Connecticut HUSKY A Waiver

Behavioral Health Services Carve Out Methodology

Presented at the March 9, 2005 BH Oversight Committee meeting

Overview

_ Base Data

_ Encounters

_ RFI

_ Financials

_ Administration

_ Reinsurance

_ Summary

Base Data

_ Three sources

_ encounters

_ RFI

_ financials

_ Coverage grid

_ detailed grid of services to be carved out

_ Base year SFY03

_ Summarized and analyzed on PMPM basis

_ Trend to carve out implementation date

Base Data - Encounters

_ Criteria

_ encounters flagged in correspondence with BH coverage grid

_ flagged based on procedure code, diagnosis code, provider type, etc.

_ Adjustments

_ completion

_ MCO credibility

_ program changes

_ relational modeling

Base Data - RFI

_ Supplemental data request from DSS

_ Corresponds to BH coverage grid

_ BH professional services

_ estimated based on one MCO's reported data

_ Adjusted for reinsurance

_ Blended for MCO credibility

Base Data - Financials

_ MCO submitted financial data

_ Not specific to BH coverage grid

_ BH inpatient and BH outpatient lines

_ BH professional services estimate

_ Adjusted for reinsurance

_ Blended for MCO credibility

Base Data - Trend

_ Applied to base data to project SFY06

_ Applied by category of service

_ BH inpatient

_ BH outpatient

_ professional services

_ Developed based on analysis of historical HUSKY A encounter and financial data

_ Consistent with HUSKY A rate setting process

Base Data - Blending

_ Three sources of data

_ blended to yield one comprehensive estimate of BH services carve out PMPM

_ Best estimate based on available data sources

_ Reasonability checks

BH Carve Out Estimates

Administration

_ Determination of BH-related administration

_ supplemental data requests to MCOs

_ follow up communication with MCOs

_ BH subcontractor financials

_ Administration as a percentage of BH service cost

BH Administration Estimates

BH Reinsurance

_ Reinsurance data (SFY03) pulled from database

_ Adjustments made to each base data source

_ Riverview and non-Riverview amounts determined based on database

_ Base trended to appropriate time periods

BH Reinsurance Estimates

Riverview Reinsurance

_ DSS reinsures HUSKY MCO cash payments to Riverview under reinsurance

_ Riverview reinsurance expenditures have been off-budget for several years

_ Under the carve-out, Riverview stays will be shadow claimed, which means Riverview expenditures will remain off-budget

_ Riverview expenditures are included in the waiver analysis because they are Medicaid expenditures for which the state receives a Federal share

Summary

_ BH coverage grid detail

_ Three base data sources blended to determine base carve out PMPM

_ Base PMPMs trended forward using trends consistent with capitation rate setting

_ BH administration based on supplemental data

_ BH reinsurance pulled from reinsurance database

Next Steps

_ DSS requested Mercer review MCO operations including behavioral health

_ administration

_ finance

_ claims

_ systems

_ Reviews to be completed Feb-March 2005

_ Final BH carve-out amount to be negotiated with each health plan

Connecticut Community KidCare - BHP

Methodology for Setting

Rates and Fees

Terminology

_ The Departments uses the term rates when referring to payments that are provider specific.

_ The term fee is used for payments that are uniform across all providers and published on a fee schedule.

Current HUSKY Program

_ Many providers are subject to uniform fee schedules, which vary across the four MCOs

_ Other providers have rates that they have negotiated with the MCOs. Rates for a given service may vary across MCOs and across providers

Rates and Fees under KidCare

_ The Departments will establish a single set of rates and fees for each provider type and service

_ Proposed methods balance need for fair and efficient rate methods with the need to avoid significant disruptions in provider revenue

Provider specific rates

_ General hospital - inpatient, PHP, IOP, EDT

_ Psychiatric hospital - inpatient, PHP, IOP, EDT

_ Psychiatric residential treatment facility - inpatient

_ Alcohol and drug center - acute detoxification, ambulatory detoxification

_ Mental health clinic - PHP, IOP, EDT

_ Methadone maintenance clinic - methadone maintenance

Provider specific rates

_ SFY 2003 utilization

_ Rates in effect as of March 1, 2004

Rate = MCO 1 (Volume * Rate) + MCO 2 (Volume * Rate)

MCO 1 Volume + MCO 2 Volume

Uniform fees

_ Hospital routine outpatient

_ Independent practitioners

· Psychiatrists

· Psychologists

· APRNs

· Masters level clinicians (LCSW, LMFT, LPC, LADC)

_ Home health care agency services

_ School-based health center services

Uniform Fees

_ SFY 2004 utilization

_ Fees in effect as of December 2004

Fee = MCO 1 (Volume * Fee) + MCO 2 (Volume * Fee)

MCO 1 Volume + MCO 2 Volume

Uniform Fees

_ MH Clinic routine outpatient services

_ SFY03 encounter data used to model volume and expenditure allocation across services

_ Total volume and expenditures than increased to match SFY03 RFI data

_ Fees adjusted to uniform percentage of Medicare

_ Selected fees exempted from Medicare adjustment to support access (medication management, group therapy, testing)

Future Adjustments

_ Departments propose to adjust behavioral health provider rates under the waiver when rate adjustments are appropriated for the HUSKY MCOs

_ Governor's budget provides for 2% in SFY06 and 0% in SFY07

_ Departments will invest final appropriated rate increase in behavioral health rates and review any proposed rate methodology in advance with the Behavioral Health Oversight Committee.