I/DD Reimbursement Changes Bring New Management Challenges

Two recent headlines snagged my attention – both related to changes in Medicaid reimbursement for intellectual/developmental disabilities (I/DD) services. In September, the states of Virginia and Kansas both made changes to restrict how and when they will reimburse for residential I/DD services – creating some new challenges for provider organizations.

On September 1, 2016, the Virginia Department of Medical Assistance Services (DMAS) and the Department of Behavioral Health and Developmental Services (DBHDS) implemented a new reimbursement structure for certain residential services for people enrolled in the former Medicaid Intellectual Disability (ID) waiver (see Virginia Changes Reimbursement For Some ID Waiver Services To Tiered Rate).

Also on September 1, the Kansas Department for Aging and Disability Services (KDADS) implemented a new policy that changes reimbursement for residential home- and community-based services (HCBS) for people with intellectual and developmental disabilities (I/DD) from monthly to daily billing (see Kansas Shifts Residential IDD Services Reimbursement From Monthly To Daily Billing). Under the new policy, KDADS will pay only for the days that services are actually provided.

BraunsteinGeorge_250x250_web — Mr. Braunstein

What do these reimbursement changes mean for executives of service provider organizations serving the I/DD population? For a perspective from the field, I reached out to OPEN MINDS senior associate, George Braunstein, who provided some context for the changes and five-part plan to address them. He said:

The trends in benefit plan design and reimbursement structures for I/DD services are moving in a similar direction, although much slower, as the trends in Medicaid funded behavioral health. States are restructuring their Medicaid I/DD service waivers to serve more people with the same or less overall funding. They are doing that because the previous plans automatically paid very high rates for congregate residential and very low rates for other, less intensive residential services. These changes are meant to re-balance the existing funding so that more people can be served.

These trends in Medicaid funding for I/DD services are similar to what we have observed in Medicaid behavioral health. Therefore, provider systems need to develop operational and service management tools similar to their behavioral health peers, with an understanding of the difference in defining outcomes and value for the I/DD populations. The tools they need to develop include:

Develop well-trained managers and supervisors who can efficiently manage limited resources and still create value with the services provided.
Work on developing effective contract negotiating strategies, and especially developing structures to manage risk-based, value-based reimbursement methodologies.
Build an effective health information and financial management software that will enable executive leadership teams to make data-driven decisions. Too often, I/DD provider organizations rely on state data bases as their sole source of information.
If your I/DD service system is housed in a larger organization that provides behavioral health or other disability services, use your organizational strategic planning to develop effective strategies and tactics for economy-of-scale approaches.
Focus on proactively planning for the inevitable next stages of Medicaid reimbursement changes for I/DD.

Obviously, there are a number of operational decisions that will need to be made about the service delivery system, but unless you take steps to put the above in place, those operational decisions will more likely be reactive in nature.

Ms. Harmon

I also reached out to OPEN MINDS senior associate, Tonya Harmon who noted how important it is for provider organizations serving the I/DD population to invest in information systems and analytic capabilities needed for the new market realities. She noted:

I/DD provider organizations need more sophisticated information systems. The field has incredibly high documentation requirements and services are often delivered in a variety of out-of-office settings in the community, so mobility and ease of data collection and access are paramount – systems that can track service delivery in real time, that are connected to billing systems, and can easily be configured to meet new billing requirements. They need systems that tie service delivery to documentation and service plans – they are all highly interconnected and required not only for billing but licensure and forecasting.

In the new environment, payers – both states and health plans – are realizing that outcomes in I/DD programs are vastly different than in mental health. Executives of provider organizations need to be able to articulate and demonstrate outcomes specific to this market segment. In addition, parents and guardians also want access to information: to read notes; participate in care plans; and for self-directed care. As a result, consumer portals are becoming more and more important. And finally, I/DD provider organizations also have high staff turnover, so training and technology literacy are ongoing issues.

For more on the changing I/DD financing and reimbursement landscape, check out these resources in the OPEN MINDS Industry Library:

For even more, join me at The 2017 OPEN MINDS I/DD Executive Summit on February 15, 2017 in Clearwater, Florida where Dave Richard, Deputy Secretary of Medical Assistance, North Carolina Department of Health & Human Services will open the institute with his session, “Emerging Best Practices In Medicaid Managed Care Long-Term Supports & Services: Trends Shaping The Market.”