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    Document Summary
    - Report Published -

    House Document No. 6

    Document Title
    Implementing Medicaid Reform in Virginia

    Department of Medical Assistance Services

    Enabling Authority
    Appropriation Act - Item 307 RRRR.4. (Regular Session, 2013)

    Executive Summary
    As the single state agency responsible for delivery of Virginia’s Medicaid program, the Virginia Department of Medical Assistance Services (DMAS) seeks to transform the Virginia Medicaid program into a cutting-edge payment and delivery system that rewards quality and in which efficiency and cost-effectiveness are paramount. To accomplish this, DMAS, in collaboration with other state agencies with stakeholders, plans to implement a number of programmatic changes to improve and change the way long-term services and supports (LTSS) are administered. This report provides attention to the reforms that will impact LTSS.

    Since the inception of the Virginia Medicaid program in 1969, the Commonwealth has worked diligently to offer coverage for qualifying individuals with disabilities and low-income. The program operates as authorized under Titles XIX and XXI of the Social Security Act (SSA). As of July 2013, over one million individuals receive coverage through Virginia Medicaid and the Children’s Health Insurance Program (CHIP). There are 938,095 enrollees in programs offered through Title XIX of the SSA, and Virginia serves qualifying individuals in need of long-term services and supports through Title XXI.

    Virginia’s Medicaid program offers health care benefits through several payment and service delivery models, including the fee-for-service (FFS) model and a full-risk capitated managed care model. DMAS also contracts with administrative service organizations to improve administration of certain services and functions provided through FFS. The delivery models are authorized through the Virginia State Plan for Medical Assistance, coupled with several different Federal waiver authorities. Waivers are vehicles states can use to test new or existing ways to deliver and pay for health care services in Medicaid and FAMIS. Virginia has tailored its program to best meet the needs of the Commonwealth by developing 1915(c), 1915(b), and 1115 waivers. The 1915(c) waivers provide authority for the state to provide LTSS to individuals who qualify for institutional level of care in the community, versus in an institution. The 1915(b) wavier provides authority to mandatorily enroll beneficiaries into the MCO program. Virginia’s current 1115 waiver allows DMAS to provide services to individuals who would not otherwise be eligible for Medicaid benefits due to their income level or other disqualifying characteristics.

    Most of the individuals who receive services predominantly through the FFS model are receiving LTSS, either through an institution or through one of the six home and community-based services waivers that DMAS operates through 1915(c) waiver authority. With some exceptions, individuals eligible for the managed care model generally include children; pregnant women; parents of dependent children; and aged, blind, or disabled individuals residing in the community who are not receiving Medicare benefits. Often individuals receive services through both payment and service models simultaneously, as some services are carved out of the MCO contracts and provided through FFS, such as non-traditional community behavioral health care services.

    Virginia began operating a managed care program in 1996, when it launched the Medallion II managed care program in the Tidewater region of the state. Today, the Medallion II program operates statewide, and DMAS currently contracts with seven managed care organizations (MCOs) that participate in the fully capitated, risk-based, mandatory managed care program. Virginia recently added a seventh MCO to operate in Northern Virginia. In addition to the Medallion II program, DMAS operates a full-risk managed care program for individuals who receive both Medicaid and Medicare benefits – the Program for the All-inclusive Care for the Elderly (PACE). The PACE program provides all Medicare and Medicaid benefits under one entity anchored by an adult day health center. Lastly, DMAS is working toward the implementation of the Commonwealth Coordinated Care Program in early 2014, which is a demonstration in partnership with CMS that will serve individuals receiving Medicare and Medicaid under a capitated, full-risk managed care model.

    Since its inception, Virginia’s Medicaid program has received national recognition for a number of its programs. Overarching reform, however, is still needed in order to transform this program and enable them to achieve a broader vision of:

    (i) Coordinated Service Delivery-Virginia seeks a Medicaid program where costs are predictable, services are coordinated, quality innovation is rewarded, and provider compensation is based on the quality of the care provided;

    (ii) Streamlined Administration-DMAS is efficient, streamlined, and user-friendly. Tax payer dollars are used effectively and for their intended purposes; and

    (iii) Significant Beneficiary Engagement- Beneficiaries take an active role in the quality of their health care and share responsibility for using Medicaid dollars wisely.

    In order to remain on the cutting edge of program design, service delivery, and provider reimbursement, the 2013 Virginia General Assembly directed DMAS through budget language (http://leg2.state.va.us/WebData/13amend.nsf/e36ae9ff57e29a228525689e00349980/1c6d29fff614c86e85257b1b00756af1?OpenDocument) to achieve a number of reforms to the Medicaid program. This language identifies three pathways to continued reform: (1) Advancing reforms currently in progress; (2) Implementing innovations in service delivery, administration, and beneficiary engagement; and (3) Ongoing progress towards expanding coordination of care for long-term services and supports. These directives set forth an ambitious Medicaid reform agenda, which directs DMAS to expand principles of care management to all geographic areas, populations, and services under programs administered by DMAS.

    In order to accomplish a number of the tasks set out before DMAS, Virginia must obtain additional authorities from CMS. DMAS will seek expanded flexibility from CMS to ensure that the Commonwealth can implement reforms outlined by the General Assembly in a manner that best meets the needs of Virginia’s Medicaid beneficiaries, providers, and the Commonwealth as a whole. Virginia will also continue working closely with stakeholders to ensure that LTSS reforms address the needs of Virginia’s citizens. Between the reforms already in progress and those being pursued in the months and years ahead, DMAS seeks to accomplish the following changes to best achieve LTSS reforms:

    1. Continue Implementation of Current Reforms: DMAS will continue in its work with stakeholders to ensure both (1) the development and successful implementation of the Commonwealth Coordinated Care Program for individuals who are dually eligible for Medicare and Medicaid Services, and (2) the successful implementation of the Behavioral Health Services Administrator to improve coordination of behavioral health services that are not currently included in a managed care system.

    2. Rapid Cycle Implementation of Innovative Pilots: DMAS will seek approval from CMS to implement pilot programs that meet agreed upon assurance parameters on an expedited basis. This will allow DMAS to work with stakeholders to develop and implement innovative pilots for managed long-term services and supports, including but not limited to health homes or PACE models of support for individuals with developmental disabilities including intellectual disability.

    3. Comprehensive Coordination of Long-Term Care Services and Supports: DMAS will work with stakeholders and CMS to develop a number of initiatives and programs that will provide comprehensive coordination of Virginia’s community-based and institutional long-term supports and services. This includes a restructuring of Virginia’s service delivery system for individuals with intellectual and developmental disabilities.