Managed Care Long Term Care Model The Texas Experience Presentation to: San Diego County LTCIP October 26, 2001 Cindy Adams

Long Term Care - The Texas Experience October 26, STAR+PLUS CBA Eligibility l MAO Applicants for CBA Waiver Services u TDHS informs applicant that services are provided through an HMO and allows applicant to select HMO u TDHS informs selected HMO and requests pre-enrollment assessment be completed* u HMO completes: n Medical necessity form n CBA eligibility assessment u HMO provides results of assessment activities to TDHS * HMO is authorized payment for assessment regardless of final eligibility determination

Long Term Care - The Texas Experience October 26, STAR+PLUS CBA Eligibility u THDS notifies applicant and HMO of their eligibility determination n Applicant eligible: è HMO notified of applicant eligibility and effective date è Applicant will be enrolled in HMO è HMO will initiate ISP on date of enrollment n Applicant ineligible: è Applicant notified and provided information on their right to appeal the adverse determination è HMO not notified if applicant is ineligible

Long Term Care - The Texas Experience October 26, STAR+PLUS CBA Eligibility l SSI Member CBA Upgrades u Currently enrolled members who meet screening criteria based on TDHS Risk Assessment Indicator (RAI) u Care Coordinator completes: n Medical Necessity Form n MDS-HC n Complete Personal Attendant Services (PAS) tool n Assesses current equipment and supplies n Completes cover sheet u Submits to TDHS Regional Nurses for review and eligibility determination

Long Term Care - The Texas Experience October 26, STAR+PLUS CBA Eligibility u Denial of CBA Upgrade n Regional nurse notifies HMO n HMO authorizes identified medically necessary services n No increase in capitation u Approval of CBA Upgrade n Regional nurse notifies HMO n HMO authorizes identified medically necessary services n Member enters 120-day wait n At end of 120-days capitation increases to CBA payment amount

Long Term Care - The Texas Experience October 26, STAR+PLUS CBA Eligibility l CBA Annual Reassessments u Completed on all enrolled CBA waiver members n Up to 120-days prior to expiration of ISP u Care Coordinator completes: n PAS Tool and MDS-HC n Assesses member for equipment and supplies n Completes Medical Necessity Form n Completes CBA cover sheet u Assessments completed and forwarded to TDHS Regional Nurses

Long Term Care - The Texas Experience October 26, STAR+PLUS Population l STAR+PLUS is the largest population enrolled in an integrated, acute and LTC managed care model in the country l 47% of the STAR+PLUS population are dual eligibles l Approximately 18% of the STAR+PLUS population are members under the age of 21 l 2.7% of the STAR+PLUS population are CBA waiver members l 7% of the STAR+PLUS population have the diagnosis of SPMI l 85% of the total mandatory enrollees selected the HMO model

Long Term Care - The Texas Experience October 26, STAR+PLUS Capitation l DHS pays health plans prospectively on a capitated, per member per month basis by client risk group l There are six risk groups with amounts differing by Medicare status, care setting and status at enrollment l Rates for Medicaid only members are higher than those for dual eligibles to reflect HMO liability for acute care l Capitation rates are discounted 2% from projected fee-for- service nursing facility costs and 5% from projected fee- for-service acute and long term care costs

Long Term Care - The Texas Experience October 26, Development of STAR+PLUS Capitation Rates l Information used in rate development: u Reduced fee-for-service (FFS) methodology u Calendar year 1997 FFS experience data trended forward u Relativity factor for Harris Co. u Assumed all-plans cost increase of 6% (FY2002) l Assumptions u STAR+PLUS program must be cost neutral so aggregate claims and average costs become the balancing items with PCCM and FFS u Equitable distribution of risk among plans u Costs for CBA waiver members are comparable to 1997 FFS nursing facility claims costs

Long Term Care - The Texas Experience October 26, STAR+PLUS Capitation

Long Term Care - The Texas Experience October 26, STAR+PLUS Capitation Continued

Long Term Care - The Texas Experience October 26, STAR+PLUS Capitation Continued

Long Term Care - The Texas Experience October 26, Risk Adjusters l Risk Adjusters u Medicare status u Waiver status u Geographic relativity factor n Harris County - 14% higher medical costs that statewide average u Share of Cost n Members are required to contribute toward the cost of their care based on their income and type of placement n Provider is responsible for collecting the SOC n HMO payment to facility is based on total payment due facility less the member’s SOC

Long Term Care - The Texas Experience October 26, Risk Sharing l HMOs retain the first 3% of any profit, but split equally with the state any profit between 3 and 7 percent l Any profit over 7 percent must be paid back to the state