Commonwealth Coordinated Care Update and the Future of Medicaid Payment

As we reported last month, in late September the Department of Medical Assistance Services (DMAS) announced in an email message that the agency had approved provider agreements submitted by Virginia Premier Health Plan, Inc. including the plan’s nursing facility agreement.  The message also indicated that DMAS had approved all agreements submitted by HealthKeepers (Anthem/WellPoint) except for the nursing facility agreement.  Finally, the Department indicated that none of the provider agreements submitted by Humana have been approved at this time.  Virginia Premier officials stressed that the approved plan will serve as a template for individual provider agreements and provides the flexibility to incorporate contact provisions that foster innovative and effective approaches for care coordination.

DMAS officials confirmed earlier this week that the Centers for Medicare and Medicaid Services (CMS) has still not issued blended Medicare-Medicaid rates to health plans participating in Virginia’s dual demonstration.  Given that participating plans do not know how much they are going to be paid by CMS and DMAS under the Commonwealth Coordinated Care (CCC) demonstration, we again encourage our members to delay the execution of provider agreements until the plans are able to provide more payment details.  DMAS recently made available a set of slides developed to provide a general introduction to the CCC demonstration.  Members are encouraged to review this information which focuses primarily on the demonstration from a beneficiary perspective and not that of a provider.

VHCA members continue to participate in a formal DMAS nursing facility payment workgroup charged with the task of analyzing and developing options for transitioning from our current cost-based payment methodology to a price-based system.  Under a price-based system, facilities will be paid for Medicaid services in a manner similar to Medicare PPS RUGs payment for skilled nursing services.  Prospective prices are likely to be established for each RUG category within designated geographic peer groups.  A key factor in the research now under way focusing on price-based Medicaid payment is to create a payment methodology that health plans can readily adopt for facility payment under the CCC demonstration. The payment workgroup has modeled a number of alternative price-based design parameters and is continuing to investigate options that will create a system that is as fair and equitable as possible.  Earlier this week, members of VHCA’s Payment for Services Committee were briefed on the efforts of the workgroup and provided feedback to both the workgroup members as well as DMAS staff overseeing this effort.  In connection with this week’s Payment for Services Committee meeting, DMAS developed presentation materials that provide a comprehensive overview of the workgroup’s price-based payment system efforts.