Overview of the Disability Services Divisions New Payment Structure Project for Day Services and Sup

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Overview of the Disability Services Divisions
New Payment Structure Project for Day Services
and Supports2009 Age Disabilities
OdysseyWednesday, August 19, 2009830 a.m.
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Table of Contents
Slide title should not be larger than Palatino
Linotype 24pt.
Section 1 Welcome and Introductions Section
2 Minnesotas Need for a New Statewide
Payment Structure
for Day Services Supports Section 3
Goals Objectives for Developing New Payment
Structure Section
4 Project Methodology Section 5
Project Results Section 6 Current
Status and Next Steps Section 7
Questions and Answers
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Section 1
Welcome and Introductions
4
Welcome

• Todays Presenters
• Jim Pettersson (Navigant Consulting)
• Cathy Anderson (Navigant Consulting)

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Who is Navigant Consulting?

• Approximately 1,700 consultants
• More than 350 dedicated healthcare consultants
• More than 40 offices across the U.S. and abroad
• Our experience includes
• HCBS waiver development and review
• Strategic planning
• Cost analysis
• Payment system design and evaluation
• Stakeholder meeting facilitation
• We have assisted the disability programs of
  Alaska, Arizona, California, Georgia, Illinois,
  Indiana, Massachusetts, Nebraska, North Carolina,
  Ohio, Oklahoma, Pennsylvania, Texas, West
  Virginia and Wyoming

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Section 2
Minnesotas Need for a New Statewide Payment
Structure for Day Services Supports
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Introduction / Background

• What are Day Services and Day Supports?
• Services and supports that Minnesotans with
  disabilities access during the day to meet their
  assessed needs. These services and supports
  include
• Day Training and Habilitation (DTH) Services
• TBI Waivers Structured Day Program
• Adult Day Care
• Supported Employment Services
• Pre-Vocational Services

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Introduction / Background

• How are Day Services Funded?
• Minnesotas day services are supported by
  Federal, State and County dollars.
• Minnesota receives Federal dollars from Medicaid
  for providing health and human services at a 50
  match rate to State dollars. This is called
  Federal Medical Assistance Percentage (FMAP).
  Because it is a 50 FMAP, for every dollar that
  Minnesota contributes to health and human
  services programming, the Federal government
  contributes a matching dollar.
• Because the Federal government pays/funds 50 of
  Minnesotas Medicaid services, it is imperative
  that the state meet all of the Federal/CMS
  requirements.

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Introduction / Background

• What are the Federal / CMS requirements for
  Medicaid-funded programs?
• The state must provide documentation of its
  ability to meet specified Federal standards in
  areas such as, among others
• Financial Accountability
• Eligibility / Enrollment
• Individual Choice
• Quality Management
• Access to Services
• When CMS introduces new rules and regulations,
  Minnesota must adhere to them in its operation of
  Medicaid-funded programs or risk losing the 50
  match funding. Therefore, Minnesota is required
  to modify and update its Medicaid-funded health
  and human services programs on a regular basis.

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Introduction / Background
What is the purpose of developing a new payment
structure for Day Services Supports? The
Department of Human Services is interested in
establishing a new payment structure for services
and supports during the day for people with
disabilities that is flexible to accommodate
choice, while providing incentives for a range of
employment supports, community participation and
contribution.
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Section 3
Goals Objectives for Developing New Payment
Structure
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Project Guiding Principles and Values
Measurable, Consistent
Cost Effective Budget Neutrality
Considers Reasonable Necessary Costs
Predictable Funding
Meets Consumer Needs
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DSD Initiatives

• DSD also stipulated that the Day Services Payment
  Structure must work with the anticipated results
  of the following initiatives
• Common Service Menu (will be a streamlined menu
  of services available under the home and
  community-based waivers)
• Comprehensive Assessment (a set of standards and
  protocol for assessing needs of persons with
  disabilities under age 65 years)
• Self-Directed Services (giving people more
  choices and control over the assistance they
  receive)

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Section 4
Project Methodology
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Overview of DSD Payment Structure Project
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Importance of Stakeholder Input
Stakeholder input is central to the success of
this endeavor. Input was gained through the
following strategies

• Established an Advisory Group
• Group provides input and recommendations on the
  payment structure options however, not a
  decision-making body.
• Group assists in arriving at a process that
  everyone can buy into and support.
• Group members represent themselves and their
  organization as well as to share information with
  others and represent their views.

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Importance of Stakeholder Input

• Worked with Providers and County Staff
• Communication to Complete the Cost Survey and
  Wage Survey
• Distribute Project Updates
• Receive Additional Information Pertaining to Day
  Services and Supports Payments
• Complete Field Testing
• Collaborated with Department of Human Services
  offices and programs to ensure coordination of
  payment structure across services
• On-site visits / meetings
• Status update conference calls
• Developed project website http//minnesotadaysuppo
  rtsproject.com with e-mail address link to post
  new material as it was developed and collect
  stakeholder input electronically

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Section 5
Project Results
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INVENTORY OF MINNESOTAS DAY SERVICES AND SUPPORTS

• PROJECT RESULTS

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Inventory of Minnesotas Day Services and Supports

• Purpose
• Establish baseline understanding of currently
  available day services under Minnesotas
  existing disability waivers and ICF/MR pass
  through
• Understand which services will be impacted by the
  new payment structure.
• Identify factors that may affect new payment
  structure (i.e. geographic variation in wage
  rates paid to employees).
• Understand differences in day supports and
  services currently available in different regions
  and counties in the State, and identify
  regions/counties with potential gaps in service
  offerings.

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Inventory of Minnesotas Day Services and Supports

• Findings
• There are 5 primary day service types in
  Minnesota
• Adult Day Care
• Day Training and Habilitation (DTH)
• Pre-Vocational Habilitation
• Structured Day Program
• Supported Employment
• Many counties do not have any Adult Day Care
  capacity however, the vast majority of counties
  do have DTH capacity.
• Many differences in existing rates, rate setting
  methodologies, and rate units across day service
  types this indicates a need for increased
  uniformity and standardization.
• Significant variation in average waiver funding
  amount per participant by county and by region.

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COMPARISON STATE STUDY

• PROJECT RESULTS

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Comparison State Study

• We researched the payment structures used in 6
  states
• Colorado
• Florida
• New Jersey
• Ohio
• Tennessee
• Washington

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Comparison State Study

• Findings
• Several states use a Comprehensive Person
  Assessment (CO, TN, WA)
• Majority of states have open panel of providers
  (CO, FL, OH, WA)
• Many states have direct contracts with providers
  in place vs. intermediary contracts through
  county or other administrative entity (FL, NJ,
  TN, WA)
• Trend states are moving away from negotiated
  rates for services
• Most states have standardized rates in place (CO,
  FL, OH, TN)
• Two states currently have implemented the
  Independent Model Approach for determining
  service rates (CO and OH)

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PAYMENT STRUCTURE DESIGN OPTIONS

• PROJECT RESULTS

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Payment Structure Design Options
Methodology used to identify payment structure
options
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Payment Structure Design Options
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Payment Structure Design Options
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Process Used to Propose Payment Structure Options
Understanding of Minnesota Day Services
Environment
Navigant Consulting Experience with Payment
Structures
Options to be Considered Option 1
Prospective Independent Model Approach Option 2
Prospective Historical Cost Approach Option 3
Prospective Negotiated Facility-Specific
Approach
Knowledge of CMS Requirements
Review of MN DSD Reports Documents
Knowledge of National Best Practices
Discussions Interviews with MN DSD Staff
State-Specific Experience (AZ, OH, WY, CO)
Implementation / Use of Payment Structure Models
State Demographics / Geography
Administrative Practices Used for Day Services
Comparison State Information
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Proposed Payment Structure

• Decisions by the Advisory Group
• Best new payment structure model for Minnesota
  day services is Option 1, Prospective Independent
  Model Approach
• Summary of Approach Rates established based on
  an independent determination of costs necessary
  to provide services, as opposed to solely using
  historical costs incurred for services.
• Benefits This approach addresses common
  criticism of historical cost-based methods, which
  produce rates not necessarily reflective of costs
  actually incurred by providers.
• Criticism Since providers can spend only as
  much on providing services as they received in
  payments, their costs may be inappropriately
  suppressed.

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Proposed Payment Structure

• Decisions by the Advisory Group (continued)
• Best sub-options for the structure
• Smaller units of service to comply with CMS
  requirements
• Person-specific rates based on individual
  assessed needs
• Geographically-adjusted rates
• Separate transportation rate
• Incentives for achieving specified outcomes

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Proposed Payment Structure Option 1
Prospective Independent Model Approach
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Independent Rate Model Example
CalculationSupported Employment, Staffing Ratio
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Independent Rate Model Example
CalculationSupported Employment, Staffing Ratio
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FTE Factor assumes 320 hours per year to cover
vacation, sick days, holidays and training
approximately 0.15 FTEs
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Independent Rate Model Example
CalculationSupported Employment, Staffing Ratio
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FTE Factor assumes 320 hours per year to cover
vacation, sick days, holidays and training
approximately 0.15 FTEs
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Independent Rate Model Example
CalculationSupported Employment, Staffing Ratio
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Other Factors Influencing Payment Structure

• Transportation
• Either include in service rate or establish
  separate rate
• Not all providers use transportation this
  supports a separate rate
• Cost neutrality may be unachievable if true costs
  of transportation are recognized
• Transportation costs probably similar statewide
• Public transportation does not meet all of the
  individual needs

• Employee Benefits
• Most providers have some employee benefits
  (health insurance, dental coverage, vacation,
  sick time, and holidays)
• Provider benefits costs as a percentage of total
  costs range from 3 to 25

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FIELD TESTING OF PAYMENT STRUCTURE

• PROJECT RESULTS

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Field Testing Process

• Purpose
• Identify additional data inputs required to
  support the new payment structure
• Determine if methodology is consistent with DSDs
  goals
• Determine if payment structure achieves budget
  neutrality
• Approximate magnitude of anticipated payment
  changes for providers and effect on participants

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Field Testing Process
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Field Testing Process
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Cost and Wage Survey Sample Size and Data

• Sample Size
• Random selection of 30 unique providers
  identified in claims data for all DTH and HCBS
  providers active in March 2008, sorted by county
  and by March 2008 day service Medicaid payments.
  We then selected every 5th provider within each
  county, starting with the provider with the
  highest Medicaid payments.
• We received 26 survey responses from 23 providers
  (some providers submitted multiple survey
  responses for their different offices within
  Minnesota).

• Data Collected
• Employee Salaries and Wages
• Employee Benefits
• Professional Fees and Contracted Services
• Other Administrative Expenses
• Other Program Support Expenses
• Property-Related Expenses
• Equipment-Related Expenses
• Other Transportation Expenses

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Project Outcomes

• As part of the original conversations DSD had
  with Navigant Consulting at the outset of this
  project, DSD requested that the results of this
  project address 8 specific outcomes when
  recommending a new payment structure for day
  services
• Complexity of implementation
• Cost neutrality
• Impact on individual choice
• Portability
• Flexibility
• Community inclusion
• Employment
• Impacts on state, county and federal budgets

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Future Considerations
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Future Considerations
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Section 6
Current Status and Next Steps
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Overall Project Progress
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Overall Project Progress (continued)
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Next Steps

• Submit Finalize Report of findings and
  recommendations, based on input received from
  this conference, the Advisory Group and
  conversations with DSD.
• The Final Report will include
• Description of analytical process, issues
  identified and methods for resolution
• Recommendations for the payment structure
• Summary of results of field testing and fiscal
  simulation analyses
• Implementation considerations, for example the
  Comprehensive Assessment Tool Common Service
  Menu transportation costs facility costs and
  use of a standardized reporting process for
  provider costs
• Comparison of current payment structure to
  proposed structure
• Plan for incorporating into the Rate Setting
  Methodology Initiative

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Future Phases Implementation of Proposed
Payment Structure
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Section 6
Questions and Answers
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Discussion Questions

• What are your initial reactions to / opinions of
  the Independent Model?
• 2. Would an Independent Model payment structure
  create any advantages or consequences not
  outlined in our presentation?

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Contact information

• Navigant Consulting
• Jim Pettersson - jpettersson_at_navigantconsulting.co
  m
• Cathy Anderson - cathy.anderson_at_navigantconsulting
  .com
• Disability Services Division
• Deb Schauffert - deb.schauffert_at_state.mn.us
• Cathy Jacobson - cathy.l.jacobson_at_state.mn.us