Managed Care IDD Special Needs

Managed Care and the IDD Service Professional

Table of Contents

A Brief Historical Perspective

Historically, Americans have paid for health care and long-term supports on a fee-for-service (FFS) basis. Under this approach, a qualified care practitioner bills and receives payment for each episode of service rendered to a person. However, change is inevitable (for good or bad!). The Centers for Medicare & Medicaid Services (CMS) and each state (if it wants to continue receiving federal funding) has committed to a different payment or reimbursement system through Managed Care Organizations (MCOs). 

Will Caring and Working Hard Be Enough?

How will this impact those of us who make our living providing supports for people with IDD? Most Providers choose their path based on a personal connection, a ministry-linked calling (Matthew 25:40), or a strong sense of social justice, but will compassion and good intentions be enough to survive in the new managed care payment system?  The answer is a resounding – NO!

Defining Managed Care

CMS defines “Managed Care” as a health care delivery system organized to manage cost, utilization, and quality. The Managed Care Organizations (MCOs) will be responsible for delivering Medicaid program services to their beneficiaries, enabling states to reduce Medicaid program costs and better manage utilization.

What Is Managed Care Really About?

At its core, managed care is about saving CMS money.  Benchmarks of successful implementation of managed care systems are based primarily upon cost savings (or cost containment) – which has a direct impact on how much, when and for what you get paid. Every organization (including CMS) should strive to steward it’s funds wisely however many of the basic tenets of Managed Care appear diametrically opposed to the delivery of community-based services for people with IDD/Special Needs. Since community-based services already cost, on average, about ¼ of the cost of serving the same people in institutional settings, a logical approach would be to focus any cost-containment measures first at institutional settings.

How Does Managed Care Work?

Controlling Contracts
Proponents of managed care have identified several opportunities to control costs. One way is the establishment of provider networks. To become a member of a network, providers have to meet specific quality standards and agree to pricing arrangements that lower overall costs.  What does that mean for providers of IDD services?  Economies of scale are the cost advantages that larger companies realize due to their scale of operation (typically measured, in IDD services, by number of people served), with cost of service provision per person decreasing with increasing scale. This places small provider programs at a distinct disadvantage – after all, a small provider agency serving only 15 people must employ or contract people to provide case management and nursing services to their 15 people, while a larger provider agency may be able to employ the same number of staff to serve 30 consumers or more.

Many MCOs expanding into the MLTSS (Managed Long Term Services and Supports) market have a limited understanding of LTSS, and of the LTSS service provider community. Most managed care companies are used to contracting for acute health care services that are highly regulated and licensed. They are not accustomed to contracting for LTSS services that are more socially oriented, less well defined, and more tailored to the individualized needs of the LTSS recipient. Further, MCOs are not used to contracting with non-licensed agencies with very limited corporate infrastructures. Finally, some of the new delivery models that have been developed in LTSS, such as consumer-directed services, are unfamiliar to managed care entities and do not fit into their usual contracting processes. CMS has made efforts to provide guidance but a lot remains unexplained or at least difficult to apply but this will NOT slow the onslaught of Managed Care.

Controlling utilization
Another important way that managed care attempts to keep a lid on healthcare costs is through utilization management and prior authorizations. The idea behind utilization management is for payers to evaluate the need and appropriateness of care on a case-by-case basis prior to care being given.  This newly-important attention to justification detail will necessitate more comprehensive assessment and planning tasks than have been required in the past, as well as strict adherence to pay structure alignment.  Do current providers possess the internal capacity necessary to sustain increased caseloads AND increased workloads? The answer will be to use EHRs like Focused Software to automate electronic data systems with internal quality checks that will negate the need for personnel doing increased paperwork and crosschecking for human error.

Controlling payments
Managed Care Organizations exert control over service provision through their control of provider payments.  Requirements for “clean claims,” which define acceptability of service provision documentation, will become highly regulated and strictly enforced in a way that has not been experienced in the current culture of DADS/HHS oversight. Using standardized claim forms which may not “fit” the traditional service provision documentation will likely be required for program providers who contract with MCOs.  In fact, each MCO may have different claim forms for the same services, requiring providers to learn several different billing systems.

Consider the current Billing & Payment Review process, which typically occurs through the review of a sample selection every 2-3 years, then imagine that scrutiny placed on every billing document produced.  Rather than periodic recoupment, providers may experience consistent delays and denials, interrupting necessary cashflow to sustain continuous provision of services.  Can your IDD Service Company wait 6 months to be paid for services provided this month?  Will you be able to recoup payments made to service providers if services are denied?  CMS requires MCOs to collect a certain level and quality of data associated with claims to qualify and remain in good standing. A review of the questions MCOs are required to answer shows a preference for MCOs to  collect claims data electronically, install quality checks and have the ability to control for errors, omissions and reports in ways that are only feasible when service delivery data and reports are submitted electronically. From a financial standpoint, it will benefit the MCOs to make it very difficult (almost impossible) for anyone to submit claims by paper because electronic submissions are cheaper, more efficient and much easier when it comes to identifying and/or preventing (innocent and not so innocent) billing errors. It is also a way for the MCOs to protect their profits and to keep their good standing/recognition with CMS.

If You Think Billing HHS In CARE is a Hassle Watch Out!  With the New MCO System Each Consumer Could Have Different a MCO and Each Billable Service Might Have Different Forms for Reimbursement. If You Use Paper Forms to Bill This Will Mean You Have To Learn to Bill With Multiple Systems and Your Administrative Workload Will Increase Exponentially!!

Does Managed Care Work?

Opinions vary greatly about just how effective managed care actually is. Opponents point to high overhead costs at large HMOs and lower quality scores as signs that managed care doesn’t work well. But, as the old saying goes, “perception is reality,” and the perception of insurers and employers seems to be that managed care controls costs better than healthcare that isn’t managed.

The Future - EHRs In Managed Care

Expect managed care to become an even bigger factor in Medicare and Medicaid. As more Americans with disabilities age, federal and state governments will become even more desperate to find ways to control the costs associated with services.

CMS has announced its effort to advance the ‘Medicare and Medicaid Electronic Health Record (EHR) Incentive Program’ and introduced the ‘Promoting Interoperability Programs’ in a proposed rule made public on April 24, 2018.  While this Program does not yet impact LTSS providers, each new effort pushes the inevitability of electronic documentation requirements further toward the services YOU provide.

Implementing an Electronic Health Record NOW can better prepare you for Managed Care requirements

Final Points...

We know CMS is strongly in support of the use of EHR/EMRs throughout healthcare including LTSS. Implementing Focused EHR is easier than you think! Once consumer and service provision data exists within our Electronic Health Record (EHR), the data can be manipulated to provide output in different formats to facilitate billing, payment, and utilization/quality management tasks and reports.  Investing time and energy into the implementation of an EHR with billing features like Focused today will reap future benefits, enabling providers to quickly and seamlessly adapt to changing documentation requirements and billing forms.

The introduction of MCOs will mean that giving excellent care isn’t enough anymore (it hasn’t been for years but it’s going to get even tougher). Each provider will have to decide to run their business like a business or understand that they have made the decision to be weeded out. Strong leaders with great integrity will be needed to avoid the unnecessary demise of many IDD service organizations. The loss of a care-oriented business impacts your consumers, staff, family and most of all owners like you. As the margins lessen this rules out the knee-jerk response of just hiring more staff (your most expensive cost item). Automation is the smart and most affordable answer! Call FOCUSED SOFTWARE TODAY!

Call NOW – (281) 884 3537 ext. 107

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Photograph: Lorelei (unicorn)