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Washington Releases 2019/2020 Integrated Managed Care RFP

This week’s In Focus section reviews Washington’s 2019/2020 Integrated Managed Care (IMC) request for proposals (RFP) issued by the Washington State Health Care Authority (HCA) on February 15, 2018 to provide 1.6 million Medicaid enrollees with both physical and behavioral health services. The procurement will expand Washington’s Apple Health – IMC program (formerly known as Fully Integrated Managed Care (FIMC)) to eight additional Regional Service Areas (RSAs) and add an additional managed care organization to the Southwest RSA. It will also add one county to the Southwest RSA and one county to the North Central RSA.

Services and Populations Covered

Selected Medicaid Managed Care Organizations (MCOs) will provide the full continuum of physical and behavioral health, including primary care, pharmacy, mental health, and SUD treatment, to Medicaid enrollees. Most Medicaid enrollees will be enrolled in the IMC program, including current Apple Health managed care beneficiaries. Apple Health covers most populations, including individuals who are aged, blind, and disabled (ABD) and HCBS waiver beneficiaries. Those who are not eligible for managed care will receive Behavioral Health Services Only (BHSO) through the IMC contracts and will continue to receive their medical services through the state’s fee-for-service system. These include dual eligibles, individuals residing in an IMD (Institution for Mental Disease), medically needy spenddown enrollees, and pregnant women who are not citizens of the U.S.

Incumbent Behavioral Health Organizations (BHOs) will either cease operations or convert to a Behavioral Health Administrative Service Organization (BH-ASO) in regions where IMC is implemented. MCOs will be required to subcontract with BH-ASOs under the contract.

Foster care beneficiaries will remain enrolled in the current statewide foster care plan for physical health. Beginning on October 1, 2018, all behavioral health services will also be provided through that MCO. American Indian/Alaska Native (AI/AN) individuals may voluntarily opt into IMC. If they are not eligible for IMC, they can select BHSO with one of the IMC-contracted MCOs.

RFP Requirements

HCA is accepting bids only from MCOs with current Apple Health Medicaid Managed Care contracts.

Contract Awards

HCA anticipates awarding multiple contracts per RSA:

Region Number of MCOs
Greater Columbia 5
King 5
North Sound 5
Pierce 4
Spokane 4
Thurston-Mason 3
Great Rivers 3
Salish 3

Additionally, HCA will select a third MCO to operate in the Southwest RSA. This region is already in the IMC program. Molina Healthcare and Community Health Plan of Washington are currently serving the Southwest RSA. In the Southwest region, the service area will also be expanded to include Klickitat County and in the North Central region, the service area will be expanded to include Okanogan County.

For regions choosing to implement IMC in 2019, contracts are set to begin on or about January 1, 2019 and end December 31, 2020. For regions choosing to implement IMC in 2020, contracts are set to begin on or about January 1, 2020 and to end on December 31, 2020. HCA can extend the contracts for up to two (2) additional one (1)-year periods.

Evaluation Criteria

MCOs will be evaluated based on combined scores on statewide and regionally-specific questions. Under some service areas, specific issues are identified in addition to general requirements. For example, a rural county may ask how a bidder will ensure clients have access to specific services. Counties with high homelessness rates can ask the bidder how they can develop affordable housing. Mandatory requirements, including medical and behavioral health networks, will be evaluated on a pass/fail basis.

Evaluation Criteria Maximum Points
RFP Compliance N/A
Mandatory Management Review
Letter of Submittal and Certification and Assurances
N/A
Statewide Evaluation Questions 650
   (Management and Administration) (105)
   (Behavioral Health Network and Access) (210)
   (Quality and Utilization Management) (105)
   (Care Coordination) (230)
2019 Regional Questions
   Greater Columbia 250
   King 250
   North Sound 250
   Pierce 250
   Spokane 250
Provider Network Pass/Fail

 

RFP Timeline

MCOs are required to submit a mandatory letter of intent to propose by March 1. Proposals are due on April 12, with “Apparently Successful Bidders” selected on May 22, 2018. Contracts run for one year, with renewal options for two (2) one (1)-year periods.

RFP Activity Date
RFP Issued February 15, 2018
Mandatory LOI Due March 1, 2018
Proposals Due April 12, 2018
Awards May 22, 2018
2019 Implementation January 1, 2019
2020 Implementation January 1, 2020

 

Current Medicaid Managed Care Market

Washington’s total managed care enrollment is 1.6 million. Molina Healthcare is the largest MCO, with over 45 percent of the market share.

MCO 2017 Enrollment Market Share
Molina Health Care 730,752 45.4%
Community Health Plan of WA 278,038 17.3%
UnitedHealth/Optum Total 234,774 14.6%
Coordinated Care Corp./Centene 203,107 12.6%
Anthem/Amerigroup 145,303 9.0%
Various Tribal/County Orgs 16,057 1.0%
Total Managed Care 1,608,031

 

Waivers

Washington’s Section 1115 Waiver, Medicaid Transformation Project (MTP), was approved by the Centers for Medicare & Medicaid Services (CMS) on January 9, 2017. The five-year waiver, worth $1.5 billion, integrates physical and behavioral health purchasing and service delivery, converts 90 percent of Medicaid provider payments to reward outcomes instead of volume, supports providers to adopt new payment and care models, implements population health strategies, and addresses key determinants of health.

Link to RFP/Bidders’ Library

RFP #2567 Integrated Managed Care (IMC) can be found in the Request for Proposals section.

https://www.hca.wa.gov/about-hca/bids-and-contracts

Section 1332 State Innovation Waivers

This week, our In Focus, written by HMA Principals Nora Leibowitz and Donna Laverdiere, reviews Section 1332 State Innovation Waivers.

What Are Section 1332 Waivers and How Can They Be Used?

Section 1332 of the Affordable Care Act allows states to apply for State Innovation Waivers to pursue innovative ways of offering high-quality, affordable health coverage to state residents. This authority allows states to seek waivers of provisions related to these elements of the Affordable Care Act:

  • The individual mandate (Internal Revenue Code Section 4980H)
  • The employer mandate (Internal Revenue Code Section 5000A)
  • Marketplaces and Qualified Health Plans (ACA Title I, Subtitle D, Parts I and II)
  • Benefits and subsidies (ACA Section 1402; Internal Revenue Code Section 36B)

This broad authority is tempered by the requirement that the state show the proposal will provide access to coverage that: is available to at least as many state residents; is at least as affordable; and provides at least as comprehensive coverage as would have been provided without a waiver. In addition, the program implemented under a Section 1332 Waiver cannot increase the federal deficit. Waiver applications must follow requirements set forth in regulation, and they require federal approval, including an assessment of the state’s ability to meet requirements.

What Can’t Be Done with Section 1332 Waivers?

Reducing Overall Coverage or Financial Assistance. Under the current Section 1332 authority, a state may not reduce the benefits package or financial support for eligible residents. While some states have investigated changes to eligibility or covered services, at present this must be done within the requirements that coverage be as affordable and comprehensive with a waiver as without.

Changes to a State’s Medicaid Program. To make changes to Medicaid, a state must use a State Plan Amendment or a Medicaid waiver. Many states have used Social Security Act Section 1115 waivers to implement significant changes to their Medicaid programs, including waiving some Medicaid requirements and using Medicaid funds in ways not otherwise allowed.

A state seeking to make health system changes that affect both Medicaid and commercial markets may develop a companion Medicaid 1115 Waiver that works with the 1332 Waiver. The dual waivers can be used to support health care reform designed to align eligibility and enrollment practices, purchasing, and/or cost containment.

ACA Section 1332 State Innovation Waiver SSA Section 1115 Medicaid Demonstration Waiver
Used to make changes to state commercial individual and/or small group market

  • State agency is applicant (applicant agency is determined by state)
  • Waive mandates, change benefits, plan offerings, subsidies
  • Can be large-scale change to commercial market(s) or more narrow efforts (e.g., market stabilization)
Used to make changes to state Medicaid program

  • State Medicaid agency is applicant
  • Use to test and implement coverage approaches in Medicaid that do not otherwise meet federal program rules
  • May be comprehensive changes in eligibility, benefits, cost sharing, and provider payments, or more focused changes on specific services and populations.

Changes to Medicare or Other Federal Health Care Programs. States have limited control over programs that are federally administered.

What Are States Currently Doing with Section 1332 Waivers?

Reinsurance. In 2017, the first year that states could apply for a waiver under ACA Section 1332, CMS approved applications from Alaska (July), Minnesota (September) and Oregon (October). Each state has established a reinsurance program that is partially supported with federal funds.

Other Approval. Hawaii, which has had an employer mandate since the 1970s, in 2016 was given approval to waive SHOP requirements and related provisions. This situation was unique to Hawaii and is unlikely to be replicated by other states.

Other State Action. As of December 2017, 24 states have considered or passed legislation to develop a Section 1332 waiver. While a number of states submitted applications in 2017, several waivers were withdrawn by states during the year. In January 2017, California pulled its waiver, which would have allowed undocumented state residents to buy coverage in the state Marketplace, Covered California. Oklahoma’s reinsurance waiver was not approved by its September implementation deadline and was withdrawn. The state has signaled that it will resubmit an application, possibly on a larger scale than the initial reinsurance proposal. Iowa withdrew its application when it became clear CMS had significant concerns about the proposal. Massachusetts and Vermont applications were both deemed incomplete and not further reviewed by CMS, though Massachusetts has signaled it may pursue further reforms for the 2019 coverage year. Idaho has a draft Section 1332 Waiver application out for public comment that it plans to submit in conjunction with an 1115 Waiver.

What Has Changed or May Change Soon?

Executive Order. On his first day in office, President Trump signed an executive order pledging his administration to provide states with more flexibility and control in health care. This included agencies committing to using their authority and discretion to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

Agency Support. The President’s statement was followed in March 2017 by a letter to the governors from then-HHS Secretary Price, indicating support for reinsurance-focused waivers and the use of 1115 and Section 1332 Waivers to align Medicaid and private coverage rules.

Congressional Action and Proposals. While the rules regarding Section 1332 Waivers have not changed in the past year, the tax overhaul passed at the end of 2017 included a provision that eliminated the penalty associated with the individual coverage mandate. While the individual mandate penalty does not end until the 2019 tax year, it would be hard to imagine a state applying to waive this provision given the time it takes to develop and get approval of a waiver.

In addition, several Congressional health reform proposals discussed last year would have affected the applications and impact of waivers.

  • American Health Care Act (House). Would have added new waiver authority to eliminate Essential Health Benefits, allow premiums to vary based on the health of the insured, and allow states to set age bands. States would have been able to eliminate the employer responsibility payment, establish reinsurance without a waiver, and provide tax credits in and outside of Marketplaces.
  • Better Care Reconciliation Act (Senate). Proposed elimination of guardrails requiring the Section 1332 Waiver program provide as much coverage and coverage that is as affordable, to as many people as without the waiver. Would have eased Section 1332 Waiver approval, promoted expedited review, and lengthened the waiver period.
  • Lower Premiums Through Reinsurance Act (Collins-Nelson). Would add $4.5 billion for reinsurance programs established by a Section 1332 Waiver, and would expedite approval for such proposals.
  • Bipartisan Health Care Stabilization Act (Alexander-Murray). Would ease 1332 application and expedite approval process. Would relax affordability language and allow other federal program costs to be included in federal deficit impact calculation.

A combination of policies from the Collins-Nelson and Alexander-Murray bills may re-emerge based on deals made during the passage of the tax reform package at the end of 2017.

What Does This Mean for the Future of 1332 Waivers?

The Trump Administration has consistently messaged a desire to work with states seeking to innovate, and there is no reason to think this will change. While state interest in big changes has been limited to date, a number of states have indicated at least preliminary interest in market stabilization activities. If Congress or the Administration can make good on attempts to offer funding to support this work, it is likely that more states will jump into the 1332 Waiver waters. In the meantime, states should take seriously the administration’s statements that it will support state-based reform, and, if they think such changes would benefit state residents, use the authority in Section 1332 Waivers to design change that fits their residents’ needs. States like Idaho are now promoting programs that propose to combine changes in Medicaid and the individual market to improve affordability and access to quality care across programs. It remains to be seen how the Administration will react to such proposals under current guidance.

To watch the HMA Information Services webinar on 1332 Waivers, please click here.

How Interagency, Cross-Sector Collaboration Can Improve Care for CSHCN: Lessons from Six State Initiatives

Families and care providers know that children and youth with special health care needs (CYSHCN) are best served through a coordinated approach across the myriad programs, agencies, and levels of government that touch them. However, states face structural, operational, financial, regulatory, and cultural challenges to breaking down traditional silos to achieve interagency, cross-sector collaboration.

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CMS Renews Healthy Indiana Plan Through 2021

HMA Medicaid Market Solutions helped the State of Indiana secure approval for an extension of its Medicaid Section 1115 Waiver, the Healthy Indiana Plan. Below is a summary of what the renewal entails. 

On February 1, 2018, Indiana received approval from the Centers for Medicare and Medicaid Services (CMS) to continue its long-standing Healthy Indiana Plan (HIP) with a three-year renewal. This CMS approval maintains the core of the HIP program and incorporates additional features, including expansion of the current Gateway to Work initiative to add required community engagement for non-exempt HIP members beginning in 2019. Also new is a substance use disorder component that will be available to all Indiana Medicaid members, including those enrolled in HIP.

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Texas Receives 1115 Waiver Renewal

This week, our In Focus section reviews Texas’ 1115 Medicaid waiver renewal. After more than a year of negotiations, on December 21st the Texas Health and Human Services Commission (HHSC) received CMS approval to extend the state’s 1115 waiver.[1] The Texas Healthcare Transformation and Quality Improvement Program waiver was initially approved by CMS as a five-year demonstration waiver that began December 2011 and ended September 2016 and included $29 billion in funding.  The waiver authorized the expansion of Medicaid managed care while preserving federal hospital funding historically received as supplemental payments. The waiver created two new funding pools:  the Uncompensated Care (UC) payment pool and the Delivery System Reform Incentive Payment (DSRIP) pool.

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Kentucky Becomes First State to Enact Community Engagement & Employment Requirements for Medicaid Members

This article was written by Senior Consultants Amanda Schipp and Lora Saunders of HMA Medicaid Market Solutions (HMA MMS). HMA MMS helped the Commonwealth of Kentucky secure a groundbreaking Medicaid Section 1115 Waiver. Below is a summary of what the waiver entails.

On January 12, 2018, Kentucky’s section 1115 Medicaid Demonstration Waiver was approved by the Centers for Medicare and Medicaid Services (CMS). The demonstration includes two significant components: an expansion of substance use disorder (SUD) services, including a waiver of the Institution for Mental Disease (IMD) exclusion, and the creation of a new Medicaid program for able-bodied adults, known as Kentucky HEALTH (Helping to Engage and Achieve Long Term Health). The demonstration contains several groundbreaking policies never previously approved by CMS, most notably, a requirement for non-exempt Medicaid enrollees to work or participate in approved work-related activities, such as education, training, or volunteering as a condition of Medicaid eligibility. This approval paves the way for the nine other states that also have pending waivers requesting similar work requirements.[1]

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CMS approves Kentucky Medicaid Waiver

The Centers for Medicare & Medicaid Services (CMS) has approved the “Kentucky Helping to Engage and Achieve Long Term Health” 1115 Medicaid Waiver, a five-year waiver that includes a “community engagement” or work requirement as a condition of eligibility for non-disabled adult Medicaid beneficiaries ages 19-64.

The decision from CMS represents the first approval of a Medicaid waiver that includes a work requirement as a condition of eligibility. Kentucky developed the waiver in collaboration with HMA Medicaid Market Solutions (HMA MMS).

Kentucky defines “community engagement activities” as 80 hours per month of employment, education, job skills training, and community service. Exempted groups include pregnant women, the medically frail, and full-time students. The waiver also includes “consumer-driven tools” that provide incentives for healthy behavior.

Come back to the HMA blog Monday to read more about Kentucky HEALTH.

Read the full text of the press release issued by the Kentucky Governor’s Office here.

Read the Kentucky HEALTH Demonstration Approval here.

Medicaid Managed Care Enrollment Update – Q4 2017

This week, our In Focus section reviews recent Medicaid enrollment trends in capitated, risk-based managed care in 27 states.[1] Many state Medicaid agencies post monthly enrollment figures by health plan for their Medicaid managed care population to their websites. This data allows for the timeliest analysis of enrollment trends across states and managed care organizations. Nearly all 27 states highlighted in this review have released monthly Medicaid managed care enrollment data into the fourth quarter (Q4) of 2017. This report reflects the most recent data posted. HMA has made the following observations related to the enrollment data shown on Table 1 (below):

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Highlights from NASBO Fall 2017 Fiscal Survey of States

This week, our In Focus section highlights some of the key findings of the Fiscal Survey of the States Fall 2017, released this month by the National Association of State Budget Officers (NASBO). The association conducted surveys of state budget officers in all 50 states from August through November 2017. The findings in the report focus on the key determinants of state fiscal health, highlighting data and state-by-state budget actions by area of spending. Below we summarize the major takeaway points from the report, as well as highlight key findings on Medicaid-specific and other health care budget items.

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Dual Eligible Financial Alignment Demonstration Enrollment Update

This week, our In Focus section reviews publicly available data on enrollment in capitated financial and administrative alignment demonstrations (“Duals Demonstrations”) for beneficiaries dually eligible for Medicare and Medicaid (duals) in 10 states: California, Illinois, Massachusetts, Michigan, New York, Ohio, Rhode Island, South Carolina, Texas, and Virginia. Each of these states has begun either voluntary or passive enrollment of duals into fully integrated plans providing both Medicaid and Medicare benefits (“Medicare-Medicaid Plans,” or “MMPs”) under three-way contracts between the state, the Centers for Medicare & Medicaid Services (CMS), and the MMP. As of November 2017, more than 400,000 duals are enrolled in an MMP, the second-highest monthly enrollment since the demonstrations began, according to state and CMS enrollment reports.

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