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Substantive Changes in Federal Medicaid Rules and Anticipated Impact

INFORMATIONAL LETTER: 80
POLICY CODE: CGD

 

TO: Superintendents and Special Education Directors of School Administrative Units, Regional Child Development Services Boards of Directors and Regional Child Development Services Site Directors
FROM: Susan A Gendron, Commissioner
DATE: February 1, 2008
SUBJECT: Substantive Changes in Federal Medicaid Rules and Anticipated Impact

 

The Center for Medicaid and Medicare Services (CMMS) have proposed federal regulations that will change the reimbursement for a number of Medicaid services in all the states.

In order to prepare for these changes, please be advised of the following:

1. You will be asked to respond to a four page web-based questionnaire, in order to determine whether you continue to qualify by federal definition for reimbursement for “Certified Public Expenditure”, also referred to as certified seed.
2. We will be requesting data to inform both our advocacy and financial planning work. Accurate data from you will be critical in determining actual impact.
3. We are committed to work with you to determine solutions.

Federal Regulation Changes

The Center for Medicaid and Medicare Services [CMMS] will implement five federal regulations that will dramatically change a number of Medicaid services in all 50 states.

1. Targeted Case Management (TCM) – effective March 3, 2008
2. Rehabilitation Services - effective July 1, 2008
3. Hospital Outpatient Physician Services – effective July 1, 2008
4. Certified Public Expenditure (CPE or “Certified Seed”) - effective May 25, 2008
5. Administrative and Transportation Services – effective February 26, 2008

1. Targeted Case Management Rule Changes

1. TCM cannot be used for the administration of the following non-Medicaid programs:
• Child Welfare/Child Protection Services: including investigation of abuse/neglect, monitoring at-risk children, placement of children in foster care/adoption, development of service plans with goals of moving children towards "permanency.”
• Parole and Probation Services supervision, counseling and oversight.
• Public Guardianship and Adult Protective Services.
• Head Start: including direct service delivery or duplication re: EPSDT.

 

2. Also, record-keeping requirements are more complex, requiring a medically necessary service in each time allotment.
3. Rates must be billed in 15-minute intervals, rather than monthly.
4. Targeted Case Management Rule Changes - Special Education

   Case Management will continue to be reimbursable when a SINGLE Medicaid (MaineCare) qualified case manager comprehensively addresses all the service needs of the IDEA-eligible child, including:

   - services identified on the IFSP or IEP
   - coordination of the provision of those services
   - facilitation of timely delivery of those services.

Medicaid case management services must remain separate and distinct from the administration of IDEA programs.

Time spent facilitating IFSP and IEP meetings and the development of Prior Written Notices will not be allowed as TCM.

5. Targeted Case Management Rule Changes - Anticipated Impact

Loss to General Fund				Loss to Community
	FY 08	FY 09		FY 08	FY 09
Education	$733,000	$2,200,000		$133,000	$400,000
Corrections	$280,000	$720,000		$0	$0
Head Start/Home Visitation	$1,080,000	$3,240,000		$0	$0
DHHS	$4,850,000	$14,550,000		$5,240,000	$15,720,000
Total	$6,943,000	$20,710,000		$5,373,000	$16,120,000

6. Targeted Case Management Rules – additional significant change effective June 2009

Each individual will be allowed to have only one case manager.

• In the past, we have relied on case managers and their respective areas of expertise. With this rule, case managers must be generalists.
• There is a concern in child welfare and in adult protective services because many have more than one case manager.
• The timeframe, changes in billing system and ability to collaborate will affect many programs, including developmental disabilities services.
• This runs counter to many social service delivery best practices.

2. Rehabilitation Rule Changes Effective July 1, 2008

The primary changes include a reduction in the scope of allowable services that can be provided.

1. Each individual who receives rehabilitation services will have to have a written plan that specifies the physical impairment, mental health and/or substance-related disorder to be addressed and measurable goals for demonstrating progress.
2. The plan’s goals must ensure the ‘least intrusive level possible’ to sustain health.
3. Anticipated Impact

Loss to General Fund		Loss to Community
Rehabilitation Services	FY 09	FY09
Education – school-based	$7,400,000	$19,600,000
Education – developmental therapy required by IDEA	$10,000,000	$0
DHHS	$0	$100,000,000
Total	$17,400,000	$119,600,000

4. Services may not be reimbursed if the services are part of a non-medical program, such as foster care, child welfare, education, child care, vocational and pre-vocational training, housing, parole and probation, juvenile justice and public guardianship.
5. Another significant change is the disqualification of habilitation services to persons with mental retardation outside a waiver or related conditions, such as traumatic brain injury and dementia if those conditions are not expected to improve. These are now considered ‘maintenance services.’

Examples include adult day services, traumatic brain injury clinics, day habilitation services and most special-education and related services.

6. Other Exclusions:
   
   
   • recreational or social activities that are not focused on rehabilitation and not provided by a Medicaid provider.
   • Services provided to inmates living in secure custody of law enforcement and residing in public institutions.
   • Services to people residing in psychiatric hospitals
7. Other Changes:
   • Personal care services must be incidental and not separately billable.
   • Federal match may only be claimed for services directed to a Medicaid recipient.
   • Transportation costs may not be included in a rate.
8. Private Non-Medical Institution’s Impact (PNMI)
   These changes will affect all PNMI programs. Services will need to be unbundled and some of the currently covered services in the bundled rate will not be allowable. This will affect eldercare services, mental health services and developmental disabilities services, brain injury and neuro-rehabilitation and substance abuse services.

 

3. Hospital Outpatient Physician Services Rule Change – Effective July 1, 2008

Hospital-based physician services will be impacted by the rule change, which states that only one fee schedule can be used to reimburse physicians.

4. Administration and Transportation Rule Changes – Effective February 26, 2008

This will affect Maine because it disallows federal financial participation for transportation of school-age students to and from school.

5. Unit of Government – CPE Rule Change - Effective May 27, 2008

This rule change requires that money used to draw down matching federal funds must come from either a “governmental unit or an instrumentality of the state.”

What We Have Done Thus Far To Challenge These Changes:

• Governor Baldacci, the Maine Department of Health and Human Services (DHHS) and the Department of Education (DOE) began working with staff at Senator Snowe’s office as far back as September, 2007 on the proposed Medicaid rules, (as well as on the State Children’s Health Insurance Program (SCHIP) legislation).
• The agencies have worked collaboratively on analysis and impact statements that have been requested.
• An early impact analysis was sent to Senator Collins’ and Senator Snowe’s offices at their request.
• A letter was forwarded to the Senate Finance Committee, signed by Senator Collins and 38 other Senators, addressing the negative impact of the rule change on the states.
• Information has been shared with providers, legislators, schools and stakeholders since the rule changes were proposed. 

What’s Happening Now:

• Governor John Baldacci continues to speak with our congressional delegation and to work with the National Governor’s Association to address the impact of these rules.
• The Maine Department of Health and Human Services continues to hold numerous meetings with the other State departments, advocates and stakeholders to explain the changes and to discuss the new state rules that are being written to address the federal CMMS policy changes.
• We are currently working on the detailed analysis requested by Representative Henry Waxman (D-California) of all 50 states on the impact anticipated by these rule changes.
• Legislation has been developed and proposed by the Covington and Burling Law Firm to preclude the adoption and/or implementation of all of the above rules. The argument for the legislation is that it fits well into the economic stimulus approach currently being developed by preventing the overall reductions in Medicaid payments to states. The legislation challenges CMMS for going beyond its legal authority.

 

What You Can Do to Help

• Help Us Understand the Impact
• Ask Questions and Share Your Concerns
• Work With Us to Determine Solutions
• Contact Your Congressman

 

Questions/solutions – online feedback form, additional information:
www.maine.gov/education/medicaid.html

Congressional Information

Senator Olympia Snowe 154 Russell Senate Office Building Washington, DC 20510-0001 202-224-5344 Fax: 202-224-1946 http://snowe.senate.gov Senator Susan Collins 413 Dirksen Senate Office Bldg. Washington, DC 20510 202-224-2523 Fax: 202-224-2693 http://collins.senate.gov

Representative Tom Allen 27 Longworth House Office Building Washington, DC 20515 Phone: 202-225-6116 Fax: 202-225-5590 rep.tomallen@mail.house.gov Representative Michael Michaud 1724 Longworth House Office Building Washington, DC 20515 Phone: 202-225-6306 Fax: 202-225-2943 http://michaud.house.gov

Thank you for your attention to this important matter. If you should have any questions regarding these changes, you can contact Joanne (Jaci) Holmes at (207) 624-6669 or jaci.holmes@maine.gov .

 

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