Medicaid Contract Purchasing Specifications

Medicaid Managed Care for Pediatric Services

Executive Summary

Overview of Contractor's Duties

The sample Medicaid Pediatric Purchasing Specifications are divided into an Overview of Contractor's Duties and 14 accompanying Parts that provide greater detail on specific subject areas. The Overview sets forth the basic duties owed by Contractor and providers to comply with the requirements in the various Parts.

Part 1: Items and Services

This Part enumerates an option for the benefit package for an enrolled child. These specifications have been drafted to be co-extensive with the full Medicaid program. The specifications offer sample language for virtually all Medicaid covered services for children under age 21 in accordance with federal Medicaid coverage and medical necessity standards. §101 represents a comprehensive listing under §1905(a) of the Social Security Act of all potential benefits categories for which federal Medicaid matching funds are available without a demonstration waiver. All federal service definitions found in federal regulations are incorporated by reference. §102 articulates the elements of the EPSDT coverage requirements in the Medicaid statute. A separate section, §105, sets forth benefit categories not covered under the purchasing agreement, if any. Purchasers that wish to include fewer than all items and services covered under their State Medicaid plans in agreements with MCOs retain direct responsibility under federal Medicaid law for the provision of remaining items and services to eligible children. This Part includes other sections for Purchasers interested in elements of particular items or services, such as prescription drugs and public health services.

Part 1A: Coverage Determination Standards and Procedures

This Part sets forth possible coverage determination standards and procedures to be followed by MCOs as well as permissible prior authorization and self-referral procedures. The coverage determination standards articulated in §101A reflect the federal Medicaid statute and regulations. These standards are broader in scope than the standards typically found in commercial MCO contracts. Insurers generally limit coverage to certain treatment which is medically necessary to restore functioning following an illness or injury. This traditional rule of insurance is designed to limit financial risk exposure and to prevent "moral hazard," an industry term used to describe the problem which arises when individuals with costly long-term and chronic health conditions seek coverage. Traditional insurance principles therefore may result in coverage for only a subset of all procedures that Medicaid may cover. See Negotiating the New Health System (2^nd Ed.), Vol. 1, p.18.

§101A speaks to standards for coverage determination, which is a decision by the Contractor as to whether to furnish (or pay for) an item or service that is covered under the purchasing agreement (in Part 1) with respect to an individual child. Subsection (e) defines "coverage determination." Subsection (a) lists the standards that the Contractor is to apply in making such determinations. Subsection (b) lists the types of evidence the Contractor must consider in making such determinations. Subsection (c) lists the reasons for which a Contractor may not make a coverage determination that results in the denial of a covered item or service to an individual child. Finally, subsection (d) sets forth a special rule for coverage determinations in the case of enrolled children with reportable conditions or diseases. The process by which coverage determinations are to be made is set forth in §102A.

Part 1B: Delivery of Covered Items and Services

The provisions in this Part address ways in which providers may deliver items and services to enrolled children. This Part was designed to enable Purchasers to specify, at their option, criteria and guidelines for the delivery of health care services to specific populations of children, or for specific illnesses or conditions. For example, §101B(b) specifies the use of Bright Futures: Encounter Forms for Health Professionals (1998) for an initial assessment of an enrolled child by a provider.

Part 2: Enrollment and Disenrollment Procedures

This Part sets forth Contractor's possible duties related to enrollment and disenrollment procedures. Specifically, in accordance with the overwhelming majority of state contracts and RFPs, §201 clarifies that children born to women who are enrolled with a contractor shall be treated as enrolled with the contractor and shall remain enrolled until the newborn is determined ineligible for Medicaid by the State Medicaid Agency or disenrolled by the family or caregiver. The other sections in this Part concern the possible duties related to children receiving treatment at the time of enrollment, and at the time of disenrollment. In addition, possible grounds for disenrollment of an enrolled child are enumerated.

Part 3: Information for New and Potential Enrolled Children

This Part enumerates possible information to be given to enrolled children prior to enrollment, and once enrolled. The contents of and requirements for an enrollee handbook are spelled out. The Part also specifies what information should be included in health education materials for enrolled children and in a pamphlet for enrolled adolescents. In addition, the Part provides language that would require Contractor to issue an enrollment card with Contractor's name and 24-hour toll-free phone number to the family of each enrolled child.

Part 4: Provider Selection and Assignment

This Part sets forth an option for the process for selection and assignment of primary care providers and dental care providers by enrolled children. It also provides for an option that allows a child with special health care needs to have a choice between a primary care provider or a pediatric specialist to serve as the primary care provider. This Part also allows for periodic re-selection of providers by enrolled children. It specifies that an enrolled child may disenroll for cause if inaccurate provider information is given or if Contractor fails to comply with the requirement to find an appropriate provider. In addition, this Part provides specifications for a Contractor to issue an updated enrollment card with provider information to the family of each enrolled child.

Part 5: Provider Network

This Part sets forth optional specifications for participation in Contractor's provider network for primary care providers, pediatric specialists, and dental care providers. Measures of sufficiency and the role of the provider are enumerated in §§502-504. This Part also contains participation and reimbursement provisions for consideration relating to specific types of providers, such as school-based providers and traditional Medicaid providers. §510 and §511 address access and reimbursement provisions relating out-of-network providers.

Part 6: Access Standards

This Part sets forth possible access standards for an initial assessment of an enrolled child, along with travel time and service waiting time standards. §602(a) addresses (1) the number of providers to which an enrolled child may have access, (2) the types of providers available to enrolled children in an urban service area, and (3) a specified travel time to each type of provider within the urban area. §603 addresses optional specifications on maximum service waiting times for emergency and urgent medical conditions, and for other illnesses or conditions.

Part 7: Relationships with Other State and Local Agencies

This Part sets forth optional specifications to coordinate Contractor's relationship with eight specific public agencies, including state Title V agencies and state Child Welfare agencies. This Part is divided into sections that address the issues and administrative mechanisms specific to each agency. Each section contains a provision relating to the possible elements of a memorandum of understanding between Contractor and the particular agency.

Part 8: Quality Measurement and Improvement

This Part sets forth optional specifications for Contractor's quality measurement and improvement program regarding the delivery of covered items and services to enrolled children. The optional provisions address the specific program elements, along with criteria for clinical studies, drug formulary assessments, utilization review, external quality review, and medical audits. §805 addresses optional utilization review criteria, including Contractor's compliance with the coverage determination standards and procedures required by this agreement and the detection of under-utilization of items and services by enrolled children.

Part 9: Data Collection and Reporting

This Part sets forth possible requirements for an information system to be maintained by Contractor, and specifies nine different types of data that a purchaser may wish to collect, including encounter and quality data. In addition, this Part addresses optional provisions relating to cross-cutting issues, including confidentiality, public access, ownership, and purchaser access.

Part 10: Enrolled Child Safeguards

This Part enumerates optional protections for enrolled children relating to communications with providers, confidentiality, and liability for payment.

Part 11: Vaccines for Children (VFC) Program

This Part describes the requirements of the VFC program under managed care, including network participation and reimbursement and reporting provisions. The VFC program is mandatory for all Medicaid-insured children (including targeted low income children under Title XXI who obtain Medicaid coverage as a result of Title XXI). VFC-eligible children receive vaccines through the VFC program.

Part 12: Remedies for Noncompliance

This Part sets forth optional remedies for Purchaser to apply if Contractor does not comply, or otherwise fails to perform, a requirement of the agreement. Such remedies include withholding of capitation payments, suspension of enrollment, notification of right to disenroll, liquidated damages, civil money penalties and termination. In addition to these remedies, the Part enumerates specific statutory remedies for different types of non-compliance. For example, §1202(a)(1) imposes a civil money penalty of not more than $25,000 for each instance in which Purchaser determines that Contractor has substantially failed to provide medically necessary items and services required under this agreement or under federal law. This Part also provides language that would afford Contractor the right to a hearing prior to the imposition such civil money penalties specified.

Part 13: Other Applicable Federal and State Requirements

This Part specifies the application of federal requirements under §1903(m) of the Social Security Act relating to risk contracts. Many of these requirements are generally found in Medicaid managed care contracts and are also applied in various Parts of this agreement. These federal or state requirements are incorporated by reference into the agreement to provide protections to an enrolled child. For example, §1301(b) enumerates non-discrimination statutes in federal law. Purchasers may wish to use this Part as a checklist for statutory references in developing Medicaid managed care purchasing documents.

Part 14: Definitions

This Part sets forth definitions used throughout the document and provides statutory references as necessary.