What management issues should states be aware of?
Medicaid Management Information Systems (MMIS)
The drive for better management of the most common Medicaid diseases comes from the rapid changes in information technology. For over 30 years, most Medicaid agencies have used the Medicaid Management Information System (MMIS). Primarily a claims processing system, many states are now adopting new generation MMIS and applying the tools of relational databases, data warehousing, and the power of the Internet to study diseases, look for adverse outcomes, and implement corrective actions or interventions.
Since October 1972, Public Law 92-603, section 235, has provided for 90-percent Federal financial participation (FFP) for design, development, or installation, and 75-percent FFP for operation of State mechanized claims processing and information retrieval systems. For Medicaid purposes, the Medicaid Management Information System has been the standard (see CFR 250.90 and 42 CFR 433, subpart C).
The objectives of this system and its enhancements include: title XIX program control, tracking administrative costs; service to recipients, providers and inquiries; operations of claims control and computer capabilities; and management reporting for planning and control. Most states use contractual services to perform work for the design, development, installation, or enhancement of mechanized claims processing and information retrieval system. A fiscal agent who is a private contractor to the State, normally selected through a competitive procurement process, operates the State's MMIS.
The standard files include an eligibility file, with a current and historical record of eligible person including name, age, sex, address, and reason for eligibility among many other items. The eligibility files can be linked by a person identifier to huge claims records for all types of claims with information on dates of service, payment amounts, and date paid, among many other items. Finally, the claims files can be linked to a database on current and past providers of all types, including information their credentials, billing address, and many other items.
Disease-Structured Database
These basic MMIS claims files can be reorganized into a disease-structured database. They do not necessarily replace the old MMIS standard files, but create a different set of relationships among records and create new summary information at the person level.
The process starts with a search of some, most, or all of the various claims records. It is possible to identify patients with certain diseases Searching for diagnosis-related group in the inpatient files; or international classification of diseases (ICD) code in the hospital, emergency, outpatient, or physician office visit files; or National Drug Code (NDC) code in the prescribed medicine file;. This is a claims-based definition of diseases.
State Waivers & Demonstration Authority
Disease management programs that qualify as a medical service can be authorized through state plan amendments or waivers. You may implement a totally voluntary program immediately without waivers. Merely a plan amendment will suffice. But if you wish to implement in a portion of the state or change the freedom of choice of recipients in your program, waivers of federal provisions of Medicaid may be needed. Because of the Balanced Budget Act of 1997, these waivers are supposed to be easier to obtain.
Waiver authority can provide states with greater flexibility to design more focused programs. For instance, states that want to limit the number of disease management providers in order to achieve better cost and administrative efficiencies may request selective contracting authority under section 1915(b)(4) of the Social Security Act. Waiver authority also can be used to intentionally restrict geographic areas where disease management is available; restrict eligible beneficiaries (e.g., exclude Medicare beneficiaries); or mandate beneficiary enrollment.
1115 Demonstration Authority: The purpose of Section 1115 of the Social Security Act provides the Secretary of Health and Human Services with broad authority to authorize experimental, pilot, or demonstration project(s) which, in the judgment of the Secretary,(are) likely to assist in promoting the objectives of (the Medicaid statute).
General features of the waiver include broad flexibility to sufficiently allow States to test substantially new ideas of policy merit. States commit to a policy experiment that will be evaluated. Section 1115 should demonstrate something that has not been demonstrated on a widespread basis, the specific research/demonstration finding will be drawn from the projects results. The waiver also provides flexibility for the provision of services which are not otherwise matchable and allows for the expansion of eligibility for those who would otherwise not be eligible for the Medicaid program. CMS maintains the responsibility to evaluate the project, including state specific and cross-state analyses of impact on utilization, insurance coverage, public and private expenditures, quality, access, and satisfaction. Waivers are generally approved to operate for a five year period and the demonstration must be budget neutral, meaning simply that the demonstration cannot be expected to cost the Federal government more than it would cost without the waiver.
For an overview of recent waiver activity (since January 2001) and a
review of the implications for coverage and access to care, please visit
the Kaiser Family Foundation web site for New
Directions for Medicaid Section 1115 Waivers: Policy Implications of Recent
Waiver Activity.
Pharmacy Plus: Section 1115 demonstration authority may be used to extend
pharmacy coverage to certain low income elderly and disabled individuals
who are not otherwise eligible for Medicaid. The demonstrations may offer
assistance by providing pharmaceutical products, assisting individuals
who have private pharmacy coverage with high premiums and cost sharing,
or providing wraparound pharmaceutical coverage to bring private sources
of pharmacy coverage up to the level of desired demonstration benefit
coverage. The demonstrations may include incentives for individuals with
private pharmacy coverage to not drop their existing coverage in favor
of demonstration pharmacy coverage. States are encouraged to adopt competitive
private sector approaches to provide more cost effective, modern prescription
drug benefits in Medicaid. The demonstrations will test how provision
of a pharmacy benefit to a non-Medicaid covered population will affect
Medicaid costs, utilization, and future eligibility trends. For more information,
visit http://www.cms.hhs.gov/medicaid/1115/RXFACTSHEET41202.pdf.
1915(b) Freedom of Choice Waivers: Through a 1915(b) waiver states are
permitted to waive statewideness, comparability of services, and freedom
of choice. States may use this waiver to mandatory enroll beneficiaries
into managed care programs, create a "carveout" delivery system for specialty
care (e.g., managed behavioral health care plan), create programs that
are not available statewide, and provide an enhanced service package allowing
the State to provide additional services to Medicaid beneficiaries via
savings from a managed care product. Though allowing for greater flexibility,
1915(b) waivers are limited in scope: the State cannot use them to serve
beneficiaries beyond Medicaid State Plan Eligibility. For more information,
visit http://www.cms.hhs.gov/medicaid/1915b/default.asp.
1915(c) Home and Community-Based Services (HCBS): The HCBS is the Medicaid program alternative to providing long-term care in institutional settings. States have the flexibility to design HCBS waiver programs (1) to the specific needs of defined groups, specifically, the elderly and persons with physical disabilities, developmental disabilities, mental retardation or mental illness, (2) for a specific illness or condition, such as technology-dependent children or individuals with AIDS, as well as persons with acquired or traumatic brain injury, and/or (3) for individuals who would otherwise qualify for Medicaid only if they were in an institutional setting. In other words, individuals receiving services under an HCBS waiver program must meet either a hospital, nursing facility or intermediate care facility for persons with mental retardation level of care.
States are not limited to the number of services that can provide under
an HCBS waiver program and may use the waiver to provide a combination
of both traditional medical services (i.e. dental services, skilled nursing
services) as well as non-medical services (i.e. respite, case management,
environmental). There are no specific services that must be offered in
an HCBS waiver program and no limit on the number of services that can
be offered under a single waiver program as long as the waiver retains
cost-neutrality and the services are necessary to avoid institutionalization.
For more information, visit http://www.cms.hhs.gov/medicaid/1915c/default.asp.
1915 (b)/(c) Combination Waivers: Increasingly, States have increasingly expressed interest in providing long-term care services in a managed care environment or using a limited pool of providers. In addition to providing traditional long-term care services (e.g., home health, personal care, institutional services), many States are proposing to include non-traditional home and community-based "1915(c)-like" services in their managed care plans. These services include, but are not limited to, homemaker services, adult day health services, and respite care. There is no authority under 1915(b) to cover individuals in a special eligibility category (the 42 CFR 435.217 group) who are only Medicaid eligible through a link to a 1915(c) waiver. For these reasons, States use the 1915(b) authority to limit freedom of choice, and use the 1915(c) authority to provide the home and community-based services and expand Medicaid eligibility to the 435.217 group
States can implement 1915(b) and 1915(c) concurrent waivers as long as
all Federal requirements for both waiver programs are met. States must
submit a separate application for each waiver type and satisfy all of
the applicable requirements. For example, States must demonstrate cost
neutrality in the 1915(c) waiver and cost effectiveness in the 1915(b)
waiver. States must also comply with the separate reporting requirements
for each waiver. Because the waivers are approved for different time periods,
renewal requests must be prepared separately and submitted at different
points in time. Meeting these separate requirements is somewhat cumbersome
for States, and can be a potential barrier for States that are considering
such a program. However, the ability to develop an innovative managed
care program that integrates home and community-based services with traditional
State plan services is appealing enough to some States to outweigh the
potential barriers. For more information, visit http://www.cms.hhs.gov/medicaid/1915b/1915bc.asp.
State Medicaid Plans & Amendments
The state Medicaid plan is a document that defines how the state will operate its Medicaid program. The plan addresses the areas of administration, eligibility, service coverage, and provider reimbursement. After approval of the original state plan, all relevant changes (required by new statutes, rules, regulations, interpretations, and court decisions) must be submitted to CMS to determine if the plan continues to meet Federal requirements and policies.
Waiver authority can provide states with greater flexibility to design
more focused programs. Authorized state plan amendments provide much of
the same flexibility, but do not require the periodic renewals associated
with programs operating under waiver authority. A disease management state
plan amendment may mandate enrollment in PCCMs or MCOs; may provide flexibility
with respect to limiting providers, eligible populations, and geographic
areas not normally available under traditional state plan amendments (e.g.,
enhanced PCCM programs); and/or may authorize disease management activities
through expansions of the covered benefits for "other licensed practitioners"
or "preventive services," as appropriate. All disease management
(both capitated and FFS) state plan amendments must meet Federal requirements,
including those of statewideness, comparability, and freedom of choice.
For more information, please visit http://www.cms.hhs.gov/medicaid/stateplans/.
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