1. Payer of Last Resort Requirements of the Ryan White CARE Act
Julia Hidalgo, ScD, MSW, MPH
(443) 

2. What are HAB’s policies regarding payer of last resort?

3. Payer of Last Resort (PLR) Requirement
Introduced in the 1990 authorization of the CARE Act and is found in Parts A, B, C, and F of the Act
“CARE Act grant funds cannot be used to make payments for any item or service if payment has been made, or can reasonably be expected to be made, with respect to that item or service under any State compensation program, under an insurance policy, or under any Federal or State health benefits program; or by an entity that provides prepaid health care”
Implementation of this requirement has been addressed primarily by grant guidance
In December 2002, additional instructions were provided through a letter to grantees from Dr. Parham

4. HAB Policies Regarding Payer of Last Resort: Q and A’s
Are CARE Act grantees, sub-grantees, or contractors required to bill?
If you provide services that are eligible for third party (TP) reimbursement and grant funds you must have a system to bill and collect from TPs.
You must identify potential sources of TP revenue for each client, refer them for eligibility determination, set up billing systems, bill all available sources of TP reimbursement, and negotiate the best reimbursement rates possible.
While Medicaid eligibility determination is pending you may use grant dollars but bill retroactively (i.e., pay and chase)
Does HAB support the reduction of a grant award to their contractors due to increase TP revenue?
No, HRSA discourages this. They would prefer that you use the money to expand and/or enhance HIV services.

5. HAB Policies Regarding Payer of Last Resort: Q and A’s
Must a parent agency credit the HIV unit’s budget for TP reimbursements or can they retain the funds?
The parent organization must report the amount of the reimbursements to the HIV/AIDS unit and to return or credit these funds to the HIV unit.
How can funds received from TP reimbursement be used?
The funds must be used to pay for HIV/AIDS services to the eligible population.
Since TP payment is typically less than submitted charges, should the grantee or contractor bill for their actual costs?
Yes. Try to negotiate the best possible rate with TP insurers, unless prohibited by your Medicaid Program.

6. HAB Policies Regarding Payer of Last Resort: Q and A’s
How can we become a Medicaid provider?
Check the State Medicaid website or contact the State Medicaid Program directly. Help can also be obtained from CMS’s Regional Office:
If our employees do not meet Medicaid credential requirements and we provide Medicaid covered services what must we do to meet the qualifications to be a provider?
If you do not charge for the covered service or seek TP reimbursement, there is a waiver provision. Otherwise, careful attention should be paid to staffing a program with quality of care and reimbursement implications in mind. Your program should evaluate the costs and benefits of adjusting your staff mix over time to assess if staffing changes would be beneficial in the long term to ensure quality of care.

7. HAB Policies Regarding Payer of Last Resort: Q and A’s
Can CARE Act funds be used to pay to prepare to become a Medicaid provider?
Yes. Capacity development funds may be used for this purpose. Title I Planning Councils can allocate capacity development funds.
Can a grantee require a contractor to become a Medicaid provider even if the service we provide are not covered by Medicaid?
No.

8. HAB Policies Regarding Payer of Last Resort: Q and A’s
If a client is enrolled in Medicaid, can CARE Act funds be used to pay for case management?
If your State Medicaid Plan covers the type of case management that you provide, Medicaid should pay for those services. To find out if case management is covered see: To obtain information about your State’s State Medicaid Plan see: If the case management services provided by your agency are not covered, then the services may be paid for using CARE Act funds.

9. Who is the payer of last resort?
Some grantees and subgrantees are still unaware of the PLR requirement and do not implement it
Subgrantee contracts do not reflect the requirement nor do grantees monitor their subgrantees
Grantees and subgrantees are unclear who the payer of last resort is
Other federal funders claim they are
SAMHSA, VA, HUD, State or local-funded systems
It is unclear within the CARE Act, which title is the payer of last resort
Grantees seek to cost shift to other titles
Conflicting advice from HRSA offices, HAB project officers, and grantees
Title I and II grantees have highly variable policies regarding PLR

10. Participation in Third Party Payment Systems
Almost all CARE Act medical providers participate in Medicaid and other payers
Some are locked out of Medicaid managed care plans who will not contract with them
Some CARE Act providers funded for mental health and drug treatment services are not licensed and do not employ licensed supervisors or line staff
Not eligible for participation in Medicaid
May employ contractors that bill directly with no revenue returned to the program
Some Medicaid programs have a moratorium on new provider numbers for certain provider categories
Some CARE Act providers cannot afford credentialed personnel to provide billable services

11. Participation in Third Party Payment Systems
MCOs have considerable requirements that CARE Act providers may not meet
24/7 staffing, HIPAA compliance, staff credentialing, quality assurance, electronic claims submission, reporting, risk bearing
Considerable infrastructure investment is commonly required for HIV providers to become ready for participation in managed care
Case management and psychosocial support providers may not provide a billable service
They may provide a billable services but are not sufficiently credentialed
Some providers may not be aware that they provide a billable service
Becoming a participating provider is likely to represent significant costs; often not covered by CARE Act capacity building funds

12. Billing Systems
Many providers receiving CARE Act funds have inadequate billing systems
In large systems, their billing systems do not separately account for HIV program revenues or expenses
Some staff are not adequately trained, credentialed, or supervised
Newer or small providers often try to build rather than buy billing capacity
Evidence of coding insufficiency resulting in lower payments
Do not research and resubmit rejected claims
CARE Act providers are reluctant to require payment from self-pay patients
No collections process in place; even when patients have income
Billing systems are not set up to do “pay and chase”

13. Billing Systems
In some healthcare markets, CARE Act providers may potentially bill numerous payers
Payers vary in their mechanisms for provider networks, covered benefits, and the amount that they will pay
Prior authorization and standing order requirements must be constantly addressed to ensure that payment are made
Payments are slow, with claims commonly rejected at first submission
This level of complexity is quickly outstripping the capacity of even relatively sophisticated providers
Billing software, hardware, and training/re-training represent significant operating costs
CARE Act grantees are commonly unwilling to support or that HAB will not fund

14. Third Party Payment Structure
Many providers are unaware of their per service cost
Tend to accept payments that are well below their actual costs
Commonly have little bargaining power with insurers
Most Medicaid programs have not adjusted their payment structures in many years, few have HIV enhanced rates
Some Medicaid programs have decreased payments or “tax” providers
HIV medical providers tend to offer non-covered services
Prevention, medication education, adherence counseling
Personnel costs are reported to be rapidly rising
Unionized organizations are bound by collective bargaining
CARE Act grantees’ unit cost payments are reported to not reflect program costs and inadequate

15. Third Party Payment Structure
Visits to HIV care providers tend to be relatively long and labor-intensive
Volume is insufficient to generate increased marginal revenue
Insolvency is increasing among HIV medical practices that rely heavily on third party payments
In the past, parent institutions have been willing to absorb uncompensated costs or to support administrative staff and related costs
Many of the agencies report that their institutional support has eroded rapidly as broader financial pressures increase
An increasingly hostile environment is reported

16. What are HAB’s policies regarding use of a sliding fee scale?

17. Sliding Fee Scales: The Policies
CARE Act grantees must use a sliding fee scale
Clients with an income < to 100% of the FPL may not be charged for service provided under the grant
Clients with an income > 100% of the FPL must be charged for services based on a schedule that is available to the public
For clients with an income > 100% and < 200% of the FPL, the provider will not, for any calendar year, impose charges in an amount exceeding 5% of the annual gross income of the client
For clients with an income > 200% and < 300% of the FPL, the provider will not, for any calendar year, impose charges in an amount exceeding 7% of the annual gross income of the client

18. Sliding Fee Scales: The Policies
For clients with an income > 300% of the FPL, the provider will not, for any calendar year, impose charges in an amount exceeding 10% of the annual gross income of the client
A grantee or entity receiving assistance may, in the case of clients subject to a charge,
Assess the amount of the charge in the discretion of the grantee, including imposing only a nominal charge for the provision of services and
Take into consideration the medical expenses of clients in assessing the amount of the charge, subject to such provisions

19. Sliding Fee Scales: The Policies
HHS may not make a grant to an eligible area unless they agree that the limitations established regarding the imposition of charges for services applies to the annual aggregate of charges imposed for such services, without regard to whether they are characterized as enrollment fees, premiums, deductibles, cost sharing, co-payments, coinsurance, or other charges
If a CARE Act grantee or subgrantee charges for services, it must do so on a sliding fee schedule that is available to the public

20. Sliding Fee Scales: The Policies
Client, annual aggregate charges to clients receiving CARE Act services must conform to statutory limitations and applies to the annual charges imposed for all CARE Act services without regard to whether they are characterized as enrollment fees, premiums, deductibles, cost sharing, co-payments, coinsurance, or other charges
This requirement applies to all subgrantees from which an client receives CARE Act-funded services

21. Sliding Fee Scale : The Policies
A grantee can waive this requirement for a subgrantee if the provider does not impose a charge or accept reimbursement available from any third-party payer -- including reimbursement under any insurance policy or any Federal or State health benefits program
The intent is to establish a ceiling on the amount of charges to clients of services funded
A simple application requesting annual gross salary of the client or family is enough for a baseline by which the caps on fees will be established
The client assures that the information provided is accurate

22. Sliding Fee Scale : The Practice
The sliding fee scale is rarely required by grantees in their subcontracts
HIV programs in agencies with mandatory scales do apply them (e.g., FQHCs, hospital districts, county health systems)
Some agencies have aggressive collection processes
The sliding fee scale requirement is reported to be impractical by many CARE Act providers
Providers do not coordinate client client’s out-of- pocket payments to determine when the maximum amount is reached
In most communities, there is no single point of CARE Act eligibility determination to assess income at entry into care or during periodic re-determination

23. Sliding Fee Scale: The Practice
The ceiling on out-of-pocket payments requires a high level of documentation of paid bills
Clients have difficulty maintaining records
Some providers do not have the ability to collect and account for cash
A problem in small and large institutions
In large organizations, out-of-pocket payments are often not applied to the budget of the HIV program nor does the accounting system separately identify out-of-pocket revenue generated by the HIV program

24. What are HAB’s policies regarding eligibility determination?

25. Eligibility Determination: Policy
A requirement to conduct eligibility determination of clients seeking CARE Act-funded services is not addressed explicitly by CARE Act or the Q and As.
It is addressed to some extent in grant guidance, with some grantees “down-streaming” this expectation through contracts or by funding eligibility determination (e.g., in the scope of work of CARE Act-funded case managers)

26. Eligibility Determination: Policy
For example in the FY 2003 Title II grant guidance:
“Funds may not be used to provide items or services for which payment already has been made, or reasonably can be expected to be made by third - party payers, including Medicaid, Medicare, and/or other State or local entitlement programs, prepaid health plans, or private insurance. It is therefore incumbent upon grantees to assure that eligible clients are expeditiously enrolled in Medicaid and that CARE Act funds are not used to pay for any Medicaid-covered services for Medicaid enrollees.”

27. Eligibility Determination: Practice
CARE Act providers tend not to maximize resources available in other systems
Assume somebody else will take care of determination rather than coordinating efforts
Often take a passive approach to determination and do not make the system work for clients proactively
Take the attitude “don’t ask, don’t tell,” giving the clients the impression that “there is a free lunch”
Providers are often unaware that clients are already enrolled or eligible for care
Do not coordinate applications for benefits
Flood the system with completed forms to “see what sticks”

28. Eligibility Determination: Practice
Most HIV care systems have no single point of entry for eligibility determination for CARE Act services or other payers
There is a vast array of entitlement and discretionary programs that HIV-infected clients might be eligible for today and tomorrow
Eligibility criteria (the short list)
Geographic residency, US citizenship, legal residency status, age, race (Native Americans), gender, previous financial contributions by client, employment, employer, preexisting medical condition, disability, employability, income, assets, HIV serostatus, CD4 count, annual or lifetime utilization of benefits, criminal convictions
Effective eligibility determination requires highly trained staff whose single focus is get clients enrolled and keep them enrolled in entitlement and disability systems

29. Eligibility Determination: Practice
Disability claims are taking longer than ever to be processed
Many State and federal entitlement programs have had layoffs or working with inexperienced staff
SSA HIV policies are under review
Legal services must be available to pursue claims
Front-loaded intake and assessment at entry in care, without re-determination on a regular basis
There is ineffective communication between care providers about eligibility “triggers”
Loss of employment, inpatient admission, change in clinical condition

30. Eligibility Determination: Practice
HIV care providers assume that clients’ disability claims should only be HIV-related
Medical providers are often not trained to prepare medical claims for disability
This service is usually not billable
Case managers are commonly used to conduct eligibility determination
Training and retraining of case managers regarding eligibility determination is often limited
There are competing demands for their time and turn-over is growing

31. Eligibility Determination: Practice
The role of the client is not well addressed
Many providers assume that clients will be able to navigate the system, can read, complete forms, and advocate for themselves
Other providers assume that the client cannot navigate the system when they can
Determination processes that rely on clients do not work
Paperwork is not the highest priority when you are trying to survive
Housing instability often leads to loss of benefits because of returned mail
Clients are commonly not informed that providers rely on their ability to be paid for their work

32. Eligibility Determination “Best” Practices
Collaboration between policymakers to establish policies and procedures that coordinate benefits
Systematic assessment of the eligibility determination processes among HIV providers
Review organizational policies and procedures and talk to your staff about what is actually being done in your program to determine clients
Review insurance status data and client records
Where feasible, establish performance requirements to ensure periodic re-determination
Develop CQI processes to improve determination
Identify entitlement and discretionary programs for which there are barriers to enrollment
Document the problem and establish ongoing processes for resolution
Establish processes to fast track applications and to train public and commercial claim assessment staff regarding HIV disease

33. Eligibility Determination “Best” Practices
Routinely monitor changes in entitlement and discretionary programs that impact eligibility and adjust accordingly
Fund and employ trained eligibility determination workers
Broker roles and responsibilities among medical providers, case managers, eligibility determination workers, and legal aid providers to reduce duplication of effort and maximize enrollment
Make sure that clients receive the maximum benefit to which they are legally entitled
Communicate with clients that to continue to operate, your program must have revenue