Outpatient Rates in Medical Assistance 2017 Policy Conference Julie Marquardt Director, Purchasing and Service Delivery 11/14/2017 Minnesota Department of Human Services mn.gov/dhs Rate methodology basics Resource Based Relative Value Scale rate setting Developed and updated annually by the Centers for Medicare and Medicaid Services Weighs procedures against each other, paying more for those with greater complexity Removes inconsistency in reimbursement based on charges providers submit 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 2 1
How it works The Resource Based Relative Value Scale assigns weighted values (called relative value units) to most procedure codes Payers calculate a conversion factor to assign dollar amounts to the relative value unit Relative value unit Conversion factor Reimbursem ent rate 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 3 Components of the relative value unit Physician work Practice expense Nonfacility Facility Malpractice expense 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 4 2
Geographic practice cost indices Adjustments to account for geographic variations in the costs of practicing medicine in different areas across the country Applied to each of the three relative value unit components used in calculating a rate 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 5 Resource Based Relative Value Scale outpatient rate formula RVU: relative value unit GPCI: geographic practice cost indices Physician work RVU Physician work expense GPCI Practice expense RVU Practice expense GPCI Malpractice insurance RVU Malpractice insurance GPCI Total relative value unit Total RVU Conversion factor Total payment 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 6 3
Conversion factor Used to convert relative value units to a dollar amount for payment Can be used to increase or decrease the final rate calculation for a procedure code Medicare program changes annually 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 7 2017 Minnesota Medicaid conversion factors $27.92: evaluation and management and OB procedure codes Example: $32.49: mental health procedure codes $25.55: radiology and all other codes 42820 7.98 RVU x $25.55 conversion factor= $203.88 In 2016, the reimbursement rate was $204.52 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 8 4
Rate variation examples Prenatal or postpartum home visit by public health nurse: $140.00 per visit Complex, comprehensive physician office visit for established patient: $111.95 Physician performed tonsillectomy and adenoidectomy for a patient under age 12: $203.88 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 9 Causes of rate variation Changes to RVUs and conversion factors 1/09/2017 Minnesota Department of Human Services mn.gov/dhs 10 5
Add ons and cutbacks Examples: 10 percent reduction for nurse practitioners, physician assistants and clinical nurse specialists 20 percent reduction for master s prepared mental health providers 12 percent reduction for professional services 3 percent reduction for basic care services per legislation effective July 1, 2010 5 percent add on for professional services 3 percent add on for basic care services per legislation effective Sept. 1, 2014 2 percent MinnesotaCare tax 11/14/2017 11 Affect of add ons and cutbacks Office visit (99213) for a gynecological exam performed by a physician in private practice: $59.50. Office visit (99213) for a gynecological exam performed by the same physician in a public or community health clinic:$107.10. That amount would be reduced to $72.86 as statute requires that the state not pay more than the Medicare allowed rate. 11/14/2017 12 6
Examples of other rate methodologies in use Outpatient hospital facility services Lab services Early and Periodic Screening, Diagnosis and Treatment Services (EPSDT) Nonpediatric dental services 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 13 How home health services are paid Outdated rates set many years ago based on a percentage of billed charges Periodic cost of living increases applied Physical therapy Occupational therapy Speech therapy Home care (per day) S9131: $77.43 S9129: $79 S9128: $78.60 Not in the home (RBRVS methodology) Average rate per 15 minutes: $20.69 97110: $23.25 97116: $20.18 97127: $18.65 Average rate per 15 minutes: $23.37 97535: $25.03 97537: $21.71 92507: $56.46 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 14 7
Why change the payment methodology? Outdated Inflexible Inconsistent Complex 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 15 Costs change 8
The goal Identify a comprehensive set of payment methodologies that are simple to update and better reflect industry changes that impact the costs and resources necessary to deliver services within various settings and under various conditions, while also being transparent to providers and consumers. Study of outpatient rates Review and analysis of all outpatient rates for services covered under Medical Assistance. Identify issues within the current payment systems Recommend alternative rate methods based on industry best practices Address any issues and provide necessary flexibility to promote policy objectives 18 9
The goal Updated Flexible Consistent Less complex 11/14/2017 Minnesota Department of Human Services mn.gov/dhs 19 Thank you Questions? 10
Elderly Waiver Rate Setting Session C: Payment Reform: Sustainability & Survival (1:50 2:50 PM) 2017 Home Care Policy Conference November 16, 2017 Todd Bergstrom Director of Research & Data Analysis Care Providers of Minnesota Bloomington, MN Background on Elderly Waiver State/Federal Medicaid Age 65 and older MA financial and nursing facility level of care Around 90% of clients enrolled in MSC Plus or MSHO Around 30,000 access program during the year 2/3s in the community 1/3 in Assisted Living / Housing with Services Setting 24-Hour Customized Living A to K Case Mix Budget Caps 11
Reasons for Elderly Waiver Reform Proposal Rates not updated without legislative appropriation Rates for certain services - woefully insufficient Rates used not based on actual activities Not aligned with quality improvement efforts and health care reforms Workbook used for Assisted Living / Housing with Services Elderly Waiver Reform: Background Long-Term Care Imperative Effort began Fall 2015 Work with DHS and Other Stakeholders began in 2016 A comprehensive package New Rate Methodology Payment Policies Policies centering around information and process improvement 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates 12
Elderly Waiver Reform Bill Introduced in 2017 Rate Reform for EW, AC, CADI Residential Services Quality / Performance Measures Create and allow specific licensed nursing services to be authorized and funded within the EW program. In-lieu days Behavioral Factor A couple of policies to increase transparency and collaboration Sharing of information Medicaid Applications and LTC Assessment Change-in-condition reassessment requirements 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates Elderly Waiver Reform: Rate Methodology January 1, 2019 Rate Increase 10% of a new payment rate methodology for identified rates will be blended with 90% of the June 30, 2017 rates. EW Caps/Limits Increases Moved to January 1 Programs included: Elderly Waiver (EW) and EW Customized Living (CL), EW Foster Care Community Access for Disability Inclusion (CADI) Customized Living (CL) Alternative Care (AC) Essential Community Supports (ECS) Members, Staff, DHS, Other stakeholders Establish base wages for each service rate using blended positions from the annual labor market information from the Minnesota Department of Employment and Economic Development (DEED). The Minneapolis-St. Paul-Bloomington, MN-WI MetroSA is the geographic area Apply the following factors to the base wages determined for each service rate above: A payroll taxes and benefits factor A general and administrative factor A program plan support factor which is 12.8 percent A registered nurse management and supervision or social worker supervision factor equal to 15 percent 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates 13
Example of Calculation Rate R.N. Value Social Worker Value Home Management / Support Services EW / CADI Customized Living X Service Unit Per Hour Present Value $16.84 Social Worker Value Home Management / Support Services Average Wage 1st Qtr 2016 (Minneapolis St. Paul Bloomington, MN WI MetroSA) Value R.N. Value 31 1011 Home Health Aides $12.72 21 1022 Medical and Public Health Social Workers $27.16 100.00% 29 1141 Registered Nurses $37.30 100.00% 29 2061 Licensed Practical and Licensed Vocational Nurses $21.59 31 1014 Nursing Assistants $14.98 39 9021 Personal and Home Care Aides $11.73 33.33% 31 9099 Healthcare Support Workers, All Other $17.32 35 2021 Food Preparation Workers $12.63 33.33% 53 3031 Driver/Sales Workers $12.80 37 2012 Maids and Housekeeping Cleaners $11.53 33.33% 37 3011 Landscaping and Groundskeeping Workers $14.46 Wage Only Value $37.30 $27.16 $11.96 Apply Factors Value R.N. Value Social Worker Value Home Management / Support Services Net Nursing Facility Net Payroll Taxes & Benefits Divided by Total Salaries 22.51% $8.40 $6.11 $2.69 Non Salary Nursing Facility G&A divided by Total Operating Costs 8.69% $3.24 $2.36 $1.04 Program Plan Support is defined as the direct service staff needed to provide support of the HCBS service when not engaged in direct contact with clients (indirect time). Examples include, but are not limited to the following: Documentation Direct staff preparation and service planning Collateral contact related to direct service Travel time when the client is not present 12.80% $4.77 $3.48 $1.53 R.N. Supervision (15% of subvalue) 15.00% $7.34 $7.34 Social Worker Supervision (15% of subvalue 15.00% $5.35 New Component Values (expressed as hourly) $24.57 New Component Values (15 Minutes if applicable) Percent Increase 45.9% 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates Elderly Waiver Reform: Rate Methodology January 1, 2019 Phase-In of Rates (90% of July 1, 2017, and 10% of Model Rates)* January 1, 2019 Percent Increase (Estimate) Rate EW / CADI Customized Living Elderly Waiver (Community) and Alternative Care Service Unit July 1, 2017 Rates Model Rates (1-1-2019) Home Management / Support Services X Per Hour $16.84 $25.79 $17.73 5.3% Home Care Aide X Per Hour $23.02 $28.65 $23.58 2.4% Home Health Aide X Per Hour $26.27 $32.36 $26.88 2.3% Medication setups by licensed Nurse X Per Hour $31.76 $54.02 $33.98 7.0% Socialization 1 staff: 1 resident ratio X Per Hour $16.84 $25.79 $17.73 5.3% Individual transportation (1 rider) X Per Hour $16.84 $25.79 $17.73 5.3% Adult Day Service X 15 Minutes $3.37 $3.96 $3.43 1.8% Adult Day Service - FADS X 15 Minutes $3.37 $3.96 $3.43 1.8% Adult Day Service Bath X 15 Minutes $7.55 $7.57 $7.55 0.0% Chore Services X 15 Minutes $3.76 $6.32 $4.02 6.8% Companion Services X 15 Minutes $2.17 $5.80 $2.53 16.7% Home Delivered Meals X 1 Meal Per Day $6.53 $9.30 $6.81 4.2% Homemaker / Assistance with Personal Cares X 15 Minutes $4.61 $6.59 $4.81 4.3% Homemaker Services / Cleaning X 15 Minutes $4.61 $6.59 $4.81 4.3% Homemaker Services / Home Management X 15 Minutes $4.61 $6.59 $4.81 4.3% Respite Care Services, in Home x 15 Minutes $5.42 $6.58 $5.54 2.1% Respite Care Services, in Home x Daily $97.63 $118.51 $99.72 2.1% Respite Care Services, out of Home x 15 Minutes $5.42 $6.58 $5.54 2.1% Respite Care Services, out of Home x Daily $97.63 $118.51 $99.72 2.1% 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates 14
Looking Back at 2017 Legislative Reception Senate 2017 legislative budget process Focus on budget, not policy Funding Targets and Fiscal Notes! Ownership of and understanding of proposal Connecting goals of proposal to the actual mechanisms 11/14/2017 CARE PROVIDERS OF MINNESOTA www.careproviders.org #CPMEducates Payment Reform: Disability Waiver Rate System Minnesota HomeCare Association 2017 Policy Conference Kevin P. Goodno Fredrikson & Byron, P.A. November 16, 2017 15
DWRS Background 2017 Fredrikson & Byron, P.A. Application Disability Waiver Services Developmental Disability (DD) Brain Injury (BI) Community Alternative Care (CAC) Community Access for Disability Inclusion (CADI) 2017 Fredrikson & Byron, P.A. 16
Timeline 2007: CMS Minnesota Out-of-Compliance Corrective Action 2013 Legislation Enacted Jan 1, 2014: Begin Implementation Jan 1, 2020: Full Implementation* 7 th Year of Banding Pending (1/2021) 2017 Fredrikson & Byron, P.A. Characteristics Statewide v. County-based Uniform Methodology v. Not Uniform Recipient-based v. Provider-based 2017 Fredrikson & Byron, P.A. 17
DWRS Methodology 2017 Fredrikson & Byron, P.A. Services Service Areas (Frameworks) Residential Day Unit-Based with programming Unit-Based without programming Specific Services, Each are: In a Framework Have a Base Wage Index 2017 Fredrikson & Byron, P.A. 18
Frameworks Base: Base Wage Index (20 different) Adjustments: Component Values (6 to 8 per Service Area) Add-ons: Transportation, RVF (varies by Service Area) Inflationary Adjustments (5 years) Post Formula Adjustments (Banding, Rate increases, Exceptions) 2017 Fredrikson & Byron, P.A. Issues to Consider 2017 Fredrikson & Byron, P.A. 19
Considerations Formula Components & Values Budget Neutrality Exceptions to Uniformity Quality Components Regional Variances Other Inflationary Adjustments Implementation Logistics Transition to New Methodology 2017 Fredrikson & Byron, P.A. Questions Kevin Goodno MHCA Chief Lobbyist Fredrikson & Byron, P.A. kgoodno@fredlaw.com 2017 Fredrikson & Byron, P.A. 20