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Commonwealth Care CommCare Renewal March 20, 2008

Commonwealth Care CommCare Renewal March 20, 2008. Agenda. MMCO Update Co-Pay Schedule Enrollee Contributions Waiver Simplification. MMCO Update. Background Information. CommCare Bid specifications reviewed with BOD on December 13, 2007 Formal bid process began on December 21, 2007

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Commonwealth Care CommCare Renewal March 20, 2008

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  1. CommonwealthCare CommCare RenewalMarch 20, 2008

  2. Agenda • MMCO Update • Co-Pay Schedule • Enrollee Contributions • Waiver Simplification

  3. MMCO Update

  4. Background Information • CommCare Bid specifications reviewed with BOD on December 13, 2007 • Formal bid process began on December 21, 2007 • Initial bids received on January 23, 2008 • CCA/MCO bid discussions finalized on February 22, 2008 • Based on results of the bids, CCA extended process to get to today’s final results.

  5. Background Information (continued) • Current Medicaid waiver subjects Commonwealth Care to an “Actuarially Sound Rate Range” which is independently calculated and certified by actuaries • The purpose of the rate range is to establish a floor / ceiling in which the MMCO’s capitation payments must be within • This is required in order to receive federal match dollars • The rate range is based primarily on underlying actual claims cost of the Commonwealth Care population, adjusted for utilization and price trend, acuity changes, programmatic changes, etc. • Actual claims detail and the MMCO’s self-reported 4B reports (through September 2007) were the primary data sources used by the actuaries

  6. Background Information (continued) • CCA influences the bids through bid specifications prior to the initial bidding and MMCO specific discussions after receipt of the initial bids • Independent of the actuaries, CCA develops a “target” capitation rate, by Plan Type • Not MMCO specific • The CCA target is the basis of negotiations with the MMCOs • CCA Target is within the actuarial sound rate range • Primary data source for the CCA target is the actual CommCare claims cost

  7. Actual Bid Process • On February 22, 2008, CCA and the MMCOs completed the bid process as identified in the bid specifications • As a result of the bid process, overall average increase of 15.4% • Significant variation by MMCO • Post bid process, CCA initiated discussions with each of the MMCOs regarding a financial modification

  8. Overall Financial Picture

  9. MMCO Capitation Rates • Final Capitation Rates • Overall average increase of 12.1% (prior to benefit changes) • Rates are within the actuarially sound rate range • Significant variation exists between MMCOs • Average increase reflects not only annual trend, but also a correction for underlying medical need • Cannot compare CommCare rate of change to CommChoice • Current capitation rates were based on proxy data • Actual claims cost in excess of capitations for some Plan Types, especially Plan Type IV

  10. Aggregate Risk Corridors • Modified risk corridors due to scale of program and continued uncertainty of projected claims cost • The following risk corridors are symmetrical (the same percentage for both surplus or deficit share) • 2% band = 100% MMCO Risk • >2% - 5% band = 50% State / 50% MMCO • >5% - 50% band = 75% State / 25% MMCO • >50% band = 100% MMCO (closed-end risk corridor)

  11. PT 1 Terms • Wide range of projected likely claims experience for PT1 among MMCOs • Partially due to redetermination process just beginning • MMCOs agreed to lower rates & CCA agreed to increase risk sharing

  12. Co-Pay Schedule

  13. Plan Type II Recommendation Current Recommendation PCP $5.00 $10.00 Specialist $10.00 $18.00 ER $50.00 $50.00 Inpt - Hospital $50.00 $50.00 Inpt - Mental Health $50.00 $50.00 Otpt - Surgery $50.00 $50.00 Otpt - Mental Health $10.00 $10.00 Rx: Generic $5.00 $10.00 Preferred $10.00 $20.00 Non-preferred $30.00 $40.00 Rx - Mail: Generic $10.00 $20.00 Preferred $20.00 $40.00 Non-preferred $90.00 $120.00 Abortion Services $50.00 $50.00 Inpt Rehab (100 day max) $50.00 $50.00 S/T Otpt Rehab (PT/OT/Speech) $10.00 $10.00 Podiatry (diabetics only) $5.00 $5.00 Vision (exam/eyeglass 24 mths) $10.00 $10.00

  14. Plan Type III Recommendation Current Recommendation PCP $10.00 $15.00 Specialist $20.00 $22.00 ER $75.00 $100.00 Inpt - Hospital $250.00 $250.00 Inpt - Mental Health $250.00 $250.00 Otpt - Surgery $100.00 $125.00 Otpt - Mental Health $20.00 $15.00 Rx: Generic $10.00 $12.50 Preferred $20.00 $25.00 Non-preferred $40.00 $50.00 Rx - Mail: Generic $20.00 $25.00 Preferred $40.00 $50.00 Non-preferred $120.00 $150.00 Abortion Services $100.00 $100.00 Inpt Rehab (100 day max) $250.00 $250.00 S/T Otpt Rehab (PT/OT/Speech) $20.00 $20.00 Podiatry (diabetics only) $10.00 $10.00 Vision (exam/eyeglass 24 mths) $20.00 $20.00

  15. Co-Pay Schedule • Newly automated OOP maximums greatly enhance protection against excessive total cost-sharing • The current ‘shoe-box’ process requires members to keep track of their receipts • Virtually no reported relief in year 1 from ‘shoe-box’ method

  16. Out-of-Pocket Maximum Recommendation • Rx OOP maximum increased in line with Rx copays, from • $250 to $500 (PT2) • $500 - $800 (PT3) • Real OOP maximum is being added for all other services • $750 (PT2) • $1,500 (PT3) • More protection than in ESI

  17. Enrollee Contributions

  18. Enrollee Contribution Overview • Revised proposal lowers increase from 14% to 10% for all premium paying categories • The weighted average for all CommCare enrollees will be 2.5% • Waivers available to those for whom contribution is unaffordable • 10% increase is lower than CommCare capitation rate increase

  19. 2008 Draft Affordability Schedule – Individuals

  20. 2008 Draft Affordability Schedule – Couples

  21. Waiver Simplification

  22. Proposed Waiver Process Changes • Extend the length of a potential waiver from the current 6 month maximum to 12 • Expand proof of medical/dental expenses category from previous 12 months to previous 24 months of Commonwealth Care enrollment • Simplify MCO Plan Change requests • Limit the need for physician signature

  23. Proposed Waiver Process Changes, con’t • Illness of the individual (not just the child) will be included as a hardship situation • Individual would need to prove that the illness led to an increase in expenses related to the need to hire a full-time person to care for them • This would constitute the hardship

  24. Implementation • Changes would require programmatic and operational work • Administrative bulletin (and eventual regulatory changes) • Changes to existing processes, including forms, approvals and data collection • Changes, as outlined above, can be implemented by July 1, 2008

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