April 18, Florida s Pending Proposal for Medicaid LTSS Managed Care; Combined Section 1915(b), (c) Waiver Application
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1 April 18, 2012 Cindy Mann CMS Deputy Administrator/Director Center for Medicaid and CHIP Services Centers for Medicare and Medicaid Services 7500 Security Boulevard Baltimore, Maryland Re: Florida s Pending Proposal for Medicaid LTSS Managed Care; Combined Section 1915(b), (c) Waiver Application Dear Ms. Mann: We appreciate the opportunity to speak with you this coming Friday afternoon (April 20) in the meeting set up by Brian Lindberg and Fay Gordon. Brian and Fay are providing you with an outline of some issues for discussion, as suggested by the group of persons who will be meeting with you on Friday. This letter is submitted separately by the National Senior Citizens Law Center (NSCLC) to highlight some issues that appear to us to be of particular importance. We have serious reservations about Florida s proposed course of action, particularly under the suggested implementation schedule, and urge CMS to proceed with caution. The waiver population consists of those Medicaid beneficiaries who are deemed to need nursing facility care or the equivalent and, as you well can appreciate, any policy missteps could have significant negative consequences for beneficiaries health and well-being. 1. The Proposed Waiver Will Not Rebalance Florida s Medicaid System. As applied to long-term services and supports (LTSS), managed care is generally promoted in part as a method to increase usage of home and community-based services (HCBS). The expectation is that managed care organizations (MCOs) will have an incentive to avoid unnecessary nursing facility use, and that incentive will lead to increased provision of preventive care, along with greater access to HCBS. In the case of Florida s proposed waiver, however, these typical advantages will not be present. A. The Proposed Waiver Will Not Incentivize Preventive Services or Therapy.
2 Under the Florida proposal, managed care plans are specifically limited to those persons who already are deemed to need a nursing facility level of care; as a result, MCOs will have no ability to provide the preventive care that might keep a beneficiary from needing nursing facility care in the first place. 1 An MCO s incentive for preventive care is stronger when an enrollee currently does not need nursing facility care but is at risk of needing that level of care. In Florida s proposal, however, the at-risk population will not be eligible to enroll in the managed care plans. Furthermore, plans might have an incentive to not provide the therapeutic care that might move an enrollee s care needs below the nursing-facility threshold. If, for example, a managed care enrollee needed a nursing facility level of care, but had relatively light care needs for that population, the MCO might have a financial incentive to retain that enrollee as a member, rather than providing the condition-improving therapy from which the enrollee would benefit. B. HCBS Will Remain Subject to Hard Enrollment Caps. The problem here lies not in the incentives to the MCOs, but in an overarching limitation imposed by the Florida Medicaid program. Florida proposes to authorize only 44,286 HCBS waiver slots annually for each of the five years of the proposed waiver. 2 This represents merely a five-year maintenance of the status quo vis à vis the balance between nursing facility services and HCBS. Because of the hard cap on HCBS waiver slots, MCOs and the service planning process will be prevented from doing the type of rebalancing that would be advisable both for enrollees individually and for Florida s LTSS program systemically. There is no indication that 44,286 slots are adequate for a state the size of Florida, particularly given the state s relatively high percentage of older persons. In implementing the proposed managed care proposal, Florida intends to eliminate five existing waivers: the Aged and Disabled Adult Waiver, the Assisted Living Waiver, the Nursing Home Diversion Waiver, the Channeling Waiver, and the Comprehensive Adult Day Health Care Waiver. 3 Currently, those waivers offer 37,337 slots, with enrollment of 33,051 and wait lists totaling 30, Accordingly, the proposed enrollment cap of 44,286, given the elimination of the five existing waiver programs, will not allow for rebalancing, and will instead lock the Florida LTSS system into a nursing facility/hcbs ratio that will likely be comparable to, or worse than, the status quo. 1 Florida Medicaid Section 1915(b) Managed Care Waiver, Long Term Care Managed Care Program, at 11, (Aug. 1, 2011 (hereafter, Section 1915(b) Waiver Application). 2 Florida s Application for a 1915(c) Home and Community-Based Services Waiver, at 29 (Aug. 1, 2011) (hereafter, Section 1915(c) Waiver Application); Fla. Stat. Ann (2), (3) (b) Waiver Application at 11, 22; Section 1915(c) Waiver Application at 9. 4 The measures in the text of this letter are based upon the following statistics: Aged and Disabled Adult Waiver (capacity of 12,087, enrollment of 10,228, and wait list of 20,708), Assisted Living Waiver (capacity of 5,630; enrollment of 3,841; wait list of 1,896), Nursing Home Diversion Waiver (capacity and enrollment of 17,645; wait list of 8,015), Channeling Waiver (capacity of 1,825; enrollment of 1,311; no wait list), and the Comprehensive Adult Day Health Care Waiver (capacity of 150; enrollment of 26; no wait list). Florida Office of Program Policy Analysis and Government Accountability (OPPAGA), Profile of Florida s Medicaid Home and Community-Based Services Waivers, Rep. No , at 1-7 (Jan. 2012).
3 Furthermore, that status quo is substandard. The recent AARP LTSS scorecard rated Florida s LTSS system as 44 th overall among the states, including rankings of 35 th in Affordability and Access, and 37 th in Choice of Setting and Provider. Notably, Florida ranked 38 th in the specific measure of the Percent of Medicaid and State-Funded LTSS Spending Going to HCBS for Older People and Adults with Physical Disabilities Enrollees Need Additional Protections in the Service Planning Process to Assure that Services Will Be Adequate. In general, managed care proposals present a risk that the service planning process will lead to decreased access to services, and increased denials of service by MCOs. Pursuant to Florida s proposal, the case manager will be working for the MCO, which will have a financial incentive to deny services. 6 We applaud some steps by Florida to ameliorate the potential problems. First, according to the proposal, MCOs and the state will conduct quality assurance monitoring of service planning processes. 7 Second, the enrollee must be consulted in service planning, and has the right to include a representative, family member, or other person. 8 Also, it should be noted that the Section 1915(c) Waiver Application does not include an explicit limit on service costs. 9 Nonetheless, we believe that the proposed protections are inadequate. Without taking a position on the specific quality assurance methodology, we note that quality assurance will always be too little and too late for individual enrollees. Identifying a systemic problem six months later will not repair matters for an enrollee who has been denied necessary services, or deprived of opportunities to direct care. For service planning to be truly effective, the enrollee must have decision-making control to the extent possible. That control is not adequately protected by a system that merely requires that the enrollee be consulted and have the right to include a family member or friend in the procedures. Also, the enrollee should have clear access to Medicaid fair hearing processes to appeal denials of services that occur during the service planning process. Florida s proposal is somewhat ambivalent on this important protection. Appendix F-1, addressing fair hearings, acknowledges that a denial of services creates a fair hearing right, but the discussion focuses almost entirely on eligibility determinations conducted by the state s Medicaid program. 10 Notably, the proposal s service planning discussion does not address fair hearings in any explicit way, giving the 5 AARP Public Policy Institute, Raising Expectations: A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers (Sept. 2011). The report, including statespecific information on Florida and the other states, is available at 6 Section 1915(c) Waiver Application at Section 1915(c) Waiver Application at Section 1915(c) Waiver Application at Section 1915(c) Waiver Application at Section 1915(c) Waiver Application at
4 impression that the state is proceeding under the faulty assumption that service planning decisions are not subject to fair hearing rights. 11 A recent federal case from North Carolina illustrates the faultiness of Florida s position: an Medicaid MCO in North Carolina argued that the managed care planning process was not an action for appeal purposes, but the court disagreed, finding that a reduction in a beneficiary s annual budget constituted an appealable action. 12 Thus, if CMS chooses to approve Florida s proposal, the special terms and conditions must require the state to include fair hearing protections in the service planning process. Under the U.S. Constitution and federal Medicaid law, enrollees have a right to due process prior to any deprivation of necessary services. In addition, we encourage CMS and Florida to consider other options that might improve the service planning process and make fair hearings less frequently necessary. One example comes from the current Massachusetts proposal for Medicare-Medicaid integration. In order to ensure that the care management process is person-centered and does not favor medical interventions over LTSS options, the current Massachusetts proposal for a dual-eligible demonstration project includes the requirement that each care team have access to an independent, qualified LTSS coordinator from a community-based organization (CBO) such as an Independent Living Center (ILC), a Recovery Learning Community (RLC), an Aging Services Access Point (ASAP), Deaf and Hard of Hearing Independent Living Services programs, The Arc, or other key organizations expert in working with people with disabilities. 13 Florida, on the other hand, states that it will not made arrangements for independent advocacy relating to enrollee-directed services Florida s Waiver Should Be Amended to Include Additional Protections for Continuity of Care. Although the Section 1915(b) Waiver Application states that the otherwise mandated beneficiaries can request an exemption, 15 the state has failed to identify a credible process for requesting such exemptions. In response to informal questions from CMS, the Florida Medicaid program stated tersely that it would include the following language in the waiver application: This process is completed on a case-by-case basis and approved by state Medicaid staff. 16 To its credit, CMS followed up on this issue; in response, Florida subsequently added more detail, as follows: When a Medicaid recipient contacts the state s contracted enrollment broker to request an exemption from enrollment, the enrollment broker will alert the Agency for Health Care Administration and refer the request to the Agency. The agency will work with the individual and the individual s managed care plan to 11 Section 1915(c) Waiver Application at L.S. v. Delia, 2012 U.S. Dist. LEXIS 43822, at *43 (E.D. N.C. 2012). 13 Massachusetts Proposal to the Center for Medicare and Medicaid Innovation, State Demonstration to Integrate Care for Dual Eligible Individuals, at 10 (Feb. 16, 2012). 14 Section 1915(c) Waiver Application at Section 1915(b) Waiver Application at Florida (b) Waiver Application, Informal Questions, at 6 (Sept. 22, 2011).
5 try and reach a mutually acceptable solution. If this cannot be achieved, and other available managed care plans in the region cannot meet the individual s specific needs, then the Agency has the ability to instruct the enrollment broker to exempt the individual from enrollment into managed care. 17 The state s proposed language is wholly inadequate. Florida is suggesting an ad hoc process with no standards, that does not even begin unless a beneficiary somehow is aggressive enough to request an exemption from the enrollment broker to request an exemption. Imposition of mandatory managed care can present significant problems for beneficiaries who have established relationships with providers, particularly given the vulnerable nature of the nursing-facility-eligible population, and the importance of the relationship between beneficiaries and LTSS providers. We recommend to CMS that it require Florida to establish coherent, transparent standards for determining when a beneficiary can be exempted from managed care enrollment. As a useful example, we commend to CMS the standards used by the California Medicaid program in the implementation of mandatory managed care for seniors and persons with disabilities. Under the California procedures, under specified circumstances, a beneficiary with complex health care needs can be exempted from managed care enrollment, and a beneficiary with a pre-existing relationship with a provider can be allowed to see that provider on a fee-forservice basis for an additional twelve months Assisted Living Room and Board Allocations Are Based on Shared Occupancy, But Shared Occupancy Is Improper for a Home and Community-Based Setting. Under Florida s proposed post-eligibility rules, assisted living residents would be able to retain income sufficient to pay for Three meals per day and the semi-private room rate (ALF Basic Room and Board Rate) + 20% of the Federal Poverty Level Benefit. 19 This allocation is inadequate because, we contend, HCBS assisted living settings should be based on single occupancy. This is the position our organization and many other stakeholders took in response to proposed regulations published last year. 20 The issue currently is being considered by CMS, and we urge you to take this opportunity to require that assisted living settings be single occupancy for purposes of federal HCBS funding. 17 Letter from Justin M. Senior, Deputy Secretary for Medicaid, Florida Medicaid, to Jackie Glaze, Associate Regional Administrator, Division of Medicaid and Children s Health Operations, CMS, at 3, and p. 48 of Attachments to letter (Nov. 22, 2011). This letter was the state s response to CMS s formal questions relating to the Section 1915(b) Waiver Application. 18 Cal. Code Regs., tit. 22, (exemption from managed care enrollment); CMS, Special Terms and Conditions; California Bridge to Reform Demonstration, # 11-W-00193/9, at 38 (continued fee-for-service relationship with provider). 19 Section 1915(c) Waiver Application at 35. Evidently the room and board rate will be the actual rate; the state s existing Nursing Home Diversion Waiver currently allows an assisted living resident to retain actual monthly room and board cost plus 20 Percent of the Federal Poverty Level. Florida Transmittal No.: (Sept. 10, 2003) (emphasis in original). 20 See 76 Fed. Reg. 21,311 (April 15, 2011).
6 We recognize that, in correspondence with CMS, Florida has claimed that enrollees will have a choice of private or shared occupancy. 21 This choice will be illusory, however, unless enrollees are allowed to retain enough income to pay the private room and board rate. CONCLUSION 21 Florida s Response to CMS s Request for Additional Information, at 12 (Dec. 8, 2011).
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