The Use of Private Insurance to Support Part C Systems

1
The Use of Private Insurance to Support Part C
Systems

• Ron Benham
• Andrew Gomm
• Maureen Greer

NECTAC/ITCA Finance Seminar August 14-16, 2006
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State System of Payments

• Non-Substitution of Funds (Section 640)(a)
• Funds provided under section 1443 of this title
  may not be used to satisfy a financial commitment
  for services that would have been paid for from
  another public or private source, including any
  medical program administered by the Secretary of
  Defense, but for the enactment of this
  subchapter, except that whenever considered
  necessary to prevent a delay in the receipt of
  appropriate early intervention services by an
  infant, toddler, or family in a timely fashion,
  funds provided under section 1443 of this title
  may be used to pay the provider of services
  pending reimbursement from the agency that has
  ultimate responsibility for the payment.

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Sec. 303.12 Early intervention services

• . a) General. As used in this part, early
  intervention services means services that--...
  (3) Are provided...(iv) At no cost, unless,
  subject to Sec. 303.520(b)(3), Federal or State
  law provides for a system of payments by
  families, including a schedule of sliding fees
  and

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Sec. 303.520 Policies related to payment for
services.

• (a) General. Each lead agency is responsible for
  establishing State policies related to how
  services to children eligible under this part and
  their families will be paid for under the State's
  early intervention program. and

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Sec. 303.520 Policies related to payment for
services.

• (b) Specific funding policies. A State's policies
  must
• (1) Specify which functions and services will
  be provided at no cost to all parents
• (2) Specify which functions or services, if any,
  will be subject to a system of payments
• (i) Information about the payment system and
  schedule of sliding fees that will be used and
  
• (ii) The basis and amount of payments and
• (3) Include an assurance that--
• (i) Fees will not be charged for the services
  that a child is otherwise entitled to receive at
  no cost to parents and

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Sec. 303.520 Policies related to payment for
services.

• (c) Procedures to ensure the timely provision of
  services.
• No later than the beginning of the fifth year of
  a State's participation under this part, the
  State shall implement a mechanism to ensure that
  no services that a child is entitled to receive
  are delayed or denied because of disputes between
  agencies regarding financial or other
  responsibilities.

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Sec. 303.527 Payor of Last Resort

• Funds under this part may be used only for
  early intervention services that an eligible
  child needs but is not currently entitled to
  under any other Federal, State, local or private
  source.

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Use of Private Insurance

• Accessing the familys private insurance coverage
  for covered Part C services
• Family Co-Pay or Deductible
• Paying insurance premiums for Part C enrolled
  children

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States Use of Private Insurance

• 2003 Survey 20 states indicated they utilized
  private insurance as a fund source
• 2005 Annual Performance Report 17 states
  reported the receipt of revenue from private
  insurance totaling 52.7 million
  (Range 35M 12,000)

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Todays Presentation

• Two states who will address
• Development of Insurance Legislation
• Challenges and Opportunities of Fund Expansion
• Impact on Families

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Early Intervention and Third Party Payers in
Massachusetts

• A progressive partnership serving infants and
  toddlers with developmental concerns

Ron Benham, MA Department of Public
Health NECTAC/ITCA Fiscal Seminar August 14-16,
2006
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Early Intervention Third Party Payers in
Massachusetts

• Definition
• Eligibility
• Overview of Current System
• Passage of Early Intervention Legislation 1983
• Medicaid Participation 1985
• Mandated Insurance Coverage 1990
• What Works

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1. Definition

• Early Intervention is a comprehensive,
  community-based program of integrated
  developmental services which uses a family
  centered approach to facilitate the developmental
  progress of children between the ages of birth
  and three years whose developmental patterns are
  atypical, or are at serious risk to become
  atypical through the influence of certain
  biological or environmental factors.

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Definition, continued

• Early Intervention services are focused on
  the family unit, recognizing the crucial
  influence of the childs daily environment on his
  or her growth and development. Therefore, Early
  Intervention staff attempt to work in partnership
  with those individuals present in the childs
  natural environment, which may include settings
  other than the childs home. The program seeks
  to support and encourage the caregivers growth
  toward independence in planning for the childs
  continuing and changing needs.

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2. Eligibility

• Children with a diagnosis known to result in
  developmental delay
• Children evaluated and found to have a
  developmental delay of 25 in one domain based
  upon their age
• Children at risk of developmental delay

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3. Overview of Current System

• All services are purchased through community
  agencies (38 agencies)
• Agencies bill insurers and MassHealth (Medicaid)
  directly
• Department of Public Health payor of last resort
• 83 million for direct services in FY05 28,xxx
  children served

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Overview, cont.

• 62 Early Intervention providers
• Range of disciplines in each program
• Transdisciplinary service model

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4. Passage of EI Legislation - 1983

• Required statewide service system
• Established Public Health as lead agency
• Required development of service standards
• Required Medicaid participation

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Who Pays Direct Service Only, FY05 (Excludes
Specialty Program for Children with Autism or
Children who are Blind)

• State appropriation 25.4 M
• Third party 38.9 M
• Medicaid 18.2 M

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5. Medicaid Participation 1985

• Reimbursement model changed from cost
  reimbursement to unit based
• Currently 7 reimbursable services current
  hourly rates
• Home Visits 73.80
• Center Individual 61.88
• Community Based Group 28.32
• EI Only Group 21.56
• Parent Group 27.68
• Screening 86.24
• Assessment 99.00
• DPH serves as gatekeeper to Medicaid

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6. Mandated Insurance Coverage 1990

• Bill introduced in 1986
• Legislation passed in January 1990
• Law took effect in April 1990
• Fully in effect April 1991
• Medically Necessary criteria
• Service costs capped
• 5,200 yearly/15,600 aggregate

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7. What Works

• Vision, Commitment, Persistence
• Positive, cooperative working relationship with
  insurers and Medicaid
• Insurance/Health Plans with Early Intervention
  coordinators work best
• Insurers did not strongly oppose increase in cap
  to 5,200 annually, effective 7/1/04
• Joint efforts related to billing/claims
  submission
• Ongoing identification of systemic problems,
  programs, payors

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New MexicoFamily Infant Toddler Program

• Private Health Insurance
• Legislation

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Background

• NM Primary funding sources
• State General Funds
• Medicaid
• IDEA Part C grant
• Sporadic use of family fees
• Historic billing of Health Plans but most
  providers had given up

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Funding challenge

• Over 100 growth in children / families served in
  5 years (2000 2005)
• Average annual growth of 16
• Flat Federal Part C funding
• Rate study in 2003 recommended increase to rates
  to meet costs
• Challenge to access State General Funds to match
  growth

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Initial steps

• Decision by ICC to look for other sources of
  funding
• 2004 Legislature passed a Joint Memorial to study
  the feasibility of billing private health
  insurance
• HJM 38 Committee included parents, providers, 3
  major health plans, Insurance Division Dept of
  Health and Medicaid
• Input from two other States Massachusetts and
  Connecticut

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Joint Memorial results

• Brought health plans to the table
• Various options considered
• Report presented to Health Human Services
  Committee
• Report identified potential for 3 million
  revenue
• Health plans recognized the minimal impact to
  premiums
• Health plans saw writing on the wall for
  legislation and got behind the idea of an annual
  cap

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NMs Insurance Statute

• Introduced by Legislator (whos on the ICC)
• Language for bill submitted by ICC members
• Testimony provided by families providers
• Recommendations of the HJM utilized in testimony
• Passed the first session it was introduced!

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Features of legislation

• Early Intervention must be provided by provider
  agencies certified by the Dept. of Health
• IFSP is considered plan of care
• Can not effect the families lifetime benefit cap
• 3,500 annual cap (after which the Department of
  Health picks up all costs)

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Implementation

• Consultation from Massachusetts
• Initial meeting with health plans, Insurance
  Division, EI provider agencies, families
• Monthly meetings with 3 major health Plans
• Collecting health insurance information from
  families
• Contract with billing agent to process third
  party claims

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Decisions / agreements

• Department of Health will submit claims (rather
  than 33 providers)
• Contracted agency will submit claims Health plans
  will not charge co-pays or deductibles
• Health plans will not have certify FIT Provider
  agencies
• Health plans will not conduct prior auth.
• Health plans will allow back billing to July 01st

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Work ahead

• Decide whether to require families to allow
  access to the insurance plan and if they choose
  not to whether to levy a fee
• Develop MOUs with health plans that would cover
  issues like no co-pays or deductibles
• Clean-up legislation that clarifies that this
  benefit does not apply to specific plans (dental,
  vision, long term care ins. etc.)
• Collect the