Medicaid Oversight and Advisory Committee




<MeetMDY1> July 17, 2017


Call to Order and Roll Call

The<MeetNo2> Medicaid Oversight and Advisory Committee meeting was held on<Day> Monday,<MeetMDY2> July 17, 2017, at<MeetTime> 1:00 PM, in<Room> Room 131 of the Capitol Annex. Senator Ralph Alvarado, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Ralph Alvarado, Co-Chair; Representative Kimberly Poore Moser, Co-Chair Designate; Senators Julie Raque Adams, Danny Carroll, Morgan McGarvey, and Stephen Meredith; Representatives Robert Benvenuti III, Jim Gooch Jr., Joni L. Jenkins, and Melinda Gibbons Prunty.


Guest Legislators: Representatives Danny Bentley, Ken Fleming, Russell Webber, and Addia Wuchner.


Guests: Veronica Cecil, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services; Pat Smith, RMC RMM, Chief Financial Officer, Owner, MD Billing Services, LLC; Rosmond J. Dolen, Kentucky Association of Health Plans; Lynn Tanner, Vice President Payer Strategy and Operations; Krista Matlock, Senior Director Payer Contracting, KentuckyOne Health, Kentucky Hospital Association; Mike Downing, President RSVP Homecare, Kentucky Medical Equipment Supplier Association; Sarah S. Nicholson and Carl Herde, Kentucky Hospital Association; Christina Bowlen, Norton Healthcare; and Matt Corbin, Maxim Healthcare.


LRC Staff: Ben Payne, Becky Lancaster, and Heather Scott.


Election of Committee House Co-Chair

The first order of business was election of the committee House co-chair. A motion was made by Representative Gibbons Prunty and seconded by Representative Gooch to nominate Representative Moser as House co-chair. A motion was made by Representative Gooch, seconded by Representative Gibbons Prunty, and approved by voice vote that nominations cease and Representative Moser be elected House co-chair by acclamation.


Approval of the Minutes from the October 19, 2016 Meeting

            A motion to approve the minutes of the October 19, 2016 meeting was made by Representative Benvenuti, seconded by Senator Meredith, and approved by voice vote.


New Medicaid Managed Care Organizations (MCOs) Contracts with the Commonwealth

            Veronica Cecil, Deputy Commissioner, Department for Medicaid Services, Cabinet for Health and Family Services, stated the latest MCOs’ contracts became effective July 1, 2017 and will continue until December 31, 2017. The MCOs’ contracts added language that requires the MCOs to participate in and pass a readiness review for the Kentucky HEALTH 1115 Waiver in order to be eligible for any future contract extension. The contracts require the MCOs to provide one credentialing process to satisfy credentialing for the MCOs and any of its subcontractors, if permitted under National Committee for Quality Assurance (NCQA) requirements. The Department for Medicaid Services (DMS) has added clarifying language to the contracts stating the external independent third party provider appeal applies to emergency room services. The entire Pharmacy Benefit Section was amended to incorporate changes required by Section 1927 of the Social Security Act as well as clarify language in the contracts. In the contracts, additional language required the MCOs to maintain an adequate behavioral health network for continuum of care upon decertification at a certain level of care. Future managed care contracts will contain specific Kentucky HEALTH 1115 Waiver requirements, changes to quality measures, increased financial reporting and a focus on encounter quality.


            In response to questions from Senator Meredith, Deputy Commissioner Cecil stated the Centers for Medicare and Medicaid Services (CMS) requires a minimum of two MCOs for the State but having at least three MCOs gives the Department of Medicaid Services the opportunity to shift members to other MCOs if something happened to one of the MCOs. DMS has not evaluated if going from five to three MCOs would reduce administrative costs. DMS would continue provide oversight and compliance to the MCOs.


            In response to questions from Senator Carroll, Deputy Commissioner Cecil stated the current MCOs’ contracts have the requirement of a 90 percent Medical Loss Ratio (MLR). The contracts are an extension of the original Request for Proposal (RFP) that contain five MCOs. The department would like to maintain consistency and would need to clarify with CMS before it could do away with any of the MCOs because that could generate an open enrollment process for those members.


            In response to questions from Representative Benvenuti, Deputy Commissioner Cecil stated DMS does step back from the administration of the MCOs day to day operations.


            In response to questions from Representative Moser, Deputy Commissioner Cecil stated she could provide a report regarding the timeline for credentialing providers. She stated the MCOs require credentialing within 45 days of a complete application for a behavioral health provider. For a regular provider it is 90 days and the department monitors that the reports are reflecting that number. There will be outliers but DMS does write letters of concern if the MCOs are outside of that number of days and the MCOs are not addressing the issue. The department’s fiscal agent utilizes a subcontractor to do all utilization management.


            In response to questions from Senator Alvarado, Deputy Commissioner Cecil stated prior to July of 2016, the department set a risk corridor for our Affordable Care Act (ACA) Medicaid expansion population, with a MLR between 82 percent and 92 percent. If MCOs were below 82 percent it had a premium refund. Prior to 2016, the only premium refunds have been on the ACA population which is all federal dollars. The premium refunds for calendar year 2014 was $97,023,465.00 and for calendar year 2015 was $42,444,039.00. The department will not see the results of the new requirement implemented in July of 2016 until a year after the close of the 2016 calendar year. DMS hopes the new provider appeal process will aid providers in getting substantiated services through the claim process and push MCOs to change behavior and cover services once an appeal is settled.


In response to questions from Senator Alvarado, Deputy Commissioner Cecil stated the department could compare commercial insurance appeal ratios to Medicaid appeal ratios. The top three appeal requests have been for; air and ambulance, inpatient stays primarily psychiatric, and anesthesia. The MCOs have a Healthcare Effectiveness Data and Information Set (HEDIS) incentive. The MCOs contracts reference providing physician incentive payments. DMS is involved in an innovations grant with CMS to look at value based purchasing.


MCOs Billing Practices

Pat Smith, RMC RMM, Chief Financial Officer, Owner of MD Billing Services and MD Consulting Services, LLC, stated her companies provide consulting and billing services for more than 350 providers, many are in under-served areas of Kentucky. Since the inception of the Medicaid MCOs her companies have experienced extreme difficulties in getting claims paid for the providers. She has increased her management staff by three people to follow up with MCOs. Her companies are waiting four to six months to get a new provider credentialed and effective dates are never backdated. The extended timeframe puts a financial hardship on providers. She recommended MCOs be contractually bound to backdated effective dates for all providers to the one year regulation that has always been a Medicaid regulation. MCOs should be required to properly staff the provider enrollment team so applications could be processed within a 30 day timeframe.


Ms. Smith continues to have problems with taxonomy codes and provider specialties not being loaded correctly. The claims are denied and her companies are told it could take from 30 to 60 days to correct the codes. Once codes are corrected MCOs are requiring her business to send additional information as a special project only to then have to wait another 60 to 90 days for that special project to be processed by the MCOs. Ms. Smith shared several specific examples of how processing and payments were delayed by MCOs. She has assisted in closing many practices that were providing medical care to Medicaid patients in under-served areas. The practices could not financially continue due to not being able to have their claims paid in a timely manner by the MCOs. She is aware of many providers who refuse to see Medicaid patients due to the difficulty of working with MCOs. Ms. Smith asked for support to enforce stricter regulations on MCOs for the sake of Medicaid patients who deserve to have access to medical care.


In response to questions from Representative Fleming, Ms. Smith stated that her companies’ guidelines are so the accounts receivable (AR) runs no more than 18 percent of primary claims and no more than 25 percent of secondary claims past 90 days. She stated she has not done a cost analysis for time, labor, or materials spent while working with MCOs but she has employed three full-time people to deal with the MCOs issues. Her companies’ profit margin has gone down 15 to 20 percent since dealing with MCOs.


In response to a question from Representative Jenkins, Ms. Smith stated all five MCOs are doing a bad job at process claims.


In response to questions from Senator Alvarado, Ms. Smith stated her businesses cover practices in Kentucky, Maine, Maryland, Ohio, West Virginia, Missouri and Hawaii. In her experience, Kentucky is having more problems with MCOs because when MCOs were implemented the MCOs were not ready. Ms. Smith stated the biggest issue with MCOs is credentialing. The physicians have the impression that MCOs are slow to get them credentialed because it saves the MCOs money to not pay for services provided while physicians wait for credentialing.


MCOs Billing Processes

            Rosmond Jones Dolen, Kentucky Association of Health Plans (KAHP), presented a high level, overview of the claims process by the MCOs. The process is as follows; a provider submits the claim via electronic data interchange (EDI), paper or web portal, validation of Strategic National Implementation Process (SNIP) edits, validation of recipient data, validation of provider data, validation of reference data, validation of Benefit Provider Administration (BPA) rules, prior authorization (PA) if required, perform editing that includes checking for adherence to National Correct Coding Initiative (NCCI) edits and specific state requirements, perform pricing, perform an audit, recognize claim disposition as pay, deny or hold, and finally to send the provider an Explanation of Payment (EOP). Ideally, this would happen in a 30 day period, however Kentucky Department of Insurance (DOI), does not require 100 percent standard on this issue. DOI is aware some claims are being pulled for reviews. She is not aware of any MCOs that are under corrective action with DOI relating to claims processing.


            In response to questions from Senator Adams, Ms. Dolen stated the timeframe for the claims process is 30 days. She does not have a specific number of claims the MCOs receive that are considered a clean claim, however millions of claims do get processed.


            In response to questions from Representative Benvenuti, Ms. Dolen stated the claims flow process presented has elements of prepayment review, specifically when performing the audit, to make sure claim is priced accurately. The term “clean claim” means a properly completed billing instrument. The claim must be in a nationally accepted Health Insurance Portability and Accountability Act (HIPPA) format, along with standard coding guidelines with no further information, adjustments, or alteration in order to be processed and paid by the health plan. Statutorily prescribed interest will attach if the claim goes beyond 30 days. The rate approaches 21 percent if the claim is over 90 days.


            In response to questions from Senator Meredith, Ms. Dolen recommended a conversation between the Senator and individual MCOs about the efforts made to set equal and fair payments for rural providers as opposed to urban providers. She stated she could not speak for the MCOs as to whether they would support a bill that would require payment information be given to the committee. Ms. Dolen recommended discussions between Ms. Smith and the individual MCOs to talk about general issues that may be impacting her claims process. As of June 30, 2017, there have been 204 requests that have been received for 3rd party review. The external independent third party review and administrative hearing appeal process is a free process available to every provider after they exhaust their plan remedies.


            In response to questions from Representative Gibbons Prunty, Ms. Dolen stated that MCOs are allowed different criteria for prior authorizations because each of the MCOs has the ability to employ its own medical management tools. She is not sure why MCOs are not non-profit. There is mix of memberships of profit and nonprofit MCOs in Kentucky. She does not identify that as something that needs to change, it is the structure of the companies operating in Kentucky.


            In response to questions from Representative Fleming, Ms. Dolen stated any claims paid after 30 days, 12 percent interest is added, after 60 days it goes up to 18 percent, and anything over 90 days is 21 percent. Interest should be added automatically when claims are paid. MCOs have a 95 percent adjudication requirement.


            In response to questions from Representative Jenkins, Ms. Dolen stated providers have different contracts with MCOs and the rate for services provided would be negotiated between the provider and the MCOs. A provider has 30 days from receiving the notice of denial to appeal the decision. If the provider disagrees, the appeal can go to the prompt pay appeals process, which involves an independent review entity. After that appeal, the provider can request a state hearing. An individual appeal predates the provider appeal process. She does not know how many fraudulent claims are being discovered by the appeal processes. Fraud, waste, and abuse continue to be a problem. The MCOs have steps and validations to check and recheck to deter fraud, waste, and abuse.


            In response to questions from Senator McGarvey, Ms. Dolen stated she could send him the number of children in the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program. Ms. Dolen responded that she would need to speak with other KAHP members before giving suggestions on further legislation to get MCOs to pay claims properly and on time. She would like to see the conversation be more collaborative and cooperative. KAHP would like to discuss what can be done to help providers who are struggling with billing issues.


MCOs Payment Processing

            Mike Downing, President, RSVP Homecare, Kentucky Medical Equipment Supplier Association, stated it frustrating that the coverage guidelines for Durable Medical Equipment and Supplies (DME), are quite varied. In regards to DME, his company has been asked to follow Medicare guidelines, Medicaid guidelines, and CMS guidelines by the MCOs, however they are all different. He is asking for consistency among the MCOs on the requirements. MCOs use two sets of coverage guidelines, Interqual or Milliman. Both are based on inpatient systems but not as much for DME and home care. He is asked by the MCOs to wait until the request is denied, and then MCOs will tell him what is required. Guidelines are supposed to be posted but they are not or vary between the MCOs. The MCOs may authorize the equipment on the date of service, however their systems are not updated fast enough and the claim is not paid. He does not recall receiving interest payments on unpaid claims. If a claim is adjudicated, it does not mean the claim was paid correctly.


MCOs Billing Procedures

            Krista Matlock, Senior Director Payer Contracting, KentuckyOne Health, Kentucky Hospital Association, stated KentuckyOne Health is an integrated healthcare delivery system, it operates in 17 hospitals throughout Kentucky and has approximately 1481 providers including physicians, physician assistants, nurse practitioners, and licensed medical social workers (MSW). She stated 25 percent of the business is Medicaid, however, approximately 75 percent of administrative costs go towards pursing payments from MCOs. KentuckyOne Health has several issues with MCOs such as untimely loading of rates causing untimely payments, non-compliance with the prompt payment law once errors are corrected, loading codes, insuring the code sets are loaded properly, finger-pointing between MCOs and their contractors, and inconsistent interest payments.


            Lynn Tanner, Vice President Payer Strategy & Operations, KentuckyOne Health, Kentucky Hospital Association, testified there are added steps involved when adjudicating a claim when an MCOs’ outsourced entity is included in the process. Interest payments to providers are not automatic. Payers are making profits in healthcare, not providers.


            In response to questions from Representative Gooch, Ms. Tanner stated Medicaid payments generally do not cover costs. Payment depends on regulations and provider services but it may cover 75 to 90 percent of the cost.


            In response to questions from Senator Carroll, Deputy Commissioner Cecil stated with each of the new MCOs’ contracts, DMS has tried to create better practices and higher compliance standards. MCOs have received letters of concern, corrective action plans, or sanctions. She requested providers make DMS aware if there are providers outside the credentialing requirement. She asked that providers use the appeal processes given so DMS is more aware of the issues. DMS wants to partner with providers and MCOs to create a better system.



            There being no further business, the meeting was adjourned at 3:20 PM.