August 12, 2016
Submitted via email to:
[email protected]
Margaret Rose
Office of Legal & Regulatory Affairs
Division of Medical Assistance & Health Services (DMAHS)
P.O. Box 712, Mail Code #26
Trenton, NJ 08625-0712
RE:
HCANJ Comments on the NJ Family Care 1115 Comprehensive Waiver Demonstration
Application for Renewal
Dear Ms. Rose,
Thank you for the opportunity to provide comments regarding the New Jersey Family Care
1115 Comprehensive Waiver Demonstration Application for Renewal. Our comments on the Waiver
relate most specifically to the 2014 transition Managed Long Term Services & Supports (MLTSS).
Please know we appreciate the continued collaboration with DHS & DMAHS on the MLTSS
transition and are pleased to provide these thorough and direct comments to meet the challenges and
applaud the successes that have arisen since the program’s inception. Our comments are designed to
inform DHS, DMAHS, CMS and the public about the unique perspective of our over 300 HCANJ
member providers, their 40,000 plus employees, and the residents and families they serve.
We stand ready to assist DMAHS in any initiatives put forth that will contribute to improving
the access and affordability of quality long term care in New Jersey. That can be best accomplished
by creating a more timely, accurate and effective Medicaid certification, enrollment and reimbursement
processes for the poor, frail & elderly served in the state’s long term care continuum.
Respectfully,
Jonathan Dolan
President & CEO
Cc:
Valerie Harr
Deputy Commissioner, Department of Human Services
The Health Care Association of New Jersey represents over 300 nursing facility (NF), special
care nursing facility (SCNF) and assisted living (AL) providers who care for residents in over 39,000
beds in New Jersey. As significant stakeholders in the provision of long term care services in the state’s
$1.8 billion expenditure for the same, we are grateful for the opportunity to comment on the State’s
application for renewal of New Jersey Family Care 1115 Comprehensive Waiver Demonstration
(CWD). We submit the following comments for consideration:
Supporting & Commenting on the Waiver & MLTSS Program Goals
The CWD renewal application only very generally references continuation of the original Waiver
services and processes. The bulk of the renewal application relates to the expansion of services and
populations to be served under the Waiver. Although these additions to the Waiver would only
marginally impact our members, we acknowledge they positively advance the goals of the Waiver.
Likewise, we have supported the goal of better care management and rebalancing services between
HCBS and long term care LTC providers. As many states are not seeing results of projected savings
in care managing such acutely ill populations, future efforts must be balanced with reasonable fiscal
expectations moving forward. MLTSS Stakeholder meetings address metrics and evaluations of the
program’s ability to rebalance HCBS versus LTC services. We have supported these efforts.
Efforts to involve stakeholders and respond to stakeholder concerns are to be applauded. The approach
is collaborative and makes sense as it is born from the fact that the State has expended a tremendous
effort over the past several years into implementing the Waiver. We acknowledge that our providers
and their residents represent only a portion of those being served through the Waiver. We also
recognize that any change of this magnitude will not happen without problems. However, we feel
obligated to bring to light critical challenges that exist and continue to inhibit the smooth transition to
MLTSS. These concerns are of such a significant impact that requiring a resolution to them as
contingencies of approving the CDW renewal is warranted.
Operational Challenges & Failures Require Solutions
The primary concern of HCANJ is the lack of emphasis and resources by the state to remedy systemic
operational failures and critical issues despite regular complaints since late 2014. Like Kansas recently
experienced, any progress toward MLTSS, and in New Jersey that means continuance of the Waiver,
must address the delay or denial of access and care to residents as well as the inability to provide
accurate and timely payment to their providers.
The solution for New Jersey is to ensure decisive state action for fairness to providers, accurate payment
metrics, transparent and realistic reporting on claims paid, and sanctions on MCOs who fail to enroll
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residents and pay providers in a timely and accurate fashion. These requirements and the others we
are discussed herein, may be in the existing state contract with the MCOs. Ignoring or omitting them
has caused challenges and resulted in failures of the MLTSS transition. The comment period for the
CDW application for renewal is an appropriate time and method for resolutions to be found or placed
as contingencies to the CDW renewal and HCANJ recommends both approaches.
Major Operational Concerns Not Completely Resourced or Addressed
1. LTC Clinical Eligibility Reviews: A key state function that has hampered the smooth
transition to MLTSS is the process for verifying clinical eligibility for long term care. There
were significant delays in this process during the first year of the MLTSS transition. The
Department did ramp up hiring and training of clinical screening staff to help remedy backlogs
and delays. It has helped somewhat. More resources are essential for the efficient operation of
the state’s administrative duties under the Waiver.
2. Timely & Accurate Claims Processing: Of major concern to all providers (special care
nursing facilities, nursing facilities, assisted living, adult day care, home health, etc.) is the
continuing failure of the MCOs to process claims in a timely and accurate manner. The State
and the MCOs appeared to have done their due diligence in providing training to providers prior
to and in the early MLTSS transition. Standard claim forms were implemented and each MCO
offered training on coding and claims unique to their respective organizations.
However, the lack of decisive intervention and oversight of MCO performance by DMAHS,
including the absence of effective and realistic claims payment metrics, transparent reporting
of the same, and sanctions for non-compliant MCOs has enabled MCOs to do whatever they
want, however they want, and whenever they want.
A case in point regarding intervention and awareness by the state was the recent fiasco where a
MCO simultaneously changed its call center and third party payer. It appears this was done
without any oversight, permission, notice, or comment from the state. These actions eviscerated
the MCO’s claims processing and providers are still trying to come current.
In addition to the absence effective and reportable metrics, benchmarks, or sanctions, we are
unaware of any standard or action by the state to ensure the MCOs avoid authorization delays
due to coding errors nor are they under any mandate to adapt their billing systems to account
for the same. This is especially important in the SCNF arena. In all levels of care, MCOs
regularly allege improper claims due to errors, inconsistencies, and flaws caused by their
systems and on the part of their employees.
Sadly, claims testing was not thoroughly and competently conducted prior to going live and the
State and the MCOs were not systemically or technologically prepared for the MLTSS
transition. These payment delays have resulted in serious cash flow problems for many
Medicaid assisted living providers who transitioned completely to MLTSS in July 2014.
Luckily, the state’s decision to phase in the NF & SCNF Facilities was one of the best moves it
made during the MLTSS process. Even so, the cash flow problems are becoming increasingly
acute in these provider communities as their populations migrate to MLTSS.
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The bottom line is that we are two years into the MLTSS transition and the system does not
appear to meet performance levels required by either the state contract and State or federal law.
Once again, the renewal of the Waiver should apply resolution contingencies to these problems.
3. Here is a list of system challenges in need of resolution, not just attention:
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Delays in Pre-Admission Screening.
Incorrect assignment of Fee for Service (FFS) eligible persons to MLTSS.
FFS service payment for assisted living residents requiring manual review and processing. We
appreciate what is known as “gap” funding but it must be automated.
The continuing inability by some MCOs to process patient pay liability (PPL or “cost share”)
claim offsets correctly.
MCO delays in processing authorizations and connecting them to providers in their claims
payment systems.
Failure/refusal by the MCOs to follow Department Guidance and State contract provisions
regarding cost avoidance and third party liability resulting in inappropriate claim denials.
MCO inability to make electronic claim adjustments.
Multiple reprocessing of claims is time consuming and costly.
Inability of MCOs to systemically process State rate increases.
Claim denials using general edit codes which are simply unexplained and inconsistent.
MCO Help Centers that are unresponsive and staff that are inadequately trained.
Access to Care & Network Adequacy
The DHS Waiver renewal application states that “New Jersey has successfully implemented a Managed
Long Term Services and Supports program… .” With respect, this implementation is still a work in
progress, especially in the area of nursing facilities and special care nursing facilities. Even with the
low utilization in the Assisted Living waiver arena, there are massive delays. The NF & SCNF
populations are heavy Medicaid populations and transitioning to MLTSS through the enrollment of
new Medicaid eligible residents into MCOs continues while previously eligible “grandfathered”
residents remain FFS. At this point in time, somewhat over a third of nursing facility residents are
MLTSS/managed care participants. Although a majority of Medicaid residents will probably be
MLTSS participants by the time of the CDW renewal’s effective date, a significant portion of the
nursing home Medicaid census will still be in a FFS status.
Further, the State’s necessary recognition of "any willing provider” (AWP) by the MLTSS managed
care companies for both nursing facility and assisted living providers through June of 2017 should
highlight that this part of the MLTSS “implementation” is still in a transitional stage. Justifiably so,
because of the uniqueness of the services provided and the population being served. Nursing home
residents are among the most chronically ill of New Jersey residents. In addition, the nature of the
services as custodial/residential present challenging issues. Only a portion of the population to be
served by MLTSS in a nursing facility or assisted living will be Medicaid eligible and have care
managed by an MCO at the time they enter a facility/residence. Most people will only become eligible
by the fact of their admission to a long term care facility/residence and/or their spending down of assets
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(possibly years after admission). The choice of a “residence” has already been made by the patient or
patient’s family based on a variety of personal and economic considerations. This will pose a problem
for patients/residents of providers who may be left out of “limited/exclusive” networks across all of the
participating MCOs. This problem becomes more apparent in the consideration that 60% of all nursing
home beds are occupied by Medicaid eligible residents and over 90% of nursing home providers are
required by State statute to maintain at least 45% Medicaid occupancy. In the context of long term
care, the State will have to address the need to meet network adequacy on a global basis (i.e., across
all of the MCO networks).
HCANJ recommends a proper global standard of network adequacy be established. The state has
admitted it has few if any such standards. It is meaningless and ill-advised to look at the perspective
of MCOs reaching their idea of covered lives as a complete network or adequacy. Their estimations
are purely driven by capabilities, market share and profits.
A global or patient centered approach is required to prevent MCOs from limiting networks and denying
access. Keep in mind, New Jersey is a state with an average NF census of over 85%, over 30% of
facilities have Medicaid occupancies have over 75% and over 75% of facilities have Medicaid
occupancies over 50%. Thus, the state must dive into the network adequacy issue, assess its number
of beds, location of beds, payer mix, and other estimates not with what a managed care company wants
but with what New Jersey communities need. This way, our poor, frail & elderly citizens can be assured
of facilities ready to provide the right care at the right price and in the right place.
A terrific development on the network adequacy horizon has been through the leadership of Deputy
Commissioner Harr for establishing a recent collaborative effort which developed and recommended
certain quality metrics, which if a majority are achieved, would promote network adequacy and
participation by preventing a MCO from removing that provider from a network. As the state considers
the stakeholder input and their ideas on such an initiative, we are hopeful it, and/or the continuance of
Any Willing Provider, will replace the MCO driven model which would seriously jeopardize access to
care for so many of New Jersey’s most chronically ill and needy citizens.
Actuarially Sound & Fair Reimbursement
Another part of the Waiver’s long term care component that is still in transition is nursing home and
assisted living provider reimbursement. Just as the case mix rate system was phased in gradually so as
not to unduly disrupt provider fiscal equilibrium, the State has provided for the facility specific “state
set rate” as a floor for the initial stage of the MLTSS transition. Like AWP, this is for good cause and
common in the most successful MLTSS states. Revenue stability is essential for this industry that is
so heavily reliant on Medicaid as a payer source.
Current State Budget language provides for the payment of a state set rate in the absence of a negotiated
rate between the MCO and provider. In fact, most MCOs are paying nursing and assisted living
providers at the state set rate. Sadly & unless providers are told otherwise, it is assumed that the State
plans to move exclusively to negotiated rates and discontinue the payment of the “state set rate” by the
MCOs upon the renewal of the Waiver in July 2017. This and the jettisoning of all cost reports in 2014
is completely ill-advised and objectionable. As Kansas recently illustrated, you cannot abandon or cut
rates, delay or deny enrollment, and still meet the federal standard for access to care. Providers need
reassurance that they will NOT be left with options other than accepting “low ball rates” in a situation
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in which they have no leverage for bargaining and wind up competing against othepopr providers who
may not be providing a comparable quality of care.
Speaking for the majority of long term care providers, HCANJ believes the restoration of payment at
facility specific rates would best guarantee payment for quality care. A rate structure could be created
that would reflect actual industry costs, recognize resident acuity and provide incentives for providers
that achieve specific patient quality care goals. As the State is getting out of the rate setting business,
we do not see much support or any action toward this best approach. However, it still must recognize
its responsibility to ensure that they (during FFS periods) and MCOs (after enrollment) have an
actuarially sound and fair rate system as demonstrated in Tennessee by state set rates and California by
a state set minimum rate.
New Jersey providers are being paid about what they were nearly 10 years ago. According to a
reputable national study of the underfunding of Medicaid skilled nursing care, our disparity between
the actual cost and actual reimbursement is over $35 per patient day and 47th in the nation. Add to
that the fact that just last year, and before the State announced the continuation of state set rates, the
MCOs were proffering rates at $10 per patient day less than these currently inadequate rates.
HCANJ believes the state has not prepared for a proper guarantee of an actuarially sound rate system
that promotes access and care through fair reimbursement to providers commensurate with the highest
industry standards of direct patient care quality. We feel that this would, at a minimum, require the
State to guarantee that the MCOs to pay at an actuarially sound (i.e. statewide average) rate floor or
minimum rate. The current state set rate protections should therefore remain in place until such time
such a system, with proper analysis of actual costs can be discussed, considered, implemented and a
proper minimum rate and cost of living adjustment (COLA) formula realized.
HCANJ also recommends the state pursue an enhanced reimbursement rate program for providers that
commit their resources to meeting specific goals or quality metrics thus incentivizing the best care (top
3rd) and management. With a statewide minimum rate, a proper and forward thinking value based
purchasing program or quality incentive could be achieved quite readily.
Medicaid Certification & Eligibility Reforms - “the problem of pendings”
The delays and barriers to effective certification and eligibility processing in New Jersey precedes the
CDW & MLTSS implementation. HCANJ firmly believes they have reached a crisis level and with
the exception of Illinois, where payments are delayed due to a fiscal crisis, we are the worst in the
nation. Finding a solution to this crisis is the #1 priority for HCANJ. Thus, we appreciate your
indulgence in allowing us to point out the background of the issue and a correlation to the MLTSS
process in the state.
The long term care Medicaid eligibility process in New Jersey is administered by the County Welfare
Administrations (CWAs). Under the regulations it is intended to be an applicant friendly process that
anticipates most applications to be processed within 45 days. Unfortunately, in many cases the review
period for applications extends for months and occasionally years. In these cases, potential Medicaid
eligible persons will not be able to participate in any of the intended benefits of the Waiver.
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Causes for delays include the inability of applicants’ families to meet process requirements; delays in
obtaining required documentation from third parties; staffing shortages, turnover and training at the
CWAs; administrative inefficiencies in the system; among other causes.
Deputy Commissioner Harr and Director of Medicaid, Meghan Davey, have been attentive and
proactive by increasing county oversight, making communications and applications more consistent,
automating processes whenever possible, and finding solutions for administrative inefficiencies within
DHS control.
However, we feel that further progress lies in the current regulations not affording specificity and
adequate protection for applicant’s rights. In the next few months HCANJ intends to propose
regulatory and statutory changes designed to extend protections of applicant’s’ rights and increase
efficiencies and resources in the certification and eligibility system.
We wish to emphasize why our earlier comments about timely and accurate payments under MLTSS
are so important. MLTSS related delays have added 30-45 days of further delays on an already
burdened and delayed Medicaid Pending disaster. Consideration of our requests and recommendations
in light of this related challenge and crisis is important as you consider the CDW renewal application.
There are some specific requests included in the CDW renewal application which HCANJ applauds.
Delays in the processing of Medicaid eligibility applications for long term care is stressful for residents’
families and a financial burden for providers. We are encouraged by the Sate’s commitment to Improve
“the Medicaid eligibility system by reducing the backlog of new and redetermination applications.”
The State’s intention to pursue the use of an Asset Verification System is a good step in this direction.
We also agree that the State’s request for authority to expand self-attestations of non-transfer of assets
to individuals with income up to 300% of the Federal Benefit Rate (FBR) is a practical and efficient
way to expedite the eligibility process.
Finally, we also commend two other accommodations requested in the renewal application. The
provision for an “allowance to include expenditures for a court-ordered guardian fee as part of the
Personal Needs Allowance under the post-eligibility treatment of income” relieves the health care
provider of indirectly paying for a personal expense of the resident. In addition, the provision allowing
members a 90-day period after MCO enrollment to change MCOs without cause will facilitate member
choice related to long term care placement.
In conclusion, we thank you for your consideration of our direct, forthright and necessary comments.
We look forward to a continued collaboration with DHS and other stakeholders and encourage you to
favorably consider the increased accountability and efficiency that would be provided by our
recommendations and resolutions as you also consider the renewal application of the CDW.
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