Part C System of Payments Study:

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• Part C System of Payments Study
• Consultant Update

Community Service Board Leaders April 29, 2008
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Outcomes for Today

• Participants will
• Understand the evolution of the System of
  Payments initiative and its implications upon the
  0-3 service delivery system including but not
  limited to financing
• Understand the system analysis and findings to
  date
• Understand the system change proposals,
  implications for Local Lead Agencies (LLAs) and
  early intervention practices in all arenas and
• Have the opportunity to pose questions, discuss
  potential implications for LLAs and plan next
  steps for positive engagement and support of this
  initiative.

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Consultant Commitment

• Think SYSTEMS Research and study the issues
  comprehensively.
• Ask probing, sometimes hard questions, and
  listen to answers.
• Give you an honest opinion and options based upon
  research, other state experiences, etc.
• Honor that you make we advise.
• We cant support anything illegal related to any
  regulatory source
• In finance work, construct policy and procedures
  which avoid any possibility of recoupment or
  payback by providers or LLAs or state.
• In all services, produce outcomes that keep both
  the state administrators and stakeholders and us
  out of jail.

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Consultant Request

• Acknowledge that the way you are now funding your
  EI system will change for a variety of reasons
  beyond your control or the consultants influence
• Suspend consideration of the current barriers of
  the current system
• Write them down if you have to
• Focus on whats good for families and kids
• What would you LIKE to do but CANT due to
  funding limitations?

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The Road to Here Where we have been and how
we got here

• Evolution of Infant Toddler Connection of
  Virginia
• System of Payments Study

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The Sequence of Events

• Solutions Technical Assistance through NECTAC
• Key issue What rate (provider cost or negotiated
  rate) should be used in the assignment of Part C
  Ability To Pay (ATP)?
• RESULTS ?

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INCONSISTENCIES IDENTIFIED STILL REMAINED

• ?

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The Sequence of Events - 2

• 1st Solutions Contract (3/06-1/07) (6 on-site
  visits)
• February 15, 2007
• Solutions Report Issued with 5 QA documents,
  Appendices
• Proposed Initiatives
• Update of 2003 Fiscal Study
• Development of new Allocation Formula for
  State/Federal Funds to LLAs
• Identification of Common Rates for Reimbursement
• ITOTS Evaluation
• Final Family Cost Participation Developed
• EI Medicaid Initiative (to include MCOs,
  Insurance Legislation)
• Interagency Agreements
• RESULTS ?

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The Sequence of Events - 3

• Solutions Proposal for 2nd Contract Developed
• 08/13/07 CMS REHAB NPRM
• 08/07 OSEP Draft Financial Monitoring Tool
• 2nd Solutions Contract 9-07-12/08 (7 on-sites to
  date)
• 09/07/07 CMS Admin Claiming NRPM (9/08
  Implementation)
• 12/04/07 CMS TCM/CM NPRM (March 3, 2008
  implementation)

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Todays Topics

• The Medicaid Early Intervention (EI) Initiative
• System infrastructure state and local level
• Service Coordination
• Part C Entitled Services
• Fiscal Study Update
• Rates Recommendations
• Funding Allocation Revisions
• ITOTS Evaluation
• Family Cost Participation (formerly Ability to
  Pay to ATP)

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The Medicaid Early Intervention (EI) Initiative
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Your Reality Now

• The way that Part C does business with Medicaid
  cannot continue as is
• TCM/CM reimbursement must change
• IDEA Related services plus IFSP
• CMS will not pay for blended SC
• CMS requires reimbursement in 15 minute units
• Rehab vs. Habilitation
• Part C services must be relocated in VA Medicaid
  State Plan to EPSDT from Rehab Services Option
  (RSO)
• Family Choice of Provider is a CMS requirement
  (since 1965)

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What Now Is

• There is no Medicaid reimbursement for the
  Medicaid-related administrative services provided
  by Part C (state and local level functions)
• Service Coordination is a Medicaid covered
  service under the SPO
• Most (not all) EI Services are covered under the
  Rehab Services Option
• Different agreements exist with the MCOs and LLAs
  including reimbursement, who provides the
  service, how referrals are received, etc.

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In Construction Administrative Claiming

• Administrative Claiming Agreement between Part C
  Lead Agency and DMAS
• 50 FFP/50 State Match Certification
• Will require time sampling to document
  expenditures, monthly child enrollment to verify
  Medicaid
• Could include service coordination (intake and
  ongoing)

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In ConstructionService Coordination

• Option
• Administrative Claiming (earlier slide) for
  intake service coordination
• Option
• Establish new TCM for EI
• Could include intake, ongoing service
  coordination
• Option
• Include Service Coordination under EI Services
  Chapter in EPSDT (next slide)
• May include Intake Service Coordination or not

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In Construction Direct Services

• Establish EI Services Chapter in EPSDT
• Includes all Part C services
• Reimbursement related to functions
• Screening
• Multidisciplinary Team Services
• Evaluation for Eligibility
• Assessment for Service Planning
• Team Meetings
• EI Services
• Service Coordination OPTION (see earlier slide)

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Early Intervention Services (not an inclusive
list!)

• Assistive Technology devices and services
• Audiology
• Family Training, Counseling and Home Visits
• Health Services
• Medical Services only for diagnostic or
  evaluation purposes
• Nursing Services

• Nutrition
• Occupational Therapy
• Physical Therapy
• Psychological Services
• Social Work Services
• Special Instruction
• Speech/Language Pathology
• Transportation
• Vision Services

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Considerations in Direct Services Configuration

• Match of Part C and EPSDT obligations
• Compliance
• Primary Provider Model/Services and Supports
  document
• Consideration of best practice

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Sequence of Events

• ?Complete Conceptual Framework
• ?Identify current DMAS expenditure (match)
• Develop State Plan Amendment (SPA) in
  coordination with CMS (In progress)
• Develop cost estimates determine potential
  budget impact (nearly complete)
• Gap analysis
• If needed, identify additional match
• Submit SPA to CMS

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ImplementationDMAS Responsibilities

• Regulations development
• Interagency Agreement Part C/DMAS
• Software updates to accommodate service codes,
  rates
• Provider enrollment based upon Part C provider
  qualifications (highest entry level standard)
• Training

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ImplementationPart C Responsibilities

• Forms revisions/updates
• Services Support document update
• Policies and Procedures updates
• Develop Provider database
• Training/Technical Assistance
• Implementation must be statewide assures access,
  equity, consistency and standardization

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Fiscal Study Update

• Common Rates
• Distribution of Funds

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Common Reimbursement

• Non-third party covered direct services between
  the DMHMRSAS and each of the 40 LLAs.
• Reimbursement by DMAS for Part C services
  delivered to children covered by non-HMO
  Medicaid.
• Reimbursement structure to be woven into the
  contracts with the Medicaid-HMOs.
• Payment between sub-contracted providers and each
  Local Lead Agency (LLA).

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2007 Fiscal Study Participation Levels  2007 Fiscal Study Participation Levels  Requested Received Received
I. Individualized Family Service Plan 250 239 96
II. Encounter Forms 343 199 58
III. Salary Survey 110 34 31
IV. Revenue Survey 110 12 11
V. Rate Survey 40 25 63
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Virginia Early Intervention Cost Study Update Virginia Early Intervention Cost Study Update Virginia Early Intervention Cost Study Update Virginia Early Intervention Cost Study Update Virginia Early Intervention Cost Study Update
Salary Survey - Category Totals Comparison Salary Survey - Category Totals Comparison Salary Survey - Category Totals Comparison Salary Survey - Category Totals Comparison Salary Survey - Category Totals Comparison
  2007 Data 2007 Data 2003 Data 2003 Data
Salary 9,673,595   9,279,258  
Benefit Total 2,396,495 24.8 1,757,621 18.9
Personnel Costs 12,070,090 19.9 11,036,879 15.9
Annual Work Hours 340,395   409,988  
Compensated Hours Off 48,409 0.14 44,487 10.9
FTE 163.7   197.1  
FICA 599,763 6.2 575,314 6.2
Medicare 140,267 1.45 134,550 1.45
FUTA 4,224 0.04 3,112 0.0
SUTA 6,441 0.1 18,252 0.2
Retirement 731,563 7.6 369,932 4.0
Health 710,413 7.3 554,959 6.0
Other 203,824 2.1 101,502 1.1
Annualized Salary 13,452,736   12,442,378  
Average Hourly Amount 28.42   22.63  
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Salary Findings Direct Service Personnel

• Both years have a comparable quantity of salaries
  at 9.2 and 9.6 million for 2003 and 2007
  respectively.
• Average hourly personnel costs is 28.42 for 2007
  and was 22.63 in 2003 without benefits.
• The 2007 average hourly cost with benefits is
  35.46
• The hourly amount includes employees and
  contractors.
• The hourly amount represents a mix of personnel
  types.
• Benefits cost 24.8 of salary in 2007 and 18.9
  of salary in 2003 good health and retirement
  generating the highest increases.

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Employment Trends

• Longevity has increased over the past four years.
• More then 47 of personnel have been employed for
  greater than five years as compared to less than
  30 four years ago.
• 18 of the personnel had been employed for less
  than one year.
• The single greatest change in the last four
  years occurred in the three to five year
  employment category.

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Cost Per Hour - Caution

• This amount will be used to configure a
  reimbursement system that is intended to be a
  common rate across the Commonwealth and includes
  what is now called associated cost.
• It will be molded/adapted to the final service
  delivery model and structure crafted with
  DMHMRSAS and DMAS.

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Stakeholder Consensus

• The mechanics of computing the hourly cost of
  direct service (face to face time) was a
  reasonable approach.
• Reimbursement should be configured in 15 minute
  increments (non-negotiable).
• That there should be two different rates since
  market wages cluster in two groups.
• Therapist cost (no benefits included) at
  37/average hourly cost
• Special Educators/Service Coordinators (no
  benefits included) at 22/average hourly cost.

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Stakeholder Consensus

• There were two competing discussions in the move
  for differential rates.
• The system should move to a more homogeneous
  definition of Early Interventionists.
• The market wages of therapist is notable more.
• The group did reach a consensus on how to
  structure the two amounts that was released in
  the draft report.

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Rate Differentials

• Two other areas were considered for differential.
• Salary differences which do exist in the Northern
  Virginia area
• Travel times across the state, especially rural,
  western part of the Commonwealth
• After reviewing some data sets, the group
  concluded that neither of these issues created a
  significant enough difference for a differential
  to exist.

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Current Status/Next Steps

• DMAS personnel are reviewing draft rates report
• DMAS has provided expenditure information for FY
  2007.
• Update system costs and DMAS contributions to
  assess match needs
• Review infrastructure costs and match issues.
• Case Management
• Confirm interim insurance needs

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EDGAR

• Education Department Guidelines and Regulations
  (Sec. 74.24  Program income)
• Handout
• Local Program Implications
• Impact Discussion
• Transition Planning Discussion
• Next Steps and Partnerships

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ITOTS Evaluation
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What ITOTS Does

• Collects information for all referrals to the
  system
• Captures information from the Individual Child
  Data Form (ICDF)
• Data updates occur primarily at referral, at
  initial IFSP at transition
• Maintains limited history
• Includes planned services only at entry into the
  system
• Captures child outcome information

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What ITOTS Doesnt Do

• It doesnt capture all planned services for
  children and families
• It doesnt say anything about the services that
  actually happened
• It doesnt provide sufficient data for Local
  System Managers to be effective in their
  responsibilities.

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Current Status/Next Steps

• Current Status
• Charter Document Complete
• Internal DMHMRSAS review started
• VACSB Data Committee review
• Secure project approval
• Complete the requirements detail
• Identify project approach
• Software Procure/Develop/Modify
• Evaluate Timeline Issues
• Implementation/Training

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Family Cost Participation

• Formerly Ability to Pay (ATP)

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FCP Status Report

• One (1) meeting of Stakeholder Group under this
  contract held
• General consensus that NOT having fees would be
  desirable (some disagreed)
• Reaffirmed earlier observations re FCP
• Priority in FCP Design
• Easy to administer
• Doesnt influence families in service selection,
  participation in Part C
• Methods for assigning fee discussed
• Multiple alternatives to be considered

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Some Options

• Fee Structure as you now have
• A General IFSP Fee
• Annual Enrollment Fee
• Fee Per Service
• Fee for Some But Not all Services
• No Fee (a la CSB prevention services)

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Considerations

• Must link to utilization of private insurance
• Wont be more than the cost of service
• Family Cost Participation would be implemented
  for all new families entering the system and at
  the annual IFSP with families already in the
  system.
• Who conducts the process? (service coordinator or
  a designated financial person)
• Who collects the fees?
• Training and monitoring of the process with
  possible incentives provided to local lead
  agencies
• The fee could be based on an income range or FPL
• Discussed information collection, verification
  approaches

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Interim Consensus

• A recap of the potential process for establishing
  a flat fee included
• Establishing the fee based on the federal poverty
  level
• Ask the family if this is manageable for them
• Family cost would be reviewed annually
• If child is in service less than one year,
  payment would only be made for the time in
  service
• Insurance with deductibles and co-pays must be
  considered
• The fee could be put on hold until insurance was
  established
• There would only be deductibles/co-pays or the
  fee, not both.

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Parent Survey Results

• Approximately 4,500 surveys were sent to
  families.
• 730 responses were received.
• The survey was two pages in length with the
  second page consisting of open-ended questions.
• Approximately 100 individuals requested that the
  Family Involvement Project contact them for
  further follow-up.

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Findings

• 51.9 of the families reported completing the
  Ability to Pay process
• It was noted that many families may not have
  recognized the term ability to pay
• 27 of the families reported paying a fee
• 5 of the families used the appeals process
• Many families reported not knowing about the
  appeals process
• 4.2 of the respondents stated that their fee was
  reduced following the appeal
• Private insurance was billed in 48.5 of the
  cases
• Medicaid was used in 30 of the cases

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Next Steps, Timelines

• Integrate with final rate recommendations
• Revise (again) Policies Procedures,
  documentation
• Training/orientation
• Collection of fee amounts paid, billed and
  unpaid, of families who decline services or
  decline to participate in Part C due to fees

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Realities of Implementation System Redesign
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Overall Transition Planning, Timing and
Responsibilities
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Solutions Consulting Group, LLC

• Karleen R. Goldhammer
• 725 Riverside Drive
• Augusta, ME 04330
• KGoldhamm_at_aol.com
• Tel [phone]
• Cell 207-446-8994
• Fax [phone]

• Sue Mackey Andrews
• Post Office Box 218
• Dover-Foxcroft, ME 04426
• sdmandrews_at_aol.com
• Tel [phone]
• Cell 207-408-8040
• FAX [phone]

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