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Building a Strong Substance Use Disorder (SUD) 1115 waiver demonstration

07.27.18

Is your state Medicaid agency considering a Centers for Medicare and Medicaid Services (CMS) Section 1115 Waiver to fight the opioid epidemic in your state? States want the waiver because it provides flexibility to test different approaches to finance and deliver Medicaid services. The skyrocketing prevalence of substance use disorders nationwide calls for such flexibility and innovation to expand existing services for treatment and recovery. Although applying for an 1115 waiver can be daunting, here are some guidelines to help you succeed with implementation.

Be pragmatic
Be honest and pragmatic in planning discussions for the essential resources you need to have in place for a successful implementation. Ask yourselves who and how many people you need to involve to develop and execute each stage. Plan enough time to develop policies and agency protocols, make sure you have the right providers for your members, set provider rates, and then train the providers.

Ask hard questions
Once you identify key requirements to address first in your waiver, ask yourself what elements need to be in place to meet these requirements. Here are elements to consider and questions to answer:

  • Fee-for-service and managed care organization (MCO) rates — new services, such as adult residential treatment services aligned with care standards (e.g., American Society of Addiction Medicine (ASAM®) levels), may require changes to reimbursement rates. What needs to happen to develop new rates? What obstacles do you anticipate and how will you overcome them?
  • Care standards (e.g., ASAM® levels of care) and training your providers — consider what the levels mean given the range of providers in your state and the services your members receive. What is required to move to these standards? How you will work with providers to ensure adherence, including certification and training? What will this cost?
  • Policy changes — your state’s Medicaid agency will need to revamp and create policies to cover the service expansion and other changes. How will you complete all necessary policy and protocol changes early enough to inform MCO and provider actions?
  • MCO provider network adequacy — it’s worth investing the time in your application development to assess whether the MCOs serving Medicaid recipients in your state have the right mix of providers to ensure that you can fully implement the new service structure. How long should you give the MCOs for network expansion or recruitment?
  • MCO care coordination guidelines — each MCO will have its own approach. How are you going to ensure adherence to your waiver’s vision of care coordination?
  • Indicators — how will you evaluate the success of your program? How will you collect and analyze data? The earlier you determine how you will evaluate your program, the easier it will be to report on, and make improvements.

Get started
Applying for and implementing an SUD 1115 waiver is a complex and time-consuming process — but by dedicating the time up front to address the many details of time and resources, you’ll find implementation to be far smoother, and effective treatment and recovery services provided sooner for those who need it most. Our Medicaid team is here to help.

Topics: MESC 2018, Medicaid

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The American Public Health Association annual conference’s thematic focus on preventing violence provided an illustration of the extent of the overwhelming demands on state public health agencies right now. Not only do you need to face the daily challenges of responding to the COVID-19 pandemic, you also need to address ongoing, complex issues like violence prevention.

The sheer breadth of sessions available at APHA shows the broad scope of public health’s reach and the need for multi-level, multi-sector interventions, all with a shrinking public health workforce. The conference’s sessions painted clear pictures of the critical public health issues our country currently faces, but did not showcase many solutions, perhaps leaving state health agency leaders wondering how to tackle these taxing demands coming from every direction with no end in sight.

BerryDunn has a suggestion: practice organizational self-care! It might seem antithetical to focus maxed-out resources on strengthening systems and infrastructure right now, but state public health agencies have little choice. You have to be healthy yourself in order to effectively protect the public’s health. Organizational health is driven by high-functioning systems, from disease surveillance and case investigation to performance management, and quality improvement to data-informed decision-making.  

State health agencies can use COVID-19 funding to support organizational self-care, prioritizing three areas: workforce, technology, and processes. Leveraging this funding to build organizational capacity can increase human resources, replace legacy data systems, and purchase equipment and supplies. 

  1. Funding new positions with COVID sources can create upward paths for existing staff as well as expanding the workforce
  2. Assessing the current functioning of public health data systems identifies and clarifies gaps that can be addressed by adopting new technology platforms, which can also be done with COVID funding.
  3. Examining the processes used for major functions like surveillance or case investigation can eliminate unproductive steps and introduce efficiencies. 

So what now? Where to start? BerryDunn brings expertise in process analysis and redesign, an accreditation readiness tool, and an approach to data systems planning and procurement―all of which are paths forward toward organizational self-care. 

  1. Process analysis and redesign can be applied to data systems or other areas of focus to prioritize incremental changes. Conduct process redesign on a broad or narrow scale to improve efficiency and effectiveness of your projects. 

  2. Accreditation readiness provides a lens to examine state health agency operations against best practices to focus development in areas with the most significant gaps. Evaluate gaps in your agency’s readiness for Public Health Accreditation Board (PHAB) review and track every piece of documentation needed to meet PHAB standards.
  3. Data system planning and procurement assistance incorporates process analysis to assess your current system functioning, define your desired future state, and address the gaps, and then find, source, and implement faster, more effective systems. 

Pursuing any of these three paths allows state health agency leaders to engage in organizational self-care in a realistic, productive manner so that the agency can meet the seemingly unceasing demands for public health action now and into the future.

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Three paths to organizational self-care for state public health agency survival

Truly effective preventive health interventions require starting early, as evidenced by the large body of research and the growing federal focus on the role of Medicaid in addressing Social Determinants of Health (SDoH) and Adverse Childhood Experiences (ACEs).

Focusing on early identification of SDoH and ACEs, CMS recently announced its Integrated Care for Kids (InCK) model and will release the related Notice of Funding Opportunity this fall.

CMS describes InCK as a child-centered approach that uses community-based service delivery and alternative payment models (APMs) to improve and expand early identification, prevention, and treatment of priority health concerns, including behavioral health issues. The model’s goals are to improve child health, reduce avoidable inpatient stays and out-of-home placement, and create sustainable APMs. Such APMs would align payment with care quality and support provider/payer accountability for improved child health outcomes by using care coordination, case management, and mobile crisis response and stabilization services.

State Medicaid agencies have many things to consider when evaluating this funding opportunity. Building on current efforts and innovations, building or leveraging strong partnerships with community organizations, incentivizing evidence-based interventions, and creating risk stratification of the target population are critical parts of the InCK model. Here are three additional areas to consider:

1. Data. States will need information for early identification of children in the target population. State agencies?like housing, justice, child welfare, education, and public health have this information?and external organizations—such as childcare, faith-based, and recreation groups—are also good sources of early identification. It is immensely complicated to access data from these disparate sources. State Medicaid agencies will be required to support local implementation by providing population-level data for the targeted geographic service area.

  • Data collection challenges include a lack of standardized measures for SDoH and ACEs, common data field definitions, or consistent approaches to data classification; security and privacy of protected health information; and IT development costs.
  • Data-sharing agreements with internal and external sources will be critical for state Medicaid agencies to develop, while remaining mindful of protected health information regulations.
  • Once data-sharing agreements are in place, these disparate data sources, with differing file structures and nomenclature, will require integration. The integrated data must then be able to identify and risk-stratify the target population.

For any evaluative approach or any APM to be effective, clear quality and outcome measures must be developed and adopted across all relevant partner organizations.

2. Eligibility. Reliable, integrated eligibility and enrollment systems are crucial points of identification and make it easier to connect to needed services.

  • Applicants for one-benefit programs should be screened for eligibility for all programs they may need to achieve positive health outcomes.
  • Any agency at which potential beneficiaries appear should also have enrollment capability, so it is easier to access services.

3. Payment models. State Medicaid agencies may cover case management services and/or targeted case management as well as health homes; leverage Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services; and modify managed care organization contract language to encourage, incent, and in some cases, require services related to the InCK model and SDoH. Value-based payment models, already under exploration in numerous states, include four basic approaches:

  • Pay for performance—provider payments are tied directly to specific quality or efficiency indicators, including health outcomes under the provider organization’s control. 
  • Shared savings/risk—some portion of the organization’s compensation depends on the managed care entity achieving cost savings for the targeted patient population, while realizing specific health outcomes or quality improvement.
  • Pay for success—payment is dependent upon achieving desired outcomes rather than underlying services.
  • Capitated or bundled payments—managed care entities pay an upfront per member per month lump sum payment to an organization for community care coordination activities and link that with fee-for-service reimbursement for delivering value-added services.

By focusing on upstream prevention, comprehensive service delivery, and alternative payment models, the InCK model is a promising vehicle to positively impact children’s health. Though its components require significant thought, strategy, coordination, and commitment from state Medicaid agencies and partners, there are early innovators providing helpful examples and entities with vast Section 1115 waiver development and Medicaid innovation experience available to assist.

As state Medicaid agencies develop and implement primary and secondary prevention, cost savings can be achieved while meaningful improvements are made in children’s lives.

Article
Three factors state medicaid agencies should consider when applying for InCK funding

Read this if you are a not-for-profit organization.

With springtime upon us, it may be difficult to start thinking about this upcoming fall, but that is exactly what many folks in the nonprofit sector are starting to do. The reason for this? It’s because 2022 brings with it the mid-term election cycle. While technically an off-year election, many congressional and gubernatorial races are being contested, in addition to a myriad of questions that will appear on ballots across the country. It is around this time of year we start to see many questions from clients in the nonprofit sector in the area of political campaign activities, lobbying (both direct and grassroots), and education/advocacy.

This article will discuss the three major types of activities nonprofit organizations may or may not undertake in this arena and will offer guidance to give organizations the vote of confidence they need to not run afoul of the potential pitfalls when it comes to undertaking these activities.

Political campaign activity

Political campaign activities include participating or intervening in any political campaign on behalf of (or in opposition to) any candidate for elective public office, be it at the federal, state, or local level. Examples of such activities include contributions to political campaigns as well as making public statements in favor of or in opposition to any candidate. The IRS explicitly prohibits section 501(c)(3) organizations from conducting political campaign activities, the consequence of doing so being loss of exempt status. However, other types of exempt organizations (such as 501(c)(4) organizations) are allowed to engage in such activities, so long as those activities are not the organization’s primary activity. Only Section 527 organizations may engage in political campaign activities as their primary purpose. 

Direct lobbying

Direct lobbing activities attempt to influence legislation by directly communicating with legislative members regarding specific legislation. Examples of direct lobbying include contacting members of Congress and asking them to vote for or against a specific piece of legislation.

Grassroots lobbying

Grassroots lobbying, on the other hand, attempts to influence legislation by affecting the opinions of the general public and include a call to action. Examples of grassroots lobbying include requesting members of the general public to contact their representatives to urge them to vote for or against specific legislation.  

A quick way to remember the difference:
Political = think “P” for People – advocating for or against a specific candidate 
Lobbying = think “L” for Legislation – advocating for or against a specific bill

Education/advocacy

Organizations may engage in activities designed to educate or advocate for a particular cause so long as it does not take a specific position. For example, telling members of Congress how grants helped constituents would be considered an educational activity. However, attempting to get a member of Congress to vote for or against specific piece of legislation that would affect grant funding would be considered lobbying. Another example would be educating or informing the general public about a specific piece of legislation. Organizations need to be mindful here as taking a specific position one way or the other would lend itself to the activity being deemed to be lobbying, and not merely education of the general public. There is no limit on how much education/advocacy activity a nonprofit organization may conduct.

Why does this matter?

As you can see, there is a very fine line between lobbying and education, so it is important to understand the differences so that an organization conducting educational activities does not inadvertently end up conducting lobbying activities.

Organizations exempt under Code Section 501(c)(3) can conduct only lobbying activities that are not substantial to its overall activities. A 501(c)(3) organization may risk losing its exempt status and may face excise taxes on the lobbying expenditures if it is deemed to be conducting excess lobbying, whereas section 501(c)(4), (c)(5), and (c)(6) organizations may engage in an unlimited amount of lobbying activity.

What is substantial?

Unfortunately, there is no bright line test for determining what is considered substantial versus insubstantial. As an industry standard, many practitioners have taken a position that insubstantial means five percent or less of total expenditures, but that position is not codified and could be challenged by the IRS. 

Section 501(c)(3) organizations that intend to conduct lobbying activities on a regular basis may want to consider making an election under Code Section 501(h). This election is only applicable to 501(c)(3) organizations and provides a defined amount of lobbying activity an organization may conduct without jeopardizing its exempt status or becoming subject to excise tax. The 501(h) election limit is based on total organization expenditures with a maximum allowance of $1 million for “large organizations” (defined as an organization with total expenditures over $17,000,000). 

While the 501(h) election provides some clarity as to how much lobbying activity can be conducted, it may be prohibitive for some organizations whose total expenditures greatly exceed the $17,000,000 threshold. Another item to be aware of is that the lobbying threshold applies to all members of an affiliated group combined, which means the entire group shares the maximum threshold allowed. 

Another option for those engaging in lobbying is to create a separate entity (such as a 501(c)(4) organization) which conducts all lobbying activities, insulating the 501(c)(3) organization from these activities. As previously mentioned, organizations exempt under Code Section 501(c)(4) can conduct an unlimited amount of lobbying activities but can only conduct limited political campaign activities.

What about political campaign activities?

Section 527 organizations, known as political action committees, are exempt organizations dedicated specifically to conducting political campaign activities. If a 501(c)(4), (c)(5), or (c)(6) organization makes a contribution to a 527 organization, it may be required to file a Form 1120-POL and be subject to tax at the corporate tax rate (currently a flat 21%) based on the lesser of the political campaign expenditures or the organization’s net investment income. State income taxes may also be applicable. Section 501(c)(3) organizations may not make contributions to 527 organizations. 

If your organization is considering participation in any of the above activities, we would recommend you reach out to your not-for-profit tax team for additional information. We’re here to help!

Article
Lobbying and politics and education, oh my!

Is your Women, Infants, and Children (WIC) agency struggling with Maintenance and Enhancement (M&E) vendor management? Here are some approaches to help improve your situation: 

  • Product Management Office (PdMO): Product management can help you manage your WIC system by coordinating and planning releases with the M&E vendor, prioritizing enhancements, reviewing workflows, and providing overall vendor management.
  • Project Management Office (PMO): Project management can help with budgeting, resource management, risk management, and organization. 
  • A blend of product and project management is a great partnership that can relieve some of the responsibilities of WIC agency staff and allows a third party to provide support in all areas of product and project management.

Whether you are an independent WIC State Agency (SA) or a multi-state consortium (MSC), having a PMO and/or PdMO can help alleviate some of the challenges facing WIC today. While an MSC may present significant cost savings, managing an M&E contract for multiple states can be overwhelming. Independent state agencies (SAs) may not have multiple states to coordinate with, but having the staff resources for vendor facilitation and implementing federal changes can be challenging. A PMO/PdMO can aid in improving business and technology outcomes for SAs and MSCs by bringing a level of coordination and consistency that otherwise might not happen. 

As federal changes grow in complexity, evidenced by the many changes to WIC stemming from the American Rescue Plan Act, coupled with workforce challenges in government, the importance of a PMO/PdMO has never been greater. Here are six ways a PMO/PdMO can help you:

  1. Facilitate the vendor relationship
    A PMO/PdMO not only holds the vendor accountable but also takes some of the workload off the SA by facilitating meetings, providing meeting notes, and tracking action items and decisions.
  2. Manage centrally located data
    A PMO/PdMO keeps all documents and data in a centralized location, fostering a collaborative environment and ease of access to needed information. A centralized location of data allows SAs to be on the same page for consistency, quality control, and to support the state’s need for clean, reliable information that is current and accurate.
  3. Track and mitigate risks 
    Effective risk management requires a substantial commitment of time and resources. The PMO/PdMO identifies, tracks, and assesses the severity of risks and suggests approaches to manage those risks. Some PMO/PdMOs assess all risks based on a severity index to help clients determine which risks need immediate action and which need monitoring.
  4.  Assist in the creation of Implementation Advanced Planning Document Updates (IAPDUs) 
    Creating and implementing an IAPDU can be time-consuming, confusing, and requires attention to detail. A PMO/PdMO alleviates time and pressure on SAs by helping to ensure that an IAPDU or funding request clearly outlines a plan of action to accomplish the activities necessary to reach an organization’s goal. PMO/PdMOs can draft IAPDUs to determine the need, feasibility, and projected costs and benefits for service. 
  5. Provide an unbiased, third-party opinion 
    A PMO/PdMO will offer an unbiased, third-party opinion to help avoid misunderstanding and frustration, decision stalemates, inadequate solutions, and unpleasant relationships between WIC agencies and M&E vendors. 
  6. Provide the right combination of business and technical expertise
    Staffing challenges (exacerbated by COVID-19), difficulties finding expertise managing software change management for WIC, and a retiring workforce knowledgeable in WIC system implementation have in some cases left SAs without critical resources. Having the right combination of skills from a third party can resolve some of these challenges.

Independent SAs or MSCs would benefit from having a PMO/PdMO to help meet the challenges WIC agencies face today, whether it is an unplanned funding change or updates to the risk codes. With the help of a PMO/PdMO developing standard practices and methodologies, SAs and MSCs can deliver and implement high-quality services more consistently and efficiently. The role of the PMO/PdMO is far-reaching and positively impacts WIC by providing backbone support for WIC’s overarching goal, to “safeguard the health of low-income women, infants, and children who are at nutrition risk.”

If you have questions about PMOs or PdMOs and the impact they can have on your agency, please contact us. We're here to help.

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Product Management Office: Benefits for WIC state agencies

Read this if you are a behavioral health agency leader looking for solutions to manage mental health, substance misuse, and overdose crises.

As state health departments across the country continue to grapple with rising COVID-19 cases, stalling vaccination rates, and public heath workforce burnout, other crises in behavioral health may be looming. Diverted resources, disruption in treatment, and the mental stress of the COVID-19 pandemic have exacerbated mental health disorders, substance use, and drug overdoses.

State agencies need behavioral health solutions perhaps now more than ever. BerryDunn works with state agencies to mitigate the challenges of managing behavioral health and implement innovative strategies and solutions to better serve beneficiaries. Read on to understand how conducting a needs assessment, redesigning processes, and/or establishing a strategic plan can amplify the impact of your programs. 

Behavioral health in crisis

The prevalence of mental illness and substance use disorders has steadily increased over the past decade, and the pandemic has exacerbated these trends. A number of recently released studies show increases in symptoms of anxiety, depression, and suicidal ideation. One CDC study indicates that in June 2020 over 40% of adults reported an adverse mental or behavioral health condition, which includes about 13% who have started or increased substance use to cope with stress or emotions related to COVID-19.1 

The toll on behavioral health outcomes is compounded by the pandemic’s disruption to behavioral health services. According to the National Council for Behavioral Health, 65% of behavioral health organizations have had to cancel, reschedule, or turn away patients, even as organizations see a dramatic increase in the demand for services.2,3 Moreover, treatment facilities and harm reduction programs across the country have scaled back services or closed entirely due to social distancing requirements, insufficient personal protective equipment, budget shortfalls, and other challenges.4 These disruptions in access to care and service delivery are having a severe impact.

Several studies indicate that patients report new barriers to care or changes in treatment and support services after the onset of the pandemic.5, 6 Barriers to care are particularly disruptive for people with substance use disorders. Social isolation and mental illness, coupled with limited treatment options and harm reduction services, creates a higher risk of suicide ideation, substance misuse, and overdose deaths.

For example, the opioid epidemic was still surging when the pandemic began, and rates of overdose have since spiked or elevated in every state across the country.7 After a decline of overdose deaths in 2018 for the first time in two decades, the CDC reported 81,230 overdose deaths from June 2019 to May 2020, the highest number of overdose deaths ever recorded in a 12-month period.8 

These trends do not appear to be improving. On October 3, the CDC reported that from March 2020 to March 2021, overdose deaths have increased 29.6% compared to the previous year, and that number will only continue to climb as more data comes in.9  

As the country continues to experience an increase in mental illness, suicide, and substance use disorders, states are in need of capacity and support to identify and/or implement strategies to mitigate these challenges. 

Solutions for state agencies

Behavioral health has been recognized as a priority issue and service area that will require significant resources and innovation. In May, the US Department of Health and Human Services' (HHS) Secretary Xavier Becerra reestablished the Behavioral Health Coordinating Council to facilitate collaborative, innovative, transparent, equitable, and action-oriented approaches to address the HHS behavioral health agenda. The 2022 budget allocates $1.6 billion to the Community Mental Health Services Block Grant, which is more than double the Fiscal Year (FY) 2021 funding and $3.9 billion more than in FY 2020, to address the opioid epidemic in addition to other substance use disorders.10 

As COVID-19 continues to exacerbate behavioral health issues, states need innovative solutions to take on these challenges and leverage additional federal funding. COVID-19 is still consuming the time of many state leaders and staff, so states have a limited capacity to plan, implement, and manage the new initiatives to adequately address these issues. Here are three ways health departments can capitalize on the additional funding.

Conduct a needs assessment to identify opportunities to improve use of data and program outcomes

Despite meeting baseline reporting requirements, state agencies often lack sufficient quality data to assess program outcomes, identify underserved populations, and obtain a holistic view of the comprehensive system of care for behavioral health services. Although state agencies may be able to recognize challenges in the delivery or administration of behavioral health services, it can be difficult to identify solutions that result in sustained improvements.

By performing a structured needs assessment, health departments can evaluate their processes, systems, and resources to better understand how they are using data, and how to optimize programs to tailor behavioral health services and promote better health outcomes and a more equitable distribution of care. This analysis provides the insight for agencies to understand not only the strengths and challenges of the current environment, but also the desires and opportunities for a future solution that takes into account stakeholder needs, best practice, and emerging technologies. 

Some of the benefits we have seen our clients enjoy as a result of performing a needs assessment include: 

  • Discovering and validating strengths and challenges of current state operations through independent evaluation
  • Establishing a clear roadmap for future business and technological improvements
  • Determining costs and benefits of new, alternative, or enhanced systems and/or processes
  • Identifying the specific business and technical requirements to achieve and improve performance outcomes 

Timely, accurate, and comprehensive data is critical to improving behavioral health outcomes, and the information gathered during a needs assessment can inform further activities that support programmatic improvements. Further activities might include conducting a fit-gap analysis, performing business process redesign, establishing a prioritization matrix, and more. By identifying the greatest needs and implementing plans to address them, state agencies can better handle the impact on behavioral health services resulting from the COVID-19 pandemic and serve individuals with mental health or substance use disorders more efficiently and effectively.

Redesign processes to improve how individuals access treatment and services

Despite the availability of behavioral health services, inefficient business and technical processes can delay and frustrate individuals seeking care and in some cases, make them stop seeking care altogether. With limited resources and increasing demands, behavioral health agencies should analyze and redesign work flows to maximize efficiency, security, and efficacy. Here are a few examples of process improvements states can achieve through process redesign:

  • Streamlined data processes to reduce duplicative data entry 
  • Automated and aligned manual data collection processes 
  • Integrated siloed health information systems
  • Focused activities to maximize staff strengths
  • Increased process transparency to improve communication and collaboration 

By placing the consumer experience at the core of all services, state health departments can redesign business and technical processes to optimize the continuum of care. A comprehensive approach takes into account all aspects that contribute to the delivery of behavioral health services, including both administrative and financial processes. This helps ensure interconnected activities continue to be performed efficiently and effectively. Such improvements help consumers with co-occurring disorders (mental illness and substance use disorder) and/or developmental disorders find “no wrong door” when seeking care. 

Establish a strategic plan of action to address the impact of the COVID-19 pandemic

With the influx of available dollars resulting from the American Recovery Plan Act and other state and federal investments, health departments have a unique opportunity to fund specific initiatives to enhance the delivery and administration of behavioral health services. Understanding how to allocate the millions of newly awarded dollars in an impactful and sustainable way can be challenging. Furthermore, the additional reporting and compliance requirements linked to the funding can be difficult to navigate in addition to current monitoring obligations. 

The best way to begin using the available funding is to develop and implement strategic plans that optimize funds for behavioral health programs and services. You can establish priorities and identify sustainable solutions that build capacity, streamline operations, and promote the equitable distribution of care across populations. A few of the activities state health departments have undertaken resulting from the strategic planning initiatives include: 

  • Modernizing IT systems, including data management solutions and Electronic Health Records systems to support inpatient, outpatient, and community mental health and substance use programs 
  • Promoting organizational change management 
  • Establishing grant programs for community-driven solutions to promote health equity for the underserved population
  • Organizing, managing, and/or supporting stakeholder engagement efforts to effectively collaborate with internal and external stakeholders for a strong and comprehensive approach

The prevalence of mental illness and substance use disorder were areas of concern prior to COVID-19, and the pandemic has only made these issues worse, while adding more administrative challenges. State health departments have had to redirect their existing staff to work to address COVID-19, leaving a limited capacity to manage existing state-level programs and little to no capacity to plan and implement new initiatives. 

The federal administration and HHS are working to provide financial support to states to work to address these exacerbated health concerns; however, with the limited state capacity, states need additional support to plan, implement, and/or manage new initiatives. BerryDunn has a wide breadth of knowledge and experience in conducting needs assessments, redesigning processes, and establishing strategic plans that are aimed at amplifying the impact of state programs. Contact our behavioral health consulting team to learn more about how we can help. 

Sources:
Mental Health, Substance Use, and Suicidal Ideation During the COVID-19 Pandemic, CDC.gov
COVID-19 Pandemic Impact on Harm Reduction Services: An Environmental Scan, thenationalcouncil.org
National Council for Behavioral Health Polling Presentation, thenationalcouncil.org
The Impact of COVID-19 on Syringe Services Programs in the United States, nih.gov
COVID-19 Pandemic Impact on Harm Reduction Services: An Environmental Scan, thenationalcouncil.org
COVID-19-Related Treatment Service Disruptions Among People with Single- and Polysubstance Use Concerns, Journal of Substance Abuse Treatment
Issue Brief: Nation’s Drug-Related Overdose and Death Epidemic Continues to Worsen, American Medical Association
Increase in Fatal Drug Overdoses Across the United States Driven by Synthetic Opioids Before and During the COVID-19 Pandemic, CDC.gov
Provisional Drug Overdose Death Counts, CDC.gov
10 Fiscal Year 2022 Budget in Brief: Strengthening Health and Opportunity for All Americans, HHS.gov

Article
COVID's impact on behavioral health: Solutions for state agencies

Read this if you used COVID-19 relief funds to pay essential workers.

The Coronavirus Aid, Relief, and Economic Security (CARES) and American Rescue Plan (ARPA) Acts allowed states and local governments to use COVID-19 relief funds to provide premium pay to essential workers. Many states took advantage of this opportunity, giving stipends or hourly rate increases to government and other frontline employees who worked during the pandemic, such as healthcare workers, teachers, correctional officers, and police officers.

States’ initial focus was to get the money to the essential workers as quickly as possible, but these decisions may cause them to be out of compliance with the Fair Labor Standards Act (FLSA), which sets standards for minimum wage, overtime pay, and recordkeeping. As a result, states should review how the funds were disbursed and if payroll adjustments are necessary. The amount, form, and recipients of the pay varied widely from state to state, making determining whether states are compliant with FLSA and calculating any discrepancies an immensely complex task. 

For example, states that disbursed one-time payments to essential workers will likely be able to treat those payments like standard one-time bonuses, while recurring stipends or hourly rate increases should be included in employee’s regular rate when calculating overtime pay. Because this is an unprecedented situation for both states and the federal government, clear guidance is not yet available from the Department of Labor. 

Fortunately, BerryDunn is already working with clients to review their use of the COVID-19 relief funds to help ensure essential workers were paid fairly. Our team is qualified to guide you through your unique situation and help you remain in compliance with FLSA guidelines.

If you have questions about your particular circumstances, please call our Compliance and Risk Management consulting team. We are here to help and happy to discuss options to pay for these services using federal funds.

Article
Was your COVID-19 essential worker hazard pay FLSA-compliant?

Read this if you are a state Medicaid agency (SMA) or managed care organization (MCO).

Value-based care (VBC) can help stabilize healthcare revenues during times of unexpected challenges and market volatility. Implementing or solidifying value-based payment (VBP) or purchasing arrangements between payers and providers is one pathway to stabilizing provider revenues, especially during the era of COVID-19.

On September 15, 2020, the Centers for Medicare & Medicaid Services (CMS) released a letter to state Medicaid directors (SMDs) on how states can advance VBC across healthcare systems. Earlier in 2020, the CMS Administrator indicated that value-based or capitated payments can help promote provider resiliency, allowing providers to focus on quality of care as opposed to increasing utilization for short-term reimbursement gains. 

Promoting the adoption of VBC in Medicaid managed care is a long-term strategy to create stable and predictable revenues for providers, and potentially critical to successfully react to market disruptions caused by COVID-19. Providers are encouraged or obligated to see patients to drive quality outcomes, receiving VBPs or capitation that shifts revenue streams away from traditional fee-for-service models. VBP arrangements focus on quality of care, and can promote beneficiary health while reducing total costs.

A roadmap to advancing VBP in Medicaid

As healthcare costs continue to increase, states, payers, and providers have started transitioning to VBC to reimburse services based upon particular conditions (e.g., diabetes), Episodes of Care (EOC) (e.g., pregnancy and delivery), or different population healthcare needs (e.g., immunizations and well-child visits). VBP arrangements can incentivize the delivery of healthcare innovations that prioritize care coordination and quality outcomes over volume of services rendered, and help to avoid waste and duplication of services. VBP seeks to incentivize providers based on performance, and can result in shared savings for both providers and healthcare payers.

While many states have made significant progress moving towards VBP arrangements in their Medicaid managed care programs, data from the Health Care Payment Learning and Action Network (HCP-LAN) indicates there is still opportunity for improvement. In 2018, 90% of Medicare payments were made through a VBP arrangement, yet only 34% of Medicaid payments were made through VBP.  

Through its recent guidance, CMS provides a roadmap, strategies, and alternative payment methodology frameworks for states and health plans to implement successful VBP models in collaboration with the provider community. Key considerations for successful VBP implementation include:

  • Defining level and scope of financial risk, and developing associated performance benchmarks
  • Selecting established quality metrics that incentivize provider performance without undue administrative burden
  • Encouraging multi-payer participation (e.g., Medicaid managed care, Medicare, commercial health plans) to align provider incentives across payers and delivery systems
  • Advancing Health Information Technology (HIT) capabilities across providers and delivery systems
  • Assessing health plan and provider/delivery system readiness
  • Promoting stakeholder engagement and transparency
  • Developing VBC programs focusing on sustainability

Regarding HIT and the exchange of data between providers, MCOs, and SMAs, CMS recommends states take advantage of the Advanced Planning Document (APD) process to request 90/10 funding to address technology infrastructure needs associated to help implement a robust VBC program and help ensure delivery system readiness. Facilitating data sharing and promoting real-time and reliable data transactions between payers and providers engaged in VBC is critical to measurement, monitoring, and programmatic success. Additionally, SMAs can leverage VBP arrangements to focus on areas of waste in the healthcare system, including care delivery, and care coordination. 

If you would like more information or have questions about VBC and guidance on assessing, developing or implementing changes to your managed care program, please contact us. We also offer services related to value-based payment, as detailed here. We’re here to help.

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Value-based care to increase provider and delivery system resiliency

Read this if you are a state Medicaid agency, state managed care office, or managed care organization (MCO).

The November 9, 2020 announcement by the Centers for Medicare & Medicaid Services (CMS) outlines updates to the 2016 Medicaid & Children's Insurance Program (CHIP) Managed Care Final Rule (Final Rule), which present new challenges to state Medicaid and CHIP managed care programs to interpret the latest CMS guidance that attempts to relieve current administrative burdens and federal regulatory barriers.

Although the latest guidance by CMS attempts to provide potential relief to states to administer their managed care programs, states will need to coordinate with federal and state partners to further understand the latest updates to federal regulations that are presented by the updated Final Rule.

By providing relief for current reporting requirements for program costs, provider rates, network adequacy, and encounter data, this latest change by the administration enables state managed care programs to reassess current operations to update and improve their current service delivery. The updated Final Rule continues CMS’ efforts to transition state managed care and CHIP programs from a fee-for-service delivery system, and to urge state Medicaid and CHIP agencies to continue to implement payment models to improve quality, control costs, and promote innovation.  

Impacts on Medicaid managed care operations 

Changes for states to consider that impact their Medicaid managed care operations based on the latest Final Rule include:

  • Coordination of benefits agreements (COBA): States will have the option to leverage different methodologies for crossover claim distribution to managed care plans, and the updated Final Rule indicates that managed care plans do not have to enter into COBA directly with Medicare.
  • Rate setting and ranges, and development practices: CMS provides the option for states to develop and certify a rate range and has provided clarification and different options for rate setting and development practices.
  • Network adequacy: CMS will allow for states to set quantitative network standards, such as provider to enrollee ratios, to account for increases in telehealth providers and to provide flexibilities in rural areas.
  • Provider directory updates: CMS will allow for less than monthly updates to provider directories due to the increased utilization of digital media by enrollees, emphasizing decreased administrative burden and the costs for state managed care plans. This update also indicates that completion of cultural competency training by providers will no longer be required.
  • Provider termination notices: The latest update increases the length of provider termination notice requirements to 30 calendar days (previously 15 calendar days).
  • Member information requirements: The latest update outlines flexibilities for enrollee materials as it relates to font size and formatting.
  • Quality Rating System (QRS): CMS will be developing a QRS framework in which states must align with, but will be able to develop uniquely tailored approaches for their state.
  • External quality review: States that exempt managed care plans from external quality review activities must post this information on their websites for public access on an annual basis.
  • Grievance and appeal clarifications: The latest update provides clarification that the denial of non-clean claims does not require adverse benefit determination notices and procedures; adjustments and clarification to State Fair Hearing enrollee request timeframes to align with recent Medicaid fee-for-service requirements

CHIP to Medicaid regulatory cross-references

CMS clarifies several CHIP to Medicaid regulatory cross-references. These cross-references include the continuation of benefits during State Fair Hearings, changes to encounter data submission requirements, changes to Medicaid Care Advisory Council (MCAC) requirements, grievance and appeals requirements, and program integrity standards.

Changing demand on managed care programs

The November 9 announcement follows a series of efforts by CMS during the past few years to modify the Final Rule in an attempt to help states meet the changing demands on their managed care programs. For the 2016 Final Rule, CMS formed a working group with the National Association of Medicaid Directors (NAMD) and state Medicaid directors to review current managed care regulations. The recommendations from the group led to public comment in November 2018 with state Medicaid and CHIP agencies, advocacy groups, health care providers and associations, health insurers, managed care plans, health care associations, and the general public. As a result of this public comment effort, the latest Final Rule seeks to streamline current managed care regulations.

The new Final Rule announcement comes after a series of efforts by CMS to offer guidance and make changes to their provider payment models, including its recent September 15 letter to state Medicaid directors that further promotes a strategic shift towards value based payments to transform the alignment of quality and cost of care for Medicaid beneficiaries.

The effective date for the new regulations will be 30 days after publication of the new Final Rule in the Federal Register (target date November 13, 2020), except for additions §§ 438.4(c) and 438.6(d)(6) for Medicaid managed care rating setting periods, which are effective July 1, 2021.

If you would like more information or have questions about interpreting the Final Rule for changes to your managed care program, please contact us.

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The 2020 Final Rule—Understanding new flexibilities to control costs and deliver care

Read this if your agency is planning to procure a services vendor.

In our previous article, we looked at three primary areas we, or a potential vendor, consider when responding to a request for services. In this follow-up, we look at additional factors that influence the decision-making process on whether a potential vendor decides to respond to a request for services.

  • Relationship with this state/entity―Is this a state or client that we have worked with before? Do we understand their business and their needs?

    A continuing relationship allows us to understand the client’s culture and enables us to perform effectively and efficiently. By establishing a good relationship, we can assure the client that we can perform the services as outlined and at a fair cost.
  • Terms and conditions, performance bonds, or service level agreements―Are any of these items unacceptable? If there are concerns, can we request exceptions or negotiate with the state?

    When we review a request for services our legal and executive teams assess the risk of agreeing to the state’s terms and compare them against our existing contract language. States might consider requesting vendors provide exceptions to terms and conditions in their bid response to open the door for negotiations. Not allowing exceptions can result in vendors assuming that all terms are non-negotiable and may limit the amount of vendor bid responses received or increase the cost of the proposal.

    The inclusion of well-defined service level agreements (SLAs) in requests for proposals (RFPs) can be an effective way to manage resulting contracts. However, SLAs with undefined or punitive performance standards, compliance calculations, and remedies can also cause a vendor to consider whether to submit a bid response.

    RFPs for states that require performance bonds may result in significantly fewer proposals submitted, as the cost of a performance bond may make the total cost of the project too high to be successfully completed. If not required by law that vendors obtain performance bonds, states may want to explore other effective contractual protections that are more impactful than performance bonds, such as SLAs, warranties, and acceptance criteria.
  • Mandatory requirements―Are we able to meet the mandatory requirements? Does the cost of meeting these requirements keep us in a competitive range?

    Understanding the dichotomy between mandatory requirements and terms and conditions can be challenging, because in essence, mandatory requirements are non-negotiable terms and conditions. A state may consider organizing mandatory requirements into categories (e.g., system requirements, project requirements, state and federal regulations). This can help potential vendors determine whether all of the mandatory requirements are truly non-negotiable. Typically, vendors are prepared to meet all regulatory requirements, but not necessarily all project requirements.
  • Onsite/offsite requirements―Can we meet the onsite/offsite requirements? Do we already have nearby resources available? Are any location requirements negotiable?

    Onsite/offsite requirements have a direct impact on the project cost. Factors include accessibility of the onsite location, frequency of required onsite participation, and what positions/roles are required to be onsite or local. These requirements can make the resource pool much smaller when RFPs require staff to be located in the state office or require full-time onsite presence. And as a result, we may decide not to respond to the RFP.

    If the state specifies an onsite presence for general positions (e.g., project managers and business analysts), but is more flexible on onsite requirements for technical niche roles, the state may receive more responses to their request for services and/or more qualified consultants.
  • Due date of the proposal―Do we have the available proposal staff and subject matter experts to complete a quality proposal in the time given?

    We consider several factors when looking at the due date, including scope, the amount of work necessary to complete a quality response, and the proposal’s due date. A proposal with a very short due date that requires significant work presents a challenge and may result in less quality responses received.
  • Vendor available staffing―Do we have qualified staff available for this project? Do we need to work with subcontractors to get a complete team?

    We evaluate when the work is scheduled to begin to ensure we have the ability to provide qualified staff and obtain agreements with subcontractors. Overly strict qualifications that narrow the pool of qualified staff can affect whether we are able to respond. A state might consider whether key staff really needs a specific certification or skill or, instead, the proven ability to do the required work.

    For example, technical staff may not have worked on this particular type of project, but on a similar one with easily transferable skills. We have several long-term relationships with our subcontractors and find they can be an integral part of the services we propose. If carefully managed and vetted, we feel subcontractors can be an added value for the states.
  • Required certifications (e.g., Project Management Professional® (PMP®), Cybersecurity and Infrastructure Security Agency (CISA) certification)―Does our staff have the required certifications that are needed to complete this project?

    Many projects requests require specific certifications. On a small project, maybe other certifications can help ensure that we have the skills required for a successful project. Smaller vendors, particularly, might not have PMP®-certified staff and so may be prohibited from proposing on a project that they could perform with high quality.
  • Project timeline―Is the timeline to complete the project reasonable and is our staff available during the timeframe needed for each position for the length of the project?

    A realistic and reasonable timeline is critical for the success of a project. This is a factor we consider as we identify any clear or potential risks. A qualified vendor will not provide a proposal response to an unrealistic project timeline, without requesting either to negotiate the contract or requesting a change order later in the project. If the timeline is unrealistic, the state also runs the risk that the vendor will create many change requests, leading to a higher cost.

Other things we consider when responding to a request for services include: is there a reasonable published budget, what are the minority/women-owned business (M/WBE) requirements, and are these new services that we are interested in and do they fit within our company's overall business objectives?

Every vendor may have their own checklist and/or process that they go through before making a decision to propose on new services. We are aware that states and their agencies want a wide-variety of high-quality responses from which to choose. Understanding the key areas that a proposer evaluates may help states provide requirements that lead to more high-quality and better value proposals. If you would like to learn more about our process, or have specific questions, please contact the Medicaid Consulting team.

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What vendors want: Other factors that influence vendors when considering responding to a request for services