policy in Health Care (1996)• http://www.ftc.gov/bc/healthcare/industryguide/policy/statement8.htm
• Medicare Shared Savings Program (MSSP)
Antitrust “Safety Zones”
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
119
HEALTH CARE ENFORCEMENT POLICY
Statement 4: Collection/Sharing Of Non-fee Related Information
• Collective provision of non-fee related information by competing health care providers to a purchaser [such as an MCO] in an effort to influence terms upon which the purchaser deals with the providers does not necessarily raise antitrust concerns.
• Does not apply to providers acting individually (which may provide any information to purchasers) or the collective provision of information through an integrated joint venture, discussed in later Statements.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
120
HEALTH CARE ENFORCEMENT POLICY
Statement 4: Collection/Sharing Of Non-fee Related InformationSafety Zone (Not challenged “absent extraordinary circumstances”):
– Collection of outcome data from network members about a particular procedure that they believe should be covered by a purchaser or
– Providers’ development of suggested practice parameters (e.g., standards for patient management to assist clinical decision-making)
Collective provision of such information poses little risk of restraining competition and may help in the development of protocols that increase quality and efficiency.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
121
HEALTH CARE ENFORCEMENT POLICY
Statement 4: Collection/Sharing Of Non-fee Related InformationConduct Falling Outside of Safety Zone:
– Any attempt by providers to coerce a purchaser's decision-making by implying or threatening a boycott of any plan that does not follow the providers' joint recommendation;
– Providers who collectively threaten to or actually refuse to deal with a purchaser because they object to the purchaser's administrative, clinical, or other terms governing the provision of services run a substantial antitrust risk; or
– Providers' collective attempt to force purchasers to adopt recommended practice parameters by threatening to or actually boycotting purchasers that refuse to accept their joint recommendation also would risk antitrust challenge.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
122
HEALTH CARE ENFORCEMENT POLICY
Statement 5: Collection/Sharing Of Fee Related Information
• Collective provision to purchasers of factual information concerning fees charged currently or in the past for the providers’ services does not necessarily raise antitrust concerns.
– Factual information includes other aspects of reimbursement, such as discounts or alternative reimbursement methods accepted (including capitation arrangements, risk-withhold fee arrangements, or use of all-inclusive fees)
• Such factual information can help purchasers efficiently develop reimbursement terms to be offered to providers and may be useful to a purchaser when provided in response to a request from the purchaser or at the initiative of providers.
• Does not apply to providers acting individually (which may provide any information to purchasers) or the collective provision of information through an integrated joint venture, discussed in later Statements.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
123
HEALTH CARE ENFORCEMENT POLICY
Statement 5: Collection/Sharing Of Fee Related InformationSafety Zone (Not challenged “absent extraordinary circumstances”): In order to qualify for this safety zone, the collection of information to be provided to purchasers must satisfy the following conditions:
1. Collection is managed by a third party; and2. Although current fee-related information may be provided to purchasers, any information
that is shared among or is available to the competing providers furnishing the data must be more than three months old; and
3. For any information that is available to the providers furnishing data, there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data may represent more than 25 percent on a weighted basis of that statistic, and any information disseminated must be sufficiently aggregated such that it would not allow recipients to identify the prices charged by any individual provider.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
124
HEALTH CARE ENFORCEMENT POLICY
Statement 5: Collection/Sharing Of Fee Related InformationConduct Falling Outside of Safety Zone:
– Collective negotiations between unintegrated providers and purchasers in contemplation or in furtherance of any agreement among the providers on fees or other terms or aspects of reimbursement, or to any agreement among unintegrated providers to deal with purchasers only on agreed terms;
– Providers who collectively threaten implicitly or explicitly, to engage in a boycott or similar conduct, or actually undertake such a boycott or conduct, to coerce any purchaser to accept collectively-determined fees or other terms or aspects of reimbursement; or
– Providers' collective provision of information or views concerning prospective fee-related matters (which is assessed on a case-by-case basis based on all the facts and circumstances surrounding the provision of the information.)
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
125
HEALTH CARE ENFORCEMENT POLICY
Statement 6: Provider Participation In Exchanges Of Price And Cost Information
• Participation by competing providers in surveys of prices for health care services, or surveys of salaries, wages or benefits of personnel does not necessarily raise antitrust concerns.
– Providers can use information derived from price and compensation surveys to price their services more competitively and to offer compensation that attracts highly qualified personnel.
– Purchasers can use price survey information to make more informed decisions when buying health care services.
• Such factual information can help purchasers efficiently develop reimbursement terms to be offered to providers and may be useful to a purchaser when provided in response to a request from the purchaser or at the initiative of providers.
• Without appropriate safeguards, however, information exchanges among competing providers may facilitate collusion or otherwise reduce competition on prices or compensation, resulting in increased prices, or reduced quality and availability of health care services.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
126
HEALTH CARE ENFORCEMENT POLICY
Statement 6: Provider Participation In Exchanges Of Price And Cost InformationSafety Zone (Not challenged “absent extraordinary circumstances”).
Provider participation in written surveys of (a) prices for health care services or (b) wages, salaries, or benefits of health care personnel, if the following conditions are satisfied:
1. Collection is managed by a third party; and
2. Information provided by survey participants is more than three months old; and
3. There are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data may represent more than 25 percent on a weighted basis of that statistic, and any information disseminated must be sufficiently aggregated such that it would not allow recipients to identify the prices charged by any individual provider.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
127
HEALTH CARE ENFORCEMENT POLICY
Statement 6: Provider Participation In Exchanges Of Price And Cost InformationConduct Falling Outside of Safety Zone:
– Exchanges of price and cost information that fall outside the antitrust safety zone generally will be evaluated to determine whether the information exchange may have an anticompetitive effect that outweighs any procompetitive justification for the exchange.
– Depending on the circumstances, public, non-provider initiated surveys may not raise competitive concerns. Such surveys could allow purchasers to have useful information that they can use for procompetitive purposes.
– Exchanges of future prices for provider services or future compensation of employees are very likely to be considered anticompetitive. If an exchange among competing providers of price or cost information results in an agreement among competitors as to the prices for health care services or the wages to be paid to health care employees, that agreement will be considered unlawful per se.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NEGOTIATING MANAGED CARE CONTRACTS
• Can a provider network negotiate fee-for-service (i.e., non-risk) contracts with MCOs?
• Generally, no as it would constitute price-fixing.
• But the answer can change:
• If the network is not composed of competitors (or potential competitors)
• If the network is “financially integrated“
• If the network is “clinically integrated” and the joint negotiation is necessary to make the clinically integrated activities work
• If the network participates as an ACO in the Medicare Shared Savings Program (MSSP)
128© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HEALTH CARE ENFORCEMENT POLICY
Statement 9: Multiprovider Networks• Health care providers are forming a wide range of new relationships and affiliations,
including networks among otherwise competing providers, as well as networks of providers offering complementary or unrelated services.
• These affiliations-- referred to as “multiprovider networks”-- can offer significant procompetitive benefits to consumers. Such ventures may contract to provide services to subscribers at jointly determined prices and agree to controls aimed at containing costs and assuring quality.
• They also can present antitrust questions, particularly if the network includes otherwise competing providers.
• Because multiprovider networks involve a large variety of structures and relationships among many different types of health care providers, and new arrangements are continually developing, the Agencies were unable to establish a meaningful safety zone for these entities.
129 129© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HEALTH CARE ENFORCEMENT POLICY
Statement 9: Multiprovider Networks
• Multiprovider networks will be evaluated under the “rule of reason,” and will not be viewed as per se illegal, if the providers' integration through the network is likely to produce significant efficiencies that benefit consumers, and any price agreements (or other agreements that would otherwise be per se illegal) by the network providers are reasonably necessary to realize those efficiencies.
• Significant efficiencies may be achieved by competing providers sharing “substantial financial risk” (defined in next slide) for the services provided (and jointly priced) through the network.
130 130© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HEALTH CARE ENFORCEMENT POLICY
Statement 9: Multiprovider NetworksExamples of “substantial financial risk-sharing” include:
– capitation payments– global fee arrangements – fee withholds– cost or utilization based bonuses or penalties for participants, as a group, to achieve specified
cost-containment goals– agreement by the venture to provide a complex or extended course of treatment that requires
the substantial coordination of care by different types of providers offering a complementary mix of services, for a fixed, predetermined payment, where the costs of that course of treatment for any individual patient can vary greatly due to the individual patient's condition, the choice, complexity, or length of treatment, or other factors.
Tip: The Enforcement Agencies encourage multiprovider networks which are uncertain whether their proposed arrangements constitute substantial financial risk sharing to take advantage of the Agencies' expedited business review and advisory opinion procedures.
131© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HEALTH CARE ENFORCEMENT POLICY
The Rule Of Reason• A rule of reason analysis determines whether the formation and operation of the joint venture may have a
substantial anticompetitive effect and, if so, whether that potential effect is outweighed by any procompetitive efficiencies resulting from the venture.
• The rule of reason analysis takes into account characteristics of the particular multiprovider network and the competitive environment in which it operates to determine the network's likely effect on competition.
• The steps ordinarily involved in a rule of reason analysis of multiprovider networks are set forth below.:1. Market Definition - Product and geographic markets, i.e., what substitutes, as a practical
matter, are reasonably available to consumers for the services in question?2. Competitive Effects – vertical and horizontal, i.e., market share and concentration3. Efficiencies - lower prices or higher quality
132© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NETWORK SERVICES
• Can provider networks jointly price and offer “network services”?– Delegated credentialing activities– Care management activities– Quality improvement activities– Utilization review/management activities
• Legal Test: Do the network members share “substantial financial risk” in providing all the services that are jointly priced through the network?
– Yes, if the network receives a capitated or fixed pre-determined fee for providing the network services.
• Conclusion: The network may negotiate payment for furnishing services that it directly provides to an MCO.
133© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
INCENTIVE-ONLY PAYMENTS
• Can provider networks jointly negotiate incentive payments?– “Value-based” payment models such as shared savings (upside only) or shared risk
(upside/downside) for managing total costs of defined population– Performance incentives earned for achieving certain clinical outcomes (e.g., HEDIS
measures)
• Legal Test: Do the network members share “substantial financial risk” under the proposed arrangement?
– Yes, if the financial incentives are based on group performance, as a whole, to achieve specified cost-containment or clinical goals.
• Conclusion: The network may negotiate incentive-only payments that are based on overall network performance.
134© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
“RULE OF REASON” TEST FOR CLINICAL INTEGRATION
“Rule of Reason” test applies to determine whether providers’ integration through the network is likely to produce significant efficiencies that benefit consumers and the price agreements by the network participants are reasonably necessary to realize those efficiencies.
Clinical Integration: Active and on-going programs to evaluate and modify clinical practice patterns of all network providers
– Establishing mechanisms to monitor and control utilization of health care services;
– Selectively choosing network participants; and– Significant investment of capital.
FTC has issued Advisory Opinions to guide organizations on sufficiency of clinical integration activities.
135 135© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
EXAMPLES OF CLINICAL INTEGRATION
• Implementing utilization control mechanisms to control costs and assure quality of care• Establishing information systems to gather aggregate and individual data in order to measure
performance of the group and of the individual participating providers, and to ensure exchange of all relevant patient data.
• Monitoring patient satisfaction with the participating providers.• Establishing reporting systems to provide payers with detailed reports on the costs and quantity of the
services delivered, and on the collaboration’s success in meeting its goals.• Employing centralized staff• Investing significant time and money in the development of necessary infrastructure, including practice
standards and protocols and care management protocols, and actively monitoring the care provided through the collaboration.
• Monitoring the participating providers’ compliance with network’s standards and protocols, and taking remedial action against those individuals who fail to adhere to them.
136© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
HOW THE GOVERNMENT WILL ASSESSCLINICAL INTEGRATION
• What do the participating providers plan to do together from a clinical standpoint (i.e., the specific activities, the desired results, how the activities differ from what each provider does individually)?
• How do the providers expect to accomplish these goals (i.e., necessary infrastructure and investment, specific implementing mechanisms, specific evaluation measures)?
• What basis is there to think that the individual provider will actually attempt to accomplish the goals (i.e., individual incentives, specific mechanisms to change and re-align incentives)?
• What results can reasonably be expected from undertaking these goals (i.e., evidence to support the goals, potential for success)?
• How does joint contracting contribute to accomplishing the goals (i.e., is it reasonably necessary and in what ways)?
• To accomplish the goals of the collaboration, is it necessary for providers to affiliate exclusively with one network, or can they effectively participate in multiple networks and continue to contract outside of the network?
Federal Trade Commission and Department of Justice, Improving Health Care: A Dose of Competition (July 2004), available at http://www.usdoj.gov/atr/public/health_care/204694.htm.
137© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CLINICAL INTEGRATION: EXAMPLE 1
FTC Advisory Opinion to MedSouth, Inc.• Network composed of competing primary and specialty care physicians who sought to negotiate
price and other terms on a fee-for-service basis with payors.• Proposed to coordinate and integrate certain health care services by its members with a clinical
resources management program that would include:– Web-based electronic clinical data record system– Clinical practice guidelines– Measurable performance goals– Centralized Medical Director– All network members would commit to participate in the network’s programs and adhere to
network’s protocols.• FTC approved the proposal on Feb. 19, 2002
– http://www.ftc.gov/bc/adops/medsouth.htm– http://www.ftc.gov/bc/adops/070618medsouth.pdf
138© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CLINICAL INTEGRATION: EXAMPLE 2
FTC Advisory Opinion to Greater Rochester IPA, Inc.• Network composed of two hospitals and approximately 600 physicians who sought to
negotiate price and other terms on a fee-for-service contracts with payers.• Proposed developing an internet-based health information system to identify high-cost, high-
risk patients and facilitate the exchange of patient treatment information to better manage them.
– Network would develop clinical practice guidelines, report information using the internet-based system, and then monitor physicians’ compliance with those guidelines.
– The network would also set performance targets, monitor performance using its own benchmarks, and take action when physicians failed to meet performance expectations.
• FTC approved the proposal on September 17, 2007– http://www.ftc.gov/bc/adops/gripa.pdf
139© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CLINICAL INTEGRATION: EXAMPLE 3
FTC Advisory Opinion to Tri-State Health Partners, Inc.• Network composed of more than 200 physicians and one hospital that sought to
contract jointly with payers on a fee-for-service basis• Proposed a formal and stringent medical management program that includes
protocol development and implementation, performance reporting, procedures for corrective action when necessary, and aggressive management of high-cost, high-risk patients.
• Plans to implement a web-based health information technology system to review episodes of care to determine where performance improvement will have the greatest financial and quality benefits.
• FTC approved the proposal on April 13, 2009– http://www.ftc.gov/os/closings/staff/090413tristateaoletter.pdf
140© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
CLINICAL INTEGRATION: EXAMPLE 4
FTC Advisory Opinion to Norman PHO• Network composed of a health system (hospitals) and 280 physicians in 38 medical
specialties and one hospital that sought to contract jointly with payers on a fee-for-service basis.
• Already had an extensive electronic system including e- prescribing, EHR and electronic health interface system.
• Proposed physician led advisory groups and committees that were responsible for developing the clinical practice guidelines on an ongoing basis
• Proposed to measure and evaluate physician performance and compliance with the clinical practice guidelines.
• Notable advisory opinion request in that it stated that it couldn’t quantify the potential savings from the improvements in care but that did not prevent FTC for issuance of a favorable opinion.
• FTC approved the proposal February 13, 2013
141© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
BASE REIMBURSEMENT RATES
• Can provider networks negotiate base reimbursement rates?– Fee-for-service (“FFS”) schedules
• Legal Test: – Do the network members share “substantial financial risk”?
• No, because the network participants do not share financial risk for the services priced through the network.
– Are the network members “clinically integrated”?• Analyze extent of integration under DOJ/FTC standards.
• Conclusion: Until the network satisfies the test for clinical integration it cannotnegotiate base reimbursement rates.
142© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
NEGOTIATING MANAGED CARE CONTRACTS
Medicare Shared Savings Program Antitrust Safety Zone
• If ACO participates in MSSP and qualifies for this safety zone, it protects joint negotiation of fee-for-service rates with private payors .
• Eligibility must be determined under four-step process that requires calculating an ACO’s share of services in the Primary Service Area (PSA) of each participant in that ACO.
• ACOs whose combined common service share in each participant’s PSA is less than 30% or less qualify for the antitrust safety zone, with certain qualifications and exceptions.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 143
NON-INTEGRATED NETWORKS
Non-integrated provider networks do not meet legal standards for financial or clinical integration
Non-integrated provider networks may facilitate (but not negotiate)
contracts involving base reimbursement rates if they
carefully comply with the “Messenger Model”
144© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
MESSENGER MODEL
Provider Network communicates each provider’s decision back to MCO
Each provider determines whether to accept (or reject) MCO’s payment terms
Provider Network, as the messenger, transmits proposed rates to each provider in network
145© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
MESSENGER MODEL
CON
• No additional leverage• Long formation periods• Difficult to maintain over time• Infrastructure costs• Risky
PRO
• Transaction cost-efficiencies• Increased patient volumes• Analysis of contracting terms and
provisions• In certain cases not related to market
power, higher reimbursement
CON
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 146
COMBINATION APPROACH
Base Reimbursement Messenger Model• Network members accept FFS
rates offered by MCO (without engaging in any negotiation).
• May be little or no downside if State mandates minimum rates for Medicaid enrollees.
147
Payment Incentives Financial Risk-Sharing• Network negotiates incentives (e.g.,
P4P, shared savings, shared risk) with MCO
• Payment incentives won or lost on group performance
• Network distributes incentive payments, if any, to providers, pursuant to methodology agreed by the members of the network.
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com
FINAL THOUGHTS
• Grant-funded payment models do not generate “margin” for investments and long-term sustainability.
• MCO participation agreements generally favor MCOs and the default payment method of FFS often fails to cover the cost of services.
• Regulatory requirements, market power, and timing offer critical leverage to providers in negotiating favorable participation agreements.
• To participate fully in population-based VBP methodologies, providers should consider forming or joining provider networks that are able to manage the total costs of care and quality for a population.
• Primary care and behavioral health-controlled provider networks can:• Develop expertise to negotiate “smarter” contracts with MCOs • Protect smaller primary care and behavioral health providers from unfair terms typically
found in MCO participation agreements• Support community-based organizations that address SDOH• Distribute shared savings to primary care and behavioral health providers
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com 148
149
QUESTIONS?
Adam J. Falcone, Esq.FELDESMAN TUCKER LEIFER FIDELL LLP1129 20th Street, N.W.Suite 401Washington, DC 20036(202) [email protected]
© 2019 Feldesman Tucker Leifer Fidell LLP. All rights reserved. | www.ftlf.com