MRT Plan Current STCs - April 19, 2019

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DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop: S2-25-26
Baltimore, Maryland 21244-1850


April 19, 2019

Donna Frescatore Director
Office of Health Insurance Programs
New York State Department of Health
Empire State Plaza
Corning Tower (OCP - 1211)
Albany, NY 12237

Dear Ms. Frescatore:

Under section 1115(a) of the Social Security Act ("the Act"), the Secretary of Health and Human Services ("Secretary") or CMS, operating under the Secretary´s delegated authority, may authorize a state to conduct experimental, pilot, or demonstration projects that, in the judgment of the Secretary, are likely to assist in promoting the objectives of the Medicaid program, as discussed below. Congress enacted section 1115(a) of the Act to ensure that federal requirements did not "stand in the way of experimental projects designed to test out new ideas and ways of dealing with the problems of public welfare recipients."1 As relevant here, the Secretary (1) may, under section 1115(a)(l ), waive provisions in section 1902 of the Act; and/or may, under section 1115(a)(2)(A), authorize federal financial participation (FFP) for state expenditures that would not qualify for FFP under section 1903 of the Act (i.e., provide "expenditure authority"). Section 1902 of the Act lists what elements the Medicaid state plan must include, such as provisions relating to eligibility, beneficiary protections, benefits, services, and premiums. Section 1903, "Payments to States," describes expenditures that may be "matched" with federal title XIX dollars, allowable sources of non-federal share, and managed care requirements.

For the reasons discussed below, the Centers for Medicare & Medicaid Services (CMS) hereby approves New York´s request to amend its section 1115(a) demonstration titled, "Med icaid Redesign Team" (MRT) (Project Number 11-W-001142/2). Approval of this amendment enables the state to exempt Mainstream Medicaid Managed Care (MMMC) enrollees from the cost-sharing provisions outlined in New York´s Medicaid state plan, except for applicable pharmacy co-pays.

Extent and Scope of the Amendment

The New York Medicaid Redesign Team (MRT) demonstration (formerly known as "Partnership Plan") allows New York to implement a managed care delivery system to provide benefits to its Medicaid recipients, create efficiencies in the Medicaid program, and enable the extension of coverage to many individuals needing long term services and supports (LTSS). The demonstration was originally approved in 1997 to enroll most of the state´s Medicaid recipients into managed care organizations (MCO) and it has been amended numerous times, including through the following notable amendments:

  • In 2010, a Home and Community Based Services (HCBS) expansion program was added;
  • In 2012, an improved care coordination model of managed LTSS was added;
  • In 2013, modifications were approved to coordinate with the Medicaid expansion and other changes under the Affordable Care Act-including a) transitioning childless adults and parents and caretaker relatives with incomes up to, and including, 133 percent of the federal poverty limit (FPL) into state plan coverage; and b) mandating them into managed care arrangements;
  • In 2014, a Delivery System Reform Incentive Payment (DSRIP) program was added; and
  • In 2015, Health and Recovery Plans (HARP) were approved to integrate physical, behavioral health and HCBS for beneficiaries diagnosed with severe mental illness and/or substance use disorder.

For this amendment, CMS is approving the state´s request to exempt MMMC enrollees from cost sharing-by waiving comparability requirements-to align with the state´s social services law, except for applicable pharmacy co-payments described in the STCs.2 The exclusion of MMMC enrollees from cost sharing is a long-standing program design element. Additionally, it is consistent with CMS´s approved capitated rate assumptions and the language previously-approved by CMS.3 The MRT demonstration remains in effect, as amended and technically corrected, through March 31, 2021.

Promoting the Objectives of Medicaid

Under section 1901 of the Act, the Medicaid program provides federal funding to participating states "[for the purpose of enabling each state, as far as practicable under the conditions in such state, to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care."

As this statutory text makes clear, a basic objective of Medicaid is to enable states to "furnish … medical assistance" to certain vulnerable populations (i.e., payment for certain healthcare services defined at section 1905 of the Act, the services themselves, or both). By paying these costs, the Medicaid program helps vulnerable populations afford the medical care and services they need to attain and maintain health and well-being. In addition, the Medicaid program is supposed to enable states to furnish rehabilitation and other services to vulnerable populations to help them "attain or retain capability for independence or self-care," per section 1901 of the Act.

We are committed to supporting states that seek to test policies that are likely to improve beneficiary health because we believe that promoting independence and improving health outcomes is in the best interests of the beneficiary and advances the fundamental objectives of the Medicaid program. Healthier, more engaged beneficiaries also may consume fewer medical services and have a lower risk profile, making the program more efficient and potentially reducing the program´s national average annual cost per beneficiary of $7590.4 Policies designed to improve beneficiary health that lower program costs make it more practicable for states to make improvements and investments in their Medicaid program and ensure the program´s sustainability so it is available to those who need it most. In so doing, these policies can promote the objectives of the Medicaid statute.

While CMS believes that states are in the best position to design solutions that address the unique needs of their Medicaid-eligible populations, the agency has an obligation to ensure that proposed demonstration projects are likely to better enable states to serve their low-income populations, through measures designed to improve health and wellness and help individuals and families attain or retain capability for independence or self-care. Medicaid programs are complex and shaped by a diverse set of interconnected policies and components, including eligibility standards, benefit designs, reimbursement and payment policies, information technology (IT) systems, and more. Therefore, in making this determination, CMS considers the proposed demonstration as a whole.

In its consideration of the MRT amendment proposal, CMS examined whether the demonstration was likely to assist in improving health outcomes, whether it would address health determinants that influence health outcomes, and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes. CMS has determined the MRT Demonstration is likely to promote Medicaid objectives, and the waiver and expenditure authorities sought are necessary and appropriate to carry out the demonstration.

Approval of this amendment will align the cost-sharing obligations of MMMC enrollees with the longstanding managed care assumptions about cost-sharing built into the methodology for determining Medicaid Managed Care Organization (MMCO) capitation rates paid to the MMCOs in which MMMC beneficiaries are enrolled. These assumptions continue to be based on the cost-sharing provisions outlined in New York´s Medicaid state plan, with the exception of applicable pharmacy co-pays. Elimination of cost-sharing also permits the state to: (a) test the effects of these cost-sharing changes on enrollee service utilization-including whether it leads to unnecessary overutilization of services; and (b) aid provider participation in managed care by reducing the number of copays that providers assess to managed care enrollees.

Consideration of Public Comments

CMS and New York did not receive any public comments during their respective comment periods for this amendment.

Other Information

CMS´s approval of this amendment is subject to the limitations specified in the enclosed authorities and STCs which define the nature, character, and extent of federal involvement in this project. The state may deviate from the Medicaid state plan requirements only to the extent they have been specifically listed as not applicable and approval is.

This approval is also subject to your written acknowledgement of the award and acceptance of the STCs within 30 calendar days of the date of this letter. Please send written acceptance to your project officer, Ms. Audrey Cassidy. Ms. Cassidy is available to answer any questions concerning your section l l 15(a) demonstration and may be contacted as follows:

Centers for Medicare & Medicaid Services
Center for Medicaid and CHIP Services
Mail Stop: S2-0l-16
7500 Security Boulevard
Baltimore, MD 21244-1850
Telephone: (410) 786-0059
E-mail: Audrey.Cassidy@cms.hhs.gov

Official communication regarding official matters should be simultaneously sent to Ms. Cassidy and Mr. Ricardo Holligan, Deputy Director, Division of Medicaid Field Operations East, Regional Operations Group in our New York Regional Office. Mr. Holligan´s contact information is as follows:

Mr. Ricardo Holligan
Deputy Director, Division of Medicaid Field Operations East
Regional Operations Group
Centers for Medicare & Medicaid Services
Jacob K. Javits Federal Building
26 Federal Plaza, Room 3811
New York, NY 10278-0063
Telephone: (212) 616-2424
E-mail: Ricardo.Holligan@cms.hhs.gov

If you have any questions regarding this approval, please contact Ms. Judith Cash, Director, State Demonstrations Group, Centers for Medicaid & CHIP Services at (410) 786-9686.

Sincerely,

Chris Traylor
Deputy Administrator and Director

Enclosures

cc: Francis McCullough, Director, Division of Medicaid Field Operations East, Regional Operations Group
       Ricardo Holligan, Deputy Director, Division of Medicaid Field Operations East, Regional Operations Group
       Maria Tabakov, State Lead, Division of Medicaid Field Operations East, Regional Operations Group, New York Regional Office

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1. See S. Rep. No. 87-1589, at 19 (1962), as reprinted in 1962 U.S.C.C.A.N. 1943, 1961.  1
2. See STCs section V(2)(a) and Attachment A.  2
3. See STC Attachment A which only lists pharmacy co-pays (the absence of non-pharmacy co-pays presumes that they were not applied for MMMC enrollees).  3
4. U.S. Department of Health and Human Services 2017 Actuarial Report on the Financial Outlook for Medicaid.  4


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1. Medically needy refers to those who have the option of spousal impoverishment budgeting, including post eligibility when it is more beneficial. Medically needy is defined as an individual who is not eligible for, or in receipt of public assistance or SSI (or the state supplement), because his/her income and/or resources are in excess of cash assistance standards, but who has insufficient income and/or resources to meet the cost of his/her necessary medical and remedial care (42 CFR §435.320 (aged), §435.322 (blind) and §435.324 (disabled)).  1
2. All beneficiary protections apply to MMMC, MLTC and HARPs, unless otherwise noted in Section V  2
3. Throughout these STCs, the term "Health Home," unless otherwise noted, only refers to Health Homes approved under section 1945 of the Act and consistent with approved NY Health Home state plan benefits for Health Homes SPA for IDD, Health Homes SPA for children, and/or Health Home SPA for Chronic Medical and SSI Health Home program.  3
4. Note: for all children, HCBS Non-Medical Transportation (NMT) is paid through the State´s transportation broker.  4
7. The terms ´visits´, ´services´, and ´qualifying services´ are used interchangeably throughout Attachment I.  7


New York State Medicaid Redesign Team Section 1115(a) Medicaid Demonstration
CMS Approved: December 7, 2016 through March 31, 2021
Amended on April 19, 2019