Family Care Residential Rate Setting Methodology Project

1. 1 Family Care Residential Rate Setting Methodology Project 

2. 2 Introduction Early 2010, DHS initiated residential rate setting project for the Family Care program. Purpose of project: establish a uniform methodology for determining all-inclusive rates for services provided by community-based residential programs that reflect the reasonable costs of services in relation to the acuity of members served. DHS has held five stakeholder meetings since April to gather input and keep stakeholders apprised of approach under development.

3. 3 Introduction Meeting Agenda General background Technical updates to model Discussion of policy approaches to: Scope of Services Vacancy Rate/Bedhold Payments Member Funding of Enhanced Services Long Term Care Functional Screen: Review of comments received and next steps Implementation Approach Next Steps

4. 4 Residential Rate-Setting Team Members Fredi Bove, DLTC Deputy Administrator Tom Lawless, Director, DLTC Bureau of Financial Management Rebecca Hotynski, DLTC Bureau of Financial Management Monica Deignan, Director, Managed Care Section Charlie Jones, Managed Care Section Deb Rathermel, Managed Care Section Dana Raue, Project Manager Jim Robinson, Director, UW Center for Health Systems and Research Analysis (CHSRA)

5. 5 Conceptual Framework for Residential Services Rate Setting Model Key characteristics Incorporate client acuity Incorporate provider facility characteristics Incorporate provider cost data and/or proxy data Link provider cost/proxy data to client acuity data on an individualized basis and to provider characteristic data Reflect policy objectives regarding best practice service and business models

6. Residential Services Rate-Setting Model First stage regression: Determination of a member�s acuity index (CMI) 170 items on LTCFS considered as possible cost drivers Based on regression analysis, 98 items were determined to be significant cost factors DHS also examined whether certain combinations of characteristics were additional cost drivers (e.g., dual diagnosis of DD and mental illness) An individual�s acuity index (CMI) is the product of his/her specific acuity factors Acuity index for each member is calculated before consideration of residential setting

7. Residential Services Rate-Setting Model Second stage regression: Determination of provider rate Separate regression for each residential setting Owner-occupied AFH Corporate AFH 5-8 bed CBRF Over 8 bed CBRF RCAC

8. Residential Services Rate-setting Model Factors used in second stage regression Member�s acuity index Member�s target population (DD, PD, FE) Demographic information about member (age) Whether member receives a significant amount of his/her daily services outside the residential setting and/or from other providers

9. Residential Services Rate-Setting Model Key refinements in regression model since Sept. stakeholder mtg Corrected error in coding of incontinence item Eliminated LTCFS items that were irrelevant to individuals living in residential settings (e.g., support at risk in next 4 months) Included violent males and females as a combination factor Corrected size definition of the two types of CBRFs: (a) 5-8 bed CBRFs and (b) 9+ bed CBRFs Added respite care for members in owner-occupied adult family homes to the set of �offsetting services� Used county of residence, rather than county of responsibility, in second stage regression to reflect accurately geographic location of facility Refined resident risk loading methodology

10. Residential Services Rate-setting Model Detailed Charts show rate calculation for two examples Female elder in 8+ bed CBRF in LaCrosse 30-year old male with DD in corporate AFH in Portage These represent examples; different rates would be generated for members who have different characteristics, are in different residential settings and/or are in different geographical locations

11. Approaches to Policy Issues: Scope of Services To achieve consistent application of residential rate setting methodology across all MCOs, the scope of services covered by the residential services rate setting methodology must be defined and applied consistently A Scope of Services document was developed through a collaborative Department/MCO workgroup last year Department intends to apply the scope of services document in the new residential rate setting methodology Will develop further clarification on items, where needed

12. Approaches to Policy Issues: Vacancy Rate/Bedhold Payments Encounter and provider cost data used in the model reflect an average vacancy rate. DHS does not intend to make any further adjustment to the vacancy rate Encounter and provider cost data used in the model reflect the average historic bedhold payment; therefore the average bedhold payment is imbedded in the daily rate generated by the model Federal government does not allow a bedhold payment to a residential provider when the individual is receiving MA-funded services in another setting, such as a hospital or nursing home Due to this federal restriction, under the residential rate setting methodology, a residential services payment will not be made to the providers for days when the member is out of the residence and is receiving Medicaid funded services in another setting. Room and board payment to the residential provider may continue during the days a member is absent and receiving MA-funded services in another setting

13. Approaches to Policy Issues: Member Payment for Enhanced Services General Principles Ensure that basic care plan services are not treated as �enhanced� services that are billed to and expected to be reimbursed by members Provide members and families the discretion to purchase enhancements above the care plan services For services in the Family Care benefit package (i.e., services other than room and board) Scope of services document defines services included in the residential services rate Member�s individualized care plan specifies the services, including the services from the set of �scope of services� items, needed for the individual Members and families may choose to purchase enhanced services beyond those defined in the care plan MCOs will be expected to conclude an agreement with the member/family and provider expressing the member/family�s informed consent to fund the enhanced services. Room and Board: Scope of services document defines services included in room and board Members and families may purchase additional room and board amenities beyond the scope of services level

14. Long Term Care Functional Screen: Follow-up and Next Steps Clinical staff from Department and EQRO reviewed all stakeholder comments on LTCFS A number of items identified by stakeholders are already captured by the LTCFS (e.g., tube feeding, nursing care) Some characteristics are captured by the screen, but may not be given sufficient weight in the model (e.g. sex offenders) These cases are likely to be outliers, and handled through the outlier process

15. Long Term Care Functional Screen: Follow-up and Next Steps Limited number of items identified by stakeholders are not currently captured by LTCFS: Need for 2-person staff Need for all male staff Certain criminal behavior, such as shoplifting These cases are likely to be treated as outliers Department intends to examine further those items not currently captured on screen to determine if a short supplementary data collection tool should be developed and implemented to supplement the LTCFS in the residential rate-setting model. If implemented, a supplementary data collection tool would need to collect at least one year of �base� data to be used to calculate weighting factors For this reason, any supplementary data items would be incorporated into the residential rate setting model in out-years after 2011

16. Status and Implementation Issues The Department is committed to developing and implementing the residential rate-setting methodology in a careful and thoughtful manner. Rate setting project is currently in the impact analysis stage; further refinements in the methodology will be undertaken to improve the accuracy of the model and to avoid unintended consequences DHS will be developing strategies to minimize disruptions to clients and providers, including development of an �outlier� policy to address cases that significantly deviate from the projected rate The Department recognizes that it is important for all providers and stakeholders to be informed about the new methodology and for MCOs and providers to have an opportunity to discuss the specific rate implementation applicable to each provider.

17. Implementation Issues The Department views this communication stage as the first step in implementing the new methodology. The first quarter of 2011 will be devoted to broad-based communication to providers and other stakeholders, individualized communication between MCOs and providers and the completion of any additional analysis needed No rate changes based on the new methodology will occur in the January-March 2011 period. Rate changes based on the new methodology will go into effect as soon as possible after the first quarter of 2011, after all necessary communications and analysis have been completed. MCOs may extend current contracts between MCOs and residential providers at the current rates until the date in 2011 when the new rate methodology becomes effective.

18. Next Steps Continue analytic work to identify any additional methodological refinements to the model Develop outlier criteria and approach Complete development of implementation strategy Engage in broad based stakeholder discussions and individualized provider/MCO communications

19. 19 Next Steps We welcome questions and comments DHS will continue to provide updates and opportunities for stakeholder comment as we proceed with the residential rate project. DHS has established a listserv for those interested in receiving all updates on the project Information on the project, including listserv signup, is available at DHS website: http://www.dhs.wisconsin.gov/ltcare/ProgramOps/ResidentialRate