Financial Incentives
Sample Contract Language
Financial incentives can be structured to guide contractor behavior in one direction or another. Below are three examples of how states have used financial incentives to encourage community-based services and supports over institution-based services.
- The first example shows how Arizona uses a capitated payment based on a blended rate of the estimated cost to serve a member’s LTSS needs in a nursing home or in the community.
- The second example, the Massachusetts language, shows how the program has incentives built in to encourage contractors to transition members from institutional to community-based settings.
- Third, the sample from Minnesota shows how the program offers a bonus payment for transitions out of nursing homes.
- 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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