Essential Health Benefits Habilitation: The Arkansas Approach

1. Essential Health BenefitsHabilitation: The Arkansas Approach April 24, 2013 David Ivers Mitchell Blackstock Ivers & Sneddon 1010 W. Third St. Little Rock, AR 72201 501 519-2072 divers@mitchellblackstock.com These materials are for instructional purposes only, and are not to be relied on for legal advice. Legal counsel should always be consulted for specific problems or questions.

2. Ten Essential Health Benefits (1) Ambulatory patient services (2) Emergency services (3) Hospitalization (4) Maternity and newborn care (5) Mental health and substance use disorder services, including behavioral health treatment (6) Prescription drugs (7) Rehabilitative and habilitative services and devices (8) Laboratory services (9) Preventive and wellness services and chronic disease management (10) Pediatric services, including oral and vision care

3. Habilitation Conundrum • Affordable Care Act requires Essential Health Benefits to resemble typical small employer plans • But most employer plans do not cover habilitation • Private insurers lack experience in this area • Lack of actuarial data causing insurers to err on side of caution, restricting benefit

4. The Arkansas Advantage • Arkansas has a unique advantage over most other states when it comes to habilitation. • Arkansas has one of the few Medicaid programs with a long history of providing habilitative services to all adults and children who qualify. • We know how much it costs. • We have providers who are already licensed and located in all areas of the state.

5. Habilitation PopulationUnder Medicaid • DDTCS serves about 8,858 children and adults • CHMS serves about 4,400

6. Exchange Planning Process Series of meetings in late 2012/early 2013 • Plan Management Advisory Committee • Steering Committee

7. Where we started:What is habilitation? • self-help/adaptive • sensory motor • communication • cognition • social/emotional

8. What else is there besides therapy? Eventually the committees came to understand the importance of the developmental services provided by non-therapists.

9. How we explained it • Developmental services are training in the acquisition or maintenance of motor, cognitive, communication, social/emotional and self-help/adaptive skills and functional activities needed for daily living.

10. How we explained it – cont. • Developmental services must be performed in a licensed or certified, organized, multidisciplinary clinic-based individual or group setting by a direct support professional with a least a high school degree under the supervision or direction of a Qualified Developmental Disability Professional (QDDP) or an Early Childhood Developmental Specialist.

11. How we explained it – cont. • Developmental services must be furnished under a prescription and in accordance with the goals and objectives in a written treatment plan certified by the treating physician.

12. Definition Adopted Definition: • Habilitative services are services provided in order for a person to attain and maintain a skill or function that was never learned or acquired and is due to a disabling condition.

13. What services will be covered Coverage: • Subject to permissible terms, conditions, exclusions and limitations, health benefit plans, when required to provide essential health benefits, shall provide coverage for physical, occupational and speech therapies, developmental services and durable medical equipment for developmental delay, developmental disability, developmental speech or language disorder, developmental coordination disorder and mixed developmental disorder.

14. Equipment Too Durable Medical Equipment when prescribed by a physician (doctor of medicine or doctor of osteopathy) or an advanced practice nurse according to the guidelines specified below: a. Durable Medical Equipment is equipment which (1) can withstand repeated use; and (2) is primarily and customarily used to serve a medical purpose; and (3) generally is not useful to a person in the absence of an illness or injury; and (4) is appropriate for use in the home. b. Durable Medical Equipment delivery or set up charges are included in the Allowance or Allowable Charge for the Durable Medical Equipment.

15. Equipment Too – cont. c. Replacement of DME is covered only when necessitated by normal growth or when it exceeds its useful life. Maintenance and repairs resulting from misuse or abuse of DME are the responsibility of the Covered Person. d. When it is more cost effective, the Company in its discretion will purchase rather than lease equipment. In making such purchase, the Company may deduct previous rental payments from its purchase Allowance.

16. Arkansas vs. Other States Arkansas definition and coverage reported in Insurance Commissioner Directive 1-2013: http://insurance.arkansas.gov/legal.htm Some other states: http://www.statereforum.org/weekly-insight/defining-habilitative-benefits

17. ACA Prohibition on Discrimination • Insurers may not discriminate in benefit design on basis of: • Age • Expected length of life • Present or predicted disability • Degree of medical dependency • Quality of life • Other health condition 45 C.F.R. 156.110(d)

18. Prohibition on Discrimination – cont. Prohibits benefit discrimination on the basis of factors including: • Race • Color • National origin • Disability • Age • Sex, • Gender identity and sexual orientation Source: Section 1302(b)(4) of the Affordable Care Act and 45 CFR 156.200(e)

19. ACA “Balance” Requirement QHPs must: “Ensure an appropriate balance among the EHB categories to ensure that benefits are not unduly weighted toward any category.” Source: 45 C.F.R. 156.110(e)

20. Dollar Caps ProhibitedBut Not Limits • No dollar limits -- but plans may impose limits on days, visits, etc.

21. Likely Habilitation Coverage • Possible: “Parity” with rehab: 30 outpatient visits and 60 days of inpatient habilitation – doesn’t make sense for habilitation • Better – 90 outpatient visits • Best – Multiplier approach: 90 hours of therapy or (5 x 90 = 450 hours) 90 days of developmental services, or equivalent combination* *still will not cover amount of services under current clinic based model

22. Not the Last Word • Definition good for 2 years • HHS/CCIO will evaluate states’ experience with habilitation during this time and then revisit the issue

23. Problems Yet to be Addressed • Problem – not enough to cover ongoing habilitation for developmental disabilities – individuals will run out each year • Does not take into account lifelong condition • Not clear whether such approach meets ACA non-discriminatory and “balanced” approach • Insurers concerned about premium increases if have to pay for full duration

24. Incentives To the extent that private plans do not provide habilitative benefits commensurate with Arkansas Medicaid’s state plan coverage, this will continue to incentivize families to depend on Medicaid.

25. Key Deadlines • June 30, 2013 – Deadline for insurers to submit plans and rates for review • July 31, 2013 – Arkansas makes recommendations to CMS on which plans to certify • Early Sept. 2013 – HHS certifies plans • October 1, 2013 – Enrollment starts • January 1, 2014 – Coverage begins