To: Interested congressional staff From: NAMD staff Date: March 27, 2015 Re: Comments on children s hospital network legislation ( ACE Kids ) Medicaid Directors across the country are committed to improving care for all Medicaid beneficiaries including children with medical complexities and are driving comprehensive delivery system and payment reforms to do so. The National Association of Medicaid Directors (NAMD) seeks to voice the common experiences of state Directors in the federal policy process and inform legislative proposals that could impact state efforts to improve care and deliver value in the program. This memo provides comments from NAMD staff on Advancing Care for Exceptional Kids Act of 2015 (H.R. 546 and S. 298), which are informed by our ongoing work with Medicaid Directors. Our feedback on the measure s overarching concepts focus on the likely impact on states delivery and payment systems as well as quality improvement and care coordination initiatives. We also offer comments on specific provisions of the bill so that policymakers may better understand the operational and technical issues from the state perspective. These comments do not, however, represent a formal position on this legislation. Our association welcomes the opportunity to engage in an ongoing dialogue around this legislation. Should you have any questions, please contact Andrea Maresca [andrea.maresca@medicaiddirectors.org]. General Feedback NAMD, in close collaboration with our members, has identified a number of overarching comments on the ACE Kids Act, which are outlined below. State adoption of this model appears to be mandatory, as currently drafted in the bill. Though the bill says that the creation of networks for children with complex conditions is optional for states, the legislative language appears to contradict this. Legal experts have noted that the link to Section 1905(a) in the legislative text would require states to cover this new model through the EPSDT benefit. Because of the variability in state Medicaid programs, provider landscapes, and marketplaces, it would neither be desirable nor feasible for this program to be mandatory. If the legislation is amended to be voluntary, the NAMD staff anticipates that states would still face pressure to take up this option, which in reality limits state flexibility around its use. Upon the enactment of this bill, states would likely face significant stakeholder pressure to adopt this model. In some situations, this dynamic may result in a state Medicaid agency pursuing a model that does not align with its broader 444 North Capitol Street, NW, Suite 524 Washington, DC 20001 Phone: 202.403.8620 www.medicaiddirectors.org
delivery model and reforms or informed by an accurate understanding of the state s program, provider landscape, and population of medically complex children. States would also have to dedicate time and resources to implement such a model, thereby diverting attention away from other major initiatives. The children s hospital network model does not align with broader state delivery reforms and could add unnecessary complexity in Medicaid. Medicaid managed care organizations (MCOs) are increasingly focused on covering complex/high cost populations and coordinating their social services and support needs. However, this legislation seeks to provide health insurance coverage for medically complex children through non-mco entities. As a result, the bill would add complexity and could be duplicative or otherwise disrupt states work including contractual obligations -- with MCO s to coordinate care for children with significant health care needs. We are concerned that using these non-mco entities could also break the family unit, which many states are working to avoid through the use of comprehensive managed care for all Medicaid enrolled family members. Additionally, the bill runs contrary to widespread state Medicaid initiatives that are moving beneficiaries away from hospital-based networks and into the least costly, most appropriate setting that provides quality care. While this legislative proposal would seek to serve medically complex children in lower cost settings within a given network, states are concerned that the model ultimately still places hospitals at the center of an individual s care. ACE Kids provides no clear path for how the children s hospital networks would interact with existing care coordination models and programs for these children, nor what would happen when children age out of the program. Many states have established care coordination approaches or specialized programs for high need children using models such as managed care, health homes and accountable care entities. However, the bill does not address how this option would leverage or work alongside these existing programs. As a result, states are concerned the new model would create confusion, lead to duplication of effort, and drive fragmentation. It also does not explicitly support children as they age-out of the program and transition away from requiring this level of care coordination, which could adversely impact these beneficiaries as they reach adulthood. The bill leaves many important elements of the proposal to be addressed through the rulemaking process. Many of pivotal elements of the model, such as creation of riskbased payment models and circumstances for terminating participation, are not addressed in the legislation but left to be decided through the regulatory process. This makes it difficult for states to fully assess the impact of this legislation and the model that it would create. New legislative authority is not needed for states that wish to pursue the type of riskbased provider arrangements proposed by ACE Kids, nor are states seeking such statutory authority. States currently believe they can pursue the concept proposed in this legislation with CMS through existing flexibilities, and can design programs that reflect individual state marketplaces and needs. States may be better supported Page 2 of 8
through federal policy attention and assistance to streamline the statutory and regulatory requirements and processes, for example those pertaining to Medicaid providers who deliver services to consumers enrolled in another state s Medicaid program. These streamlining policy changes should be applicable to hospitals and their affiliated physicians. Section-by-Section Feedback The following chart provides feedback on specific provisions of the legislation, which is intended to identify operational and policy issues that would impact state Medicaid programs under this bill. Provision Enrollment (Under new 1947(a) and (c)). States would prospectively enroll children in the program, and assign the child to a network for an initial 90 day period based on: prevalence of visits to a pediatrician/specialist in the network; family preference; residence; and proximity to referral networks. The child may opt out of this network during the first 90 days. After 90 days, the child can choose to participate in the network or in the state s standard delivery model. Network requirements and eligible anchor hospitals (new Sec. 1947(b)). To be a nationally designated network, it must include the full complement of providers needed to care for the eligible children and be anchored by a qualifying children s hospital. Qualifying children s hospitals must meet certain criteria laid out in the legislation. NAMD Comments While this provision seeks to ensure that children and their families maintain choice of health care providers, it also raises concerns about the sustainability of opt-out provisions for what is characterized as a small subset of the state Medicaid program. This is especially true as this legislation would entail significant resource investments among all entities involved, and there is no tool for states to ensure there is adequate return on investment. The designation of 90 days also raises questions for states. For example, this time frame could result in disruptions in care/services while still not being sufficient to demonstrate meaningful value for the child and their family. The legislation allows for network assignment based on residence and proximity to referral networks, but only if the network can ensure access to a medical home within 30 miles of the child s home. This requirement would not be feasible in many rural states where the nearest medical home may be several hundred miles away. Children s hospitals would be required to build networks with a range of providers and community-based organizations with whom they may otherwise have no relationship. Such connections are necessary to ensure effective transitions and child-centered plans of care. State experiences have demonstrated that such relationship/network building requires significant and ongoing investment of resources to build and maintain. Children s hospitals may not be well-positioned or the most effective in serving in such a role. The legislation could adversely impact successful partnerships and agreements that already exist between providers who deliver care for Page 3 of 8
these children. It would be challenging and resource intensive for states to terminate and re-establish contracts or MOUs to accommodate the new model. Program agreements (new Sec. 1947(d)). HHS, the state, and the children s hospital network would establish a program agreement for the delivery of care. It would: Establish the network s service area; Be effective for a contract year; Require the network submit care management network and coverage plans to HHS; Require networks meet state and local law; Require the state make payments for services delivered out of state; Require hospital networks to meet standards and measures developed by HHS for these networks (including network adequacy standards); Establish data collection and recording keeping requirements; Require the network to accept payment developed under the risk-based payment approach. Clarification is needed to address whether physicians and hospitals that currently render specialized services to high need children in Medicaid would have to meet any additional requirements to participate in a children s hospital network. Clarification is needed to address whether a hospital could be excluded from participation in the networks and around the determination process for partnerships with other states. States have strong concerns about HHS involvement in the development of procedures for or any part of agreements with Medicaid providers, including network adequacy or access standards. This is likely to add unnecessary complexity to relationships, agreements and formal contracts between state Medicaid agencies and providers. Further, it could erode the onthe-ground connection between state Medicaid agencies and providers in their communities. Also of concern is that the legislation does not specify all of the standards to which networks would be held. For example, would such networks be subject to the same program integrity, reporting, quality assurance, licensure requirements as state Medicaid programs more broadly or to new standards? If they are subject to new standards, what entity sets these standards and what is the process for doing so? Clarification would also be needed for how any standards developed under this legislation would be applied, including their application to in-state and out-of-state providers. If policymakers retain the language around program agreements, at a minimum, clarification is needed for the phrase close cooperation with (1947(d)). This phrase should be clarified to provide for states to have a lead role in the program agreement process. The use of the phrase convenient access is concerning in that it seems to add a new statutory phrase or threshold for access to care. Title XIX already includes requirements regarding sufficient access for Medicaid enrollees and a new threshold is duplicative and unnecessary. Consideration is necessary as to how any conflicts or discrepancies with existing state Medicaid program policies and procedures would be resolved through these agreements, including any conflicts around covered services. Page 4 of 8
Data and Data Sharing (new 1947(d)(2)(C)). The network must collect claims data, which would be reported in a standardized format and made available to establish a national claims database. The network would provide HHS and the state with access to program records, including financial, medical and personal records. Immediate establishment of a national database would be premature and may not necessarily align with existing state database efforts. The creation of such a database involves system development and testing that requires resources, planning and education among impacted entities. Also, before its creation, CMS would need to assess how this database fits with the agency s existing warehouses (e.g., T-MSIS). States advise against a national database without first allowing full vetting of the data to ensure it is comparable and could be used to inform future policy and operational decisions impacting quality, cost and access for enrollees. As with other data collection efforts, NAMD maintains that the collection and use of data must be designed at the forefront to be linked to improving care. As the primary payer and administrator of the program, states should have immediate access to the data. States will also want to ensure that such providers enter into agreements with health plan entities to share such data. Terminating agreements (new 1947(d)(3)). HHS would issue regulations that establish the circumstances for the state to terminate their program or for a children s hospital network to terminate an agreement. Standard Medicaid Data Set (new 1947(f)). Calls for HHS, states and the networks to obtain consistent and verifiable Medicaid Analytic Extract data or a comparable data set and establish data-sharing agreements to support care coordination. Requires HHS to perform claims analysis. States may provide pay-forreporting incentives during the first two years. Standards and quality measures (new 1947(e)). The legislation directs HHS to establish a national set of quality assurance Regarding submission of reports, the language in consultation with states could undermine state authority with respect to reporting requirements and oversight matters. We are concerned that the legislation does not explicitly allow a state to terminate its participation in the SPA option for any reason. It is unclear why regulations would be needed to establish circumstances for termination. State Medicaid agencies outline such conditions in contracts or related state statute or policies. The purposes and downstream uses for HHS claims analyses should be explicit and tied to state priorities for improving care delivery and efficient program operations. States have limited resources, and this legislation carries no clear incentives to establish pay-for-reporting programs. Should policymakers advance this legislation, there is a need and value in including state Medicaid agency experts in the process for development of such standards (in addition to HHS and the national Page 5 of 8
and improvement protocols and procedures for these state programs; develop pediatric quality measures (taking into account CHIPRA centers of excellence work and HEDIS measures); pediatric network adequacy standards for the networks; and criteria for pediatric care coordination. Payment to Networks (new 1947(g)). States must develop risk-based payment methodologies in coordination with MACPAC and pediatric health care providers that would be phased in over five years. During the phase in, data would be analyzed to support the development of the riskbased payment. Risk-based payments would have to be actuarially sound, include a risk adjustment, reinsurance, or risk-corridor approach, and a shared savings element. In the first two years, states with feefor-service would continue this payment approach but with an added per capita care coordination payment. The phase in period does not apply to states already using riskbased managed care for this population. pediatric policy organizations which are specified in the statute). The development of additional quality metrics for this population may be beneficial, but with certain qualifications. Creating national criteria for pediatric care coordination, network adequacy standards, and quality protocols for this opt-in program could have a broader impact if they are applicable beyond this model. Language requiring coordination with existing Title XVIII, XIX and related quality provisions are essential. Any effort with respect to pediatric quality measures should first draw from existing measure sets or work underway, including the child core set. States have noted several instances where federal entities or other national measure development bodies are engaged in duplicative or otherwise overlapping efforts. Further, measures must be tied to actionable information for states and providers rather than information that is simply interesting to have. It is unclear why the legislation specifies the need for actuarial soundness; the statute and implementing regulations for Title XVIII and XIX already address requirements pertaining to risk-based payments. States would retain the authority to set payment methodologies. For example, the legislation would require states with FFS programs provide an additional care coordination payment during the transition to a risk-based model. This is contrary to existing state authority to develop and set payment methodologies in Medicaid and differs from the intent of the legislation to allow states to retain this authority. It is unclear why states would be required to consult or coordinate with MACPAC. This appears inconsistent with MACPAC s role as a federal commission responsible for advising Congress. We do not anticipate that MACPAC would have the capacity and expertise to fulfill this type of technical assistance role. The payment approach could increase costs for state Medicaid programs, which are not accounted for through an enhanced match or other federal funds. For instance, the legislation requires an additional care coordination payment during the transition period. If policymakers advance this bill, states may benefit from technical assistance opportunities from CMS for the development of the riskbased methodology. Page 6 of 8
States operating under 1115 Authority (new 1947(h)). Preemption of State Law (new 1947(i)). States cannot impose requirements on the children s hospital network under this program that are inconsistent with or would impede hospital networks from the meeting the requirements of this legislation. Definitions(new 1947(j)) Eligible Child. The program applies to children who are under 18 and meet other criteria, including that they have a chronic, physical, developmental, behavioral, or emotional condition that: affects 2 or more body systems; requires intensive care coordination; or meets criterial for medical complexity agreed upon by HHS in coordination with a national panel of pediatric experts. Service Area Requirements. The size or number of children s hospital networks can t be limited. HHS must ensure the networks and population of children will support delivery of the program. Should policymakers advance this bill, additional analysis is required to determine whether the legislative language is feasible in states operating Section 1115 demonstration programs. It appears to create an exceptions process for 1115 states but it is unclear how HHS/CMS and states would operationalize this language. Given that networks are required to comply with state law in another portion of the bill, this provision could create confusion and challenges for states in what state law does/does not apply. It also raises questions about applicable licensure rules for participating facilities/providers. The definition of medically complex children, for purposes of this legislation, is both overly broad and not sufficiently defined. The preamble provides some data on possible size of the population but the actual population is not truly known due to the vagueness of the definition, which ultimately appears to be determined by HHS. This vagueness impedes a true understanding of the potentially eligible children, makes it difficult to assess its costs on states and determine if such children are already enrolled in Medicaid managed care or fee-for-service Medicaid. NAMD has strong concerns with HHS determining the universe of eligible children. Separately, the legislation does not specify a role for states to inform the definition of the eligible children. Allowing for states to have a role in determining the definition may help to promote greater alignment in the delivery of care for this population, for instance, giving states the opportunity to align it with the age requirement for EPSDT. States may have legitimate purposes for limiting the number of networks, just as states have the flexibility to limit the number of MCOs in a state for oversight and management purposes. The language indicates that the state administering agency that signs and operates the MCCC may be the single state Medicaid agency. The single state Medicaid agency is the only entity that should have authority to sign contracts/agreements with MCCC but could delegate operational responsibilities to sister state agencies if appropriate. It is unclear how the bill s approach to overlapping service areas would be operationalized in states with multiple children s hospitals that are eligible to anchor a children s hospital network under this legislation. Page 7 of 8
Timeline (Sec. 3(d)). States could to opt in this program beginning Jan. 1, 2016 using a SPA. Implementing regulations would be issued by HHS no later than 120 days after the bill s enactment. Inclusion as Medical Assistance (Sec. 3(b)). Inserts the Medicaid Children s Care coordination program into the list of medical assistance provided under Section 1905(a). The timelines specified in this legislation for CMS and states are not feasible. It would afford CMS sufficient time to promulgate guidance nor for states to prepare for implementation. The legislation purports to create a program that may be implemented at state option. However, Section 3(b) adds the Medicaid Children s Care Coordination program to the list of medical assistance provided under Section 1905(a). The EPSDT mandate at Section 1905(r)(5) applies to other necessary health care, diagnostic services, treatment, and other measures described in section 1905(a). To date, the courts have interpreted this to mean that if its listed in Section 1905(a), states have to cover it -- whether it is an optional benefit or not. Therefore the program, while theoretically optional, would be required under EPSDT. Page 8 of 8