RICK SCOTT GOVERNOR Better Health Care for all Floridians ELIZABETH DUDEK SECRETARY July 13, 2012 Prospective Vendor: Subject: Solicitation Number: AHCA ITN 004-12/13 Title: Statewide Medicaid Managed Care (SMMC) Long Term Care (LTC) Region 4 The enclosed information has been provided for consideration in the preparation of your response to the above mentioned ITN. All other terms and conditions of the ITN remain in effect. To the extent this Addendum gives rise to a protest, failure to file a protest within the time prescribed in section 120.57(3), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes. Enclosures Sincerely, Addendum No. 1 (1 Page) Attachment J-5, Capitation Rate Ranges (23 Pages) Barbara B. Vaughan Barbara B. Vaughan, SMA Procurement Office 2727 Mahan Drive Mail Stop #15 Tallahassee, FL 32308 Visit AHCA online at http://ahca.myflorida.com
AHCA ITN 004-12/13 STATEWIDE MEDICAID MANAGED CARE (SMMC) LONG TERM CARE (LTC) REGION 4 ADDENDUM NO. 1 Item #1 All references in the ITN to http://devahca/procurements/index.shtml are hereby revised to now read as follows: http://ahca.myflorida.com/procurements/index.shtml. Item #2 Attachment J-5, Capitation Rate Ranges (Place Holder), is hereby deleted in its entirety and replaced with Attachment J-5, Capitation Rate Ranges, attached hereto. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK AHCA ITN 004-12/13, Addendum No. 1, Page 1 of 1
ATTACHMENT J-5 CAPITATION RATE RANGES CONTENTS 1. Capitation Rate Range Development Overview... 2 2. Base Data and Base Data Adjustments... 3 Base Data... 3 Base Programmatic Changes... 3 Services Not Covered Under SMMC LTC... 4 Services Included in the Data Book without Historical Utilization and Expenditure Information... 4 Non-Emergency Transportation Services... 4 Regional Grouping... 5 3. Prospective Adjustments... 6 Prospective Trend... 6 Prospective Programmatic Changes... 6 Hospice and Nursing Facility Fee Changes... 6 Administration and Margin... 7 Transition from Nursing Facilities to HCBS... 7 4. Prospective Program Changes that Impact SMMC LTC Bids and Negotiated Rates. 9 SMMC LTC ITN Bid Process... 9 5. Risk Adjustment Approach... 11 Operational Plan... 12 6. Certification of Final Rate Ranges... 13 Appendix A: Adjustment Tables... 14 Appendix B: Rate Ranges... 19 Appendix C: Risk Adjustment Example Calculation... 21 AHCA ITN 004-12/13, Attachment J-5, Page 1 of 23
1 Capitation Rate Range Development Overview This document presents an overview of the process used to develop the capitation rate ranges in which the Agency for Health Care Administration (AHCA) is willing to contract for the first contract year of Florida s Statewide Medicaid Managed Care Long Term Care (SMMC LTC) Program (September 1, 2013 August 31, 2014). These rate ranges are provided in Appendix B. Please note the rate ranges presented in Appendix B are applicable only to capitated Long- Term Care Plans (LTC Plans) and are not applicable to Fee-for-Service Long-Term Care Provider Service Networks (FFS LTC PSNs). AHCA will release FFS LTC PSN benchmarks at a later date. The following sections provide prospective bidders with the following information: Base Data and Base Data Adjustments Prospective Adjustments Prospective Program Changes that Impact SMMC LTC Bids and Negotiated Rates Risk Adjustment Approach AHCA ITN 004-12/13, Attachment J-5, Page 2 of 23
2 Base Data and Base Data Adjustments Base Data The base data from the Data Book that were used to determine the rate ranges in Appendix B included the State Fiscal Year (SFY) 2009/2010 and SFY 2010/2011 data periods. The adjusted base data for SFY 2009/2010 were trended to the SFY 2010/2011 period and blended with the adjusted SFY 2010/2011 data. A weighting of 40% was applied to the adjusted and trended SFY 2009/2010 data and a weighting of 60% was applied to the adjusted SFY 2010/2011 data. The weighting of the blended base data utilizes the SFY 2010/2011 historical member months. Data for SFY 2008/2009 were considered but not included in the adjusted base data. Base Programmatic Changes The base period programmatic changes reflect adjustments that occurred after the base data periods and that need to be reflected in the development of the rate ranges. The following programmatic changes were applied to the base data as base data adjustments: Nursing Facility fee changes (effective January 1, 2012) Hospice fee changes (effective January 1, 2012) Telephonic Home Health Services Delivery Monitoring and Verification (DMV) and Care Coordination Programs Hospice and Nursing Facility Rate Changes AHCA updates the Hospice and Nursing Facility fee schedules on a semi-annual basis (January and July). Per Section 409.982(5), Florida Statutes (F.S.), all SMMC LTC contractors are required to contract with Hospice and Nursing Facility providers at rates no less than those set by AHCA. The SFYs 2008/2009, 2009/2010, and 2010/2011 base data represent expenditures based on the fees that existed during the dates of service included in each data period. The base data were adjusted for each year to reflect the Hospice and Nursing Facility fees effective January 1, 2012 to June 30, 2012. The data presented in the Data Book are net of patient responsibility. The fee changes were analyzed inclusive of patient responsibility and the impact measured both on a gross basis (with patient responsibility) and on a net basis (without patient responsibility). The fee change impact was developed by analyzing the historical data by provider and measuring the difference between the historical unit cost represented by the data and the January 1, 2012 June 30, 2012 AHCA-set fees. The gross and net impacts for each data AHCA ITN 004-12/13, Attachment J-5, Page 3 of 23
period (SFYs 2008/2009, 2009/2010, and 2010/2011) are outlined in Appendix A Tables 1 and 2. The fee changes for July 1, 2012 December 31, 2012 have not been included in the base data adjustments and rate range development due to the timing of the Invitation to Negotiate (ITN) release. AHCA will update the rate ranges to reflect the effective fee changes after the award of contracts. This process and potential future rate adjustments related to the fee changes for Hospice and Nursing Facility services are outlined in Section 4 of this document. Telephonic Home Health Services (DMV) and Care Coordination Programs AHCA implemented a telephony requirement and a care coordination program in Region 11 (Miami-Dade County only) during the SFY 2010/2011 data period. This change reduced the utilization for home health services by approximately 45%. Since this change is reflected in the SFY 2010/2011 data for Region 11, the SFYs 2008/2009 and 2009/2010 home health services utilization for Region 11 were adjusted downward by 45% to reflect this impact. AHCA intends to implement this program in additional regions covered under the SMMC LTC program, but expects a decrease in utilization of only 10%. As such, a downward adjustment to the home health services utilization in Regions 1 through 10 are included as a prospective change since the historical base data do not include the impact of this change. Please refer to Section 3 of this document. Services Not Covered Under SMMC LTC Certain services were provided under the predecessor waiver programs but will no longer be offered under the SMMC LTC program. (Costs for those services are separately identified in the Data Book.) Because these services will not be included under the SMMC LTC program, their costs were not included in the capitation rate range development. Services Included in the Data Book without Historical Utilization and Expenditure Information With the implementation of the SMMC LTC program, contracted plans will be responsible for providing Behavioral Management, Medication Management and Medication Administration services, which were not provided as distinct services under the predecessor waiver programs. The approach for including this adjustment in the capitation rate ranges is outlined in Section 4. Non-Emergency Transportation Services Contracted plans will be responsible for providing non-emergency transportation to and from services covered under the SMMC LTC program as a separate service, so long as that transportation is not the responsibility of the provider of the LTC service. AHCA estimates the total cost of this non-emergency transportation to be $0.04 per member per month (PMPM). An adjustment of $0.04 PMPM is added to the rate ranges for each region. AHCA ITN 004-12/13, Attachment J-5, Page 4 of 23
Regional Grouping The historical home- and community-based services (HCBS) and Non-HCBS Data Book data were analyzed to determine the optimal groupings for developing rate ranges for the SMMC LTC program. The optimal groupings should collapse data into similar cost categories while taking into account the size of each group for credibility purposes. Initially, data in the Data Book were stratified by: Medicare eligibility status (Duals and non-duals) Age (18 64 and 65+) and Gender (Male and Female) Region Because the SMMC LTC program covers only LTC services, there is not a notable difference between the services that are covered by Medicare and Medicaid for the populations who will enroll. Thus, combining the Dual and non-dual populations is appropriate. The Dual Eligible 65+ population is by far the largest population category. Given the very few member months in the other categories, collapsing the population categories provides additional credibility for rate-setting purposes. Small cell sizes (such as those for the Dual 18 64 and the non-duals) can lead to variation in historical costs that would not be predictive of future costs. Collapsing the cells helps to mitigate the impact of small cell size and enhances the credibility of the data used in projecting future costs. Given the populations and services covered under the SMMC LTC program, it is appropriate to collapse each region s population into a single cell that includes all eligible recipients, regardless of age or Medicare eligibility. The regional groupings for HCBS and Non-HCBS are outlined in the following table. Regional Base Data Groupings Data Grouping HCBS Regions Non-HCBS Regions 01 01, 03, 04 01, 02, 03, 04, 06 02 02 05, 07 03 05, 06, 07 08, 09 04 08, 10, 11 10, 11 05 09 Not Applicable As illustrated above, the HCBS population for Regions 01, 03, and 04 from the Data Book were aggregated and serve as the base data for the development of rate ranges for Regions 01, 03, and 04. AHCA ITN 004-12/13, Attachment J-5, Page 5 of 23
3 Prospective Adjustments This section describes the adjustments applied to the base data, which have already been adjusted and blended, as described in Section 2 of this document. Prospective Trend Historical Data Book data were analyzed and utilized to determine trends on a utilization and unit cost basis. In addition to analyzing the historical Data Book data, supplemental trend data supplied by AHCA were reviewed. The average annual trend factors were applied from the midpoint of the blended base data period (January 1, 2011) to the midpoint of the contract payment period for each region. The contract payment period for each region is detailed in Appendix A Table 3. The contract payment period varies by region and, therefore, the midpoint varies depending on the region. Appendix A outlines the following information: Table 3: Contract payment period, midpoints, trend months Table 4: Mapping of the Data Book service categories to the consolidated service categories Table 5: Average annual range of utilization/1,000 and unit cost trend factors Prospective Programmatic Changes Prospective program changes recognize the impact of benefit, eligibility or State reimbursement changes that take place between the base data period and the projection period. For the SMMC LTC program, the following prospective program changes were applied: Telephonic Home Health Services DMV and Care Coordination Programs As discussed in the base data adjustments section, AHCA will implement the Telephonic Home Health Services DMV and Care Coordination programs for Regions 01 through 10 on October 1, 2012. For these regions, a downward adjustment of 10% was applied to the home health service category for each SFY. Note that Region 11 was adjusted as part of the base programmatic change, as described in Section 2. Hospice and Nursing Facility Fee Changes As previously discussed, AHCA updates Hospice and Nursing Facility fees on a semi-annual basis (January and July). The rate ranges presented in this document are based on the fees effective for January 1, 2012 June 30, 2012. No assumptions or projections have been made AHCA ITN 004-12/13, Attachment J-5, Page 6 of 23
to estimate the impact of the fees effective for July 1, 2012 December 31, 2012 or for periods beyond December 31, 2012. The rate ranges presented in Appendix B are based on the Nursing Facility and Hospice fees in effect January 1, 2012 to June 30, 2012. For SMMC LTC offerors who are awarded contracts, negotiated rates may be adjusted to reflect the impact of future fee changes. Please refer to Section 4 of this document. Administration and Margin The rate ranges were developed including administrative cost and margin allowances. Case management services are included in the adjusted base data as covered services and through the Nursing Facility per diem, and are therefore not included in the administrative loadings. The range of administration and margin loadings are outlined in the Appendix A Tables 6 and 7. Transition from Nursing Facilities to HCBS As part of the SMMC LTC program, contracted LTC Plans are expected to transition and divert recipients from the Nursing Facility setting to the HCBS setting. The Agency-required transition percentages included in the rate range development process are outlined in Appendix A Table 8. An example of how these percentages are applied is below. In this example, the transition percentage is 2%. This example is for illustrative purposes only. The figures below do not tie to the development of the rate ranges provided in this document. Population Plan 1 Population Mix (Actual) Plan 2 Population Mix (Actual) Plan 1 Population Mix (with Agencyrequired Transition) HCBS 32.5% 39.5% 34.5% 41.5% Non-HCBS 67.5% 60.5% 65.5% 58.5% Total 100.0% 100.0% 100.0% 100.0% For purposes of this illustration, the following rates are assumed. Population Example PMPM Rate HCBS $1,000 Non-HCBS $4,000 Plan 2 Population Mix (with Agencyrequired Transition) AHCA ITN 004-12/13, Attachment J-5, Page 7 of 23
The rates for Plans 1 and 2 with the example Agency-required transition percentage of 2% would be calculated as follows: Plan 1 HCBS 34.5% * $1,000 = $ 345.00 Non-HCBS 65.5% * $4,000 = $2,620.00 Total = $2,965.00 Plan 2 HCBS 41.5% * $1,000 = $ 415.00 Non-HCBS 58.5% * $4,000 = $2,340.00 Total = $2,755.00 AHCA ITN 004-12/13, Attachment J-5, Page 8 of 23
4 Prospective Program Changes that Impact SMMC LTC Bids and Negotiated Rates AHCA intends to recalculate the capitation rate ranges to reflect two prospective program changes that are not reflected in the capitation rate ranges presented in Appendix B. AHCA implements updates to the Hospice and Nursing Facility fees on a semi-annual basis (January and July). Per Section 409.982(5), F.S., SMMC LTC contractors are required to pay Hospice and Nursing Facilities at rates no lower than those set by AHCA. With the implementation of the SMMC LTC program, contractors will be responsible for providing Behavioral Management, Medication Management and Medication Administration services, which were not provided as distinct services under the predecessor waiver programs. SMMC LTC ITN Bid Process The following outlines the process AHCA will utilize to reflect the future impact of Hospice and Nursing Facility fee changes, as well as the addition of Behavioral Management, Medication Management and Medication Administration services. SMMC LTC offerors will submit bids for the HCBS and Non-HCBS components for each region. The rate ranges the offerors bid must fall within the rate ranges outlined in Appendix B. These rate ranges are within the actuarially sound rate range for each region. The rate bids submitted by the SMMC LTC offerors will be negotiated by AHCA and final agreed-upon rates are binding. The rate ranges will be updated to reflect the Hospice and Nursing Facility fee changes effective prior to the implementation of the program for each region. They will also be adjusted to reflect the addition of Behavioral Management, Medication Management and Medication Administration services. If a rate negotiated with an LTC Plan in the initial contract year is within the updated rate range (i.e., the range that reflects the inclusion of the above program changes), AHCA will not change the LTC Plan s rate. If the rate negotiated with an LTC Plan in the initial contract year falls below the updated rate range, AHCA will contract with the LTC Plan at the lower bound of the new rate range. If the rate negotiated with an LTC Plan in the initial contract year falls above the updated rate range, AHCA will contract with the LTC Plan at the upper bound of the new rate range. If the updated rate ranges decrease as a result of legislated changes, a corresponding decrease will be applied to the negotiated rate. No other adjustments beyond those outlined above, legislatively mandated changes or AHCA-implemented changes will be considered. The capitation rate(s) paid to the SMMC AHCA ITN 004-12/13, Attachment J-5, Page 9 of 23
LTC Plans will be the rates bid under this procurement, adjusted, if necessary, as described above. Nursing Facility and Hospice Fee Change Updates Prior to September 1, 2013, AHCA will update the rate ranges in all regions to reflect the Nursing Facility and Hospice fees that will be in effect from July 1, 2013 to December 31, 2013. If necessary, LTC Plan rates will be adjusted as described above. No further updates to the rate ranges or LTC Plan rates will be made during the September 1, 2013 to August 31, 2014 period related to the Nursing Facility and Hospice fee changes. AHCA will perform a reconciliation to account for the fee changes that impacted Nursing Facility and Hospice services during the September 1, 2013 to August 31, 2014 period. Adjustments for the Addition of New Services Prior to August 1, 2013, AHCA will recalculate rate ranges to include an adjustment for the addition of Behavioral Management, Medication Management and Medication Administration services. As noted above, if the rates negotiated with LTC Plans in the initial year are within the rate ranges that include this adjustment (and the fee change adjustments described above), the LTC Plans rates will not change. If the negotiated rates fall below the updated rate range, the LTC Plans rates will be set at the lower bound of the rate range. AHCA ITN 004-12/13, Attachment J-5, Page 10 of 23
5 Risk Adjustment Approach This section describes the methodology for AHCA to prospectively adjust the negotiated SMMC LTC capitation rates for differences in actual selection risk related to recipients residing in a Nursing Facility and those in HCBS settings. Under this methodology, the actual payment rate to each contracted LTC Plan may not be the negotiated capitation rate, but instead may be the risk-adjusted rate, if an adjustment is required by this methodology. Under this approach, the contracted LTC Plan and the State agree to accept the final payment rates that result from this risk adjustment methodology (RAM), including any retroactive adjustments related to this RAM and any program changes outlined in Section 4 of this document, without further rate or contract negotiations. AHCA will ensure that the final risk-adjusted payment rates are budget neutral to the State on a regional basis. In other words, the PMPM cost (i.e., federal and State funds combined) of the respective managed care capitation payments in each region must be the same before and after application of the RAM. The approach is outlined below. AHCA will analyze 12 months of historical data 3 months prior to the beginning of enrollment in each region. The enrollment distribution will be calculated using the same population segmentation logic that was used in the SMMC LTC Data Book and the recipient s latest setting of care will be utilized. A pre-enrollment benchmark rate will be calculated based on this mix. Once the likely eligible recipients are identified, AHCA will begin the enrollment process by notifying eligible recipients. Eligible recipients will be offered the opportunity to select a plan; if they do not choose one, they will automatically be assigned a plan. For new LTC enrollees after the enrollment begin date: The enrollee will be classified as Nursing Facility (Non-HCBS) if he/she had a Medicaid paid Nursing Facility claim. HCBS enrollees will be determined through the Department of Elder Affairs. For rate purposes, for both the transitional and new enrollees, the recipient s initial classification will remain valid through the contract year. AHCA ITN 004-12/13, Attachment J-5, Page 11 of 23
Operational Plan Month 1 In each region, AHCA will pay each plan a blended capitation rate that reflects the region-wide Nursing Facility/HCBS mix, adjusted for the Agency-required transition percentage for all LTC Plans in the region. AHCA will later perform a reconciliation based on month 1 actual enrollment and case mix for each plan. Subsequent Months For the second month and each subsequent month of the contract payment period, AHCA will develop a blended capitation rate for each LTC Plan, adjusted for the new enrollments and disenrollments that occurred in the previous month (i.e., the second month payment will be based on the first month of enrollment, etc.) and adjusted for the Agency-required transition from the Nursing Facility to the HCBS setting. Once 95% of regional eligible recipients are enrolled in LTC Plans, AHCA will ensure that the recalibrated rates are budget neutral to the State on a PMPM basis. The benchmark against which budget neutrality will be measured is the regionwide rate based on the pre-enrollment mix with the Agency-required transition percentage. AHCA will compute the total PMPM rate for each LTC Plan and if the resulting rates for all plans do not result in a PMPM equal to the benchmark amount to be paid by the State, AHCA will make an adjustment (downward or upward) to compute the recalibrated final payment rates that are budget neutral. An example of the RAM is provided in Appendix C. The figures in Appendix C are for illustrative purposes only and do not tie to the development of the capitation rate ranges in this document. AHCA ITN 004-12/13, Attachment J-5, Page 12 of 23
6 Certification of Final Rate Ranges In preparing the rate ranges for the SMMC LTC program, AHCA s contracted actuary used and relied upon enrollment, eligibility, claim, reimbursement level, benefit design, financial data and information supplied by AHCA. The State is responsible for the validity and completeness of this supplied data and information. AHCA s contracted actuary reviewed the data and information for internal consistency and reasonableness but did not audit them. In the opinion of AHCA s contracted actuary, the data are appropriate for the intended purposes. If the data and information are incomplete or inaccurate, the values shown in this report may need to be revised accordingly. AHCA s contracted actuary certifies that the rate ranges developed for the SMMC LTC program were developed in accordance with generally accepted actuarial practices and principles, and are appropriate for the Medicaid-covered populations and services under the SMMC LTC program. The actuary certifying these rates is a member of the American Academy of Actuaries and meets its qualification standards to certify to the actuarial soundness of Medicaid managed care capitation rates. Rate ranges developed by AHCA s contracted actuary are actuarial projections of future contingent events. Actual LTC Plan costs will differ from these projections. AHCA s contracted actuary has developed these rate ranges on behalf of the State to demonstrate compliance with the CMS requirements under 42 CFR 438.6(c) and accordance with applicable law and regulations. Use of these rate ranges for any purpose beyond that stated may not be appropriate. LTC Plans are advised that the use of these rate ranges may not be appropriate for their particular circumstance, and AHCA s contracted actuary disclaims any responsibility for the use of these rate ranges by LTC Plans for any purpose. AHCA s contracted actuary recommends that any LTC Plan considering contracting with the State should analyze its own projected medical expense, administrative expense and any other premium needs for comparison to these rate ranges before deciding whether to contract with the State. This document assumes the reader is familiar with the SMMC LTC program, Medicaid eligibility rules and actuarial rating techniques. Readers should seek the advice of actuaries or other qualified professionals competent in the area of actuarial rate projections to understand the technical nature of these results. AHCA ITN 004-12/13, Attachment J-5, Page 13 of 23
APPENDIX A Adjustment Tables Appendix A provides the value of certain adjustments used to calculate the rate ranges shown in Appendix B. Tables 1 and 2: Hospice and Nursing Facility Fee Impact January 1, 2012 June 30, 2012 Table 1: Hospice Services SFY 2008/2009 SFY 2009/2010 SFY 2010/2011 Region Gross Net Gross Net Gross Net 01 15.0% 17.7% 2.7% 3.1% -0.6% -0.8% 02 14.8% 18.0% 1.6% 1.9% -1.4% -1.7% 03 13.2% 15.6% 0.4% 0.5% -2.2% -2.7% 04 12.1% 14.7% -0.5% -0.6% -2.7% -3.2% 05 14.0% 16.5% 0.6% 0.7% -3.1% -3.8% 06 13.7% 16.1% 0.6% 0.8% -2.5% -3.0% 07 20.3% 22.9% 2.7% 3.2% -1.9% -2.2% 08 11.4% 13.7% -1.8% -2.1% -3.1% -3.7% 09 14.0% 16.1% 0.0% 0.0% -2.8% -3.4% 10 19.6% 21.7% 1.8% 2.1% -2.5% -2.9% 11 14.4% 15.3% -0.1% -0.1% -1.9% -2.1% AHCA ITN 004-12/13, Attachment J-5, Page 14 of 23
Table 2: Nursing Facility Services SFY 2008/2009 SFY 2009/2010 SFY 2010/2011 Region Gross Net Gross Net Gross Net 01 14.1% 17.0% 1.3% 1.5% -0.5% -0.6% 02 10.7% 12.7% -0.3% -0.4% -1.4% -1.7% 03 9.7% 11.6% -0.7% -0.8% -1.7% -2.0% 04 10.7% 12.9% 0.7% 0.8% -1.6% -1.9% 05 10.0% 12.1% 0.0% 0.0% -1.8% -2.1% 06 9.8% 11.7% -0.6% -0.7% -2.3% -2.7% 07 10.2% 12.1% 0.0% 0.0% -2.1% -2.5% 08 8.6% 10.3% -0.9% -1.0% -1.5% -1.7% 09 7.6% 9.0% -0.8% -0.9% -2.0% -2.3% 10 12.0% 13.9% 1.2% 1.4% -1.4% -1.5% 11 8.0% 8.8% -0.2% -0.2% -1.8% -1.9% Table 3: Contract Payment Period / Midpoints / Trend Months Region Contract Payment Period Midpoint Trend Months* 01 November 1, 2013 August 31, 2014 April 1, 2014 39.0 02 November 1, 2013 August 31, 2014 April 1, 2014 39.0 03 March 1, 2014 August 31, 2014 June 1, 2014 41.0 04 March 1, 2014 August 31, 2014 June 1, 2014 41.0 05 February 1, 2014 August 31, 2014 May 17, 2014 40.6 06 February 1, 2014 August 31, 2014 May 17, 2014 40.6 07 August 1, 2013 August 31, 2014 February 14, 2014 37.5 08 September 1, 2013 August 31, 2014 March 1, 2014 38.0 09 September 1, 2013 August 31, 2014 March 1, 2014 38.0 10 November 1, 2013 August 31, 2014 April 1, 2014 39.0 11 December 1, 2013 August 31, 2014 April 16, 2014 39.5 *From the midpoint of the 2010/2011 data period to the midpoint of the contract payment period AHCA ITN 004-12/13, Attachment J-5, Page 15 of 23
Table 4: Mapping of the Data Book Service Categories to the Consolidated Service Categories Consolidated Service Category Assisted Living Case Management HCBS Hospice Nursing Facility Services Data Book Service Category Assisted Living Case Management Adult Companion Adult Day Health Care Assistive Care Services Attendant Care Caregiver Training Home Accessibility Adaptations Home Health Services Home Delivered Meals Homemaker Intermittent and Skilled Nursing Medical Equipment and Supplies Nutritional Assessment and Risk Reduction Occupational Therapy Physical Therapy Speech Therapy Personal Care Personal Emergency Response System Respiratory Therapy Respite - facility Respite - in-home Hospice Nursing Facility Services AHCA ITN 004-12/13, Attachment J-5, Page 16 of 23
Table 5: Average Annual Range of Utilization/1,000 and Unit Cost Trend Consolidated Service Category Trend Type Bottom of the Range Top of the Range Assisted Living Utilization 0.5% 0.5% Unit Cost 2.5% 4.0% Case Management Utilization 0.5% 1.0% Unit Cost 0.0% 0.0% HCBS Utilization 1.5% 2.0% Unit Cost 0.0% 0.0% Hospice Utilization 0.0% 0.5% Unit Cost 0.0% 0.0% Nursing Facility Utilization 0.0% 0.5% Unit Cost 0.0% 0.0% Patient Responsibility* Annual Event 3.6% 3.6% * Patient responsibility is trended according to the Cost of Living Adjustment and is not applied as a compounded trend factor. Table 6: Administration Loading (PMPM) Population Bottom of the Range Top of the Range HCBS $105.00 $108.50 Non-HCBS $96.00 $98.00 Table 7: Margin Loading (Percentage) Population Bottom of the Range Top of the Range HCBS 1.50% 1.75% Non-HCBS 1.50% 1.75% AHCA ITN 004-12/13, Attachment J-5, Page 17 of 23
Table 8: Agency-required Transition Percentages Region Contract Payment Period Transition Percentage 01 November 1, 2013 August 31, 2014 1.67% 02 November 1, 2013 August 31, 2014 1.67% 03 March 1, 2014 August 31, 2014 1.00% 04 March 1, 2014 August 31, 2014 1.00% 05 February 1, 2014 August 31, 2014 1.17% 06 February 1, 2014 August 31, 2014 1.17% 07 August 1, 2013 August 31, 2014 2.00% 08 September 1, 2013 August 31, 2014 2.00% 09 September 1, 2013 August 31, 2014 2.00% 10 November 1, 2013 August 31, 2014 1.67% 11 December 1, 2013 August 31, 2014 1.50% AHCA ITN 004-12/13, Attachment J-5, Page 18 of 23
APPENDIX B Rate Ranges The rate ranges presented in this appendix are within the actuarially sound rate ranges and represent the rate ranges in which AHCA is willing to contract. Please note that these rate ranges are applicable to capitated LTC Plans only and are not applicable to FFS LTC PSNs. Table 9: HCBS Population* Region Contract Payment Period Bottom of the Range Top of the Range 01 November 1, 2013 August 31, 2014 $1,095.71 $1,129.50 02 November 1, 2013 August 31, 2014 $760.27 $780.01 03 March 1, 2014 August 31, 2014 $1,098.74 $1,134.09 04 March 1, 2014 August 31, 2014 $1,098.74 $1,134.09 05 February 1, 2014 August 31, 2014 $1,234.72 $1,277.66 06 February 1, 2014 August 31, 2014 $1,234.72 $1,277.66 07 August 1, 2013 August 31, 2014 $1,228.95 $1,268.85 08 September 1, 2013 August 31, 2014 $1,358.17 $1,401.37 09 September 1, 2013 August 31, 2014 $1,454.57 $1,500.28 10 November 1, 2013 August 31, 2014 $1,360.24 $1,404.49 11 December 1, 2013 August 31, 2014 $1,361.28 $1,406.06 *Rates are net of patient responsibility AHCA ITN 004-12/13, Attachment J-5, Page 19 of 23
Table 10: Non-HCBS Population* Region Contract Payment Period Bottom of the Range Top of the Range 01 November 1, 2013 August 31, 2014 $4,619.89 $4,721.61 02 November 1, 2013 August 31, 2014 $4,619.89 $4,721.61 03 March 1, 2014 August 31, 2014 $4,619.90 $4,726.18 04 March 1, 2014 August 31, 2014 $4,619.90 $4,726.18 05 February 1, 2014 August 31, 2014 $4,714.38 $4,821.87 06 February 1, 2014 August 31, 2014 $4,619.90 $4,725.27 07 August 1, 2013 August 31, 2014 $4,714.35 $4,814.65 08 September 1, 2013 August 31, 2014 $4,948.21 $5,054.68 09 September 1, 2013 August 31, 2014 $4,948.21 $5,054.68 10 November 1, 2013 August 31, 2014 $5,166.61 $5,273.67 11 December 1, 2013 August 31, 2014 $5,166.61 $5,274.95 *Rates are net of patient responsibility AHCA ITN 004-12/13, Attachment J-5, Page 20 of 23
APPENDIX C Risk Adjustment Example Calculation The following example is for illustrative purposes only. The figures in this example do not tie to the rate ranges outlined in this report. Assumptions Agency-required Transition 2% Rates HCBS $ 1,000 Non-HCBS $ 4,000 Pre-enrollment The pre-enrollment membership is measured 3 months in advance of the enrollment date in each region, analyzing 12 months of data and using the segmentation logic applied in the Data Book. Pre-enrollment Membership HCBS N/A N/A 1,800 Non-HCBS N/A N/A 5,900 Total N/A N/A 7,700 Pre-enrollment Membership Mix HCBS N/A N/A 23.4% Non-HCBS N/A N/A 76.6% Total N/A N/A 100.0% Pre-enrollment Membership Mix with Agency-required Transition HCBS N/A N/A 25.4% Non-HCBS N/A N/A 74.6% Total N/A N/A 100.0% Month 1 Month 1 - Payment to Plans* Total $ 3,239 $ 3,239 $ 3,239 *This amount is later reconciled to actual plan enrollment. Reconciliation not shown here. This PMPM is also the benchmark PMPM for the Budget Neutrality calculation. AHCA ITN 004-12/13, Attachment J-5, Page 21 of 23
Month 2 Measure Actual Enrollment in Month 1 HCBS 1,050 820 1,870 Non-HCBS 3,020 2,850 5,870 Total 4,070 3,670 7,740 Actual Enrollment Percentage (Based on Month 1) HCBS 25.8% 22.3% 24.2% Non-HCBS 74.2% 77.7% 75.8% Total 100.0% 100.0% 100.0% Enrollment Percentage (Based on Month 1) with Agency-required Transition HCBS 27.8% 24.3% 26.2% Non-HCBS 72.2% 75.7% 73.8% Total 100.0% 100.0% 100.0% Month 2 - Payment to Plans before Budget Neutrality Total $ 3,166 $ 3,270 $ 3,215 Budget Neutrality Factor* 1.0073 * The Budget Neutrality adjustment would not be triggered until 95% of of regional eligible recipients are enrolled in LTC Plans. The Budget Neutrality Factor is displayed here for illustrative purposes only. Month 2 - Payment to Plans After Budget Neutrality Total $ 3,189 $ 3,294 $ 3,239 AHCA ITN 004-12/13, Attachment J-5, Page 22 of 23
Month 3 In Month 2, Plan A transitioned 10 people from NF to HCBS and enrolled 5 additional HCBS recipients. In Month 2, Plan B transitioned 5 people from NF to HCBS, enrolled 5 additional HCBS recipients and disenrolled 5 NF recipients. New Enrollment / Disenrollments HCBS 5 5 10 Non-HCBS - (5) (5) Total 5-5 Enrollment for Rate Purposes HCBS 1,055 825 1,880 Non-HCBS 3,020 2,845 5,865 Total 4,075 3,670 7,745 Percentage Enrollment for Rate Purposes HCBS 25.9% 22.5% 24.3% Non-HCBS 74.1% 77.5% 75.7% Total 100.0% 100.0% 100.0% Percentage Enrollment for Rate Purposes with Agency-required Transition HCBS 27.9% 24.5% 26.3% Non-HCBS 72.1% 75.5% 73.7% Total 100.0% 100.0% 100.0% Month 3 - Payment to Plans Before Budget Neutrality Total $ 3,163 $ 3,266 $ 3,212 Budget Neutrality Factor* 1.0084 * The Budget Neutrality adjustment would not be triggered until 95% of of regional eligible recipients are enrolled in LTC Plans. The Budget Neutrality Factor is displayed here for illustrative purposes only. Month 3 - Payment to Plans After Budget Neutrality Total $ 3,190 $ 3,293 $ 3,239 AHCA ITN 004-12/13, Attachment J-5, Page 23 of 23