CMS Rule for Medicaid and CHIP Managed Care: The Effects of the Rule on Long-Term Care

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June 08, 2016

Recently, the Centers for Medicare & Medicaid Services (CMS) released a final rule (the Rule) affecting state Medicaid programs that use managed care organizations (MCOs) to deliver services to their beneficiaries. We held a webinar on Thursday, May 26 on the effects of the rule on long-term care. If you would like to view the webinar in its entirety or see the slides, click here.

We received some questions during the webinar that we were not able to answer in the time allotted – here are those questions – answered with our perceptions of the Rule.

Q: What funding is available for the Beneficiary Support System (BSS)? Will there be an enhanced federal match? How will states ensure the CBOs have adequate resources to take on the enhanced responsibilities and additional client need in the BSS?

A: Yes, the Center for Medicare and Medicaid Services (CMS) Medicaid and CHIP Managed Care Rule (the Rule) provides a federal match, Federal Medical Assistance Percentages (FMAP), for supporting choice counseling, enrollment activities and the long-term services and supports (LTSS) beneficiary support functions. The amount of assistance is dependent on the State’s current FMAP rate. Section 438.816 of the Rule provides details about the LTSS support, while the other activities are covered under Section 438.810. However, the availability of this Federal match is dependent upon the following conditions:

  • No Service Redundancy: Services must be non-duplicative of Medicaid services or activities by other programs, such as some functions of the Long-Term Care Ombudsman that are paid by other programs.
  • Meeting Conflict of Interest Provision: The entities providing BSS services must meet the conflict of interest provisions that are contained in the Rule, similar to those for choice counseling and other BSS services.
  • CMS Approval: The state must seek approval for its BSS from CMS.
  • Supported by a Cost Allocation Methodology: The state must support the costs for the BSS by a cost allocation methodology that has been provided in a state’s approved cost allocation plan.

The Managed Care Rule does not specify how and under what circumstances states can disburse this additional money to CBOs. While the preamble to the Rule encourages states to use existing entities for providing these enhanced BSS, there is no specific direction as to how to expand the scope of services provided by community groups. Further, there is no discussion of how local Community-Based Organizations (CBOs), many of which are nonprofits operating on limited budgets, can gain the necessary resources to provide additional services to an expanded population. Therefore, many states will have to think about the capacity of their existing CBOs in designing these support systems, determining whether to leverage the existing infrastructure or build it anew.

In many states, there may well be existing publicly-funded entities that have the necessary knowledge to perform these functions including Area Agencies on Aging (AAAs), Centers for Independent Living (CILS), Long-Term Care Ombudsman programs or Protection and Advocacy agencies.

Where such entities are strong, one approach would be to use enhanced FMAP to provide additional grant funding to such agencies. However, some complexity may arise in this approach as some AAAs, CILS, and other CBOs may have conflicts of interest because they deliver services or perform other functions that prevent them from conforming to the conflict of interest provisions in the Rule.

Another potential avenue could be to expand the role of the state’s existing conflict-free Enrollment Broker, especially those who have in-depth experience working with LTSS populations and providing support in navigating the health care system. However, many enrollment brokers have limited experience with grievances, appeals and hearings, or may not have experience with the post-enrollment LTSS needs of specific subpopulations.

States will need to map their existing resources and assets to determine the best options for implementing the beneficiary support LTSS functions.

Q: If a beneficiary has a number of consecutive issues, some MLTSS and some clinical, and they raise a couple of them through internal plan grievances and don’t get good solutions, must they file a grievance or complaint on EACH issue in order to bring an external appeal?

A: There is no specific discussion about this particular circumstance in the Rule. Since the Rule does not explicitly address it, states may wish to seek additional clarification from CMS.

The Rule leaves it up to the state to design its own grievance and appeals system. Therefore, it is a state decision as to how it wants to have plans handle multiple sequential grievances and appeals from a single beneficiary.

Additionally, the Rule does not make special provisions for LTSS beneficiaries. The Rule allows the plan to perform only one level of appeal, and then requires the state to provide a fair hearing. States have the option to establish external review processes, as long as such reviews do not extend the timeframes stated in the regulation.

The Rule does create a distinction between a grievance and an adverse benefit determination, and the timeframes are an important consideration. The start of the process for a grievance begins when the individual submits the complaint, and must be resolved within 90 days. For adverse benefit determinations, the process hinges on the date of the determination. Individuals have 120 calendar days from notice to file an appeal with the plan, and the plan has 30 days to address the appeal.

Finally, it is important to note that the Rule provides for “deemed exhaustion” of the internal appeals process if a plan fails to follow the notice and timing requirements for grievance and appeals. States will need to be very clear about the processes in their contracts with plans.

Q: Does the internal grievance/complaint requirement purport to impact the right to bring private actions under federal civil rights laws?

A: No, there is nothing in the Rule that affects the right to bring private actions under current federal civil rights laws.

Q: One of the primary challenges with the LTSS population is barriers to care coordination in order to keep services in place. Is there a plan to help identify and reduce key barriers that are universal regardless of state?

A: Today, each state determines what services and supports to incorporate into its waiver and state plan programs, including the approach to case management and care coordination. The Rule does not specify what services a state must provide. Therefore, states will have to decide individually what services they wish to provide to reduce barriers. Many will be state-specific, depending upon the unique characteristics and needs of the individual state. While CMS and/or the Administration for Community Living (ACL) may provide some guidelines to help states address such universal barriers, it is unlikely that these agencies will provide a national strategy based upon the Rule.

One thing the Rule does do, however, is codify the requirements on “in lieu of services.” By doing this, the Rule allows states to plan how they want to define this concept to enable services not available under traditional programs. States can define in lieu of services that address service needs in innovative ways, providing greater flexibility for states to identify and reduce key barriers such as psycho-social challenges, transportation, safety and other universal concerns.

If you are interested in continuing the conversation with us, we will be holding two more webinars regarding the Rule that you can register for here. You can also email us with more questions or for guidance on how to bring your state into compliance.

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