1. Hot Topics in Healthcare Emerging Trends and What is Changing
American Association of Healthcare Administrative Management
November 7, 2017

2. Agenda State Legislative Issues Medicaid Reform Payor Update
Regulatory Update

3. State Legislative Issues

4. State Legislative Issues
Certificate of Need
Taxes
Graduate Medical Education
Behavioral Health

5. Medicaid Reform

6. Timeline
July Legislature directs DHHS to develop Medicaid reform plan
March DHHS releases provider-led ACO Medicaid reform plan
July Legislature passes Medicaid reform bill: hybrid MCO/PLE model
June DHHS submitted waiver to CMS

7. Timeline (Cont’d) May 2017 DHHS solicits feedback on pending waiver
Sept DHHS solicits feedback on its revised reform
proposal
July Projected start date of Medicaid managed
care (but actual start is contingent on when CMS approves the waiver)
Mid Projected start date of behavioral health integration (unless changed by legislature)

8. The 1115 Waiver Process
States can implement a managed care delivery system using three basic types of federal authorities:
State plan authority [Section 1932(a)]
Waiver authority [Section 1915 (a) and (b)]
Waiver authority [Section 1115]
NC is pursuing the 1115 waiver (as ”directed” by the legislature)

9. Major Aspects of Waiver (and Legislation)
3 Statewide MCOs; up to 12 regional PLEs
- Last week, DHHS released two requests for information
Statement of Interest from prepaid health plains due November 22, 2017
Financial aspects, including capitation rate setting, due December 1, 2017
- Request of Proposal for potential prepaid health plans expected in Spring 2018
6 PLE regions
Licensed by DOI; regulated by DHHS
- DOI looks at solvency
- NCHA pushing for ”Chapter 58” (insurance law) and other protections, such as prompt pay requirements

10. Two types of plans DHHS envisions 2 types of plans:
Standard plan (most of the population)
Tailored plans (to be phased in):
- Special Needs population
- Dual eligible beneficiaries
- Foster children
- Long stay nursing home patients

11. Waiver Aspects
DHHS and NCHA support expediting integration of physical and behavioral health
- Will require a legislative change (currently projected to integrate in 2023)
DHHS foresees advanced medical homes (including payments for care management)
- Not clear how CCNC may evolve or be involved

12. Other Aspects of the Waiver
Medical loss ratio (85% under federal rules)
Network adequacy standards
Beneficiary protections
30 days to choose a plan; switch PCPs at certain times
Provider relations: MCOs must
Have provider call center
Provide manuals and policies
Provide appeals process if provider terminated over quality; contract breach

13. Medicaid Managed Care: Safety Net
Supplemental payments are not permissible in a managed care environment.
CMS Medicaid Managed Care Rule issued in 2015.
Doesn’t align with DHHS’ policy direction.
Preservation of safety net extremely important
Supplemental payments to be rolled into hospital-specific rate using historical upper-payment limit

14. Medicaid Managed Care Contracting Challenges
Assess capabilities to move toward value-based and/or alternative payment methodologies
Negotiate payment methodologies that meet the following standards
Must have the tools to evaluate and monitor financial impact of payment methodology
Payment methodology must result in proper sharing of risks between the parties
Costs to administer and monitor must be reasonable
Never focus exclusively on price during managed care contract negotiations, since numerous contract terms can affect the degree of legal, strategic, and financial risk
Negotiate all contract terms and rates as part of a comprehensive arrangement

15. Medicaid Managed Care - Revenue Cycle Challenges
Challenges posed by the increase in Managed Medicaid plans, while not outside of the usual set of problems, will have a dramatically increased impact on the stability of the revenue cycle
System Enhancements
Establish Plan Codes
Update claim scrubber
Update Contract Management System
Provider Enrollment/Credentialing
Eligibility requirements
Detailed insurance verification is critical
Selecting correct Plan Code is a must
Staff Education extremely important

16. Medicaid Managed Care - Revenue Cycle Challenges
Authorization Requirement
More restrictive authorizations rules
Frequent changes to policies
Build authorization matrix to assist staff
Staff education extremely important
Denial Management
Working with Third Party Administrators (TPAs)
Many payers are outsourcing to reduce administrative costs
Processes become more complex with the increased number of players
Variation from standard CMS claims editing
New Reimbursement methodologies

17. Payor Update

18. Payor Update Medicare Provider Workgroup
Medicaid Technical Advisory Workgroup
Managed Care Committee

19. Payor Update CY 2018 ACA Market Update
Medicaid Payment Shortfalls – I/P Rehabilitation Services
Medicaid Secondary Claims Payment Issues

20. Medicaid Secondary Claim Payment Issues
On September 25, 2017, DMA announced that it would be suspending the new Medicaid secondary claims edits related to Claim Adjustment Reason Code (CARC) 97 for 90 days.
During this 90-day period, NCTracks will allow the claim or claim line billed with primary payer CARC 97 to process and adjudicate without denying the claim or claim line. DMA will provide further instructions before the 90-day period expires.
During this 90-day period, hospitals should work with their vendors to ensure that they can submit claims with CARC information, at the header and detail line level, exactly as it appears on the primary payer’s EOB/Remittance.
Mismatches created by payor’s different billing requirements

21. Regulatory Update

22. CMS Releases Final OPPS Rule for 2018
Finalized proposal that cuts Medicare Part B drug reimbursement to hospitals in the 340B drug discount program for separately payable drugs by nearly 30 percent, from average sales price (ASP) plus 6 percent to ASP minus 22.5 percent. The reduction takes effect January 1, 2018.
Payment reduction does not affect critical access hospitals, which are not paid under the OPPS, rural sole community hospitals, children’s hospitals, and PPS- exempt cancer hospitals.
Payment reduction applies to hospitals enrolled in 340B as disproportionate share (DSH) hospitals and rural referral centers (RRC).

23. CMS Releases Final OPPS Rule for 2018
CMS estimates that the final rule will reduce hospital’s Medicare Part B drug reimbursement by $1.6 billion, higher than the $900 million estimate in the proposed rule.
CMS stated that it will redistribute the “savings” to payment under the OPPS for non-drug items and services to all hospitals, including non-340B hospitals.
The final rule also establishes two modifiers to identify 340B drugs billed under OPPS that hospitals must begin using effective January 1, 2018
One for 340B hospitals that are subject to the payment reduction (JB)
Separate informational modifier for 340B hospitals not subject to the payment reduction (TB)

24. CMS Releases Final OPPS Rule for 2018
The America Hospital Association (AHA), the Association of American Medical Colleges (AAMC), and America’s Essential Hospitals (AEH) said they will challenge the 340B payment change in court, arguing that the new policy subverts Congress’ intent for the program.

25. CMS Releases Final 2018 Physician Payment Rule
Makes changes to policies implementing the site-neutral provisions of Section 603 of the Bipartisan Budget Act of 2015.
Section 603 requires that, except for dedicated emergency department services, services furnished in off-campus provider-based departments that began billing under the OPPS on or after Nov. 2, 2015, or that could not meet the 21st Century Cures "mid-build" exception, will no longer be paid under the outpatient prospective payment system, but under another applicable Part B payment system.
Confirms policy to pay hospitals at 40%, rather than 50%, of the OPPS rate for non-excepted services in 2018.

26. Questions/Discussion Ronnie Cook rcook@ncha.org 919-677-4225