A growing trend in state health policy is developing capitated managed care programs to provide long-term services and supports (LTSS) to Medicaid beneficiaries who are older and/or have disabilities. How states design and oversee these programs has real implications for the quality of care beneficiaries receive and their overall experience with the health care system.
During a panel discussion at NASHP’s 2024 Annual Conference titled “Medicaid Managed Care for People with Long-term Care Needs,” two states — Virginia and Tennessee — discussed strategies and challenges related to increasing access to home- and community-based services (HCBS), implementing value-based purchasing (VBP) for nursing facilities, and engaging LTSS providers and managed care plans in program implementation.
Virginia Provides Managed Care Organizations (MCOs) Added Flexibility to Improve Access to HCBS
Virginia has seven years of experience serving beneficiaries with LTSS needs through MCOs since launching its statewide managed long-term services and supports (MLTSS) program, Commonwealth Coordinated Care Plus (CCC+) in 2017. In 2023, the state combined its two managed care programs — Medallion 4.0, which serves children, pregnant women, and adults, and CCC+ — into one program called Cardinal Care. Cardinal Care currently enrolls 90 percent of all Medicaid beneficiaries into MCOs. These MCOs are responsible for delivering a comprehensive set of services, including both nursing facility and HCBS services. The agency carried forward many of the strategies developed under the previous MLTSS program into the new program.
During the panel session, Virginia representatives described adding flexibility to their respite requirements for MCOs to enhance access to services. Respite care is a service typically delivered in a home or a facility-based setting that provides short-term relief for family caregivers. Per an agreement between Virginia and the MCOs, respite can now be authorized in bulk by the year — with a maximum of 480 hours per state fiscal year — to allow individuals access to respite care how they best see fit. By allowing respite to be authorized in bulk, beneficiaries can flexibly use their allotted hours each month as needed. In addition to improving uptake of respite, this modification also reduces administrative burden for beneficiaries, providers, and MCOs. The benefit is available both as a standalone service and in combination with other services to accommodate unique caregiving situations.
Virginia also discussed how MCOs are using their flexibilities under the enhanced benefit option to increase access to certain services. Enhanced benefits are services offered by an MCO in excess of those services covered by the state plan. MCOs are likely to offer these benefits to distinguish themselves from each other when competing for beneficiaries. The state does not make any additional payment to the MCO to provide these additional services, and they are not factored into the MCO’s capitation rate.
A popular enhanced benefit offered by Virginia MCOs is increased funding for home modifications such as grab rails, handrails, and access ramps. In Virginia, certain MCOs now offer an extra $2,500 on top of the existing $5,000 benefit for home modifications available under Medicaid, bringing the total allowable reimbursement to $7,500. To further expand access to these services, the state also began partnering with a third-party administrator (TPA) to identify and pay contractors to complete these modifications. Previously, contractors had to enroll in Medicaid to receive payment, which limited provider participation in the program. Now, contractors only need to enroll with the TPA, which handles claims submission and reimbursement on their behalf.
Tennessee Implemented Value-Based Payment for Nursing Facilities through MCOs
Tennessee’s Medicaid agency has over a decade of experience using value-based payment (VBP) to incentivize nursing facilities to improve performance. Tennessee Medicaid delivers nursing facility services through MCOs and enrolls almost all Medicaid beneficiaries, including those with LTSS needs, into MCOs. The state determines who qualifies for nursing facility care and sets nursing facility per diem rates while the MCO coordinates care and manages utilization. MCOs are contractually required to pay the nursing facility per diem rate set by the Medicaid agency. This structure enables the Medicaid agency to implement a statewide VBP program while retaining the care and cost management abilities of MCOs.
Tennessee operates a VBP program called the Quality Improvement in Long Term Services and Supports initiative (QuILTSS). The Nursing Facility QuILTSS program is voluntary and open to nursing facilities that provide services to TennCare members. Under the QuILTSS program, a portion of a nursing facility’s payment is based on its performance on certain quality measures. There are two components to a nursing facility’s payment: One is based on a facility’s performance on threshold measures, and the second is based on the facility’s performance on a select number of quality measures. A facility must meet performance on the threshold measures to be eligible for the quality portion of the payment rate. Threshold measures include submitting accurate data and timely payment of a nursing home “assessment fee.”
Once a facility meets all of the threshold measures, it becomes eligible for quality payments. Its performance on quality measures will determine the amount of the quality payment the facility will receive. Payments are determined using a point system. In 2024, quality categories include satisfaction (35 points), culture change/quality of life (30 points), staffing/staff competency (25 points), and clinical performance (10 points). Facilities can also earn 10 bonus points for qualifying awards or accreditations, which display a commitment to quality improvement processes. In accordance with state regulations for 2024, the amount of funding set aside for the quality-based component of reimbursement for nursing facilities is to be no less than $40 million or 4 percent of the total projected fiscal year expenditures for nursing facility services, whichever is greater. The amount can then increase up to 10 percent in future years.
Currently, the TennCare QuILTSS has a participation rate of 90 to 95 percent among nursing facilities across the state. Since its initiation, the state has seen improvements in patient satisfaction and better engagement from staff and residents. TennCare has also seen success with helping MCOs use data to see how care is delivered from the member rather than facilities perspective to help them achieve quality benchmarks.
Involving Providers and Enrollees in Program Planning Is Key to Success
To help states navigate the complexities of Medicaid managed care, workshop presenters shared some common challenges and lessons learned related to implementing these innovations. Many of these challenges related to partnering with MCOs and engaging providers, payers, and beneficiaries n program design. Discussion points included:
- State officials noted that gaining trust and acceptance from the LTSS provider community proved challenging. Participants acknowledged that maintaining consistent communication with providers and actively seeking their feedback was crucial for effective implementation.
- To compensate for MCOs’ limited experience in delivering LTSS services, Virginia invested substantial time and resources to educating MCOs in the complexities of administering and overseeing long-term care services.
- Indiana, which just launched its first MLTSS program — PathWays for Aging — on July 1, 2024, described creating a robust engagement process with partners to facilitate implementation. The process involved offering multiple avenues for members, providers, and MCOs to provide feedback to the state on an ongoing basis. The state currently holds weekly workgroup meetings to discuss concerns and actively monitors and resolves issues on an ongoing basis.
States are continually developing innovative approaches to expand access to services and improve quality in their Medicaid managed care programs for individuals with LTSS needs. Virginia is granting MCOs additional flexibilities to enhance access to services, and Tennessee is improving quality for LTSS beneficiaries by continually refining and improving its VBP program for nursing facilities. Whether states are creating entirely new programs to improve care or making refinements to existing initiatives, creating avenues for ongoing and meaningful engagement from providers, plans, and beneficiaries can help ensure successful implementation.
To help states enhance accountability and oversight in their MLTSS programs, NASHP is currently providing technical assistance to 10 states, with three states receiving intensive assistance in its MLTSS Learning Intensive. To learn more, visit https://nashp.org/state-oversight-innovations-mltss-serving-older-adults-people-disabilities.
Acknowledgments
NASHP would like to express our gratitude to Arnold Ventures for its support and partnership in this work. We would also like to thank Kimberly Brenner, director of Indiana’s PathWays for Aging program; Jason Rachel, director of the Division of Integrated Care for Virginia Medicaid; and Kathleen Livingstone, assistant deputy chief of quality, accountability, and innovation, and Caitlin Rogers, statistical research specialist, Division of TennCare, for participating in this panel session and reviewing this brief.
