The Connector Board met yesterday morning for a fairly staid meeting, setting in motion changes in the Commonwealth Care program for next year.
Highlights:
- As of December 1, 2007, Commonwealth Care Enrollment is at 158,177 and Commonwealth Choice is at 14,698.
- Board approved the recommended Commonwealth Care MMCO bid specifications.
- Board approved changes to the Commonwealth Care and Affordability Regulations, with a public hearing to be scheduled for late January or early February
- The 2008 affordability schedule will be discussed in January, for a possible Board vote in February.
Click here for all the board materials.
The Connector Board met bright and early yesterday morning at 8:00am today to kick start a packed agenda that included a discussion on next year’s MMCO bid specifications, and approval of emergency regulations making changes to the Affordability and Commonwealth Care Regulations.
MMCO Bid Specifications
Patrick Holland, CFO of the Connector Authority, presented final Connector recommendations for the bid specifications. At the last meeting, the Board deliberated on draft options (see our blog). The ACT!! Coalition submitted a letter to the Board in response to the proposals, and urged the Board to consider carefully on changes that will impact access and affordability for consumers, such as higher co-pays.
The bid specifications, to be issued to all four MMCOs in Commonwealth Care by the end of next week, sets the stage for negotiations and may have wide implications on consumers in Commonwealth Care plans. The main goals of the bid provisions discussed by the Board are to encourage aggressive bids across all four MMCOs, and improve risk selection, utilization, and care management.
The Board discussion looked at these “levers” to be included in the bids. CFO Patrick Holland led the wide-ranging discussion:
Auto assignment
The Connector recommends continuing with the auto-assignment process for members in plan type 1 (under 100% FPL) who don’t pick a plan. To encourage aggressive bidding, they are broadening the number of regions to five compared to the current two regions, Boston and the rest of the state. Also, some of the auto-assigned members will go to the third- and fourth-lowest plans. Currently, the lowest and second lowest bidder take on 75% and 25% of the autoassignments respectively.
Provider Reimbursement Rate
The bid specifications will push the plans to over time lower provider reimbursement rates to the level of Medicaid rates. The Connector will develop an actuarially sound rate range that reduces the estimated level of provider reimbursement by 3-5%. In response to questions, Tom Dehner, Medicaid Director, defended Medicaid rates as being adequate to assure sufficient access.
Co-pays and Out of Pocket Maximums
This topic dominated much of the discussion. The recommendations proposed that MMCOs submit bids with current copay levels. The decision on the level of copays or premiums is scheduled for February 2008. Board actuaries will then value the impact of changes in copays and adjust it uniformly across the bids if the Board decides on changing current levels. The goal of adjusting co-pays would be to align values closer to commercial standards, in order to reduce crowd-out.
Celia Wcislo expressed the difficulty of making decisions on copay levels without also looking at possible changes in enrollee contribution levels. Since both are related to affordability, it will be hard to make these decisions in isolation. The Board will also consider changes to the out-of-pocket maximums for CommCare enrollees. Nancy Turnbull asked the staff to review inconsistencies in the example; for example, the lack of any drug spending cap for the higher-income plans.
Enrollee Contribution
To encourage members to pick lower cost plans, the Connector is also proposing to institute premiums for some of the Plan Type 2A population (100-150% FPL). Currently, enrollees in Plan Type 2A are subject only to co-pays. The proposal begins with a transition year where enrollees who do not choose the lowest option plan will pay 50% of the cost differential between the lowest plan and the chosen plan. Celia urged a long lead-time to prepare members for this and other changes.
Dental Benefit
The Connector is also encouraging MCOs to offer a preventative dental benefit for enrollees over 100%, though it would not be a requirement and palns would not have the cost of dental benefits added to the capitation rate. Nancy asked the staff to come up with other incentives to encourage plans to offer dental benefits, and also asked that the Connector remind members of the availability of limited dental benefits through the Health Safety Net (Uncompensated Care Pool).
Eliminate Plan Type 4
The Bid Specifications recommends eliminating the plant type 4 choice, which has higher premiums but low copays. These members would be merged into plan type 3, with higher copays and a lower premium. Plan type 4 has approximately 4000 members, and has a concentration of members with high medical expenses. Board members discussed the implications of the merger, and to what extent current plan type 3 members will be affected by the change.
CommonHealth Population
Accompanying the proposal for eliminating Plan Type 4, is work with Medicaid on the possibility of shifting disabled CommCare members into CommonHealth, a richer plan for the disabled in Medicaid. Currently, many disabled individuals eligible for CommonHealth also need to pay a spenddown amount in order to qualify. For many, the spenddown amount is unaffordable and Commonwealth Care is a better option. Tom said this is being looked at, but will need federal waiver changes as well as logistical and financial considerations.
Reinsurance
A long discussion developed over the possibility of reinsurance for plan type 3. Reinsurance is an additional risk-sharing mechanism at the individual member level. The example would have MCOs cover the cost of the first $10,000 of individual claims. Claims between $10,000-$80,000 would be divided up between the state and the MCOs, with the state taking on the burden of 75% and the MCO 25%. The MCO would then cover costs after $80,000. With the state taking on more risk of high-cost members, MCOs will have a greater confidence to bid more aggressively and realistically. In effect, as Jon Gruber put it, the state is making a bet that the mandate will encourage healthier people to sign up. The state is better able to bear the risk if that bet is wrong. The Connector also hope to eventually directly adjust premium payments based on individual risk, but will not be able to that yet.
Other levers discussed included coordination of drug management, particularly for substance abuse; more detailed contract reviews and audits, and coordination with cost and quality initiatives of other state agencies.
Jon Kingsdale said he hoped plans will strengthen their disease management and care coordination activities. After meeting with two of the plans, he found a wide disparity between the two on their ability to use care management techniques.
Changes to Commonwealth Care and Affordability Regulations
The Board approved emergency amendments to Commonwealth Care and Affordability regulations. The Commonwealth Care regulations incorporate policies set forth in Administrative Bulletins, which dealt with standards for premium hardship waivers, and the appeals process. Additionally, the regulations added time standards that matched MassHealth’s period for determining eligibility.
The amendments in the Affordability Regulations focused on adjustments to the certification of exemption process and the appeals process for the penalty. The Connector Board will now be the authority approving mandate hardship appeals.
Executive Director’s Report
Executive Director Jon Kingsdale surprised everyone when he informed the Board that they will need to hold a discussion on revising the affordability schedule in January. He proposed that the Board vote on a 2008 schedule in February, following a public comment period. Celia and Jon Gruber expressed concern that this would happen before CommCare enrollee premiums were set. Tom Dehner emphasized his view that the CommCare premiums must be defined as affordable so that enrollment can be required of those eligible. The timing issue was not resolved.
Commonwealth Care and Commonwealth Choice Progress Reports
Both Commonwealth Care and Commonwealth Choice experienced record peaks in enrollment and call volumes around the November 15 enrollment deadline, and in early December. The December CommChoice enrollees were more likely to be young than those in July. This data shows a high response rate to the mandate. Enrollment also continued to grow:
Commonwealth Care (as of December 1, 2007)– Total Enrollment – 158,177
Type 1 (<100% FPL) – 80,856
Type 2A (100-150% FPL) – 41,171
Type 2B (150-200% FPL) – 21,277
Type 3 (200-300% FPL, low premium, higher copays) – 11,360
Type 4 (200-300% FPL, higher premium, lower copays) – 3,513
Commonwealth Choice (as of December 1, 2007) – Total Enrollment – 14,698
Gold – 830
Silver – 2,285
Bronze – 5,024
Young adult – 3,272
Jon Kingsdale and Dolores Mitchell (who chaired the last half of the meeting) wished everyone a good holiday as the meeting adjourned.
Diana Ong
Thanks, Brian.
Gee, I hoped there would be more transparency on this item. I would have thought that the Connector would have the authority to actually look and see who is charging what. (Not necessarily for disclosure, but just to evaluate what the MCOs are actually being billed by each provider.) Not so?
Since CommCare is, in great measure, a substitute for previous reimbursement under the free care pool and/or Medicaid, both of whose rates were totally open to the public, shouldn’t these rates be open at least to the Connector Authority?
Ditto, by the way, for rates charged by providers to groups like the Commonwealth Care Alliance, which serves dually eligible (Medicare-Medicaid) patients — http://www.commonwealthcare.org/about.html.
We don’t know the details. In their white paper on program renewal, (here), the Connector states that “In speaking with the MCOs during the past few months, it is apparent that the level of provider reimbursement for CommCare members is significantly above current Medicaid fees.”
The recommended solution is this:
“Therefore, in order to incentivize the MCOs to negotiate more favorable (to the State) provider reimbursement rates and send a strong signal to the provider community that reimbursement rates well-above Medicaid will not be acceptable in a state subsidized program for otherwise uninsured residents of very modest means, the bid specifications can be developed so that the unit price assumed in developing the FY 2009 capitation rate trends will not exceed a fixed percentage above Medicaid. Moreover, we would expect that future program unit costs will eventually be at the Medicaid level.” (p. 15)
At the meeting they talked about reducing reimbursements next year 3%-5% to get to the goal.
Brian Rosman
I’m surprised to learn that pushing hospitals towards charging Medicaid level rates will save much money for Commonwealth Care plans. Are there many hospitals that currently charge above that?