Medicaid Contract Purchasing Specifications
MEDICAID MANAGED CARE FOR PEDIATRIC SERVICES
A TECHNICAL ASSISTANCE DOCUMENT
(September, 1999)
Funded with support from:
Health Resources and Services Administration, US DHHS
Centers for Disease Control and Prevention, US DHHS
The David and Lucile Packard Foundation
CONTENTS
This document, Optional Purchasing Specifications: Medicaid Managed
Care for Pediatric Services (Medicaid Pediatric Purchasing Specifications),
was prepared by the George Washington University Medical Center, School
of Public Health and Health Services' Center for Health Services Research
and Policy (CHSRP) in consultation with experts in child health policy.
This technical assistance document should be viewed as a tool to assist
Medicaid agencies and other public purchasers identify key issues as they
prepare their purchasing agreements with managed care organizations (MCOs).
The contents of this document are optional and are not policy guidance
of the Health Resources and Services Administration (HRSA), Centers for
Disease Control and Prevention (CDC), or the Health Care Financing Administration
(HCFA).
These sample specifications provide a broad menu of draft provisions
for contracts, requests for proposals (RFPs), requests for information
(RFIs), and general service agreements for the purchase of covered health
benefits from MCOs through Medicaid on behalf of eligible children and
adolescents. Some of these illustrative provisions reflect federal law;
some reflect professional guidelines; and some reflect the judgment of
experts in maternal and child health. The key to these different bases
is explained below.
The Origins of This Technical
Assistance Project
Since 1995, CHSRP has conducted an intensive examination of contracts
between state Medicaid agencies and MCOs. This analytic work has produced
three editions of a comprehensive study of contract provisions. The most
recent version is the six-volume document, Negotiating the New Health
System: A Nationwide Study of Medicaid Managed Care Contracts (3rd
Ed. 1999), www.gwu.edu/~chsrp.
Negotiating the New Health System is a part of a broader managed
care contract analytic studies and technical assistance project financed
by numerous funders, including HRSA, CDC, the Substance Abuse and Mental
Health Services Administration (SAMHSA), the David and Lucile Packard
Foundation, and the Commonwealth Fund. The Pew Charitable Trusts and the
Annie E. Casey Foundation supported original funding for this project.
The development of sample purchasing specifications under managed care
constitutes one component under this project.
The process for developing these sample specifications began with
guidance from a HRSA working group. A parallel process relating to adolescent
health and school health was conducted with CDC staff. CDC and HRSA agreed
to incorporate these components into the pediatric specifications. Draft
specifications were prepared and presented to various agencies, including
HRSA, CDC, and HCFA. The sample specifications were reviewed through a
series of vetting meetings involving state Medicaid and public health
officials, providers, MCO representatives, consumers, and other outside
child health experts. The changes suggested at these vetting meetings
have been incorporated into the sample specifications and have been reviewed
by representatives from these meetings.
Organization and Structure of
This Technical Assistance Document
These sample specifications contain over 120 illustrative sections.
These specifications also include over 55 alternative options, which take
the form of footnotes. These sample specifications and alternative options
are for the consideration of state purchasers that are interested in buying
pediatric care for Medicaid-eligible children from MCOs on a risk basis.
The suggested language is organized by issue so that a user with a particular
interest can refer only to those portions of the document that are relevant.
The sample specifications were developed to be consistent with the
Medicaid statute as amended by the managed care provisions in the Balanced
Budget Act of 1997(BBA), P.L. 105-33.In addition, these specifications
are consistent with the available interpretations of the BBA provisions
as reflected in letters to state Medicaid directors issued by HCFA and
available at www.hcfa.gov/medicaid.
On September 29, 1998, HCFA issued a proposed rule to implement the changes
enacted in the BBA with respect to Medicaid managed care (63 Fed. Reg.
52022). This document will be revised to conform to the applicable provisions
in the final rule.
The specifications are divided into an Overview of Contractor's Duties
and 14 accompanying Parts that provide greater detail on specific subject
areas. The logic of this format — an Overview and various Parts — is
as follows.
First, there is no universally accepted drafting format for Medicaid
purchasing agreements; instead, each state has its own approach. In order
to be useful to as many interested states as possible, illustrative specifications
such as those in this document must be organized into segments of manageable
size that are readily accessible to different potential users.
Second, much of the federal policy and the science in this area has
been evolving and will continue to do so. The format of this technical
assistance document allows new developments in any one area to be incorporated
into the relevant Part without redrafting the remainder of the document.
Finally, contracts or agreements between purchasers and MCOs tend
to cover a wide range of substantive issues. This format is designed to
facilitate the drafting and negotiation of these documents by enabling
the parties to refer to those provisions for which they need technical
assistance. In short, the Overview and the individual Parts are portable;
that is, they can be broken out separately or integrated into other purchasing
documents as the circumstances require at the option of the purchaser.
These sample specifications are designed for numerous users including:
agencies that want to construct a new purchasing document; agencies that
have a purchasing document in use but wish to modify it; public health
agencies, other state and local agencies, and constituency groups that
want to provide technical assistance to the purchasing agency; and MCOs.
Consumers and health care providers also should find this document useful
in helping them identify key issues in managed care contracting.
Not all users can be expected to be interested in every issue addressed
in these sample specifications. To facilitate the use of this document,
CHSRP will develop User Guides that identify the specific provisions that
are relevant to certain users. The following User Guides appear at the
end of this document: State Title V Agencies, Adolescents, School Health,
and Community Health Centers.
The illustrative language in this document is drafted to minimize
ambiguity and maximize clarity. The more clearly an MCO understands what
is expected of it by the purchaser, and the more clearly a purchaser understands
what the MCO is obligating itself to provide, the more likely it is that
any agreement between the two parties will be carried out to the mutual
satisfaction of each and will be likely to benefit the children enrolled
with the MCO.
Each Part contains three elements: suggested language for purchasing
agreements, alternative options to such language, and compliance measures
that Purchasers may wish to use in evaluating the performance of MCOs
and their compliance with particular duties.
Consider for example §101A(c)
of Part 1A. This section offers language as to the grounds on which MCOs
might be prohibited from denying coverage to a Medicaid-eligible child.
There are eight suggested categories of prohibited grounds for denial.
One ground, denial on the basis that the item or service is experimental,
permits an MCO to deny coverage only if the contractor adheres to federal
standards regarding when a service is considered experimental under Medicaid.
(see §101A(c)(3)). Many insurers,
in fact, use significantly different standards in administering their
private products.
One option available to an interested state purchaser is not to include
such language. This option is contained in the alternative option suggested
in footnote 4. Another option would be to include the language in §101A(c)(3)
but to modify the definition of "experimental" so as to narrow
(or broaden) the class of items and services which could be subject to
denial. Yet another option available to the purchaser is to include this
language (as modified) along with one or more of the remaining seven categories.
Whatever policy the state purchaser chooses, it should be interested
in determining the extent to which the MCO is in compliance with the purchaser's
policy. At the end of Part 1A, in boldface, is a suggested compliance
measure that the purchaser may wish to use in making this determination.
Procedural time frames are generally not included in these specifications.
Instead, a bracket ([ ]) serves as a placeholder for the state purchaser
to insert a selected time frame. The only exception is in cases where
the applicable federal statute or regulation specifies a time frame.
How to Use This Technical Assistance
Document
As mentioned above, the contents of this document are optional. Some
of the specifications are based on federal law, some are based on formal
guidelines, and some are based on the best judgment of maternal and child
health experts. To assist the user in identifying the basis (or bases)
for each sample specification, this document uses the following symbols:
- An "L"
means the provision is based in whole or in part on federal Medicaid
law, as articulated in the Medicaid statute, a federal regulation or
other written HCFA policy, such as Letters to State Medicaid Directors.
- A "G" means
the provision is based in whole or in part on formal guidelines issued
by, or under the auspices of, a government agency, a professional society,
or a formally convened deliberative body.
- A "K" means
the provision is based in whole or in part on the best judgment and
opinions of persons knowledgeable in the maternal and child health care
practice, delivery, and management. This symbol is used to signify sample
specifications that do not reflect a formal legal policy or that are
not part of a formal guideline but that are recommended as an option
because they reflect good practice in the opinion of experts. These
provisions do not represent HCFA policy, nor the position of the Medicaid
program.
The drafting format used in these sample specifications is as follows
- The Overview and each Part are divided into sections, identified
by "§";
- Each section, in turn, is divided into one or more subsections: "(a)", "(b)", etc.;
- A subsection may be divided into one or more paragraphs: "(1)",
"(2)", etc.;
- A paragraph may be divided into one or more subparagraphs: "(A)",
"(B)", etc.; and
- A subparagraph may be divided into one or more clauses: "(i)",
"(ii)", etc.
Every state purchaser has its own drafting format. The particular
format used in these sample specifications is NOT intended as a substitute
for each state's own format. Instead, it is intended simply to divide
each suggested provision into the smallest practicable policy elements.
This division and subdivision format is designed to enable a user to identify
quickly the policy choices contained in each provision and to identify
which, if any, of the elements the user wishes to adopt. This format also
serves as a detailed checklist for those users who wish to compare portions
of their current purchasing documents with the relevant portions of these
sample specifications.
For example, assume a state purchaser uses the following language
relating to data:
"7. Reporting Requirements...
b. The HMO-MA shall supply additional data upon the request of the
Department....
c. The HMO-MA shall supply such other reasonable information as the
Department may from time to time request..."
If this purchaser were to find that potential contractors are seeking
greater specificity in order to better evaluate the potential administrative
burden that they would be undertaking, the purchaser could use Part
9 of these specifications. Part 9 identifies
nine different types of data that a purchaser may wish to collect, as
well as the provisions relating to issues that cut across all types of
data, including confidentiality, public access, ownership, and purchaser
access.
The introductory commentary accompanying Part
9 also explains the federal statutory context and refers the user
to the relevant tables of Negotiating the New Health System (3rd
Ed.) where language from other state purchasing agreements may be found.
Finally, the table of contents will also lead interested purchasers to
specifications on MCO information systems and remedies for noncompliance
with any duties a purchaser may wish to impose. These different elements
are integrated into a comprehensive statement of Contractor's duties relating
to data in §901 ("In General").
Assume the purchaser decides to clarify that MCOs must collect and
report data that the purchaser needs to enable its Medicaid Management
Information System to perform as required under federal law. The sample
specifications suggest the following language:
"§906. Aggregate Utilization Data...
L(b) MMIS
� Contractor shall collect and report to Purchaser, in such form and
manner as Purchaser specifies, the aggregate utilization data necessary
to enable Purchaser to comply with the requirements of §1903(r)
of the Social Security Act, 42 U.S.C.§1396b(r), relating to the
operation of a Medicaid Management Information System."
The purchaser could then adapt this sample specification to its
own format:
"7. Reporting Requirements...
b. The HMO-MA shall supply additional data upon the request of the
Department....
c. The HMO-MA shall supply such other reasonable information as the
Department may from time to time request, in such form and manner
as the Department specifies, including the aggregate utilization
data necessary to enable Purchaser to comply with the requirements of
§1903(r) of the Social Security Act, 42 U.S.C.§1396b(r), relating
to the operation of a Medicaid Management Information System."
Issues Not Addressed in This Technical Assistance
Document
These sample specifications do not contain all the provisions that
are commonly found in contracts or purchasing agreements between state
Medicaid agencies and MCOs. For example, this document does not include
provisions on capitation rates, insolvency, financial audits, reinsurance,
duration of the agreement, termination procedures, or subcontractual relationships.
For suggested language on these and other general provisions, see:
- Wendy L. Krasner, "Government Contracts in Managed Care,"
Critical Steps in Managed Care Contracting: A Looseleaf Guide,
National Health Lawyers Association, 1995;
- NHLA/AAHA Practice Guide Series, Volume 1: Managed Care Contracting
Handbook, 1997, www.healthlawyers.org;
- Medimetrix Consulting, "Medicaid Managed Care Contracting
Guide," August 1997, Center for Health Care Strategies, Inc., www.chcs.org;
and
- Jane Perkins and Kristi Olson, "An Advocate's Primer on Medicaid
Managed Care Contracting" 31 Clearinghouse Review 19 (May/June
1997), and www.nhelp.org.
Related CHSRP Activities
In addition to the Optional Purchasing Specifications: Medicaid Managed
Care for Pediatric Services, CHSRP, with support from HRSA, is developing
Optional Purchasing Specifications for CHIP for state CHIP agencies that
do not administer their CHIP programs through Medicaid. The format of
the sample CHIP specifications parallels that of the Medicaid specifications
in this document, but there are significant policy differences that reflect
differences in the underlying statutory authorities. For example, these
Medicaid specifications contain a far more extensive set of covered benefits
than are found in the CHIP specifications. This is because the federal
Medicaid statute contains a more comprehensive minimum benefits package
than does the CHIP statute.
In connection with the general pediatric purchasing specifications
for Medicaid and CHIP, CHSRP is also developing:
- Optional Purchasing Specifications: Medicaid Managed Care for Children
with Special Health Care Needs with support from HRSA,
- Optional Purchasing Specifications: Medicaid Managed Care for Children
with Mental Illness and Addiction Disorders and Children in Foster Care
with support from SAMHSA, and
- Optional Purchasing Specifications for Child Development Services
in Medicaid Managed Care with support from the Commonwealth Fund.
With various funding support, CHSRP is also developing sample purchasing
specifications relating to a number of health services issues. Listed
below are the projects underway at CHSRP. Upon completion, relevant provisions
of these sample specifications will be incorporated into the sample Medicaid
and CHIP pediatric specifications. Each set of sample specifications will
be posted on the CHSRP website (www.gwu.edu/~chsrp)
for the benefit of interested state and local health agencies and other
potential users.
- HIV infection and HIV-related conditions (August 1999);
- Immunizations (May 1998);
- Tuberculosis (August 1999);
- Childhood lead poisoning (November 1998);
- Sexually transmitted diseases (STDs);
- Dental and oral health;
- Diabetes;
- Reproductive health;
- Mental illness and addiction disorders of adults;
- Asthma;
- Elements of Memoranda of Understanding between public health agencies
and MCOs;
- Data and information collection and reporting; and
- Access Standards.
