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Commonwealth Care Recommended Bid Specs. Board of Directors Meeting December 13, 2007. Outline of Presentation. Review Goals of Bid Process Discussion of staff recommendations to be included in CommCare Bid Specs. Bid Process - Goals.
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CommonwealthCare Recommended Bid Specs Board of Directors Meeting December 13, 2007
Outline of Presentation • Review Goals of Bid Process • Discussion of staff recommendations to be included in CommCare Bid Specs
Bid Process - Goals • Develop bid structure to allow for more aggressive bids across all four MCOs • Mitigate expected cap rate increase in Plan Types III & IV due to current risk selection • Grow enrollment and improve risk selection for enrollees between 150.1% to 300% of FPL • Ensure continued development of strong case management and utilization programs • Simplify plan type choices to meet the needs of enrollees • Strengthen program integrity
1. Auto-assignment Recommendation • To encourage competitive bidding and to allocate positive risk across all four MCOs, continue with auto-assignment for Plan Type I members only • Expand the number of geographic regions in which to apply the auto-assignment logic to 5 • Will not weight bids. Based on lowest composite rate • Allocate according to the logic on the following slide
2. Provider Reimbursement Rates Recommendation • Develop actuarial rate range for FY09 that reduces estimated level of provider reimbursement by 3-5% • Goal is to eventually reduce the provider unit price in program to approximate Medicaid levels
3. Co-pays and OOP Maximums Recommendation • Goal is to address the concerns of equity, sustainability and crowd-out • In support of this goal, need to bring co-pays more in line with the generous end of Massachusetts commercial insurance • Allow for more time and information to be available before voting on co-pay and OOP Max levels • Propose the following for the bid specs: • MCOs bid on current co-pay levels • Bid specs will provide an example of Co-pay levels (see Slide #11) • Board to vote on co-pay and OOP Max levels in February 2008
3. Co-pays and OOP Maximums (con’t) • Propose the following for the bid specs (con’t): • Bid Specs to include language that MCOs must accept Connector actuaries’ value of co-pay/OOP levels • Connector actuary to assign value to Board-approved levels in February 2008 • Adjustment to be applied uniformly to all bids
4. Dental Benefit Recommendation • For members above 100% of the FPL • Encourage MCOs to offer a preventive dental benefit • Would not be a required benefit, therefore, not included in the capitation rate (no cost to the Commonwealth) • Would allow those MCOs that choose to offer to differentiate on a “value-added” benefit basis • No change to Plan Type I – Mandatory benefit already included in the capitation rate
5. Eliminate Plan Type IV(PT III (Higher co-pay) & IV (Lower co-pay)) Recommendation • Eliminate Plan Type IV and replace with Plan Type III benefits (services, co-pays, OOP Max) • Necessary due to clear selection issue emerging in Plan Type IV relative to Plan Type III • Will reduce member confusion
6. Contract Review / Audit Recommendation • Include in bid specs full contract review and audit provision • Monitoring access to care standards • Accuracy of claims payments • Review of provider contracts • Chronic Care - assessing impact of • Utilization and • Chronic care management programs
7. Rx Management Recommendation • Leverage existing MCO pharmacy workgroup • Collaborate with MassHealth Rx Initiatives • Develop targeted programs most likely to impact cost trend • Examples: • Management of suboxone/subutex • Controlled substance abuse programs • Step therapy
8. CommonHealth Population Recommendation • Continue to work with MassHealth to evaluate ability / cost of moving population to more appropriate program • If determined feasible, will adjust capitation rate accordingly
9. Tiering of Academic Medical Center rates Recommendation • This issue would create a rate structure in which AMCs would be paid more for a high intensity inpatient admit and less for services more commonly serviced at a community hospital • Continue to work closely with EOHHS on this initiative • Include provision in FY2010 bid specifications if rate structure in place
10. Enrollee Contribution – (100.1 – 150% FPL) Recommendation • For Plan Type IIA (100.1 – 150% of FPL), member will pay 50% of the differential for selecting an MCO other than the lowest priced • Member paying 50% of cost is for FY09 only
11. Coordination with Other State Agencies Recommendation • Connector will include in bid specs a “placeholder” that ensures coordination with other state agencies around Cost / Quality initiatives • Multiple goals in implementing various state programs • Eliminate inefficiency and control administrative costs for MCOs • Improve quality of care and member satisfaction
12. Reinsurance PT III (& IV) Recommendation • Maintain existing aggregate risk sharing • Develop an additional risk-sharing mechanism at the individual member level • This would lower capitation payments to offset the cost of risk-sharing at the member level • Underlying assumption is that the individual mandate will attract better risk in 200 – 300% FPL • Is a shift of funds
12. Reinsurance PT III & IV (con’t) • In this example, the Connector would cover 75% of plan expenditures in the $10,000 to $80,000 total paid claims range for any PT III/IV enrollee in a year. Diagram is illustrative for discussion purposes only.
13. Risk Adjusted Premiums Recommendation • Will be implemented in FY10 • Will model effects of a risk-adjusted capitation payment in FY09 to determine MCO-specific impact