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Read this if you are a State Medicaid Director, State Medicaid Chief Information Officer, State Medicaid Project Manager, or State Procurement Officer—or if you work on a State Medicaid Enterprise System (MES) certification effort.

Measuring performance of Medicaid Enterprise Systems (MES) is emerging as the next logical step in moving Medicaid programs toward modularity. As CMS continues to refine and implement outcomes-based modular certification, it is critical that states adapt to this next step in order to continue to meet CMS funding requirements.

This measurement, in terms of program outcomes, presents a unique set of challenges, many of which a state may not have considered before. A significant challenge is determining how and where to begin measuring program outcomes―to meet it, states can leverage a trusted, independent partner as they undertake an outcomes-based effort.

Outcomes-based planning can be thought of as a three-step process. First, and perhaps most fundamental, is to define outcomes. Second, you need to determine what measurements will demonstrate progress toward achieving those outcomes. And the final step is to create reporting measurements and their frequency. Your independent partner can help you answer these critical questions and meet CMS requirements efficiently by objectively guiding you toward realizing your goals.

  1. Defining Outcomes
    When defining an outcome, it is important to understand what it is and what it isn’t. An outcome is a benefit or added value to the Medicaid program. It is not an output, which is a new or enhanced function of a new MES module. An output is the product that supports the outcome. For example, the functionality of a new Program Integrity (PI) module represents an output. The outcome of the new PI module could be that the Medicaid program continuously improves based on data available because of the new PI module. Some outcomes may be intuitive or obvious. Others may not be as easy to articulate. Regardless, you need to direct the focus of your state and solution vendor teams on the outcome to uncover what the underlying goal of your Medicaid program is.
     
  2. Determining Measurements
    The second step is to measure progress. Well-defined Key Performance Indicators (KPIs) will accurately capture progress toward these newly defined outcomes. Your independent partner can play a key role by posing questions to help ensure the measurements you consider align with CMS’ goals and objectives. Additionally, they can validate the quality of the data to ensure accuracy of all measurements, again helping to meet CMS requirements.
     
  3. Reporting Measurements
    Finally, your state must decide how―and how often―to report on outcomes-based measurements. Your independent partner can collaborate with both your state and CMS by facilitating conversations to determine how you should report, based on a Medicaid program’s nuances and CMS’ goals. This can help ensure the measurements (and support information) you present to CMS are useful and reliable, giving you the best chance for attaining modular certification.

Are you considering an outcomes-based CMS modular certification, or do you have questions about how to best leverage an independent partner to succeed with your outcomes-based modular certification effort? BerryDunn’s extensive experience as an independent IV&V and Project Management Office (PMO) partner includes the first pilot outcomes-based certification effort with CMS. Please visit our IV&V and certification experts at our booth at MESC 2019 or contact our team now.

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Three steps to measure Medicaid Enterprise Systems outcomes

Read this if you are a State Medicaid Director, State Medicaid Chief Information Officer, State Medicaid Project Manager, or State Procurement Officer.

As CMS moves away from the monolithic Medicaid Management Information System (MMIS) toward an outcomes-based approach that includes a modular Medicaid Enterprise System (MES), there is now more emphasis on system integration (SI). 

In the August 16, 2016 letter, State Medicaid Director (SMD) #16-010, CMS clarified the role of the system integrator (SI) by stating:

CMS envisions a discrete role for the system integrator (SI) in each state, with specific focus on ensuring the integrity and interoperability of the Medicaid IT architecture and cohesiveness of the various modules incorporated into the Medicaid enterprise. 

While the importance of the SI role is apparent, not all states have the resources to build the SI capability within their own organizations. Some state Medicaid IT teams try to solve this by delegating management roles to vendors or contractors. This approach has various risks. A state could lose:

  • Institutional knowledge, as vendors and contractors transition off the project
  • Control of governance, oversight, and leadership
  • The ability to enforce contractual requirements across each vendor, especially the SI

In addition, the ramifications of loss of state accountability can have wide-reaching implementation, operational, and financial impacts, including:

  • The loss of timely decision making, causing projects to fall behind schedule
  • State-specific policy needs not being met, impacting how the MMIS functions in production 
  • Poor integration into the state-specific Operation and Maintenance (O&M) support model, increasing the state’s portion of long-term O&M costs
  • Inefficient and ineffective contract management of each module vendor and contractor (including the SI), possibly leading to unneeded change requests and cost overruns
  • Lack of coordination with the state’s business or IT roadmap initiatives (i.e., system consolidation or cloud migration vendor/approach), possibly leading to rework and missed opportunities to reduce cost or improve interoperability 

Apply strong governance and IV&V to tackle risks

Because the SI vendor is responsible for the integration of multiple modules across multiple vendors, you may consider delegating oversight of module vendors to the SI vendor. 

The major benefit states get from using the SI vendor is efficiency. Having your vendor as the central point of contact can quickly resolve technical issues, while allowing easy coordination of project tasks across each module vendor on a continual basis. 

If you choose to use a vendor for the SI role, establish safeguards and governance to make sure your goals are being met:

  • Build a project-specific governance model (executive committee [EC]) to oversee the vendors and the project
  • Establish a regular meeting cadence for the EC to allow for status updates on milestones and discuss significant project risks and issues 
  • Allocate state resources into project leadership roles (i.e., project manager, vendor contract manager, security lead, testing/Quality Assurance lead, etc.)
  • Conduct regular (weekly) SI status meetings to track progress and address risks and issues 

You also need a strong, involved governance structure that includes teams of state senior leadership, state program managers, SI vendor engagement/contract managers, and Independent Verification and Validation (IV&V) vendors. By definition, one responsibility of IV&V is to identify and monitor project risks and issues that could arise from a lack of independence. 

Your governance teams can debate decisions and disputes, risks and issues, and federal compliance issues with their vendors to define direction and action plans. However, a state representative within these teams should always make the final management decisions, approve all SI scope items and changes, and approve all contractual deliverables from each vendor or contractor.

Your state staff (business and IT) provides project management decision, business needs, requirements (functional and non-functional), policy guidance, and continuity as the vendors and/or contractors change over time. 

The conclusion? In order to be successful, you must retain certain controls and expertise to deploy and operate a successful MMIS system. Our consultants understand the need to keep you in control of managing key portions of implementation projects/programs and operational tasks. If you have questions, please contact BerryDunn’s Medicaid team.  
 

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Risks when using vendors to manage Medicaid system implementation projects

Editor’s note: read this if you are a Maine business owner or officer.

New state law aligns with federal rules for partnership audits

On June 18, 2019, the State of Maine enacted Legislative Document 1819, House Paper 1296, An Act to Harmonize State Income Tax Law and the Centralized Partnership Audit Rules of the Federal Internal Revenue Code of 1986

Just like it says, LD 1819 harmonizes Maine with updated federal rules for partnership audits by shifting state tax liability from individual partners to the partnership itself. It also establishes new rules for who can—and can’t—represent a partnership in audit proceedings, and what that representative’s powers are.

Classic tunes—The Tax Equity and Fiscal Responsibility Act of 1982

Until recently, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) set federal standards for IRS audits of partnerships and those entities treated as partnerships for income tax purposes (LLCs, etc.). Those rules changed, however, following passage of the Bipartisan Budget Act of 2015 (BBA) and the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Changes made by the BBA and PATH Act included:

  • Replacing the Tax Matters Partner (TMP) with a Partnership Representative (PR);
  • Generally establishing the partnership, and not individual partners, as liable for any imputed underpayment resulting from an audit, meaning current partners can be held responsible for the tax liabilities of past partners; and
  • Imputing tax on the net audit adjustments at the highest individual or corporate tax rates.

Unlike TEFRA, the BBA and PATH Act granted Partnership Representatives sole authority to act on behalf of a partnership for a given tax year. Individual partners, who previously held limited notification and participation rights, were now bound by their PR’s actions.

Fresh beats—new tax liability laws under LD 1819

LD 1819 echoes key provisions of the BBA and PATH Act by shifting state tax liability from individual partners to the partnership itself and replacing the Tax Matters Partner with a Partnership Representative.

Eligibility requirements for PRs are also less than those for TMPs. PRs need only demonstrate “substantial presence in the US” and don’t need to be a partner in the partnership, e.g., a CFO or other person involved in the business. Additionally, partnerships may have different PRs at the federal and state level, provided they establish reasonable qualifications and procedures for designating someone other than the partnership’s federal-level PR to be its state-level PR.

LD 1819 applies to Maine partnerships for tax years beginning on or after January 1, 2018. Any additional tax, penalties, and/or interest arising from audit are due no later than 180 days after the IRS’ final determination date, though some partnerships may be eligible for a 60-day extension. In addition, LD 1819 requires Maine partnerships to file a completed federal adjustments report.

Partnerships should review their partnership agreements in light of these changes to ensure the goals of the partnership and the individual partners are reflected in the case of an audit. 

Remix―Significant changes coming to the Maine Capital Investment Credit 

Passage of LD 1671 on July 2, 2019 will usher in a significant change to the Maine Capital Investment Credit, a popular credit which allows businesses to claim a tax credit for qualifying depreciable assets placed in service in Maine on which federal bonus depreciation is claimed on the taxpayer's federal income tax return. 

Effective for tax years beginning on or after January 1, 2020, the credit is reduced to a rate of 1.2%. This is a significant reduction in the current credit percentages, which are 9% and 7% for corporate and all other taxpayers, respectively. The change intends to provide fairness to companies conducting business in-state over out-of-state counterparts. Taxpayers continue to have the option to waive the credit and claim depreciation recapture in a future year for the portion of accelerated federal bonus depreciation disallowed by Maine in the year the asset is placed in service. 

As a result of this meaningful reduction in the credit, taxpayers who have historically claimed the credit will want to discuss with their tax advisors whether it makes sense to continue claiming the credit for 2020 and beyond.
 

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Maine tax law changes: Music to the ears, or not so much?

Read this if you are a City/County Administrator, Building Official, Community Development Director, Planning Director, Development Services Manager or work with customers providing a service for a fee.

Planning and development service fees are, for many municipalities, often discussed but rarely changed. There are a number of reasons you might need to consider or defend your fee structure―complaints from developers, rising costs of operation, and changes in code or process are just a few. 

But when is the right time for a formal review of your service fees? There are several key organizational factors that should prompt an in-depth study of your fees, either internally or with the assistance of an objective advisor. It may be time for an update if:

  • You’re considering a new permitting system. New technology may streamline your workflows, simplify processes for your customers, or necessitate changes in your staffing. All of these secondary changes can impact the cost of your services. In addition, if you’re anticipating significant changes to your fee structure or methodology (e.g., moving to full cost recovery), you’ll want to configure your new system to support that going forward.
  • You have an enterprise development fund. Development fees are collected to cover the cost of providing a service. The methodology you use to charge fees should be based on defensible formulas that can withstand the scrutiny of your customers and cover the cost to provide the service. In addition, reserve funds should be adequate to ensure your development service is funded through the completion of the project. 
  • The regulations in your municipality are changing. Perhaps your organization is moving to a unified or form-based code or making changes to the International Building or Fire Codes. Changes in the process and requirements for development may require a reevaluated fee structure.
  • It’s been a while. Even if your organization is not experiencing any significant or sweeping change, small shifts can accumulate over the years, resulting in significant fee adjustments that may be tough for you to implement and for your customers to understand. Periodically reviewing service demand and benchmarking your individual fees against those of neighboring communities can help to avoid sticker shock.

If any of these scenarios sound familiar, you may want to consider a fee review, which may consist of benchmarking against similar jurisdictions. Not sure what level of review your organization needs? Our dedicated government consultants include former planners and community development leaders who have walked in your shoes and can talk through the considerations with you.
 

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When time is money: Reviewing your planning and development service fees

Read this if you are a Nursing Home Administrator, Admissions Coordinator, MDS Nurse, Nursing Home Owner, Business Office Manager, Case Manager, Nursing Home CEO, CFO, or COO.

Patient Driven Payment Model (PDPM) implementation is less than three months away. Is your facility ready for admissions under PDPM? The way you think about admissions and the admission process will change under PDPM. Some highlights:

  • The resident’s clinical characteristics will now be the determinant of payment rather than therapy provided.
  • Facilities that admit medically complex residents—those who need higher levels of potentially expensive care, including high-cost medications, ventilator care, and care for residents with HIV/AIDS—will receive reimbursement that more closely reflects those higher costs.
  • PDPM will eliminate the 14-day, 30-day, 60-day and 90-day assessments and will only require a five-day and discharge assessment. 
  • The five-day assessment will drive payment for the entire resident stay unless there is change in the resident’s clinical characteristics. 

With the elimination of the five scheduled assessments under PDPM, facilities will save time spent on assessments; however, PDPM will require a higher degree of accuracy on the Day Five assessment. For proper reimbursement, your staff will have to gather all relevant clinical information on the resident in a shorter period of time. A strong admissions team and processes will help you achieve financial success under PDPM. 

Screening residents for admission will also become more critical for appropriate reimbursement. Under RUGS-IV, most facilities relied only on their admissions coordinator to handle admissions. Under PDPM, facilities are going to have to involve more team members in the pre-admission process to ensure proper and thorough screening of residents. 

Since PDPM focuses on all the resident’s clinical characteristics, you will need pre-admission input from many team members, including but not limited to physicians, nurses, therapy providers, and case management. You will need to assess many other elements up front―if you miss something in the screening, you won’t receive adequate reimbursement. 

With payment tied not only to the residents' primary reasons for being in the facility, but also the comorbidities that affect their health, you need to know more about potential residents prior to admission. The admissions team will need to get a comprehensive background on each resident―including all comorbidities, recent surgical history, and other clinical characteristics and services that determine a resident’s case-mix.

For example, in some cases, two diagnoses, such as aftercare for major joint surgery and an infectious complication, may compete for the primary diagnosis. These two diagnoses would place the resident in different clinical categories and would result in different rates of reimbursement. Working as a team, your staff will have to determine which of these diagnoses most accurately reflects the characteristics of the resident, the services needed by that resident, and the resources that he or she requires.

To emphasize again, under the new PDPM assessment schedule, facilities cannot make changes to resident clinical characteristics on the five-day assessment unless a resident has a significant change in status and the facility performs an interim payment assessment. You really only have one shot at getting it right!

Here are some actions you can take now to strengthen your admissions process:

Standardize practices―Examine inconsistent and/or manual practices within the revenue cycle that may cause delays in gathering documentation and, ultimately, delay billing. Policies and procedures should include items such as team members and responsibilities, pre-admission screening procedures, protocols for communicating with physicians and the admitting hospital, and procedures for capturing and storing supporting documentation. This can help capture all information needed for proper reimbursement.

Review changes to the Minimum Data Set (MDS)―The entire admissions team needs to understand the changes to the MDS so that they capture all the required resident information. There are nearly 40 new MDS items that directly influence a resident’s clinical classification and payment rates. The most significant of these?

  • I0020B―To report the ICD-10-CM primary diagnosis code representing the main reason for Skilled Nursing Facility (SNF) admission
  • J2100-J5000―New patient surgical history items that affect the PDPM physical and occupational therapy and speech-language pathology components
  • I8000―To report comorbidities that affect non-therapy ancillaries
  • O425A1-O0425C5―To capture discharge information on therapy delivery over the course of the resident's entire Part A stay, including use of group and concurrent therapy.

Educate staff―Train your staff on the new processes and tools, as these processes directly impact daily job functions. In addition, staff should have an understanding of the functions of the entire revenue cycle so they can see how their functions affect the overall reimbursement of the facility.

Review and monitor―To better prepare for PDPM, you should review your resident charts to understand what information you are currently documenting and know what additional information you will need to gather upon admission. Even though you are not yet billing under PDPM, you can start gathering and documenting that additional information. Review your facility's utilization review and triple check processes. You should have a cross-functional utilization review team that includes a physician or mid-level practitioner to ensure comprehensive reviews. Once you begin documenting, under PDPM you will need to audit MDS to be sure they are accurate and supported by medical documentation.

You will only have until Day Eight of a resident stay to capture and document all the resident's clinical characteristics that drive payment for the entire stay. It is more important than ever to have a clearly defined, well-executed plan for getting the right information to the right people as soon as possible.

Read more
You can read Part One of this series here. Part Three is coming soon.
 

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PDPM is coming: Is your admissions team ready?

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