 Commonwealth of Virginia  Department of Medical Assistance Services Acute & LTC Integration: Phase II Data Book Develo...
Agenda <ul><li>Acute & LTC Data Book: Regional Model Phase II </li></ul><ul><li>General Approach </li></ul><ul><li>Data  <...
Data Book Development – General Approach  Acute LTC Integration: Regional Model Phase II <ul><ul><li>Present historical da...
Detailed Data Book Development –  Sources of Data <ul><ul><li>DMAS Fee For Service Data </li></ul></ul><ul><ul><ul><ul><li...
Detailed Data Book Development –  Sources of Data <ul><ul><li>External Sources </li></ul></ul><ul><ul><ul><ul><li>May need...
Data Book Development – Detailed Reports Acute LTC Integration: Regional Model Phase II <ul><ul><li>Geographic Location </...
Overall Process – Acute LTC Data Book Development Historical FFS Data Summary & Cleaning Commonwealth of Virginia Departme...
Data Sources – Acute and LTC integration Data Book <ul><li>Calculate eligible member months </li></ul><ul><li>Verify claim...
DMAS FFS Historical Adjustments <ul><li>The historical FFS data will reflect changes in payment rates, covered services, a...
DMAS Fee for Service IBNR and Trend <ul><li>Data book will report the estimated completeness of the claims </li></ul><ul><...
Administrative Cost Allowance <ul><li>DMAS guidelines for an acceptable administrative cost allowance have not been determ...
Medallion II FY 2008 Rates –  <ul><li>Show cost experience for different population groups </li></ul><ul><li>Not a direct ...
PACE Pilot FY 2008 Rates –  <ul><li>Show cost experience for Nursing Home and Nursing Home eligible seniors </li></ul><ul>...
Development of Acute and LTC Rates  Acute LTC Integration: Regional Model Phase II <ul><li>  </li></ul><ul><li>Federal Req...
Federal Requirements for Medicaid Managed Care: CMS Checklist requires rates be certified by an actuary <ul><li>The checkl...
Acute and LTC Integration: Rate Development <ul><li>Rates must meet criteria for actuarial soundness </li></ul><ul><li>Rat...
Acute and LTC Integration: Medicaid Eligibility Groups / Rate Cells <ul><li>Medicaid Eligibility Groups / Rate Cells not y...
Adjustments <ul><li>For Acute care services, adjustments used in Medallion II rate setting may be used as guidelines for a...
IBNR and Trend <ul><li>For Acute care services, IBNR and Trend used in Medallion II rate setting may be used as guidelines...
Managed Care Adjustments <ul><li>For Acute care services, Medallion II rate setting may be used as guideline for expected ...
Risk Adjustment <ul><li>Not anticipated at this time </li></ul><ul><ul><li>Acute Care Risk Adjustment </li></ul></ul><ul><...
Q&A © 2007 PricewaterhouseCoopers LLP. All rights reserved. &quot;PricewaterhouseCoopers&quot; refers to PricewaterhouseCo...
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The Integration of Acute and Long Term Care Services: Rate ...

  1. 1.  Commonwealth of Virginia Department of Medical Assistance Services Acute & LTC Integration: Phase II Data Book Development and Capitation Rates *connectedthinking September 24, 2007
  2. 2. Agenda <ul><li>Acute & LTC Data Book: Regional Model Phase II </li></ul><ul><li>General Approach </li></ul><ul><li>Data </li></ul><ul><ul><ul><ul><ul><li>DMAS FFS Data </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Medallion II Health Plan Data / FY 2008 Rates as appropriate </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Considerations and Limited or Missing Data </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Data to be Included in Acute and LTC RFP </li></ul></ul></ul></ul></ul><ul><li>Development of Acute & LTC Rates: Regional Model Phase II </li></ul><ul><li> </li></ul><ul><li>Federal Requirements: CMS Checklist for Actuarial Soundness </li></ul><ul><li>Rate Cells </li></ul><ul><li>Adjustments </li></ul><ul><li>IBNR and Trend </li></ul><ul><li>Managed Care Assumptions </li></ul>
  3. 3. Data Book Development – General Approach Acute LTC Integration: Regional Model Phase II <ul><ul><li>Present historical data to allow potential health plans to review cost and utilization of services of the A & LTC covered populations </li></ul></ul><ul><ul><li>Consider variation in circumstances based on </li></ul></ul><ul><ul><ul><ul><li>Aid category </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Waiver category </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Acute Care vs LTC services </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Geography </li></ul></ul></ul></ul><ul><ul><li>Will not project Medicaid cost and utilization. Health plans to “estimate a reasonable cost” for providing care to the covered population based on market circumstances, plan efficiencies, and state policy goals </li></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  4. 4. Detailed Data Book Development – Sources of Data <ul><ul><li>DMAS Fee For Service Data </li></ul></ul><ul><ul><ul><ul><li>Historical base: FY 2005 and FY 2006 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Separation of Acute care and LTC service categories </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Only current source of waiver population and LTC data </li></ul></ul></ul></ul><ul><ul><li>Health Plan Medallion II Data for Medicaid Only Aged Blind and Disabled </li></ul></ul><ul><ul><ul><ul><li>Historical base: FY 2005 and FY 2006 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Acute care service categories </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Rates already developed and published for FY 2008 </li></ul></ul></ul></ul><ul><ul><li>PACE Pilot Programs </li></ul></ul><ul><ul><ul><ul><li>Historical base: FY 2005 and FY 2006 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Compared costs of those in Nursing Home vs Home and Community Based Waiver </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Rates in development </li></ul></ul></ul></ul><ul><ul><li>DMAS has provided </li></ul></ul><ul><ul><ul><ul><li>Detailed eligibility category instructions </li></ul></ul></ul></ul><ul><ul><ul><ul><li>List of Acute care and LTC service categories </li></ul></ul></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  5. 5. Detailed Data Book Development – Sources of Data <ul><ul><li>External Sources </li></ul></ul><ul><ul><ul><ul><li>May need to look to other programs to estimate costs and utilization for some services </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Care Management </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Best practice / effective use of alternative LTC services </li></ul></ul></ul></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  6. 6. Data Book Development – Detailed Reports Acute LTC Integration: Regional Model Phase II <ul><ul><li>Geographic Location </li></ul></ul><ul><ul><ul><ul><li>Statewide </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Rollout geographies defined by DMAS </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Tidewater, Richmond, Northern, Surrounding counties, Rural </li></ul></ul></ul></ul></ul><ul><ul><li>Populations in Regional Model Phase II </li></ul></ul><ul><ul><ul><ul><li>Medicaid Only Aged Blind and Disabled (All Ages – PCCM) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Medicaid-Medicare Dual Eligible </li></ul></ul></ul></ul><ul><ul><ul><ul><li>New Admission Nursing Home Clients </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Home and Community Based Waiver Clients </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Elderly and Disabled with Consumer Direction </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>AIDS waiver </li></ul></ul></ul></ul></ul><ul><ul><li>Populations to be added later: Home and Community Based Waiver </li></ul></ul><ul><ul><ul><ul><ul><li>Mental Health/Mental Retardation, Day Support, Developmental Disabilities, and Alzheimer’s </li></ul></ul></ul></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  7. 7. Overall Process – Acute LTC Data Book Development Historical FFS Data Summary & Cleaning Commonwealth of Virginia Department of Medical Assistance Services Historical Cost and Utilization by eligibility category, demographic/waiver grouping, service category, and region Eligibility and Service Summary List of DMAS Program Changes Review by DMAS Include in Acute LTC RFP
  8. 8. Data Sources – Acute and LTC integration Data Book <ul><li>Calculate eligible member months </li></ul><ul><li>Verify claims through date sensitive person-level merge with eligibility file </li></ul>Commonwealth of Virginia Department of Medical Assistance Services DMAS Eligibility File DMAS FFS Invoice Data Supplemental and / or Missing Data <ul><li>Historical data for recent two year period: FY05-FY06 claims </li></ul><ul><li>Paid data for acute and LTC services </li></ul><ul><li>Medicaid Only ABD - PCCM </li></ul><ul><li>Medicare- Medicaid Dual Eligible Crossover Claims </li></ul><ul><li>Waiver services for Consumer Directed and AIDS </li></ul><ul><li> </li></ul><ul><li>FY 2008 rates: Medallion II ABD for Acute Care and PACE </li></ul><ul><li>Provide detail for selected service categories - therapy, vision? </li></ul><ul><li>Nursing home costs will be imputed from comparable populations </li></ul><ul><li>Mandatory with opt-out provisions; Unknown selection effect </li></ul><ul><li> </li></ul>
  9. 9. DMAS FFS Historical Adjustments <ul><li>The historical FFS data will reflect changes in payment rates, covered services, and any other programmatic and policy changes . </li></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>List of adjustments </li></ul><ul><li>Detail information for each adjustment </li></ul>
  10. 10. DMAS Fee for Service IBNR and Trend <ul><li>Data book will report the estimated completeness of the claims </li></ul><ul><li>Will not include trend factors at this time </li></ul><ul><ul><li>Incurred But Not Reported Claims values can be calculated using a variety of actuarially accepted methods </li></ul></ul><ul><ul><li>Historical trend can be calculated using a least-squares regression model or other actuarially accepted methods </li></ul></ul><ul><ul><li>Any adjustments will consider variation by eligibility category and claims type </li></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>Level of detail to be determined </li></ul>
  11. 11. Administrative Cost Allowance <ul><li>DMAS guidelines for an acceptable administrative cost allowance have not been determined. </li></ul><ul><ul><ul><li>Current Medallion II admin allowance is 8.9% </li></ul></ul></ul><ul><ul><ul><li>Current PACE admin allowance is 12% </li></ul></ul></ul><ul><ul><ul><li>Will consider covered services, population, total estimated health care costs </li></ul></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  12. 12. Medallion II FY 2008 Rates – <ul><li>Show cost experience for different population groups </li></ul><ul><li>Not a direct match to ALTC population, but useful as a point of comparison </li></ul><ul><li>MCO data used to develop FY 2008 rates for Medallion II </li></ul><ul><li>Public report issued May 2007 </li></ul><ul><li>Medicaid Only Aged Blind and Disabled </li></ul><ul><li>Acute Care Services Only </li></ul><ul><li>Includes “Managed Care” Adjustments </li></ul><ul><ul><ul><ul><li>Reflects MCO regional utilization, payment rates, and administrative efficiencies </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Adjusted for anticipated DMAS policy and program changes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Administrative cost reflects all Medicaid and FAMIS LOS </li></ul></ul></ul></ul><ul><li>Base Rates and Risk Adjusted Rates </li></ul><ul><li>Medallion II regions differ from proposed ALTC Integration regions </li></ul>Commonwealth of Virginia Department of Medical Assistance Services
  13. 13. PACE Pilot FY 2008 Rates – <ul><li>Show cost experience for Nursing Home and Nursing Home eligible seniors </li></ul><ul><li>Not a direct match to ALTC population, but useful as a point of comparison </li></ul><ul><li>DMAS FFS data used to develop FY 2008 rates </li></ul><ul><li>Rates near completion </li></ul><ul><li>Dual vs Non Dual Nursing Home Eligible </li></ul><ul><ul><ul><ul><li>Includes most of the Home and Community Based Waiver population </li></ul></ul></ul></ul><ul><li>Acute Care, Long Term Care and Medicare Crossover Services </li></ul><ul><li>Includes “Managed Care” Adjustments </li></ul><ul><ul><ul><ul><li>Assumes managed care savings </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Adjusted for anticipated DMAS policy and program changes </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Administrative cost developed based on financial review of Pre-PACE </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Do not Risk Adjust rates </li></ul></ul></ul></ul><ul><li>Uses Medallion II regions which differ from proposed ALTC Integration regions </li></ul>Commonwealth of Virginia Department of Medical Assistance Services
  14. 14. Development of Acute and LTC Rates Acute LTC Integration: Regional Model Phase II <ul><li> </li></ul><ul><li>Federal Requirements: CMS Checklist for Actuarial Soundness </li></ul><ul><li>Adjustments </li></ul><ul><li>IBNR and Trend </li></ul><ul><li>Managed Care Assumptions </li></ul>Commonwealth of Virginia Department of Medical Assistance Services
  15. 15. Federal Requirements for Medicaid Managed Care: CMS Checklist requires rates be certified by an actuary <ul><li>The checklist provides guidance for “actuarial soundness”: </li></ul><ul><ul><li>Use appropriate data for the population to be covered </li></ul></ul><ul><ul><li>Payment rates should be differentiated to reflect known variation </li></ul></ul><ul><ul><li>Use cost neutral data smoothing techniques where appropriate </li></ul></ul><ul><ul><li>Encounter data or FFS experience data can be used for the rate development </li></ul></ul><ul><ul><li>Must account for differences in utilization rates between FFS and MC when FFS data are used </li></ul></ul><ul><ul><li>Include appropriate levels of health plan administrative costs </li></ul></ul><ul><ul><li>Reflect programmatic changes in the contract period </li></ul></ul><ul><ul><li>An upper and lower bound in rates may be developed </li></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  16. 16. Acute and LTC Integration: Rate Development <ul><li>Rates must meet criteria for actuarial soundness </li></ul><ul><li>Rates must meet criteria for “cost effectiveness” in waiver submission </li></ul><ul><ul><li>Total cost for each eligibility group must be equal to or less than the cost of providing the services to the enrolled population in the absence of the program / under the current Medicaid FFS program </li></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services
  17. 17. Acute and LTC Integration: Medicaid Eligibility Groups / Rate Cells <ul><li>Medicaid Eligibility Groups / Rate Cells not yet determined </li></ul><ul><li>Rate cells under consideration </li></ul><ul><li>Medicaid Only – Disabled Under 65 </li></ul><ul><li>Medicaid Only – Aged and Disabled 65 and Over </li></ul><ul><li>Medicare – Medicaid Dual Eligible </li></ul><ul><li>Other </li></ul><ul><li>Waiver Population </li></ul><ul><li>PCCM </li></ul><ul><li>Must evaluate for regional differences and eligible population size/credibility </li></ul>Commonwealth of Virginia Department of Medical Assistance Services
  18. 18. Adjustments <ul><li>For Acute care services, adjustments used in Medallion II rate setting may be used as guidelines for anticipated policy changes </li></ul><ul><li>For LTC and waiver services, guidance to be developed in conjunction with DMAS </li></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>List of expected policy changes </li></ul><ul><li>Detail information for each adjustment </li></ul>
  19. 19. IBNR and Trend <ul><li>For Acute care services, IBNR and Trend used in Medallion II rate setting may be used as guidelines for anticipated policy changes </li></ul><ul><li>For LTC and waiver care services, PwC will ultimately develop assumptions through collaboration with DMAS and potential bidders </li></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>Level of detail to be determined </li></ul>
  20. 20. Managed Care Adjustments <ul><li>For Acute care services, Medallion II rate setting may be used as guideline for expected improvements in cost and utilization </li></ul><ul><li>For other services, PwC will ultimately develop assumptions through collaboration with DMAS and potential bidders </li></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>Level of detail to be determined </li></ul>
  21. 21. Risk Adjustment <ul><li>Not anticipated at this time </li></ul><ul><ul><li>Acute Care Risk Adjustment </li></ul></ul><ul><ul><ul><ul><li>CDPS or DxCG risk adjuster is not a good fit for the dual eligible population </li></ul></ul></ul></ul><ul><ul><ul><ul><li>No Medicaid Only PCCM population in Tidewater or Richmond </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Medicaid Only HCBS Waiver population very small / issue of credibility </li></ul></ul></ul></ul><ul><ul><li>Investigating LTC risk adjustment </li></ul></ul><ul><ul><ul><ul><li>Need data changes to develop further </li></ul></ul></ul></ul>Commonwealth of Virginia Department of Medical Assistance Services <ul><li>Information from DMAS to be included in RFP: </li></ul><ul><li>Not Applicable </li></ul>
  22. 22. Q&A © 2007 PricewaterhouseCoopers LLP. All rights reserved. &quot;PricewaterhouseCoopers&quot; refers to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Ltd., each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP. 

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