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Arizona, Kansas Medicaid Managed Care RFPs Reviewed

This article was authored by HMA Senior Consultant Annie Melia and Consultant Alona Nenko.

This week, our In Focus section reviews two Medicaid managed care requests for proposals (RFPs) released on November 2, 2017. The Arizona Health Care Cost Containment System (AHCCCS) issued an RFP for the “Complete Care” program, which will integrate Medicaid managed care for physical and behavioral health as well as replace the state’s long-standing Acute Care Medicaid managed care program. It will cover approximately 1.5 million Medicaid members. Meanwhile, the Kansas Department of Health and Environment and Department for Aging and Disability Services issued an RFP for KanCare 2.0 Medicaid and Children’s Health Insurance Program (CHIP) Capitated Managed Care, which will serve approximately 403,000 members.

Arizona “Complete Care” RFP

Arizona will integrate Medicaid managed care for physical and behavioral health and replace the state’s long-standing Acute Care Medicaid managed care program on or after October 1, 2018. Long-term services and supports are not included under this RFP and are managed separately under Arizona’s Long Term Care System (ALTCS) managed care program. Under the RFP, annual capitation payments to MCOs are expected to be approximately $4.5 billion and plans are expected to collectively enroll roughly 1.5 million Medicaid members. The RFP covers the three Geographic Service Areas (GSAs) that comprise all fifteen Arizona counties.

Covered Populations

AHCCCS Complete Care contractors will cover most Medicaid-eligible adults and children, including children with special health care needs, as well as members with a serious mental illness who opt out of the existing Regional Behavioral Health Authorities (RBHAs). The Complete Care contractors will not enroll foster children enrolled in the Comprehensive Medical & Dental Program or individuals with developmental disabilities (IDD). A separate IDD integrated care RFP is expected in spring 2018.

Contract Term

The initial term of the contract is three years with two two-year optional extensions, for a full potential term of seven years. Implementation of the contracts is expected on or after October 1, 2018.

Risk Corridors and Quality Withhold

Under the RFP, contractors will retain all profits less than or equal to 2 percent of revenue; half of profits more than 2 percent and less than or equal to 6 percent of revenue; and none of the profits greater than 6 percent of revenue.  Contractors are responsible for all losses less than or equal to 2 percent of revenue and none of the losses greater than 2 percent of revenue.

Contracts will include a quality-based withhold of 1 percent of an MCO’s capitation rates. Additionally, MCOs may receive incentive payments up to 5 percent of capitation rates.

Additional RFP Details

  • D-SNP Requirement: Contractors are required to have a Dual Eligible Special Needs Plan (D-SNP) for all counties in the contracted Geographic Service Area.
  • Contract changes based on Federal actions: Arizona may alter contracts that result from this RFP based on Federal changes to Medicaid and CHIP. Changes could result from the following:
    • Creation of a new, non-Medicaid program to insure individuals currently covered through Medicaid expansion and the Exchange.
    • Adding work requirements to Medicaid. Arizona plans to submit an 1115 waiver adding work requirements in their Medicaid program to the Centers for Medicare & Medicaid Services by the end of 2017.
  • Regional Behavioral Health Authorities’ (RBHAs) Option to Become a Complete Care Contractor: The state intends to allow RBHA contractors the option to become a complete care contractor if they are not affiliated with an awardee in the same GSA. The term of expanded services would be the remaining RBHA contract term. Additionally, if a successful bidder is awarded a contract in the same GSA as an affiliated organization at the time of the award, a single legal entity must be established.

Scoring and Number of Anticipated Contractors

The Capitation—Non-Benefit Costs proposal section will be scored by GSA and the Programmatic proposal portion of the proposal, which includes the narrative submission requirements and oral presentations, will be scored statewide. Each of these scores will be weighted separately then added for a final score by GSA.  A successful offeror must accept or decline all awarded GSAs. Prospective offerors are not required to include all GSAs in their proposals.

The state anticipates awarding Complete Care contracts as follows.

RFP Timeline

A pre-proposal bidders conference is scheduled for November 8, 2017.  Proposals are due January 25, 2017.

Current Market

Arizona currently has separate Medicaid managed care programs for acute care and behavioral health. Seven acute care plans serve 1.6 million Medicaid members.  As of September 2017, UnitedHealth, Mercy Care Plan, and Health Choice held the largest market share, with 34 percent, 25.4 percent, and 16.7 percent, respectively.

While the state’s three RBHAs manage behavioral health for most members, these organizations manage both behavioral health and physical health for individuals with a serious mental illness. Cenpatico Integrated Care (Centene), Health Choice Integrated Care, and Mercy Maricopa Integrated Care currently hold RBHA contracts.

The Children’s Rehabilitative Services (CRS) program currently serves children with qualifying serious medical conditions.  The contract is held by United.

With the implementation of contracts resulting from the RFP, the terms “acute care contractor,” “CRS contractor,” and “RBHA contractor” will be replaced by “AHCCS Complete Care Contractor.”

Link to RFP/Bidders Library

KanCare 2.0 Managed Care RFP

As of January 1, 2019, Kansas will contract with Medicaid managed care organizations to provide coverage to the state’s Medicaid and CHIP beneficiaries. The RFP will ensure coordination of care and integration of physical, behavioral, long term services and supports (LTSS), and home and community-based services (HCBS). When fully implemented, annual spending is estimated to be at least $3 billion across all MCOs. The contract will be effective through December 31, 2023. The RFP was initially expected to be released in 2016, but the state delayed it to see what policy changes the Trump Administration might make.

Pending CMS approval, Kansas is considering adding a work requirement for able-bodied adults in KanCare 2.0. This work requirement will be implemented as soon as possible on or after January 1, 2019, and no later than July 1, 2020.

Covered Populations and Market Size

The KanCare 2.0 program will continue to cover parents, pregnant women, children, individuals with intellectual/developmental disabilities (IDD), individuals with physical disabilities (PD), individuals with Severe and Persistent Mental Illness, and the older adults. Almost all Medicaid beneficiaries and 100 percent of CHIP beneficiaries will enroll in a MCO of their choosing. Approximately 323,000 parents, pregnant women, and children; 44,000 individuals with disabilities; and 67,000 older adults will be covered. Under a 1915(c) HCBS waiver, KanCare covers:

  • Children with autism;
  • Children and adults with intellectual and developmental disabilities (IDD);
  • People ages 16–64 with PD;
  • Medically fragile children ages 0–22 dependent on intensive medical technology (TA);
  • People ages 16–64 with traumatic brain injuries (TBI);
  • People ages 65 and older who are functionally eligible for nursing facilities (NF); and
  • Children with a serious emotional disturbance (SED).

MCOs will be required to report separately on expenditures and utilization for behavioral health, physical health, LTSS, and HCBS. They must also report performance measurement data, including performance measures relating to quality of life, rebalancing, and community integration activities for LTSS members.

Certain Medicaid beneficiaries including dual eligibles (Medicare and Medicaid), foster care children, and children with disabilities may be voluntarily enrolled.

RFP Requirements

MCOs are required to bid for all populations, services, and regions of the state. The state is also requiring bidders to implement Value Based Purchasing (VBP) models and strategies, including helping members access affordable housing, food security, employment, and other Social Determinants of Health and Independence; increasing employment and independent living supports for members with behavioral health needs or who have IDD/TBI; and providing service coordination for all youth in foster care.

RFP Timeline

Contracts will be effective January 1, 2019, through December 31, 2023, with enrollment beginning prior to November 1, 2018. Proposals are due January 5, 2018.

Current KanCare Market

Kansas currently contracts with three Medicaid plans: Centene/Sunflower State Health plans, Anthem/Amerigroup, and UnitedHealthcare. Enrollment was nearly 381,000 as of September 2017.

RFP, 1115 Waiver Request Links

Link to 1115 Waiver