State Budget: Competitive Procurement

April 8, 2022

Procurement

It appears that the Department of Health will be required to contract with an outside consultant whose job is to first examine and then make recommendations pertaining to the state’s Medicaid managed care program.  The consultant is charged with making recommendations re: the relative strengths/challenges associated with implementing a competitive MCO procurement to identify contractors to manage carved-in Medicaid services. The language focuses closely on whether competitive procurement for MCOs in the behavioral health sector (HARP) would make sense, and what the impact of such a move would be on consumers. The Report must include recommendations regarding the current state oversight of MCO performance metrics, and whether there should be revised/new performance standards for MCOs.  Finally, it must discuss current state oversight practices including enforcement of performance requirements and use of fines.  The Report must be turned over to the Exec and Legislative leaders by October 2022.

NYS Council Note:  This proposal reflects some of the major concerns the NYS Council has been raising for more than 5 years regarding MCO conduct in the Medicaid managed care program.  The language seems to have a particular focus on issues in the behavioral health carve in with references to performance metrics (a nod to the Medical Loss Ratios and Behavioral Health Expenditure Targets issues we worked so hard to bring to light), and whether a competitive procurement of the HARP would make sense.  The focus on enforcement is a welcomed addition as is the focus on network adequacy.  These are issues we have been highlighting for the Administration and DOH for years and years.

Notwithstanding sections 112 and 163 of the  state finance
10  law, the department of health shall select an independent  contractor to
11  generate a report that reviews and makes recommendations  concerning the
12  status  of  services  offered by managed care organizations  contracting
13  with the state to manage services provided under the Medicaid   program.
14  Such  report shall be provided to the governor, the temporary  president
15  of the senate and the speaker of the assembly no later than October  31,
16  2022, and shall be for the purpose of informing the development  of  a
17  plan  to reform the delivery of services offered  by managed care organ-
18  izations in the Medicaid program. The report shall  include the  follow-
19  ing:  1.  A market assessment of the managed care organizations offering
20  products in each market, including the  appropriate  number  of  managed
21  care organizations to  each region to address member needs;  2. Analysis
22  of  areas  of  potential  improvements  or  challenges as they relate to
23  healthcare access, delivery, outcomes, administrative  costs,  efficien-
24  cies and oversight that may result from competitive procurement; 3. Cost
25  savings  analysis  that  may  result  from a competitive procurement, if
26  any; 4. The current approach for addressing  Person  Centered  care  for
27  people with  behavioral health needs enrolled with Medicaid managed care
28  plans,  including   but not limited to special needs managed care organ-
29  izations authorized to  offer Health and Recovery Plans (HARPs) and  the
30  integration  of  those  benefits   with Mainstream Medicaid Managed Care
31  (MMMC);  5. Provider network access that may result  from  competitively
32  procuring   plans in each region and potential improvements in standards
33  governing  network    adequacy;    6.  Managed  care  enrollee   service
34  disruptions  that  may result from  competitively procuring managed care
35  plans in each region;   7. Impacts to providers  that  contract  or  are
36  affiliated  with  Medicaid    managed care organizations that may result
37  from a competitive procurement;   8. An evaluation  of  new  performance
38  standards  or  requirements that could  be imposed upon Medicaid managed
39  care organizations that participate in the  managed care program  pursu-
40  ant  to  a contract with the department of health; and  9. An assessment
41  of current  mechanisms  for  enforcement  of  performance  requirements,
42  including  but  not limited to oversight of Medicaid managed care organ-
43  izations  and penalties.

44 § 2. Subparagraphs (v) and (vi) of paragraph (b) of subdivision 1 of 45 section 268-d of the public health law, as added by section 2 of part T 46 of chapter 57 of the laws of 2019, are amended to read as follows:
47 (v) meets standards specified and determined by the Marketplace, 48 provided that the standards do not conflict with or prevent the applica- 49 tion of federal requirements; [and]

50 (vi) contracts with any national cancer institute-designated cancer 51 center licensed by the department within the health plan’s service area 52 that is willing to agree to provide cancer-related inpatient, outpatient 53 and medical services to enrollees in all health plans offering coverage 54 through the Marketplace in such cancer center’s service area under the

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prevailing terms and conditions that the plan requires of other similar providers to be included in the plan’s provider network, provided that such terms shall include reimbursement of such center at no less than the fee-for-service medicaid payment rate and methodology applicable to the center’s inpatient and outpatient services; and

(vii) complies with the insurance law and this chapter requirements 7 applicable to health insurance issued in this state and any regulations 8 promulgated pursuant thereto that do not conflict with or prevent the 9 application of federal requirements; and

10 § 3. Subdivision 4 of section 364-j of the social services law is 11 amended by adding a new paragraph (w) to read as follows:
12 (w) A managed care provider shall provide or arrange, directly or 13 indirectly, including by referral, for access to and coverage of 14 services provided by any national cancer institute-designated cancer 15 center licensed by the department of health within the managed care 16 provider’s service area that is willing to agree to provide cancer-re- 17 lated inpatient, outpatient and medical services to participants in all 18 managed care providers offering coverage to medical assistance recipi- 19 ents in such cancer center’s service area under the prevailing terms and 20 conditions that the managed care provider requires of other similar 21 providers to be included in the managed care provider’s network, 22 provided that such terms shall include reimbursement of such center at 23 no less than the fee-for-service medicaid payment rate and methodology 24 applicable to the center’s inpatient and outpatient services.

25 § 4. Paragraph (c) of subdivision 1 of section 369-gg of the social 26 services law, as amended by section 2 of part H of chapter 57 of the 27 laws of 2021, is amended to read as follows:
28 (c) “Health care services” means (i) the services and supplies as 29 defined by the commissioner in consultation with the superintendent of 30 financial services, and shall be consistent with and subject to the 31 essential health benefits as defined by the commissioner in accordance 32 with the provisions of the patient protection and affordable care act 33 (P.L. 111-148) and consistent with the benefits provided by the refer- 34 ence plan selected by the commissioner for the purposes of defining such 35 benefits, and shall include coverage of and access to the services of 36 any national cancer institute-designated cancer center licensed by the 37 department of health within the service area of the approved organiza- 38 tion that is willing to agree to provide cancer-related inpatient, 39 outpatient and medical services to all enrollees in approved organiza- 40 tions’ plans in such cancer center’s service area under the prevailing 41 terms and conditions that the approved organization requires of other 42 similar providers to be included in the approved organization’s network, 43 provided that such terms shall include reimbursement of such center at 44 no less than the fee-for-service medicaid payment rate and methodology 45 applicable to the center’s inpatient and outpatient services; and (ii) 46 dental and vision services as defined by the commissioner;

47    § 5. Severability. If any clause, sentence, paragraph, section or part
48  of  this act shall be adjudged by any court of competent jurisdiction to
49  be invalid and after exhaustion of  all  further  judicial  review,  the
50  judgment  shall  not affect, impair or invalidate the remainder thereof,
51  but shall be confined in its operation to the  clause,  sentence,  para-
52  graph,  section or part of this act directly involved in the controversy
53  in which the judgment shall have been rendered.
54    § 6. Sections one and five of this act shall take  effect  immediately
55  and  shall  be deemed to have been in full force and effect on and after
56  April 1, 2022. Sections two, three, and four  of  this  act  shall  take
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1  effect  on  the  first  of  January next succeeding the date on which it
2  shall have become a law and shall apply  to  all  coverage  or  policies
3  issued  or  renewed on or after such effective date and shall expire and
4  be  deemed  repealed five years after such date; provided, however, that
5  the amendments to section 364-j of  the  social  services  law  made  by
6  section three of this act, and the amendments to paragraph (c) of subdi-
7  vision  1  of  section 369-gg of the social services law made by section
8  four of this act shall not affect the repeal of such  sections  or  such
9  paragraph and shall be deemed repealed therewith.