CMS Update: How Do Recent Federal Regulation Changes Affect Your Life?

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CMS Update How Do Recent Federal Regulation
Changes Affect Your Life?

• Dale Jarvis, CPA
• NCCBH Consultant
• MCPP Healthcare Consulting
• dale_at_mcpp.net
• www.mcpphealthcare.com

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Session Overview

• Since 2003, there have been a series of federal
  legislative and regulatory changes that impact
  how Community Mental Health Services Programs and
  Community Mental Health Boards are managed and
  funded. If you want to make sense of the
  alphabet soup of BBA, DRA, CMS, PIHP, come to
  this session where we will explore the following
  topics
• Historical overview of mental health funding in
  the United States
• The early role of managed care in public mental
  health
• The Michigan 1915(b)(c) combo waiver
• The 2003 sea change brought on by the
  implementation of the Balanced Budget Act
• How the Deficit Reduction Act and subsequent
  regulations have further tightened the rules
• Whats next for the community behavioral health
  system

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• Chapter 1
• Some Relevant History about Public Mental Health
  Funding

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A bit of relevant history

• The 1963 Community Mental Health Centers
  Construction Act (PL 88-164) and its subsequent
  amendments required grantees to provide five core
  elements of service outpatient, inpatient,
  consultation/education, partial hospitalization,
  and emergency/crisis intervention.
• Categorical grant funding enabled community
  mental health centers (CHMCs) to serve all
  members of the community, regardless of their
  ability to pay, effectively creating a mental
  health safety net.
• (Note Several items of relevant history are
  from the Maine Rural Health Research Center,
  Edmund S. Muskie School of Public Service,
  University of Southern Maine)

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A bit of relevant history

• In part as a consequence of the
  deinstitutionalization movement that began in
  earnest in the 1960s, many CMHCs abandoned their
  roles as multiple service agencies to devote an
  increasing proportion of their resources to the
  needs of individuals defined by their state
  mental health agencies as members of priority
  populations.
• Children and adolescents under the age of 18 with
  a diagnosis of mental illness who exhibit severe
  emotional or social disabilities which are life
  threatening or require prolonged intervention
  and
• Adults who have severe and persistent mental
  illness such as schizophrenia, major depression,
  manic depressive disorder, or other severely
  disabling mental disorders which require crisis
  resolution or ongoing support and treatment.

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A bit of relevant history

• President Reagans Omnibus Budget Reconciliation
  Act of 1981 (PL 97-35) consolidated federal
  mental health funding into block grants to be
  administered by the state mental health agencies.
• This further hastened the transition of CMHCs
  away from their safety net roles.
• By the way, this was also accompanied by a 21
  funding cut.

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New Term

• shift and shaft v. To shift programs to a lower
  level of government without providing the means
  with which to pay for those programs.shift and
  shaft n.shift-and-shaft adj.
• The Colorado Municipal League's Sam Mamet coined
  the term 'shift and shaft' to describe this
  process back in the Reagan era, when the feds
  began shifting many of their responsibilities to
  the states and shafting them by not also
  forwarding the money to pay for those programs.

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Medicaid and Mental Health

• The next major funding phase began in the late
  1980s and early 1990s with the rise of Medicaid
  managed behavioral healthcare, which injected
  substantial funding into community mental health
  centers.

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Medicaid as a of Total MH Revenue
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President Bushs FY2008 Federal Budget Proposal

• In mid-February, President Bush released his
  proposed 2.9 trillion budget for FFY2008 that
  includes the following non-Medicaid cuts related
  to public behavioral health

• While many of the proposals made by the
  administration for FFY 2008 will likely be
  rejected by a Democratically-controlled Congress,
  the budget will place many programs in a
  defensive posture.

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President Bushs FY2008 Federal Budget Proposal

• President Bushs FFY2008 budget also includes the
  following assumptions about Medicaid funding

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Strategic efforts to sidestep the Democratic
Congress

• Now that the Democratic takeover of Congress has
  blocked one route for weakening the federal
  government's regulatory role, the Bush
  administration has found another. Under an
  executive order signed by President Bush last
  month, federal agencies will have to establish
  offices staffed with political appointees to make
  sure that any new rules or guidance documents are
  in line with the administration's anti regulation
  agenda.
• Agencies issue rules to flesh out the broadly
  worded laws that Congress passes to ensure clean
  air and water, safe food and drugs, and
  hazard-free workplaces. The rule makers are
  agency scientists and civil servants whom the
  White House cannot always count on to favor
  special interests over the public interest. The
  new regulatory oversight offices will make sure
  that agencies keep an aggregate account of the
  costs and benefits of all their regulations, not
  just new ones. They will be involved in the
  framing of regulations from the beginning, not
  just overseeing the final product.

From a Boston Globe editorial Wednesday, February
7, 2007
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Federal Budget Outlook
Cliff Notes Version of this Slide Current
projections assume that the AMT wont change, all
of the 2001 and 2003 tax cuts will sunset, and we
will still add 1.6 trillion to the national
debt. Note Off Budget Surplus is almost all
Social Security (plus a little Post Office) Data
Source Congressional Budget Office

• CBO Caveats
• Revenues are projected to rise from 18.6 percent
  of GDP this year to almost 20 percent of GDP in
  2012 and then remain near that historically high
  level through 2017. Much of that increase results
  from two aspects of current law that have been
  subject to recent policy changes the growing
  impact of the alternative minimum tax (AMT) and,
  even more significantly, various provisions
  originally enacted in the Economic Growth and Tax
  Relief Reconciliation Act of 2001 (EGTRRA) and
  the Jobs and Growth Tax Relief Reconciliation Act
  of 2003 (JGTRRA) and modified by subsequent
  legislation, which are scheduled to expire by
  December 31, 2010.
• Outlays for discretionary programs (activities
  whose spending levels are set anew each year
  through appropriation acts) are projected to
  decline from 7.8 percent of GDP last year to 5.8
  percent of GDP by 2017a lower percentage than
  any recorded in the past 45 years. That
  projection derives mainly from the assumption in
  the baseline that discretionary funding will grow
  at the rate of inflation, which is lower than the
  growth rate that CBO projects for nominal GDP.
  The projection for discretionary spending
  implicitly assumes that no additional funding is
  provided for the war in Iraq in 2007 and that
  future appropriations for activities related to
  the war on terrorism remain equivalent, in real
  (inflation-adjusted) terms, to the 70 billion
  appropriated so far this year.

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Starve the Beast..

• Starve the Beast, v. To cut taxes with the intent
  of using the reduced revenue as an excuse to
  drastically reduce the size and number of
  services offered by a government.
• starve-the-beast n., adj.starving the beast
  n., pp.starve-the-beaster n.
• (source www.wordspy.com)

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Starve the Beast

• The starve-the-beast doctrine is now firmly
  within the conservative mainstream. George W.
  Bush himself seemed to endorse the doctrine as
  the budget surplus evaporated in August 2001 he
  called the disappearing surplus "incredibly
  positive news" because it would put Congress in a
  "fiscal straitjacket."
• Like supply-siders, starve-the-beasters favor
  tax cuts mainly for people with high incomes.
  That is partly because, like supply-siders, they
  emphasize the incentive effects of cutting the
  top marginal rate they just don't believe that
  those incentive effects are big enough that tax
  cuts pay for themselves. But they have another
  reason for cutting taxes mainly on the rich,
  which has become known as the "lucky ducky"
  argument.
• Here's how the argument runs to starve the
  beast, you must not only deny funds to the
  government you must make voters hate the
  government. There's a danger that working-class
  families might see government as their friend
  because their incomes are low, they don't pay
  much in taxes, while they benefit from public
  spending. So in starving the beast, you must take
  care not to cut taxes on these "lucky duckies."
  (Yes, that's what The Wall Street Journal called
  them in a famous editorial.) In fact, if
  possible, you must raise taxes on working-class
  Americans in order, as The Journal said, to get
  their "blood boiling with tax rage."
• Paul Krugman, "The Tax-Cut Con," The New York
  Times, 9/14/2003

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• Chapter 2
• Along comes the Balanced Budget Act of 1997

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Key BBA Questions

• What is the financial impact of the Actuarial
  Rate Setting Process on States, Plans and
  Providers?
• How is CMS new oversight role and the DRA
  affecting States, Medicaid Plans and Providers?

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Overview

• In August 2003 the Balanced Budget Act (BBA) of
  1997s Final Rules for Medicaid Managed Care went
  into effect. This new rulebook changes how
  states with Medicaid Behavioral Health Managed
  Care Waivers are paid for services and manage
  their programs.
• Lets start with the question, What is the
  financial impact of the Actuarial Rate Setting
  Process on States, Plans and Providers?

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Pre Balanced Budget Act

• The Old Rules
• Under managed care, there is added flexibility to
  give clients what they need, even if it doesnt
  fit into a defined service code.
• Cost savings from the Medicaid managed care plan
  can be used to provide additional mental health
  services we dont have to worry about giving
  money back if we dont spend it.
• Recording and tracking every unit of services is
  not as important because were not begin paid fee
  for service.
• We should be focusing more on managing to client
  outcomes than managing our unit cost and
  productivity levels.

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Actuarial Soundness

• The Final Rules include a very important change
  in the Federal financing of Medicaid managed care
  programs - the repeal of the Upper Payment Limit
  (UPL).
• The UPL has been replaced with the requirement
  for States to set Actuarially Sound Capitation
  Rates.

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Actuarially Sound Rates

• The New Math Medicaid Rates are based on
• Counting the historical services that have been
  reported,
• Multiplying them by a rate for each service, and
• Adding/subtracting adjustments for inflation and
  expected changes in utilization
• Rates must be based only on Medicaid services
• If a provider provides services outside the state
  plan and theyre not one of the approved 1915(b)3
  alternative service, they wont be counted
• Rates must only pay for services to Medicaid
  beneficiaries
• If a plan uses any savings to serve persons who
  have lost their Medicaid coverage, they wont be
  counted (and they will be subject to recoupment
  in an audit)

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Actuarially Sound Rates (continued)

• Savings in a world of Actuarially Sound Rates
• If a Plan has any money is left over at the end
  of the year, the savings must be put into a
  Community Reinvestment Fund, which must be
  earmarked for service delivery projects to
  Medicaid enrollees, to be spent in the following
  12 months.
• If the Plan is a governmental entity, savings
  equal payments minus expenses no provision for
  surpluses.
• If a provider is related to the government-run
  Plan (e.g. any overlap of board members), the
  provider organization will likely be considered a
  related party and any unexpended provider funds
  will also be called savings.

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Impact of Actuarial Soundness

• A number of States have managed mental health
  care systems where Medicaid Health Plans have
  passed a portion of their capitated risk down to
  providers in the form of case rates or
  sub-capitation payments with the expectation
  that
• Providers must meet the needs of the
  clients/populations for which they are
  responsible.
• Providers are at risk for excess utilization and
  cost under case rates, plus penetration risk
  under sub-capitation.
• Providers can reap the reward if savings were
  achieved.
• These reimbursement methods inadvertently broke
  the link between recording/submitting services
  and being paid. As a result, there was a drop in
  reported state plan services and the inability to
  quantify how much was due to decreased clinical
  effort, and how much to service capture problems.

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Impact of Actuarial Soundness
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Impact of Actuarial Soundness

• No Boren Amendment Rates do NOT have to be
  adequate to cover the costs of an efficiently run
  organization (Brenda Jackson, CMS/SAMHSA
  Conference, October 2004)
• The BBA brought about the repeal of a provision
  of Medicaid law commonly known as the Boren
  Amendment, which stated that states Medicaid
  payments to hospitals, nursing facilities and
  ICF/MRs had to be sufficient to cover the cost of
  efficiently and economically operated
  facilities. Under the BBA the only requirement
  is that states must open their Medicaid
  ratesetting process to the public.
• When the unit cost portion of the actuarial math
  problem is completed, theres no assurance that
  the actuaries will use figures that are relevant
  to the cost of doing business in the community
  mental health systems

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Impact of Actuarial Soundness

• Issue A number of actuarial firms are beginning
  to examine unit costs in publicly-funded mental
  health systems in a number of non-fee for
  service managed care states this issue had
  previously fallen below the radar screen.
• Concern In States with Medicaid Health Plan
  designs that pay providers using methods other
  than Fee for Service, actual unit costs may be
  well above costs used in the actuarial studies
  and the provider community will not be able to
  respond quickly enough, which could result in
  loss of capacity and system instability.

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Cost per Hour Example (actual data)
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Back to Fee for Service

• Under a system that uses actuarial approaches to
  set capitation rates, if a service has not been
  properly recorded at the provider agency,
  accurately transmitted to the Medicaid Health
  Plan, and then submitted and accepted by the
  State Mental Health Departments data system, the
  service did not occur. Regardless of the
  payment methods used by states to pay plans, and
  plans to pay providers, we have moved to what is
  essentially a fee for service system.

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Impact on Providers

• If youre in a state where the Medicaid authority
  pays you on a fee for service basis, the world
  has come back around to your point of view and
  you should experience little or no impact.
• If youre in a state where any Medicaid services
  are paid via subcapitation, case rates,
  grant-in-aid, or similar non-fee for service
  methods, there is a high probability that your
  Medicaid funding will be cut.
• Furthermore, if you fall into this second
  category, if your state pays Medicaid health
  plans the same rate throughout the state, youre
  in greater jeopardy.

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Statewide Rates

• States with county or regional-based Plans may
  have Medicaid PMPM rate models that could create
  a downward funding spiral
• Example - Oregon Mental Health System
• Round 1 The PriceWaterhouse Coopers actuarial
  study found that, on the average, Plan PMPM rates
  were 16 higher than they could justify with
  their claims data
• Rates were cut across the board to the Plans
• Plans with higher utilization lost money Plans
  with lower utilization continued to be paid more
  than their utilization would justify.

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Statewide Rates

• Round 2 The most recent PriceWaterhouse Coopers
  actuarial study found that, on the average, Plan
  PMPM rates were 9.1 higher than they could be
  justified from claims data.
• This analysis is translating into a second across
  the board cut (9.1) that will be going into
  effect October 1, 2005.
• Again, Plans with higher utilization will lose
  money Plans with lower utilization will continue
  to be paid more than their utilization would
  justify.
• Unless a targeted intervention is made this
  downward trend could continue.

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Statewide Rates
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Flaw in the Current Actuarial Process

• Many States public mental health budgets are
  under-funded
• Different studies in California, Oregon and
  Washington estimated that only ½ of the needed
  resources were available
• ½ of the people were being served (CA)
• ½ of the funding was available (OR, WA)
• A more conservative 50 States analysis shows a
  similar picture of shortfalls

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Total FY 2002 SMHA-Controlled Per Capita Mental
Health Expenditures
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State by State Funding Comparison
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Flaw in the Current Actuarial Process

• This translates into a driving by looking in the
  rear view mirror process
• Each States rates are based on the math problem
  of counting historical services, not by analyzing
  the needs of the population.
• The process, as it is currently used, maintains
  the inequities between states and is not a
  reflection of the service needs and cost of the
  covered population.
• This is very different from how the process is
  handled in the general healthcare system.

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Healthcare Example
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Flaw in the Current Actuarial Process

• Actuarial Science is not inconsistent with how
  the process should occur
• What are the target populations, what is the
  projected prevalence of mental illness in those
  groups, and how many people ought to be
  receiving service in a given year? How do these
  projections compare with the numbers of people
  served in the last three years?
• Based on research and experience in this and
  other states, what services do clients need and
  how much of each type of service do they need?
  How do these projections compare with the service
  utilization over the course of the last three
  years?
• What service capacity does the mental health
  system have in place to meet these needs? How
  well does capacity match with demand? What
  service should the provider network offer? What
  mechanisms should be put in place to ensure that
  willing and qualified providers offer services in
  the right scope, amount and duration?
• What is the cost of meeting the projected demand
  (e.g. how much money should the state be
  spending on public mental health)? How do these
  projections compare with actual expenditures over
  the last three years?

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• Key BBA Question 2
• How is CMS new oversight role and the DRA
  affecting States, Medicaid Plans and Providers?

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CMS Oversight

• The CMS Office of Inspector General has been
  taking a hard line against past CMS practices,
  finding them at fault for inadequate waiver
  oversight and approving state requests that are
  outside the letter of the law
• The OIG is looking into issues in IA, KS, WA, UT,
  and CO and considering disallowances,
  de-categorizations and deferrals

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CMS Oversight

• CMS has stepped up their scrutiny of Medicaid
  contracts, waivers, state plan amendments, and
  state operations
• Past approval from CMS is no guarantee that they
  wont come back and tell you the rules have
  changed

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Issue 1 CMS Oversight Example
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CMS Oversight

• CMS has unveiled a plan to begin prospectively
  reviewing state Medicaid budgets
• A draft State Medicaid Director Letter from
  Dennis Smith noted
• Over the last decade states have initiated a
  number of financing mechanisms to enhance the
  allowable Federal funding for their Medicaid
  programs. CMS and the OIG reviews of these
  programs have resulted in the identification of a
  number of potential disallowances of Federal
  Funds involving billions of dollars that have
  accumulated over the years To address these long
  standing problems, CMS will implement a
  prospective financial management review process

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CMS Oversight

• Soon afterward, the Administration made proposals
  in the Presidents Budget to institute new
  Medicaid program integrity activities saving the
  federal government 1.5 billion in FY2005 and
  23.5 billion over 10 years
• Pushback by the National Governors Association
  resulted in a temporary pullback by Secretary
  Thompson, but
• Translation Expect CMS to play hardball in
  their oversight role

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CMS Regulation 2258-P

• On January 18th, CMS issued a sweeping, proposed
  regulation that is targeted specifically at
  public and other safety net providers, which
  would cut federal Medicaid payments by 3.87
  billion over five years. This regulation
• Imposes cost limits on Medicaid payments to
  Government Providers that would have the effect
  of only covering the cost of the service provided
  to Medicaid enrollees for Medicaid services any
  funds left unspent at the end of the year would
  have to be returned to CMS.
• All states would have to institute a cost
  reporting system for government providers,
  similar to the Medicare Cost Report, as the basis
  for determining cost. This approach brings with
  it a set of non-allowable costs, which means that
  government safety net providers are put in a
  cost-minus Medicaid funding environment.
• Restrictions are placed on Intergovernmental
  Transfers (IGT) and Certified Public Expenditures
  (CPE) that have the effect, in some states, of
  allowing CMS to wiggle out of paying the federal
  share of valid Medicaid expenditures.

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DRA, etc

• The federal government has continually made clear
  its intent to detect and prosecute anyone who
  commits healthcare fraud and abuse. It is
  important that all CHC CFOs recognize that they
  and their organizations, including their
  organizations directors, can be held civilly and
  criminally liable for the acts of employees, even
  if that employee acted on his or her own and
  without the permission or knowledge of
  management.
• There are several sources of regulation and
  guidance in this area including
• The Federal False Claims Act
• Health Insurance Portability and Accountability
  Act of 1996
• Balanced Budget Act of 1997
• Sarbanes-Oxley Act
• Deficit Reduction Act
• DHHS OIG Regulation

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DRA, etc

• Some government estimates indicate that
  healthcare fraud and abuse accounts for an
  estimated 10 percent of total federal healthcare
  spending in the United States.

The current annual healthcare budget in the
United States is 2 Trillion. 10 of that is 200
Billion.

• Consequently, federal and state government
  interest in combating fraudulent and abusive
  practices is now widespread. High-profile
  settlements involving many types of providers and
  settlements into the hundreds of millions of
  dollars have provided additional incentives for
  the government to continue its scrutiny of the
  healthcare industry.
• There are several federal departments that are
  charged to investigating healthcare fraud and
  abuse including the Justice Department, the Dept.
  Health and Human Services Office of Inspector
  General (DHHS-OIG), and the Centers for Medicare
  and Medicaid (CMS).

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DRA, etc

• Here are a few important provisions
• The Federal False Claims Act Any person found to
  be knowingly involved in submitting a false or
  fraudulent claim to the federal government is
  liable for a civil penalty of 5,500 to 11,000,
  plus three times the amount of damages.
  Healthcare providers run the risk of violating
  the FCA if they submit a claim for payment that
  they knew was fraudulent. While the government
  does not have to prove that an individual
  intended to defraud the government, it does have
  to prove that the individual
• 1) had actual knowledge of the information
• 2) acted in deliberate ignorance of the truth of
  the information or
• 3) acted in reckless disregard of the truth or
  falsity of the information.
• HIPAA of 1996 Federal Criminal Law HIPAA
  created new criminal statutes specificallyfor
  certain healthcare fraud activities. For
  example, anyone who knowingly and willfully
  defrauds a healthcare benefit program (e.g.
  Medicaid or Medicare) can face monetary fines
  and from 20 years to life imprisonment, or both,
  depending upon the severity of the violation.

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DRA, etc

• Here are a few important provisions (continued)
• HIPAA of 1996 Civil Monetary Penalties If an
  individual submits, or causes the submission of,
  a false or fraudulent claim for any federal
  healthcare program, they are subject to penalties
  three times the amount claimed for the service,
  and the fine is 10,000 for each item or involved
  service. Three actions were added to the existing
  list of actions
• 1) the submission of a claim based on a code that
  will result in a greater payment than should be
  applicable (upcoding)
• 2) the submission of a claim for items or
  services that are not medically necessary and
• 3) offering remuneration to beneficiaries to
  influence them to use a particular provider,
  practitioner, or supplier for anything that is
  reimbursable by Medicare or Medicaid.

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DRA, etc

• Here are a few important provisions (continued)
• October 5, 2005, the Centers for Medicare
  Medicaid Services (CMS) published the Medicaid
  Program and State Childrens Health Insurance
  Program (SCHIP) Payment Error Rate Measurement
  regulation. This regulation contains information
  on CMS plans to engage a national contracting
  strategy in order to implement a portion of
  Public Law 107-300, the Improper Payments
  Information Act of 2002 (IPIA) in Medicaid and
  in SCHIP.

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DRA, etc

• Here are a few important provisions (continued)

52
DRA, etc

• Here are a few important provisions (continued)
• Deficit Reduction Act - Employee Education about
  False Claims Recovery On January 1, 2007,
  Section 6032 of the Deficit Reduction Act of 2005
  (DRA) went into effect. This section applies to
  all health care companies (MHOs and providers)
  that receive five million dollars or more in
  annual Medicaid reimbursement.
• Section 6032 requires companies to adopt written
  policies for all employees, contractors and
  agents that discuss three specific issues.
• First, the written policies must provide
  detailed information about the False Claims Act
  and comparable state anti-fraud statutes,
  including whistleblower provisions in those laws.
  
• Second, the written policies must include
  detailed provisions regarding the company's
  policies and procedures for preventing fraud and
  abuse.
• Finally, any employee handbook must describe the
  rights of employees to be protected as
  whistleblowers. The employee handbook must also
  restate the companys policies concerning false
  claims laws and the companys internal process
  for preventing fraud and abuse.

53
DRA, etc

• The DHHS-OIG (DHHS Office of Inspector General)
  annual Work Plan is a good plact to go to
  identify concerns for any given healthcare niche.
  The FY2007 Work Plan has targeted a number of
  areas relevant to CHCs
• Family Planning Services We will determine
  whether several States improperly claimed
  enhanced Federal funding for family planning
  services and the resulting financial impact on
  the Medicaid program. States may claim Medicaid
  reimbursement for family planning services at the
  enhanced Federal matching rate of 90 percent.
  Prior work identified services that were not
  related to family planning that should not have
  been claimed at the enhanced rate.
• Improper Pediatric Dental Medicaid Payments We
  will identify improper payments and potential
  cost savings for Medicaid pediatric dental
  services in five selected States. In 2003,
  Medicaid expenditures totaled 262.6 billion, of
  which dental services accounted for 3 billion
  (approximately 1 percent). Through a medical
  review, this study will identify improper
  payments by addressing medical necessity, correct
  coding, and documentation of services.
• Medical Services for Undocumented Aliens We will
  review Medicaid payments for medical services
  rendered to undocumented aliens to determine
  whether States appropriately claimed Federal
  funds for allowable medical services. States may
  claim Federal funds for medical services
  provided to undocumented aliens only when those
  services are necessary to treat an emergency
  condition. Prior OIG survey work revealed that
  six States claimed more than 1.8 billion
  annually for medical services rendered to
  undocumented aliens. We have indications from
  work in one State and discussions with CMS
  officials that at least three of the six States
  have claimed Federal funds for non-emergency
  medical services.

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So What Do I Do About These Threats?

• Step 1 Think about Mark Twains quote, Denial
  aint just a river in Eqypt. Assess where your
  organization stands in relation to its awareness
  about the importance of addressing internal
  control and compliance risks?
• Step 2 Say the Serenity Prayer God grant me the
  serenity to accept the things I cannot change
  courage to change the things I can and wisdom to
  know the difference. And then realize that, as
  the CFO, youre THE ONE responsible for making
  changes in this area.
• Step 3 Use the DHHS OIG Compliance Program for
  Individual and Small Group Physician Practices
  as a free guide for assessing the adequacy of
  what you currently have in place. (Although its
  similar to other documents, I like the way
  theyve simplified the approach.)
• http//oig.hhs.gov/authorities/docs/physician.pdf
  
• Step 4 Review the Sarbanes-Oxley Act and use it
  as a best practice template for corporate
  compliance.

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OIG Compliance Program for Individual and Small
Group Physician Practices

• The Program contains 7 Components
• Conducting internal monitoring and auditing
  through the performance of periodic audits
• Implementing compliance and practice standards
  through the development of written standards and
  procedures
• Designating a compliance officer or contact(s) to
  monitor compliance efforts and enforce practice
  standards
• Conducting appropriate training and education on
  practice standards and procedures
• Responding appropriately to detected violations
  through the investigation of allegations and the
  disclosure of incidents to appropriate Government
  entities
• Developing open lines of communication, such as
  (1) discussions at staff meetings regarding how
  to avoid erroneous or fraudulent conduct and (2)
  community bulletin boards, to keep practice
  employees updated regarding compliance
  activities and
• Enforcing disciplinary standards through
  well-publicized guidelines.

56

• Chapter 3
• Whats Next?

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Behavioral Health Financing Model

• Each state, region and local setting has a unique
  mix of financial challenges that must be
  understood in order to match their behavioral
  health clinical design to currently available and
  potential funding sources.
• The National Council is beginning to develop a
  set of behavioral health financing
  recommendations that are relevant to most states
  and regions.
• This chapter presents a preliminary look at these
  recommendations.

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Behavioral Health Financing Model

• Recommendation 1 The Substance Abuse Mental
  Health Services Administration (SAMHSA) and the
  Centers for Medicare and Medicaid Services (CMS)
  should institute a joint project to supporta
  redesign of the public behavioral health system,
  modeled on the Institute of Medicines Change
  Model. This work should include
• Updating the final methodology for estimating
  the prevalence of serious mental illness and
  serious emotional disturbance to include a
  component for estimating the demand for public
  behavioral health services.
• Developing a set of cost models to accompany the
  evidence-based practice work that has already
  been completed. These cost models should include
  3 components the cost of implementing each EBP,
  the annual cost of providing these services, and
  the potential cost offsets.
• Developing a set of regulatory changes that would
  better facilitate blended funding of behavioral
  health services including Medicaid, Medicare,
  SAMHSA and other federal programs.
• Analyzing the different healthcare reimbursement
  methods in relation to their alignment (or not)
  with current CMS regulations.
• Recommending Pay for Performance mechanisms that
  could be piloted by state Medicaid programs.

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Behavioral Health Financing Model

• Recommendation 2 Every State, using the
  resources provided in Recommendation 1, should
  project the cost of meeting the behavioral health
  needs of citizens that require publicly funded
  behavioral health care. This should include
  analysis of
• What are the target populations, what is the
  projected prevalence of mental illness in those
  groups, and how many people ought to be
  receiving service in a given year?
• Based on research and experience in this and
  other states, what services do clients need and
  how much of each type of service do they need?
  
• What is the cost of meeting the projected demand?
• We understand that in the absence of standardized
  acuity-based level of care systems and limited
  work in the costing of evidence-based practices,
  States will have to estimate projected
  utilization levels and cost.

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Behavioral Health Financing Model

• Recommendation 3 Every State should complete a
  gap analysis between available resources (funding
  and workforce) and the projected demand for
  publicly funded behavioral health services.
• This is the same requirement CMS makes for
  Medicaid health plans under the BBA
• 42 CFR 438.207(b) Documentation of adequate
  capacity and services The contract must require
  that the entity submit documentation to the
  State to demonstrate, in a format specified by
  the State, that it
• (1) Offers an appropriate range of preventive,
  primary care and specialty services that is
  adequate for the anticipated number of enrollees
  for the service area.
• (2) Maintains a network of providers that is
  sufficient in number, mix, and geographic
  distribution to meet the needs of the anticipated
  number of enrollees in the service area.
• This analysis should by stratified by geographic
  region, age group, and payor sources (e.g.
  Medicaid, Medicare, Dual Eligibles,
  Indigent/Uninsured).

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Behavioral Health Financing Model

• Recommendation 4 Every State should complete an
  assessment of the use of evidence-based and
  promising practices in the public behavioral
  health system, including what it will cost to
  close any gaps that exist.
• The purpose of this recommendation is to enhance
  the quality of the cost recommendation, which
  requires evaluating
• The deployment of evidence-based services that
  are being provided with fidelity.
• The deployment of evidence-based services that
  are being provided below fidelity.
• Populations and service areas that would benefit
  from the use of evidence-based services provided
  with fidelity.
• Changes in the type and quantity of services that
  would be needed to improve the effectiveness of
  the system.
• The projected costs of making the changes
  described above.
• The cost offsets that would be realized.

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Behavioral Health Financing Model

• Recommendation 5 Every State should complete an
  assessment of the infrastructure gaps that hinder
  the provision of effective and efficient care.
• This assessment should include an analysis of
  gaps and costs to fill those gaps related to
• Redesigning/re-engineering care processes
• Effective use of information technologies
• Workforce development including knowledge and
  skills management
• Developing of effective teams
• Coordinating care across patient conditions,
  services and settings over time
• Use of performance and outcome measurement for
  continuous quality improvement and accountability
• (You many note that these are the 6 redesign
  imperatives from Crossing the Quality Chasm.)

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Behavioral Health Financing Model

• Recommendation 6 Every State should complete an
  assessment of the reimbursement systems used in
  the state and how they should be changed to
  comply with federal laws/regulations and support
  effective and efficient care.
• Core elements of an effective reimbursement
  system that should be considered include
• Capacity-based funding for services that require
  fire department like coverage such as crisis
  programs.
• Fee-for-service type methods where funding
  follows clients based on client need, paired with
  an acuity-based level of care system.
• Pay for Performance mechanisms to support
  reengineering efforts and the development of
  needed infrastructure that will increase the
  quality of care (and is not covered through other
  payment mechanisms).
• Pay for Performance mechanisms to reward provider
  organizations that are able to reduce the cost of
  care through improved quality (and would
  otherwise result in reduced revenue).

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Behavioral Health Financing Model

• Recommendation 7 Each State should translate
  their work in Recommendations 2 6 into a long
  range Behavioral Health Financing Plan with a
  multi-year implementation strategy that aligns
  with elements 4 8 of the Change Model. The 50
  state plans should be compiled and use to support
  state and federal legislation for improving the
  system while closing funding gaps that exist.

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Behavioral Health Financing Model

• Recommendation 8 SAMHSA should work with the
  States to develop a clearinghouse of Behavioral
  Health Financing Plans including
• State-level demand and cost forecasting models.
• Funding and workforce gap analyses.
• Strategies for expanding the use of
  evidence-based practices.
• Further refinements in the cost analysis of
  evidence-based practices.
• Infrastructure gap assessments.
• Reimbursement designs.
• Pay for Performance strategies.

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Questions and Answers