Financial Incentives
Applicable Authorities
In general, all capitated contracts, regardless of authority used, must comply with the federal Medicaid regulations at 42 CFR 438.6. In general, capitation rates must be actuarially sound, which means they:
- Have been developed in accordance with generally accepted actuarial principles and practices;
- Are appropriate for the populations to be covered and the services to be furnished under the contract; and
- Have been certified by actuaries.
States have considerable discretion in working with their actuaries to design innovative rate structures that provide incentives to achieve program goals, as long as the features are fully explained to CMS and meet the regulation.
- Adequate providers. One step in determining if a MLTSS contractor has established an adequate provider network is to review the LTSS your beneficiaries are using in the FFS environment and make sure these are well represented in the MLTSS contractor's provider network. This can ensure that the transition to managed care will yield similar access to services for consumers. Does the MLTSS contractor provider network include adequate access to skilled nursing facilities, home care providers, homemakers, etc.? Consider working with your Medicaid managed care counterparts to understand specific metrics that may be used to assess adequacy, understanding that these metrics may need to be adjusted for your target population.
- Physical accessibility. Ensure that the offices of network providers are physically accessible to beneficiaries. A few examples of physical accessibility are (1) a provider should have an elevator if their office is on the second floor, or (2) a provider should have a ramp installed if there is a step up or down into their office.
- Language access. Ensure that the provider network can accommodate your LTSS beneficiaries' language needs. This may include having providers in the network who speak languages other than English or providing access to interpreters as well as making sure providers can provide information to and communicate with beneficiaries' caregivers, beneficiaries with cognitive impairments, intellectual and/or development disabilities, and/or sensory impairments, e.g., by providing documents in braille or large print, and/or by providing access to sign language interpreters.
- Geography. In some states, beneficiary travel distance and time standards are used in Medicaid managed care programs to document reasonable access within the provider network. Consider working with your Medicaid managed care colleagues to make sure you have appropriate provisions in your LTSS solicitations/contracts, understanding that your target population may require different time and distance standards than the general Medicaid population.
- Hours of operations. The MLTSS contractor should ensure that providers have hours of operation that are appropriate for members. These hours should mirror those of commercial patients and/or of beneficiaries who have Medicaid FFS coverage.
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