School Health Services Program

Free Care Phase Three Analysis

Shannon Huska & Marissa Visscher Dr. Melinda Hollinshead, Meghan Balmer, Rose Jenson,

Department of Health Care Policy and Financing Peter Gilles

Public Consulting Group

Purpose / Background

Meeting purpose: report outcomes of the Free Care Phase Three and where we are going

Background: in December 2014 Centers for Medicare and Medicaid Services (CMS) reversed their decision of not allowing Free Care to be reimbursed. This reversal means Medicaid eligible services provided to eligible students are available for reimbursement as long as all other Medicaid requirements are met

Free Care definition: services provided to Medicaid eligible at no charge, and/or provided to the community at large free of charge

Free Care Timeline

CMS reverses their stance on Free Care reimb.

The Department & PCG complete Phase Two analysis

The Department & PCG complete Phase One analysis

First state plan to get approved for Free Care services (Massachusetts)

The Department & PCG completed Phase Three analysis

2019 2018 2017 2016 2015 2014

The Department & PCG initiate Phase Three Pilot

CMS approves two-line item cost approach

Free Care Considerations in a Cost Settlement Model Increasing reimbursement is focused on the following three (3) factors:

1. District Specific Costs – Providers must: • Meet federal Medicaid licensure and certification requirements • Must be eligible to be included in the cost settlement • Included in the State Plan Amendment (SPA) & eligible to be reimbursed

2. Direct Medical Services Percentage/Establishing Medical Necessity

• Direct Medical Percentage (DMP) time study results could be reduced when combined with Free Care time study results

• All time study res ults are applied statewide 3. Medicaid Eligibility Ratio (MER)/Individual Education Program

(IEP) Student Utilization Ratio (IEP Ratio)

• Determine a ratio that may be allowed by CMS to a newly identified ‘Free Care’ student population

Obstacles

Opening the State Plan

➢ Example: additional stringent rules for state programs

Time Study

➢ Example: changes to prior notifications and response times

Medicaid Eligibility

➢ Example: applying the lower Medicaid ratios to the new time study results related to Free Care activities

Reimbursements

➢ Example: district(s) risk losing current program reimbursement

Prior to Where We are Now…

Phase One & Phase Two

Free Care: Phase One Summary

➢ What we did: used costs from Fiscal Year (FY) 2014-15 cost data was used for this analysis

➢ General assumption on variables we did not have:

• No additional providers, therefore no additional reimbursement

• Two remaining factors: increase Direct Medical Percentage (DMP) and IEP ratio

➢ Two scenarios were built around the two remaining factors, DMP and IEP ratio

➢ Estimated cost outcomes ranged from –$3M to +$6M

Free Care: Phase Two Summary

➢ Visits with sample districts: • Any additional providers doing Free Care?

• Very few new providers doing Free Care services not already included in the program

• Ability to establish medical necessity?

• Districts had limited capability to document medical necessity for Free Care

• Unsure if documentation would meet the requirement

• District’s ability to identify population of students who may receive Free Care services?

• Districts do not have a streamlined method to identify the population

Phase 2 – Sample Districts

1 Adams 12

2 La Plata 9R

3 Pueblo 70

4 Lake County

5 Pikes Peak BOCES

What We Know Now…

CMS Development

In 2018, the Department received guidance from CMS about applying Medicaid ratios for Free Care activities as one of two line items on the annual cost report:

1. Direct Medical Percentage (current program) – sum of three time study quarters with the application of the IEP Ratio (December 1 student count)

2. Free Care Percentage – sum of three time study quarters with the application of the MER (October 1 student count)

After applying both Medicaid ratios, the costs are added together thus preserving current program reimbursement

Allowable Cost Calculation

Cost Line Item #1

Direct District Cost Indirect Annual Net

Medical IEP Ratio *FMAP Base Cost Costs

Percentage

Table 1

Cost Line Item #2

District Cost Indirect Free Care Free Care MER *FMAP

Base Cost Percentage Reimb.

Table 2

Net Allowable

*FMAP = Federal Medical Assistance Percentages

Free Care: Phase Three (Pilot)

➢ Pilot time study for six weeks (Jan 14 - Feb 22, 2019)

➢ Focus on Free Care services:

• Being delivered by qualified providers

• Documented in plans of care e.g. 504 plans, health care plans or behavior plans

• Financial impact to all districts

District Name

1 Boulder 2

2 El Paso 14

3 Englewood

4 Jefferson County

5 Mapleton

6 Mesa County 51

7 Montezuma-Cortez RE-51

8 Pikes Peak BOCES

Prior to Phase Three Concerns

➢ Responsiveness of participants with zero prior notifications and two-day response time

➢ Are there new providers? If yes, how much time is spent providing Free Care services?

➢ Percentage of time spent on Free Care services by existing providers

➢ Impact of current Direct Medical Percentages (DMP) with new providers and activities

➢ Documentation / maintenance of medical necessity for Free Care services

➢ Review of new expenditure information associated with new potential staff

➢ Additional training for districts/participants

Actual Time Pilot Time

Operation Study Study

Prior moment notifications 5 days, 24 hours None

Moment response time 5 days 2 days

Moments generated 6,400 2,000 Full quarter

Time study duration (3 months) 6 weeks

Number of districts/BOCES 54 8 9,596 (average of 3

SPL population quarters in FY 2017 – 18) 1,692

General Pilot Information

Statewide Compliance

Pilot moments were sent without prior notification of the moment date / time. For this reason statewide district responses were calculated for two and five days compliance percentages:

2 Days 5 Days

89.95% 91.86%

Direct Service (DS) Pilot Cost Pool ➢ Top six job categories combined make-up 89% of moments

distributed:

Health Technician Personal Care/ Teacher’s Aide

Speech/Language Pathologist Social Worker

Nurse, RN Occupational Therapist

Top Six Job Categories 80.0%

3.0%

58.8%

25.9%

17.0%

31.6%

55.7%

14.3%

0.8%

17.6%

10.6% 8.9%

1.4%

69.3%

24.6%

47.2%

56.4%

48.1%

24.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Health Tech Speech/Lang. Nurse, RN Person. Social Worker Occupat. Path Care/Teacher's Therapist

Aide

Direct Medical % Free Care % Non-Reimbursable %

DS Pilot Job Categories

DS Pilot Job Categories cont.. Bottom 11 Job Categories

% of Distributed Moments

DM % FC % % Non-

Reimbursable

Physical Therapist 2.6% 46.2% 0% 38.5%

Special Education Teacher 1.5% 33.3% 0% 60.0%

Occupational Therapy Assist. (Technician)

1.3% 46.2% 0% 23.1%

Speech/Lang. Impairment Teacher

1.3% 61.5% 0% 15.4%

Audiologist 1% 50.0% 20.0% 10.0%

Nurse Aide 1% 0% 0% 90.0%

Psychologist 1% 60.0% 10.0% 20.0%

Licensed Counselor .4% 0% 0% 100%

Nurse, LPN .4% 75.0% 0% 25.0%

Speech/Lang. Path. Candidate .3% 66.7% 0% 33.3%

Orientation Mobility Specialist .1% 0% 0% 100%

Non-Licensed (NL) Pilot Cost Pool ➢ Four job categories combined to make up 98% of moments

distributed:

1. School Counselor

2. Program Specialist

3. Non-Licensed Psychologist

4. Non-Licensed Social Worker

5. Psychologist Intern

6. Dietitian/Nutritionist

7. Administrator

➢ Program Specialist are a combination of 18 job titles

Top Four Job Categories 100.0%

1.1% 4.2%

23.2% 23.8%

4.1% 1.2%

5.8% 5.7%

88.4%

53.2%

63.2% 61.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

School Counselor Program Specialist Non-licensed Non-licensed Social Psychologist Worker

Direct Medical % Free Care % Non-Reimbursable %

NL Pilot Job Categories

NL Pilot Job Categories cont…

% of Bottom 3 Job % Non-

Distributed DM % FC % Categories Reimbursable

Moments

Psychologist Intern .9% 33.3% 11.1% 55.6%

Dietitian/Nutritionist .9% 0% 16.7% 83.3%

Administrator .5% 0% 0% 100.0%

Scenarios Three scenarios were developed using varied costs, Direct Medical Percentages (DMP) and Free Care time study percentages:

Explanation of Cost Variables

Existing direct service provider costs were used from FY 2017-18, DMP from FY 2017-18 and new Free Care time study percentages

Existing provider costs from both cost pools from FY 2017-18, DMP from the pilot and new Free Care time study percentages

Existing direct service provider costs were used from FY 2017-18 with the addition on non-licensed Psychologist costs, hybrid DMP from FY 2017-18/pilot and new Free Care time study percentages

Scenario A

Scenario B

Scenario C

Allowable Costs by Scenario

Statewide net reimbursement for FY 2017-18 was $44M

Statewide Net Free Care

Additional Time Job Moments Reimb. DMP Study % Categories Distributed

$8M 41.71% 11.36% 17 1,000

$123K 27.08% 8.45% 24 2,000

$12M 41.10% 10.82% 18 1,155

Scenario A

Scenario B

Scenario C

Variable Allowable Costs

Scenario B is the only scenario that resulted in districts losing potential reimbursement

Highest District Lowest District Free Care Reimb. Free Care Reimb.

$910K $5K

36/54 (66%) districts $780K ($270K)

had net loses

$2M $4K

Scenario A

Scenario B

Scenario C

Additional Influencing Factors

➢ Adding Free Care services would require the Department to seek SPA approval to add Free Care services

➢ Landscape of the health care environment nationally

➢ Zero prior notifications for time study participants

➢ Two-day time study response period for participants

➢ Additional training for participants/districts

➢ Potential additional providers

National Landscape

Type of Activity States

Approved SPA to implement Florida, Louisiana,

free care policy reversal Massachusetts, North Carolina

Expanded school-based Missouri, South Carolina

Medicaid through free care

policy reversal (no SPA needed)

SPA submitted to CMS and California, Georgia, Kentucky,

pending approval Michigan

Considering SPA Colorado, Nevada

Note: Update provided by Healthy Schools Campaign in April 2019

Options

Option: Keep program status quo

➢ Do not open the SPA

➢ Keep existing program reimbursement

Risk: Miss the opportunity to partner with CMS and capitalize on the momentum and expansion of Free Care occurring in other states

Options cont… Option: Expand program

➢ Open SPA to expand eligible providers

Risk: Other components of the SHS program could be impacted while the SPA is open

➢ Enter negotiations with CMS

Risk: Prior notification of zero / two-day response times, impact of currently approved allowable costs or claims types

➢ Increase program reimbursement

➢ Increase health services to all students

Options cont… Option: Expand program

➢ Determine provider qualifications / equivalency

➢ Determine district documentation / medical necessity requirements

➢ Time study and cost reporting system changes

➢ Training / implementation

Option Expand Timeline

2019 Today Summer:

determine if SPA will be

opened

Fall/Winter: update policy,

guides, negotiate with CMS

Winter: determine provider quals /

equivalency, medical necessity

2020 Spring:

update SHS rules after

SPA approval

Summer: update time study / cost pool, train districts on

requirements

Fall: update staff pool list,

participant training, new

interim payment amounts

Fall: conduct Oct-Dec time

study

2021 Spring:

conduct Jan-Jun time studies

Summer: train districts

Fall: report costs for FY

2020-21

Questions

➢ Do the Free Care pilot results align with your predictions?

➢ What is your recommendation given the information you heard today?

Thank You The School Health Services Program is a joint effort between the Colorado Department of Education

and Department of Health Care Policy and Financing.

www.cde.state.co.us www.colorado.gov/hcpf

Shannon Huska Financing Unit Manager

Department of Health Care Policy and Financing shannon.huska@state.co.us 303.866.3131

mailto:Shannon.huska@state.co.uswww.colorado.gov/hcpfhttp:www.cde.state.co.us

Structure BookmarksSchool Health Services Program Free Care Phase Three Analysis Shannon Huska & Marissa Visscher Dr. Melinda Hollinshead, Meghan Balmer, Rose Jenson, Department of Health Care Policy and Financing Peter Gilles Public Consulting Group Purpose / Background Meeting purpose: report outcomes of the Free Care Phase Three and where we are going Background: in December 2014 Centers for Medicare and Medicaid Services (CMS) reversed their decision of not allowing Free Care to be reimbursed. This reversal means Medicaid eligible services provided to eligible students are available for reimbursement as long as all other Medicaid requirements are met Free Care definition: services provided to Medicaid eligible at no charge, and/or provided to the community at large free of charge Free Care Timeline CMS reverses their stance on Free Care reimb. The Department & PCG complete Phase Two analysis The Department & PCG complete Phase One analysis Free Care Considerations in a Cost Settlement Model 1. District Specific Costs – Providers must: 2. Direct Medical Services Percentage/Establishing Medical Necessity 3. Medicaid Eligibility Ratio (MER)/Individual Education Program (IEP) Student Utilization Ratio (IEP Ratio) • Determine a ratio that may be allowed by CMS to a newly identified ‘Free Care’ student population Example: additional stringent rules for state programs Example: changes to prior notifications and response times Example: applying the lower Medicaid ratios to the new time study results related to Free Care activities Example: district(s) risk losing current program reimbursement Now… Phase One & Phase Two Free Care: Phase One Summary Free Care: Phase Two Summary Visits with sample districts: students who may receive Free Care services? • Districts do not have a streamlined method to identify the population 2 La Plata 9R 3 Pueblo 70 4 Lake County 5 Pikes Peak BOCES What We Know Now… CMS Development In 2018, the Department received guidance from CMS about applying Medicaid ratios for Free Care activities as one of two line items on the annual cost report: After applying both Medicaid ratios, the costs are added together thus preserving current program reimbursement Allowable Cost Calculation Cost Line Item #1 Direct District Cost Indirect Annual Net Medical IEP Ratio *FMAP Base Cost Costs Percentage Table 1 Cost Line Item #2 District Cost Indirect Free Care Free Care MER *FMAP Base Cost Percentage Reimb. Table 2 *FMAP = Federal Medical Assistance Percentages Free Care: Phase Three (Pilot) 2 • Being delivered by qualified providers • Documented in plans of care e.g. 504 plans, health care • Financial impact to all districts General Pilot Information Statewide Compliance Pilot moments were sent without prior notification of the moment date / time. For this reason statewide district responses were calculated for two and five days compliance percentages: 2 Days 5 Days Direct Service (DS) Pilot Cost Pool Top six job categories combined make-up 89% of moments distributed: Personal Care/ Teacher’s Aide Speech/Language Pathologist Occupational Therapist DS Pilot Job Categories Top Six Job Categories 80.0% DS Pilot Job Categories cont.. Non-Licensed (NL) Pilot Cost Pool NL Pilot Job Categories Top Four Job Categories 100.0% NL Pilot Job Categories cont… Scenarios Three scenarios were developed using varied costs, Direct Medical Percentages (DMP) and Free Care time study percentages: Allowable Costs by Scenario Variable Allowable Costs Scenario B is the only scenario that resulted in districts losing potential reimbursement 36/54 (66%) districts had net loses National Landscape Note: Update provided by Healthy Schools Campaign in April 2019 Options on the momentum and expansion of Free Care occurring in other states Options cont… Prior notification of zero / two-day response times, impact of currently approved allowable costs or claims types Options cont… Option Expand Timeline Questions Thank You The School Health Services Program is a joint effort between the Colorado Department of Education and Department of Health Care Policy and Financing. www.cde.state.co.us Shannon Huska Financing Unit Manager Department of Health Care Policy and Financing shannon.huska@state.co.us 303.866.3131