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Medicaid Waiver Briefing. March 10, 2010. Background Problem with current process Potential solution Pros and cons for Mecklenburg County Next Steps. Overview. Background.
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Medicaid Waiver Briefing March 10, 2010
Background Problem with current process Potential solution Pros and cons for Mecklenburg County Next Steps Overview
Background • The vision of Area Mental Health (AMH) is to be a community system that empowers and supports individuals to lead healthy and independent lives. • With the exception of providing a few direct services, Area Mental Health manages a system of community-based providers that offers mental health, substance abuse and developmental disability services.
Funding for services In Mecklenburg County, public funding for mental health, substance abuse and developmental disabilities services has three sources: Medicaid Funding $180,000,000 76% State Non-Medicaid Funding $18,706,612 8% Mecklenburg County Funding $39,090,372 16%
Current authorization process Consumers/Providers Value Options Area Mental Health Medicaid Funded Services State Non-Medicaid Funded Services Mecklenburg County Funded Services
Problems with current process • Creates a disjointed system • Providers must obtain two authorizations – AMH and Value Options • Ignores local knowledge and input • Located in Raleigh, Value Options does not know the specific needs of the Mecklenburg County community • Creates delays in authorizing needed care • Process is cumbersome and time consuming • Since Value Options authorizes care for the entire state, delays often occur
Problems with current process • Focuses on profit rather than service quality • Value Options is a private for-profit managed care company • Value Options does not reinvest profit into additional services • Quality standards are minimal for providers
Opportunity to improve service • The Division of Medical Assistance (DMA) has asked for LMEs to apply for an exemption from the current rules and authorization process • This exemption is called a Medicaid “waiver” • If AMH becomes a waiver site, it could directly manage Medicaid funding and authorization of services for Mecklenburg County residents
Medicaid waiver opportunity Consumers/Providers Value Options Area Mental Health Area Mental Health Medicaid Funded Services Medicaid Funded Services State Non-Medicaid Funded Services Mecklenburg County Funded Services
Becoming a Medicaid waiver site • AMH would: • Authorize state, County and Medicaid services creating a seamless system of care for consumers and providers • Have the authority to “waive” certain Medicaid restrictions • Receive a fixed amount of funding to authorize and manage services for Medicaid recipients in Mecklenburg County
Benefits of waiving Medicaid rules • Create quality standards that are outcome based • Reduce paperwork • Manage provider enrollment and competency standards • Set rates for providers based on market availability and local conditions • Match need for services with provider recruitment
How managing Medicaid works Fixed funding amount based on the number of Medicaid recipients in the County AMH manages services provided to consumer • Reinvest • Additional services • Quality Improvement Savings 8.5% administrative fee paid to AMH
How funding amount is set • Medicaid payment amount based on actuarial data • AMH would also hire a consultant to make sure that the State calculations are accurate • The fixed fee is estimated to be between $165 and $190 million based on prior trends • Additional 8.5% of the fixed fee will be for administrative costs • Once the payment amount is set, DMA will add an additional 2% in the fixed fee to fund a risk reserve (estimated between $3 to $4 million per year)
Medicaid dollars spent locally *Medicaid dollars spent in Mecklenburg County on mental health, substance abuse and developmental disabilities services
Who else is a Medicaid Waiver site? Piedmont Behavioral Health Local Management Entity (PBH) since April 2005. • Serves Davidson, Cabarrus, Rowan, Stanly and Union counties Positive outcomes include: • Savings of $6 million a year for the first two years • Reinvestment of savings into additional services • Services to more residents • Opening of new crisis stabilization units in several counties • 89% overall satisfaction with services from providers
Pros for Mecklenburg County • Improve access to and quality of local services • Incentivized to control Medicaid costs • Greater flexibility to distribute resources based on need and changing priorities of Mecklenburg County residents • Improve customer service through local point of contact for customers and providers • Benefit from AMH staff expertise in managed care • Gain local control of state hospital dollars
Cons for Mecklenburg County Potential cost overages $400K start up investment Recouped over time Prior to implementation, AMH would hire 22 new staff for two months to train and prepare for new responsibilities After the start up, Medicaid funding would pay for staff • DMA will add an additional 2% in the fixed fee to fund a risk reserve (estimated between $3 to $4 million) • AMH would manage risk by providing residents the right service in the right amount at the right time
Community endorsements Unanimous approval from the following AMH community committees: • The Consumer and Family Advisory Committee comprised of service consumers and/or family members of consumers • The Community Advisory Committee comprised of advocates, providers, stakeholders and consumers • The Executive Committee of the Provider Council comprised of providers elected to represent the Provider Council: Anuvia Easter Seals Family Preservation First Choice Footprints Genesis Project LifeSpan Mecklenburg Open Door Person Centered Partnership Provided Services Organization SAIL Residential and Support Services True Visions Autism Services
Application Requirements • Must end provision of direct services by time of application (April 14, 2010) • The Provided Services Organization (PSO) of Area Mental Health would become a separate county department or consolidate with a current county department • Must have majority support of the Board of County Commissioners • Must have full support from the Consumer and Family Advisory Committee (comprised of consumers and/or family members of consumers)
Next steps • Get approval from the Board to submit the application on April 14, 2010 • Action item will be on March 16 Board Agenda • Complete series of public meetings for stakeholders and providers to gain additional input
Next steps If chosen by DMA to prepare for implementation for January 2011, AMH will: • Negotiate fixed rate with DMA • Hire approximately 22 new employees • Set systems in place to manage utilization • Increase staffing as needed over the course of the waiver based on volume and revenue