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CohnReznick LLP
Managing Your Relationship With
Managed Care Organizations
October 21, 2014
O V E R V I E W
Overview of the NYS Environment
Managed Care Reimbursement
MCO/provider pressure points
Contract Terms
Operational Considerations
Value Proposition
1 March 2014
OVERVIEW OF THE NYS ENVIRONMENT
Medicaid Redesign Task Force (MRT)
Care Management for All
Fully Integrated Dual Advantage (FIDA)
Health and Recovery Plans (HARPs)
Health Homes
DSRIP
–Performing Provider Systems
2 March 2014
OVERVIEW OF THE NYS ENVIRONMENT
How is payment changing?
3 March 2014
Volume
Value
DSRIP
0%
20%
40%
60%
80%
100%
120%
OVERVIEW OF THE NYS ENVIRONMENT
How is payment changing?
4 March 2014
State Provider
State Provider
MCO
HARP
BHO
OVERVIEW OF THE NYS ENVIRONMENT
When is this happening?
BH Adults (OMH & OASAS)
Health and Recovery Plans
Qualified Managed Care Plans
NYC April 1, 2015
Rest of State October 1, 2015
5 March 2014
MANAGED CARE REIMBURSEMENT
• Fee-For-Service – a payment model in which services are
unbundled and paid separately based on the number of units
and services (HCPCS) provided
• Capitation – a payment arrangement in which a provider is
paid a set amount for each enrolled person assigned to them,
per period of time (e.g. per member per month, or PMPM),
whether or not that person seeks care
Global Capitation (full-risk) – the provider is responsible for the full
scope of covered services available to the enrollee/member
Partial Capitation (partial-risk)– the provider is responsible for a
subset of covered services available to the enrollee/member
• Pay-For-Performance (Incentive) Payments – payments made to providers for attaining certain, payor-
specific measures Quality measures
Process measures
Patient satisfaction measures
6 March 2014
MANAGED CARE REIMBURSEMENT
• Risk-Sharing – payment arrangements in which the provider
can share with the payor in the losses or surpluses of overall
healthcare expenditures for enrollees/members assigned to the
provider (upside and downstate risk)
Surplus-Sharing
a risk-sharing arrangement in which the provider shares in
only the surpluses in overall healthcare spending for
enrollees/members assigned to the provider (no downside
risk)
Risk pools and withhold provisions
Managing a “Global Budget”
7 March 2014
MANAGED CARE REIMBURSEMENT
• Quality Incentive Payments – Pay-for-Reporting (P4R)
– Pay-for-Quality (P4Q)
• P4Q Incentive Payments generally reward under 2 different
scoring scenarios -
» Attainment score – actual performance is greater than a
“benchmark”
» Improvement score – actual performance is greater than
a baseline value for the specific measure
• Common transition of quality incentive payments
» Initial period payments based on P4R
» Once providers are reporting accurately, transition to P4Q
» If payment program includes shared savings/risk sharing
arrangements, quality measures can be used to access or
reduce the level of payment
8 March 2014
E V O L U T I O N O F PAY M E N T
M O D E L S
The key to financial success in all payment models is based on your understanding of:
– The services covered by the payment
• What services do you provide versus other providers?
– Your unit cost per service
• How efficient are you at the provision of services?
– Patient utilization of services
• Do you understand how patients utilize services and variations based on health status?
– Quality of services and patient outcomes
9
E V O L U T I O N O F PAY M E N T
M O D E L S
10
Excerpt from United Hospital Fund: An Issue Brief – Moving Toward Accountable Care in New
York, 2013
E V O L U T I O N O F PAY M E N T
M O D E L S
Managing financial success in a capitated environment
11
Patient A Patient B
Annual Revenue Rate ($25 PMPM) ×
12 months = $300
Rate ($25 PMPM) ×
12 months = $300
Annual Cost:
Cost per visit $125/visit $125/visit
# of visits per year 2 visits/year 3 visits/year
Annual Cost $250 $375
Financial Success $50 $(75)
E V O L U T I O N O F PAY M E N T
M O D E L S
The paradigm shift in managing financial success
12
Fee-For-Service Capitation
Payment Model Payment based on the
# of units (visits)
provided
Payment based on the #
of patients assigned to
the Center
Revenue Equation # of units × rate =
revenue
# of patients × rate
PMPM × 12 months =
revenue
Financial Success Increase productivity
and the # of units to
increase revenue
Reduce the cost per unit,
manage patient utilization
and minimize risk through
increased # of patients
and improved health
outcomes
MCO/PROVIDER PRESSURE POINTS
Enrollment (Covered Lives)
HEDIS Indicators
– Process Measures
– Outcome Measures
Acuity
Service Utilization
–Emergency Department (ED)
– Inpatient Utilization
–Pharmacy Expense
State Requirements
13 March 2014
CONTRACT TERMS
Enrollee assignment and eligibility verification requirements
– Preference in assignment
– Retrospective ineligibility determination
Scope of services
– Can your organization provide the full scope of services?
– Are you required to participate in all products offered by the
Plan? Current Future
Covered services
– What services are you at risk for?
14 March 2014
CONTRACT TERMS
Service delivery – Types of clinicians that may provide services
– Outside referals?
– Can you advise patients of all medically appropriate treatment
options?
– Formulary?
Access standards – hours of operation
– wait times
– after hours coverage
– on-call coverage
15 March 2014
CONTRACT TERMS
Credentialing – How long does credentialing take?
– Is it retroactive?
– Delegated Credentialing?
Quality Assurance / Utilization Review – Does the Agreement specify which services are subject to
coverage determination?
– Does the Agreement define “medical necessity”?
Payment rate – Is the rate sufficient to cover your costs?
16 March 2014
CONTRACT TERMS
Payment procedures – Payment timelines
– penalties for late payments
– “clean claim”
Risk-Sharing – How much risk
– Intrinsic risk
– Extrinsic risk
Indemnification – apply to both parties
– appropriately allocate risk between the organization and the Plan
17 March 2014
CONTRACT TERMS
Future contract changes:
Renewal provisions – Automatic
– Perpetual
– Notice periods
Changes in reimbursement
– Increased payment rates
– Shared risk
– Shared savings
– Incentives
18 March 2014
CONTRACT TERMS
Future contract changes:
Impact of performance
– Demonstrate better clinical outcomes than other providers
– Document results in savings to payors (value)
Impact of growth
– IPAs, networks, ACOs
– Performing Provider Systems (PPSs)
– Integrated delivery systems
19 March 2014
OPERATIONALIZE MANAGED CARE
RELATIONSHIPS
Internal Communication
Staff Training
Contract
Provider Manual
Ongoing Communications
Work groups
20 March 2014
OPERATIONALIZE MANAGED CARE
RELATIONSHIPS
Who is your contact at the plan?
– Provider rep
– Manager or other senior official
– Dedicated?
– Turnover?
– Clinical? Administrative?
Initial Inservice
Regular meetings
Regular phone calls
21 March 2014
CREATE YOUR VALUE STATEMENT
Educate the Plan
–Re-educate the plan
Geographic Coverage
Existing Referal Patterns
Demonstrated Outcomes
–Clinical
–Cost
22 March 2014
Q U E S T I O N S
23
March 2014
C O N TA C T I N F O R M AT I O N
Scott D. Morgan
Director
Healthcare Services Practice
CohnReznick LLP
646.254.7480
24 March 2014