1. Medicaid Managed Care Webinar
March 2017

2. Medicaid Managed Care Expansion
The Missouri Department of Social Services plans to expand its MO HealthNet Division Managed Care program for children and low-income parents to a statewide program effective May 1, 2017.
MHD anticipates that nearly 244,000 of its current 487,000 fee-for-service participants will move into the program.
Missourians who are aged, blind or disabled will not be affected.

3. Medicaid Managed Care Health Plans
As set forth in the Managed Care Provider Toolkit published by MHD, the state contracted with the three Managed Care health plans listed below effective May 1,

4. Transition of Payments to Managed Care
As required by the April 25, 2016, federal Medicaid managed care regulation, payments associated with managed care must be incorporated into the capitated rates paid by the state to the managed care plans.
Therefore, not only will the inpatient and outpatient claims payments related to managed care expansion be transitioned to the capitated rates, but the direct Medicaid add-on payments associated with managed care will transition as well. This also will impact the add-on payments for hospitals in the current managed care regions.

5. Transition of Payments to Managed Care
DSH payments, out-of-state payments and graduate medical education will continue to be paid under the FFS program.
Federally designated critical access hospitals are reimbursed differently by MHD. The Medicaid direct add-on payments are rolled into the per diem rate.

6. Managed Care Health Plan Discussions

7. Managed Care Health Plan Discussions
Although the language in the state’s contract with the health plans notes the plans must use the increased hospital funds for reimbursement of inpatient and outpatient hospital services, it does not specify which hospitals must receive the funds or how any unspent funds will be distributed. These “increased funds” are FRA-funded payments being incorporated into the capitated rates.
Because of the significant shift of FRA funds to managed care, it is crucial that MSC staff have the ability to track health plan payments to hospitals.

8. Managed Care Health Plan Discussions
As a result, MSC staff and representatives from each of the plans met on multiple occasions to discuss the use of a common process for calculating and remitting amounts owed to hospitals as direct Medicaid add-on payments in a manner that complies with CMS guidance while maintaining stability for MHA’s members.
On March 17, a memorandum of understanding between the three health plans and MHA Management Services Corporation was signed to address the process.

9. Managed Care Health Plan Discussions
The MOU is available on the MHA website A link to this document has been included at the end of this presentation.

10. Memorandum of Understanding

11. Memorandum of Understanding
Each MCO will continue to negotiate confidential inpatient and outpatient claims payments directly with the hospitals for the component of hospital costs that is not attributable to the direct Medicaid add-on payment. This is consistent with the practice in the current managed care regions.
Beginning May 1, the direct Medicaid add-on payment for the managed care population will be paid by the three different MCOs. This will be a change from the current practice of MHD processing the entire direct Medicaid add-on payment.

12. Memorandum of Understanding
Currently, when the direct Medicaid add-on payment is paid by MHD, the calculation is as simple as taking the difference between the estimated cost per day and the per diem times the projected state fiscal year Medicaid days to determine the total inpatient direct Medicaid add-on payment.

13. Memorandum of Understanding
The process for calculating the direct Medicaid add- on payment as outlined in the MOU is different depending on whether or not a hospital has a signed agreement with a health plan.
Hospitals that have a signed agreement with a health plan are referred to as “participating hospitals.”
Hospitals that do not have a signed agreement with a health plan are referred to as “non-participating hospitals.”

14. MCO Payment Structure for Participating Hospitals
Inpatient Direct Medicaid Payment
The MCO will use the “inpatient direct Medicaid payment as a per diem” from column E on the rate list.

15. MCO Payment Structure for Participating Hospitals
The MCO will use the projected managed care days provided by MHD for determining the inpatient direct Medicaid add-on payments.
A hospital-specific worksheet showing the detailed calculation of the projected days will be posted on the FRA website on Friday, March 24.

16. MCO Payment Structure for Participating Hospitals
Currently, MHD projects the managed care days based on data from the fourth prior year cost report.
The total projected days will not change from MHD’s original projected days. The split between managed care and FFS will change May 1.
MHD worked with Mercer to project the annual managed care days beginning May 1.
Beginning May 1, the annual projected managed care days are prorated for the final two months of SFY 2017.

17. MCO Payment Structure for Participating Hospitals
For each participating hospital, the health plans will multiply the “inpatient direct Medicaid payment as a per diem” from Column E by the projected managed care days provided by MHD to establish the facility- specific allocation of the inpatient direct Medicaid add- on payments to be made annually by all of the MCO payers.
Each MCO will make its total monthly direct Medicaid add-on payment to hospitals based on its actual membership experience, reflecting MHD adjustments.

18. MCO Payment Structure for Participating Hospitals
The annual amount will be prorated for the final two months of SFY 2017.

19. MCO Payment Structure for Participating Hospitals
The hospital still receives the total direct Medicaid add-on payment of $4.5 million. The portion each health plan will pay is based on its actual membership experience.

20. MCO Payment Structure for Participating Hospitals
Outpatient Direct Medicaid Payment
The MCO will use the “outpatient direct Medicaid payment as a percentage” provided by MHD for determining the outpatient direct Medicaid add-on payments.
The MCO will use the projected managed care charges provided by MHD for determining the outpatient direct Medicaid add-on payments.

21. MCO Payment Structure for Participating Hospitals
For each participating hospital, the health plans will multiply the “outpatient direct Medicaid payment as a percentage” times the projected managed care charges provided by MHD to establish the facility-specific allocation of the outpatient direct Medicaid add-on payment to be made annually by all of the MCOs.

22. MCO Payment Structure for Participating Hospitals
Timing and Flow of Inpatient and Outpatient Direct Add- On Medicaid Payments
After the April 21 payroll, MHD no longer will pay hospitals for the direct Medicaid add-on payment that has been transitioned to the managed care capitated rates.
Because MHD makes the capitated payments one month in arrears, the first capitated payment MHD will make to the health plans will be on the June 5 payroll for May services. Therefore, hospitals will not receive a direct Medicaid add-on payment for managed care days during the month of May.

23. MCO Payment Structure for Participating Hospitals
Since the health plans will not have sufficient time to process the direct Medicaid add-on payments on the same day they receive the funds, the first monthly payment will be made to the hospitals on June 15 for both the current managed care areas and the expansion areas of the state.
This is a one-time delay during this transition.
Following this transition, monthly payments will be processed and paid on the second provider check date of each month based on the Claims Processing and Payment Schedule published by MHD. A link to this document has been included at the end of this presentation.

24. MCO Payment Structure for Participating Hospitals
The direct Medicaid add-on payments will be deposited into each hospital’s Central Bank account unless otherwise indicated by the hospital.
Two days before making the monthly payment, each MCO will send a report to MSC that includes the facility name, the NPI number, the bank and routing account numbers, and the total amount that will be paid to each facility.

25. MCO Payment Structure for Participating Hospitals
MSC staff will send each hospital with an account established at Central Bank in Jefferson City, Missouri, a form that can be signed and sent to each of the health plans with which the hospital has a signed agreement.

27. MCO Payment Structure for Non-Participating Hospitals
Inpatient Direct Medicaid Payment
The MCO will use the “inpatient direct Medicaid payment as a per diem” from column E on the rate list.

28. MCO Payment Structure for Non-Participating Hospitals
The MCO will use the hospital’s actual inpatient utilization rather than the projected managed care days, provided by MHD, for determining the inpatient direct Medicaid add- on payments.
The actual inpatient utilization used in this calculation will be capped at the projected managed care days provided by MHD.

29. MCO Payment Structure for Non-Participating Hospitals
For each non-participating hospital, the health plans will multiply the “inpatient direct Medicaid payment as a per diem” by the actual managed care days to establish the facility-specific inpatient direct Medicaid add-on payment to be made, reflecting adjustments based on variances in utilization.

30. MCO Payment Structure for Non-Participating Hospitals
The hospital would only receive approximately $4.4 million instead of the $4.5 million because its actual claims experience is less than projected.
The pooling contribution has been changed to reflect the actual direct Medicaid add-on payments the hospital receives.

31. MCO Payment Structure for Non-Participating Hospitals
Outpatient Direct Medicaid Payment
The MCOs will use the “outpatient direct Medicaid payment as a percentage,” provided by MHD, for determining the outpatient direct Medicaid add-on payments.
The MCOs will use the hospital’s actual outpatient charges rather than the projected outpatient charges for determining the outpatient direct Medicaid add-on payments.

32. MCO Payment Structure for Non-Participating Hospitals
The actual outpatient charges used in this calculation will be capped at the projected outpatient charges provided by MHD.
For each non-participating hospital, the health plans will multiply the “outpatient direct Medicaid payment as a percentage” times the actual outpatient charges to establish the facility-specific outpatient direct Medicaid add-on payment to be made, reflecting adjustments based on variances in utilization.

33. MCO Payment Structure for Non-Participating Hospitals
Timing and Flow of Inpatient and Outpatient Direct Medicaid Payments
Payments to non-participating hospitals will use actual paid claim experience rather than using a prospective payment methodology based on projections.
With the exception of using the actual claims’ experience, the timing of the monthly payments will mirror that of participating hospitals.
Keep in mind that if a hospital does not submit claims to the health plan during the previous month, no direct Medicaid add-on payments will be processed.

34. MCO Payment Structure for Non-participating Hospitals
The direct Medicaid payments will be deposited into each hospital’s Central Bank account unless otherwise indicated by the hospital.
Two days before making the monthly payment, each MCO will send a report to MSC that includes the facility name, the NPI number, the bank and routing account numbers, and the total amount that will be paid to each facility.

36. Distribution of Unspent Funds
Any unspent funds resulting from actual utilization being less than projected will be distributed proportionally to all hospitals based on forward-looking utilization estimates.
These payments will be processed by the health plans throughout the year.

37. Distribution of Unspent Funds
In addition, a final reconciliation of the direct Medicaid add-on payments received by MCOs versus distributed by MCOs will be completed 180 days after the state fiscal year to allow sufficient time for claims run-out. This reconciliation does not apply to NICU payments. The NICU payments reconciliation will be completed days after the state fiscal year to allow sufficient time for claims run-out.
Any unspent funds resulting from the reconciliation will be distributed proportionally to all hospitals based on forward-looking utilization estimates.

38. Distribution of Unspent Funds
Any unspent funds will be distributed to hospitals no later than 210 days following the end of each state fiscal year for which the payments related. For NICU, any unspent funds will be distributed 395 days following the end of each state fiscal year for which the payment related.

39. Timing and Flow of Inpatient and Outpatient Claims Payments
Inpatient and outpatient claims will be processed and paid based on each health plan’s established payment schedule.
The claims payments will be deposited into a bank account as directed by each hospital.
Non-participating hospitals will be paid the rate published by MHD.

40. Financial Hardships
The parties foresee that the transition from Medicaid fee-for-service payments to Medicaid managed care will cause an interruption in payments to hospitals. The MCOs will consider in good faith, on a case-by-case basis, a short-term cash advance for those hospitals for which such interruption causes financial hardship. MHA will provide a listing of these hospitals, the amount and timing of the requested cash advance for each hospital and detailed information to support the requested cash advance for MCO review before May 31, 2017.
Please contact MHA staff by May 24 if your hospital will need a cash advance.

41. FRA Working Group
The parties agree to create an FRA Working Group that will include representatives from each MCO and from MSC. The FRA Working Group will examine the process and assumptions underlying this MOU at least quarterly and make adjustments as required to be in compliance with all laws and regulations, and address any unforeseen gaps in the process or calculations.

42. Alternative Payment Methodologies
The MHA membership will continue to evaluate alternative methodologies for payment as permitted under federal regulation to transition to a more value-based and quality-centered payment solution. Any alternative payment methodologies will be presented by MSC staff to the FRA Working Group. Upon approval by the parties, such a proposal shall be implemented and supplant the initial proportional distribution.

43. Impact of Managed Care Expansion on the MSC Pooling Arrangement
The FRA Policy Committee met November 2, 2016, and endorsed staff’s initial presumptions regarding the impact of the Medicaid managed care transition on the pooling arrangement.
It is not the role of the MSC pooling arrangement to ensure that hospitals receive payment for patient days that are not provided by the hospital.
All the direct Medicaid add-on payments will be subject to pool (both FFS and managed care).

44. Impact of Managed Care Expansion on the MSC Pooling Arrangement
The applicable percentage of FRA-funded managed care claims payments also now will be considered for pool recipients before they are eligible to receive a payment from the pool.
The FRA Policy Committee and MSC Board of Directors will review the MSC pooling policies to determine if any additional changes are warranted.
Pool participants will be informed of any changes.

45. Additional Resources

46. MHA Management Services Corporation
Memorandum of Understanding
and%20MSC.pdf

47. MO HealthNet Division Publications
Managed Care Bulletins
50_2017March20.pdf
27_2016october20.pdf
Managed Care Provider Toolkit
ovider_Toolkit_ pdf

48. MO HealthNet Division Publications
Claims Processing Schedule

49. MO HealthNet Division Publications
The hospital-specific rate list is available on MHD’s website. To access the rate list, follow these steps:
Go to:
a page will open that says: “License for Use of Physician Current Procedural Terminology Fourth Edition (CPT)”
if you agree with the terms, scroll to the bottom of the page and click on “I ACCEPT”
a page with the heading “MHD Price List Search” will open
scroll to the bottom of the page and click the “Download” box
a page reflecting the various Provider Types will open
go to the bottom of the right-hand column and click on “xlsx” beside Hospitals
you will be given the option to “Open” or “Save” the SFY 2017 Hospital Rate List