Government, News

DHHR discusses Medicaid budgets for disabled clients

This is the first in a two-day series. Today: We provide an overview of the Department of Health and Human Resources’ Bureau for Medical Resources new method for determining Medicaid care budgets for people with intellectual and developmental disabilities. Monday: We hear stakeholder concerns that the new system still will fail to meet the needs of many Intellectual/Developmental Disability Waiver program clients.

The Department of Health and Human Resources’ Bureau for Medical Resources is rolling out a new method to calculate the Medicaid care budgets for people with intellectual and developmental disabilities. But many involved with the program are concerned that the new method won’t meet the clients’ needs.

The program is the Medicaid Title XIX Intellectual/Developmental Disability (IDD) Waiver program. It serves 4,634 people enrolled and plans to add another 50 from its waiting list of about 1,300, based on budgeting changes undertaken in 2015 and the rollout of the new system.

As frequently reported here, the new system was adopted as a result of a federal class action civil suit — still in process — filed on behalf of clients who suffered budget cuts to contain cost overruns. The judge determined that the old system based on a secret budget algorithm and a review process based on the assigned budget rather than the client’s needs — violated due process.

The new assessment process began April 1 for clients whose anchor date — the anniversary of the date they entered the program — falls on or after July 1.

The assessment process includes an interview with the client and the client’s guardians and care team, and the review of three forms — one of them being the ICAP, the Inventory for Client and Agency Planning.

From that, a base budget is calculated using a matrix based on the client’s age and living situation. Add-ons are available based on four criteria reflecting behavior, motor skills and personal living skills. A stop-loss/stop-gain provision prevents a client’s budget from being increased or cut more than 20 percent of the 2016 budget, to help ease the transition to the new system, DHHR said.

The client will then receive a letter explaining the budget figure and how it was calculated. The client’s Interdisciplinary Team will then formulate an Individualized Education Plan (IEP) for minors or Individualized Program Plan (IPP) for adults.

If the team thinks that the budget won’t meet the client’s needs, it can submit two IPP’s to Kepro — the state contractor handling the IDD Waiver program — for review in an exceptions process. DHHR estimates about 5 percent of waiver clients will need this process. Requests for additional services will be reviewed by a three-person team.

As background to this new system: For several years, DHHR had been spending more state money than the Legislature had appropriated for the program. Funding has remained constant, at about $89 million.

But APS (now Kepro), the state’s contracted waiver program manager, was routinely authorizing budget increases above what its algorithm assigned as clients demonstrated that the formula was budgeting according to actual need.

For instance, DHHR said in a court filing, actual state spending for Fiscal Year 2015 was $113 million, with the excess drawn from the overall Medicaid budget. DHHR never asked the Legislature for more money for the program.

BMS Commissioner Cindy Beane said in an email exchange, “This became the impetus to look closer at what APS was authorizing in an attempt to get the program under control and back within the budgetary guidelines.”

Getting it under control meant that in appeal procedures, BMS routinely denied requests for funding above the formula, saying the client had experienced no significant changes following the budget assignment. No consideration was given to previous actual budgets that included APS’ revised amounts.

A court document highlights the contrast. In 2014, 1,962 appeals — called second-level negotiations — were approved. In 2015, following the budget-control measures, only 466 were approved.

Now, under the new system, the panel will consider whether “the services are necessary to keep the member safe and healthy” and to avoid institutionalization. The panel will act on the request within 15 days.

If the request is denied, the team may then request a Medicaid Fair Hearing before the DHHR’s Office of Inspector General.

DHHR claims that the new process will be transparent and clear, as opposed the old secret algorithm and budget letters that offered no explanation of how the figure was determined.

DHHR also claims the new budgets will be “95 percent accurate in producing a budget that corresponds to actual spending among a significant majority of waiver members in 2016.”

The matrix and its dollar values were determined by an actuarial firm, the Virginia-based Lewin Group.

Lewin and DHHR predict that 65.5 percent of clients will receive budgets above their 2016 spending; 34.5 percent (1,599 people) will receive budgets below their 2016 levels; 6.8 percent (315 people) will see the full 20 percent cut.

DHHR plans to “re-base” the model with new budget ranges and add-ons after its first year and regularly thereafter. “Over time, as the model becomes more accurate, DHHR anticipates that fewer and fewer individuals will receive budgets that are lower than their actual spending.”