TransformationChanging the MR System

to Make Every Day Lives a RealityDecember 03, 2001

Dennis W. Felty

ASSUMPTIONS

This is a time of great opportunity for individuals and their families

This is a best effort to describe a rapidly changing system

Much of what we talk about may change This is the biggest change ever

AN EVERY DAY LIFE

a person's basic needs, to reaching a rich quality of life in all aspects of a person's life. It is always changing throughout a person's entire life experience. It is the kind of life we all want and is not unique to people who happen to have disabilities.

An every day life is a life rich in the qualities a person most desires; one that shows how connected we are to each other. It is a life that grows from a person's own choices, desires and dreams and is not controlled by whatkind of services happen to be currently available. It goes beyond just meeting

TRENDS

Waiver entitlement (Olmstead letter #4)

Olmstead/ADA entitlement Federalization of MR funding & policy CMS requirement for equitability CMS requirement for consistency Choice, Individualized Funding and Self Determination Data requirements for legislative initiatives & full funding OMR & DPW Information Technology initiatives Baby boomer demographics & waiting list $1,600,000,000 provided for services in Pennsylvania

POLICY OPTIONS

State fee schedule (EPSTD, partial, outpatient)

Managed care model with MCO (Health Choices)

Limited access & utilization (commercial behavioral health)

Withdraw from Medicaid Continue with current system Comprehensive resource management

system

OLMSTEAD LETTER #4

42 CFR 441.303(f)(6) “The State must indicate the number of unduplicated beneficiaries to which it intends to provide waiver services in each year of its program.This number will constitute a limit on the size of the waiver program unless the State requests and the Secretary approves a greater number of waiver participants in a waiver amendment.

Thus, unlike Medicaid State plan services, the waiver provides an assurance of service only within the limits on the size of the program established by the State and approved by the Secretary. The State does not have an obligation under Medicaid law to serve more people in the HCBS waiver than the number requested by the State and approved by the Secretary. If other laws (e.g.,ADA) require the State to serve more people,the State may do so using non-Medicaid funds or may request an increase in the number of people permitted under the HCBS waiver. Whether the State chooses to avail itself of possible Federal funding is a matter of the State ’s discretion.Failure to seek or secure Federal Medicaid funding does not generally relieve the State of an obligation that might be derived from other legislative sources, such as the ADA.”

OLMSTEAD LETTER #4

“A State is obliged to provide all people enrolled in the waiver with the opportunity for access to all needed services covered by the waiver and the Medicaid State plan. Thus, the State cannot develop separate and distinct service packages for waiver population subgroups within a single waiver. The opportunity for access pertains to all services available under the waiver that an enrollee is determined to need on the basis of an assessment and a written plan of care/support. This does not mean that all waiver participants are entitled to receive all services that theoretically could be available under the waiver. The State may impose reasonable and appropriate limits on utilization.”

OLMSTEAD LETTER #4

“Once in the waiver, an enrolled individual enjoys protection against arbitrary acts or inappropriate restrictions, and the State assumes an obligation to assure the individual’s health and welfare.”

page 6, paragraph 3

OLMSTEAD LETTER #4

“We appreciate that a State’s ability to provide timely access to particular services within the waiver may be constrained by supply of providers, or similar factors. Therefore, the promptness with which a State must provide a needed and covered waiver service must be governed by a test of reasonableness. The urgency of an individual’s need, the health and welfare concerns of the individual, the nature of the services required, the potential need to increase the supply of providers, the availability of similar or alternative services and similar variables merit consideration in such a test of reasonableness.”

page 6, paragraph 4

OLMSTEAD LETTER #4

“The fact that states have the authority to limit the total number of people who may enroll in a waiver provides states with reasonable methods to control the overall spending. This means that states should be able to manage their waiver budgets without undermining the waiver purpose or quality by exceptional restrictions applied to services that will be available within the waiver.”

page7, paragraph 5

MEDICAID WAIVERS

Person/Family Driven Supports Waiver (PFDS) Non entitlement re having all needs met IER $21,125 maximum funding Implemented as pilot in July 2002 then state wide in Jan 2003

Home and Community Based Services Waiver (HCBS)

Entitled to have all needs met IER No cap on maximum funding Includes residential services

PFDS PILOT COUNTIESJuly 1, 2002

Dauphin Delaware Westmoreland Berks

Other counties my choose to begin implementation July 1, 2002

TIME LINE

PFDS Pilot July 2002 PFDS Statewide Jan 2003 ITQ Jan 2003 HCBS July 2003 MAMIS Nov

2003?

PFDS WAIVER SERVICES

Day service (licensed 2380 and unlicensed) Pre - Employment and Supportive Employment Community Habilitation Physical Therapy Occupational Therapy Visiting Nurses Behavior Therapy Visual Mobility Therapy Transportation Speech and Language Therapy Respite Personal Support for Community Integration Vendor

SERVICE DESCRIPTIONS

“Services Descriptions” define the services that are available under the PFDS Waiver. People enrolled in the Waiver can only receive services described and approved in the Waiver. Similarly, providers can only bill for service activities described in the service descriptions of the Waiver. The provider will be responsible to assure that all services billed meet the specifications of the service descriptions.

SYSTEM ELEMENTS

Choice & Self Determination Entitlement & equity driven Geographic choice Individual Service Plan (ISP) Individual Estimated Resources (IER) Target Budget

Individualized funding Invitation to Qualify (ITQ) Prospective Fee based State wide waivers with consistent benefits Comprehensive web based data system

Waiver1000 enrollees $20,000,000

Provider ProviderProvider

County Contingency

Fund$400,000

EmergencyServices & Waiting

List Funding100/year

$2,000,000To meet increased needs

of people enrolled in the waiver

ISP 1001 $100,000

WAIVER FUNDING

HCBS Waiver1000 enrollees $20,000,000

County Contingency

Fund$400,000

EmergencyServices & Waiting

List Funding100/year

$2,000,000To meet increased needs

of people enrolled in the waiver

ISP 1001 $100,000

ISP1 + ISP2 + ISP3 …. ISP1000 = $20,000,000

ISP1 + ISP2 + ISP3 …. ISP1001 = $20,100,000

ISP1 + ISP2 + ISP3a ….ISP1000 = $20,000,000

ISP1 + ISP2 + ISP3 …..ISP1100 = $22,000,000

ISP1 + ISP2 + ISP3 …. ISP999 = $20,000,000

ISP1 + ISP2 + ISP3 …. ISP1000 = County Allocation

COUNTY CONTINGENCY FUND

County Contingency

Fund$400,000

To meet increased needsof people enrolled in the waiver

Year 1 - ISP1 + ISP2 + ISP3 …. ISP1000 = $20,000,000

Year 2 - ISP1 + ISP2 + ISP3 …. ISP1000 = $20,800,000

COUNTY CONTINGENCY FUND

HCBS Waiver1000 enrollees $20,000,000

ISP/PAYMENT PROCESS 2003

Need Assessment

IER TargetBudget

IndividualService Plan

Selection of Provider

MAMIS FeeSchedule

Service Contract

ServiceEncounter

InvoiceMAMIS

MAMISClaims Payment

PaymentAuthorization

to County

County paysInvoice

CountyApproves Rate

ITQInvitation to

Qualify

RateNegotiation &

Contract

OMR Allocation

HCSIS DATA SYSTEMHome & Community Services Information System

State wide Web based Invitation to Qualify Incident Management Needs assessment data Individual’s Estimated Resources (IER) Individual Service Plan (ISP) Individualized budget Claims payment (MAMIS) Provider performance data Longitudinal Statistical analysis of needs assessment & cost

MCO

Provider Provider

Provider

OMR/County

ConsumerFamily

ProviderProvider

Provider

SYSTEM STRUCTURE

ConsumerFamily

ConsumerFamily

ConsumerFamily

ISO

FEE OPTIONS

County set fee Provider County negotiated

fee Vendor fees

PFDS RATE SETTING

The provider will propose a rate for each service in each county they designate in their ITQ declaration. Each rate proposal will be negotiated by each county and the provider. When the county and provider reach agreement, the county will issue a contract on the rate and when the contract is signed the rate will be entered into the HCSIS county fee schedule. The provider may propose different rates for the same service provided in different locations. The 4300 fiscal regulations will not apply to PFDS Waiver services, however the provider will disclosure profits by contracted rate in their audit.

PFDS RATE SETTING COMPONENTS

Rates will be prospective. There will be no cost settlement. The 4300 regulations will not apply to PFDS services. Rates will be effective on the date they are approved by the

county and are entered into the HCSIS Fee Schedule. Rates may not be applied retroactively. With the agreement of the county and the provider, rates may

be changed mid year. OMR may publish guidelines on rate setting and appropriate

cost components of proposed rates. Providers may be required to report profit levels in their audit.

Such information may by used in subsequent rate setting. There may be multiple rates for different provider sites.

RATE SETTING COMPONENTS

Cost per hour of work Hours available that are

scheduled Travel time per visit Phone time per visit Case coordination per visit Cost of marketing Cost of capital Service Descriptions HIPAA compliance costs

Cost of compliance No shows Administration Training Rejected invoices Profit/retention Cost of infrastructure Direct travel cost per visit Incident management Unit rounding

A rate setting model is available at:http://www.keystonehumanservices.org/links.html#rate

THE IMPORTANCE OF A CAPITAL BASE

Working capital A more dynamic commercial market Choice Compliance risk Increased loss exposure Infrastructure investment Business development

DOWNSIDE LOSS EXPOSURE

Choice Unfunded ISP Components High transaction costs Infrastructure costs Utilization loss Marketing costs Compliance & audit risk Rates No retroactive contract adjustments Claims payment loss Cost of capital Start up & business development

CLAIMS PAYMENT

MAMIS, the state Medicaid Claims Payment system will be utilized. Providers will submit invoices for each encounter (hour, 1/4 hour or day of service). MAMIS will validate the invoice against: the ISP, the IER, the individualized budget (frequency) and the county fee schedule. If all screens pass, MAMIS will authorize the county to make payment.

Note: The MAMIS system will not be available until 2003.

CLAIMS PAYMENT

Prior to MAMIS being available for claims payment processing, providers will submit invoices to the county.

SERVICE AUTHORIZATIONS

When the ISP is completed and is within the IER, the county will authorize the services. The provider may continue to provide the services and bill for services as long as the county service authorization is in effect.

MAMIS - CLAIMS PAYMENT

MAMIS, the state Medicaid Claims Payment system will be utilized in 2003. Providers will submit invoices for each encounter (hour, 1/4 hour or day of service). MAMIS will validate the invoice against: the ISP, the IER, the individualized budget (frequency) and the county fee schedule. If all screens pass, MAMIS will authorize the county to make payment.

Note: The MAMIS system will not be available until 2003.

COMPLIANCE

In a Medicaid fee for service environment, a provider has a very significant responsibility to assure that invoices submitted are valid and that all services billed were fully delivered. Incorrect invoices, regardless of intent, may be defined as Medicaid fraud with very serious penalties including criminal liability for both individuals and corporations. Providers may want to give very serious consideration to establishing a Corporate Compliance Program.

COMPLIANCE

In a Medicaid fee for service, anyone, who has knowledge of incorrect bills has an obligation to disclose that information to the office of Medical Assistance. Consistent with direction from the Office of Medical Assistance the provider may be required to do a self audit (outside independent auditors) to review all bills for the defined period. The provider may be required to make restitution plus penalties for all incorrect payments. The Office of Medical Assistance provides for an informant to be eligible for a cash reward of up to 25% of the recovered funds.

HIPAA COMPLIANCE

Under the Health Insurance Portability and Accountability Act - provider agencies are responsible for full compliance with HIPAA regulations relevant to the confidentiality and safe keeping of health care information under Transformation and HICSIS.

“The doctor’s lawyer will see you now.”

New Yorker Book of Doctor Cartoons

Rigorous compliance environments, within systems that require increasing precision, risk compliance and infrastructure costs that will not be cost effective and may have an adverse effect on viability.

INDIVIDUALIZED SERVICE PLAN

The team, comprised of the individual, family, friends and other persons who care about the individual, will develop an ISP (Individual Service Plan). The ISP is designed to meet the person’s needs, service and support preferences. The ISP will be developed within the context of an individual Estimated Resource budget (IER). The IER is a threshold number that sets an estimate of resources available to the individual.

PERSONAL SUPPORTS BROKER

One of the exciting services available is a Personal Supports Coordinator. This option would permit an individual or their family

to select a consultant or advocate to support and/or participate in the ISP and provider selection process. This person could assist in planning, advocacy, identifying natural supports, preferences, service model options, costs, innovative alternatives, evaluating and selecting providers. The cost of this service can be funded through the person's ISP.

INVITATION TO QUALIFY

In order to maximize choice and competition, an ITQ (Invitation To Qualify) process will be used where all provider agencies that meet state qualifications will be entitled to be on the County’s approved provider list. After completing the ISP, an individual or family may then select any provider or combination of providers on the list to carry out the ISP. Providers will then be reimbursed at their approved rate for the contracted service. Families will have the option of using existing providers, starting a new provider agency, or use of informal supports including friends, family and neighbors.

“I’m sorry. The doctor no longer makes phone calls.”

New Yorker Book of Doctor Cartoons

INVITATION TO QUALIFY

Single qualification at state level Provider determines which county(s) they want to

provide services in Provider determines which services they will provide in

each county Provider submits rate proposal for each service in each

county Provider county(s) negotiate a rate for each service the rate is entered into county HCSIS rate schedule ISP costs are developed against provider rate schedule Provider agrees to provide service

GEOGRAPHIC CHOICE

The Waivers are state wide waivers and, as such, a family or consumer has the right to receive services to which they are entitled anywhere in the state. If a family wants to receive services in an adjoining county, they may do so. The provider they select will have to be placed on their home county ITQ list and the provider will be paid by the family’s home county at the rate approved in the county where the services are delivered.

CHOICE

Choice is a foundation principle in Transformation. It provides the person using services and their family with greater control over resources and the selection of the people and providers that will be providing their supports. Choice operates within the parameters of the ISP, the IER, ITQ, service descriptions and providers’ willingness and ability to provide services. The ISP is the central document that ultimately defines decisions around Choice and provides the formal authorization for services to be funded by the county.

CHOICE ISSUES

Who speaks for the person being served CMS requirement that a person’s needs be met Competency and informed consent The individuals Needs Assessment Individual Service Plan (ISP) Individual Estimated Resources (IER) # of Providers on Invitation to Qualify List (ITQ) Provider and county capacity Waiver Service Descriptions Enrollment in PFDS or HCBS Waiver Number of providers willing and able to provide services County authorization for services

CHOICE & SYSTEM CAPACITY

An essential element of Choice is that there are

several, perhaps three or more providers willing and able to provide the services

described in the ISP.

INTERMEDIARY SERVICE ORGANIZATION

Each county will have an Intermediary Service Organization or ISO. The role of the ISO is to serve as an agent that will pay bills for services that are not offered by provider agencies through the County ITQ process.

These include services that tend to be informal and offered on an hourly basis. The ISO may also serve as the employer for these persons and can also arrange for the purchase of adaptive equipment and accessibility modifications.

SERVICE COORDINATOR

The Service Coordinator will have extensive influence on the ISP process including the integrity of the process and family and consumer satisfaction and confidence. They will carry significant responsibility for presenting options including creative solutions specific to the needs and preferences of the consumer.

INDIVIDUAL ESTIMATED RESOURCES

The IER will be a statistical calculation based on a correlation between the 63 questions on the needs assessment and historical costs of care for the individuals assessed. Needs assessment questions that have a statistically significant correlation with cost will be used to calculate individual IERs. IERs will be based on state wide data adjusted for cost of living differences.

The Individual Estimated Resources

The IER is an estimated funding amount intended to meet each person’s needs.

The funding amount is portable and moves with the person.

The IER is a threshold that will require review and approval for funding at levels above the IER.

Is intended to provide equity and consistency. Is an important tool to better plan and budget

for future needs.

The Individual Estimated Resources

People currently receiving services will have their funding level grandfathered so they will not experience any reduction in service.

The IER will be piloted in PFDS services. The IER must be adequate to meet peoples

needs who are enrolled in the HCBS Waiver. The IER must be adequate to assure choice.

INDIVIDUAL ESTIMATED RESOURCES

Each question in the needs assessment that is determined to be statistically significant in relation to historical costs will be assigned a specific dollar value determined by the correlation. ie

Residential yes $30,000Medication yes $5,000Behavioral yes $10,000

INDIVIDUAL ESTIMATED RESOURCES

IER = x1 + x2 + x3 + x4 + ……. X

64

IER = $450 + $3,000 + $32,000 …..

IER = $75,210

STATISTICAL & VALIDITY ISSUES

Normal statistical variation Individual needs assessment’s validity Model effectiveness impact Direct care compensation impact Variation in costs driven by model ISP costs based on historical data Reliability, validity and complexity issues around

“total life” needs assessments Provision for synergistic cost efficiencies Correlation between need assessment & IER

Individualization

IER

RATES

CHOICE

ISP

“You'll be coughing up money for some time.”New Yorker Book of Doctor Cartoons

RESOURCE CONTROL POINTS

Consumer choice Needs Assessment IER ISP Process Service Coordinator Fee Schedule Legislative Allocation IER Formula

“You don’t know how lucky you are! A quarter of an inch either way, and it would have been outside the area of reimbursable coverage!”

New Yorker Book of Doctor Cartoons

“Competitive industry forces will ultimately be as powerful as public policy forces.”

OPPORTUNITY

Choice & Self Determination Individualized Budget Invitation to qualify More consistent policy Secure Medicaid funding Entitlement Potential for full funding Valid and reliable data More equitable allocation of resources

“The ringing in your ears - I think I can help.”

New Yorker Book of Doctor Cartoons

RESOURCES

Overview of the Transformation Process http://www.keystonehumanservices.org/transformationoverview.html

Links on human services, transformation, family resources and self determination.http://www.keystonehumanservices.org/links

Dauphin County Self Determination Web Sitehttp://www.dauphinselfdetermination.org/

Pennsylvania Office of Mental Retardation Web Sitehttp://www.dpw.state.pa.us/omr/dpwmr.asp

Rate setting modelhttp://www.keystonehumanservices.org/links#rate

This presentationhttp://www.keystonehumanservices.org/links#dctrans

P/FDS Waiver Services-Definitions Required for Rate SettingSummary: Bucket Approach with Modifiers

ITQ ServiceCategory Service Name

ServiceDescription Unit

StaffRequirement

1. Services to peopleoutside of where they live(Day Services

1.1.0 Day Services (2380)1.1.1 Day Services (2380)-Health Supports1.1.2 Day Services (2380)-Behavioral Supports Level 11.1.3 Day Services (2380)-Behavioral Supports Level 21.2.0 Day Services (Unlicensed)1.2.1 Day Services (Unlicensed)-Health Supports1.2.2 Day Services (Unlicensed)-Behavioral Supports Level 11.2.1 Day Services (Unlicensed)-Behavioral Supports Level 21.3.0 Pre-Employment Services (2390)1.3.1 Pre-Employment Services (Licensed)-Health Supports1.3.2 Pre-Employment Services (Licensed)-Behavioral Supports Level 11.3.3 Pre-Employment Services (Licensed)-Behavioral Supports Level 2

Licensed in for 4 ormore.

Hour

Hour

Hour

Licensurerequirements(e.g. LPN)

2.Employment services 2.1.0 Supported Employment Support to maintaincompetitiveemployment

15min.

3. Services to peoplewhere they live (Homeand Lifestyle Services)

3.1.0 Community Habilitation3.1.1 Community Habilitation-Health Supports

15min.

4. Specialized Supports 4.1.0 Physical Therapy4.2.0 Occupational Therapy4.3.0 Speech and Language Therapy4.4.0 Visiting Nurse4.5.0 Visual/Mobility Therapy4.6.0 Behavioral Therapy

15min.

5. Respite Services 5.1.0 Respite – In Home5.1.1 Respite – Out-of-Home5.1.2 Respite – Camp

Hour

ITQ ServiceCategory Service Name

ServiceDescription Unit

Staff Requirement

6. TransportationServices

6.1 Transportation Trip Mileage

7. Personal Supports 7.1 Personal Supports for Community Integration 15 min.8. Vendor Services (Non-ITQ Services

8.1 Environmental Adaptations8.2 Adaptive Appliances/Equipment8.3 Homemaker/Chore

EachEachEach