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The Use of Private Insurance to Support Part C Systems

The Use of Private Insurance to Support Part C Systems Ron Benham Andrew Gomm Maureen Greer NECTAC/ITCA Finance Seminar August 14-16, 2006 State System of Payments Non-Substitution of Funds (Section 640)(a)

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The Use of Private Insurance to Support Part C Systems

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  1. The Use of Private Insurance to Support Part C Systems Ron Benham Andrew Gomm Maureen Greer NECTAC/ITCA Finance Seminar August 14-16, 2006

  2. State System of Payments • Non-Substitution of Funds (Section 640)(a) • Funds provided under section 1443 of this title may not be used to satisfy a financial commitment for services that would have been paid for from another public or private source, including any medical program administered by the Secretary of Defense, but for the enactment of this subchapter, except that whenever considered necessary to prevent a delay in the receipt of appropriate early intervention services by an infant, toddler, or family in a timely fashion, funds provided under section 1443 of this title may be used to pay the provider of services pending reimbursement from the agency that has ultimate responsibility for the payment.

  3. Sec. 303.12 Early intervention services • . a) General. As used in this part, early intervention services means services that--... (3) Are provided—...(iv) At no cost, unless, subject to Sec. 303.520(b)(3), Federal or State law provides for a system of payments by families, including a schedule of sliding fees; and…

  4. Sec. 303.520 Policies related to payment for services. • (a) General. Each lead agency is responsible for establishing State policies related to how services to children eligible under this part and their families will be paid for under the State's early intervention program.; and

  5. Sec. 303.520 Policies related to payment for services. • (b) Specific funding policies. A State's policies must— • (1) Specify which functions and services will be provided at no cost to all parents; • (2) Specify which functions or services, if any, will be subject to a system of payments • (i) Information about the payment system and schedule of sliding fees that will be used; and • (ii) The basis and amount of payments; and • (3) Include an assurance that-- • (i) Fees will not be charged for the services that a child is otherwise entitled to receive at no cost to parents; and

  6. Sec. 303.520 Policies related to payment for services. • (c) Procedures to ensure the timely provision of services. • No later than the beginning of the fifth year of a State's participation under this part, the State shall implement a mechanism to ensure that no services that a child is entitled to receive are delayed or denied because of disputes between agencies regarding financial or other responsibilities.

  7. Sec. 303.527 Payor of Last Resort • … Funds under this part may be used only for early intervention services that an eligible child needs but is not currently entitled to under any other Federal, State, local or private source.

  8. Use of Private Insurance • Accessing the family’s private insurance coverage for covered Part C services • Family Co-Pay or Deductible • Paying insurance premiums for Part C enrolled children

  9. States’ Use of Private Insurance • 2003 Survey – 20 states indicated they utilized private insurance as a fund source • 2005 Annual Performance Report – 17 states reported the receipt of revenue from private insurance totaling $52.7 million (Range $35M – 12,000)

  10. Today’s Presentation • Two states who will address: • Development of Insurance Legislation • Challenges and Opportunities of Fund Expansion • Impact on Families

  11. Early Intervention and Third Party Payers in Massachusetts A progressive partnership serving infants and toddlers with developmental concerns Ron Benham, MA Department of Public Health NECTAC/ITCA Fiscal Seminar August 14-16, 2006

  12. Early Intervention & Third Party Payers in Massachusetts • Definition • Eligibility • Overview of Current System • Passage of Early Intervention Legislation – 1983 • Medicaid Participation – 1985 • Mandated Insurance Coverage – 1990 • What Works

  13. 1. Definition Early Intervention is a comprehensive, community-based program of integrated developmental services which uses a family centered approach to facilitate the developmental progress of children between the ages of birth and three years whose developmental patterns are atypical, or are at serious risk to become atypical through the influence of certain biological or environmental factors.

  14. Definition, continued Early Intervention services are focused on the family unit, recognizing the crucial influence of the child’s daily environment on his or her growth and development. Therefore, Early Intervention staff attempt to work in partnership with those individuals present in the child’s natural environment, which may include settings other than the child’s home. The program seeks to support and encourage the caregiver’s growth toward independence in planning for the child’s continuing and changing needs.

  15. 2. Eligibility • Children with a diagnosis known to result in developmental delay • Children evaluated and found to have a developmental delay of 25% in one domain based upon their age • Children at risk of developmental delay

  16. 3. Overview of Current System • All services are purchased through community agencies (38 agencies) • Agencies bill insurers and MassHealth (Medicaid) directly • Department of Public Health payor of last resort • $83 million for direct services in FY’05; 28,xxx children served

  17. Overview, cont. • 62 Early Intervention providers • Range of disciplines in each program • Transdisciplinary service model

  18. 4. Passage of EI Legislation - 1983 • Required statewide service system • Established Public Health as lead agency • Required development of service standards • Required Medicaid participation

  19. Who Pays: Direct Service Only, FY’05(Excludes Specialty Program for Children with Autism or Children who are Blind) • State appropriation $ 25.4 M • Third party 38.9 M • Medicaid 18.2 M

  20. 5. Medicaid Participation – 1985 • Reimbursement model changed from cost reimbursement to unit based • Currently 7 reimbursable services & current hourly rates: • Home Visits $ 73.80 • Center Individual 61.88 • Community Based Group 28.32 • EI Only Group 21.56 • Parent Group 27.68 • Screening 86.24 • Assessment 99.00 • DPH serves as gatekeeper to Medicaid

  21. 6. Mandated Insurance Coverage – 1990 • Bill introduced in 1986 • Legislation passed in January 1990 • Law took effect in April 1990 • Fully in effect April 1991 • “Medically Necessary” criteria • Service costs capped • $5,200 yearly/$15,600 aggregate

  22. 7. What Works • Vision, Commitment, Persistence • Positive, cooperative working relationship with insurers and Medicaid • Insurance/Health Plans with Early Intervention coordinators work best • Insurers did not strongly oppose increase in cap to $5,200 annually, effective 7/1/04 • Joint efforts related to billing/claims submission • Ongoing identification of systemic problems, programs, payors

  23. New MexicoFamily Infant Toddler Program Private Health Insurance Legislation

  24. Background • NM Primary funding sources • State General Funds • Medicaid • IDEA Part C grant • Sporadic use of family fees • Historic billing of Health Plans – but most providers had given up

  25. Funding challenge • Over 100% growth in children / families served in 5 years (2000 – 2005) • Average annual growth of ~16% • Flat Federal Part C funding • Rate study in 2003 recommended increase to rates to meet costs • Challenge to access State General Funds to match growth

  26. Initial steps • Decision by ICC to look for other sources of funding • 2004 Legislature passed a Joint Memorial to study the feasibility of billing private health insurance • HJM 38 Committee included parents, providers, 3 major health plans, Insurance Division; Dept of Health and Medicaid • Input from two other States – Massachusetts and Connecticut

  27. Joint Memorial results • Brought health plans to the table • Various options considered • Report presented to Health & Human Services Committee • Report identified potential for ~$3 million revenue • Health plans recognized the minimal impact to premiums • Health plans saw “writing on the wall” for legislation and got behind the idea of an annual cap

  28. NM’s Insurance Statute • Introduced by Legislator (who’s on the ICC) • Language for bill submitted by ICC members • Testimony provided by families & providers • Recommendations of the HJM utilized in testimony • Passed the first session it was introduced!

  29. Features of legislation • Early Intervention must be provided by provider agencies certified by the Dept. of Health • IFSP is considered plan of care • Can not effect the families lifetime benefit cap • $3,500 annual cap (after which the Department of Health picks up all costs)

  30. Implementation • Consultation from Massachusetts • Initial meeting with health plans, Insurance Division, EI provider agencies, families • Monthly meetings with 3 major health Plans • Collecting health insurance information from families • Contract with billing agent to process third party claims

  31. Decisions / agreements • Department of Health will submit claims (rather than 33 providers) • Contracted agency will submit claims Health plans will not charge co-pays or deductibles • Health plans will not have certify FIT Provider agencies • Health plans will not conduct prior auth. • Health plans will allow back billing to July 01st

  32. Work ahead • Decide whether to require families to allow access to the insurance plan and if they choose not to whether to levy a fee • Develop MOUs with health plans that would cover issues like no co-pays or deductibles • Clean-up legislation that clarifies that this benefit does not apply to specific plans (dental, vision, long term care ins. etc.) • Collect the $$$

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