Several THOT providers have invested in new Medicaid Supplemental programs – NAIP; MPAP/QIPP — to fund improved care and support their ability to continue providing services within Medicaid’s underfunded program. However, with CMS’ new Medicaid managed care rules, CMS working from its waiver principles, and the waiver hanging in the balance, these programs are being pended or limited with service and budget impacts to providers.

The Network Access Improvement Program had Legislative approval as an IGT-matched program to improve care provided within Medicaid managed care. A Medicaid program first, NAIP created a program in which providers and MCOs partnered on improvements with IGT-matched Medicaid supplemental funds. Beginning just over a year ago in March 2015, the voluntary program recently hit some obstacles as NAIP funding requests increased. In 2015, HHSC reported $127 million in NAIP program funding, with NAIP growing to $528 million in 2016 and projections for increased funding up to $927 million projected in 2021 in the Commission’s waiver budget neutrality document.[1] Alarmed by program growth CMS has begun a NAIP review, and HHSC is limiting the growth in NAIP program requests. Potential reductions could affect providers planning on or investing in programs. CMS also has concerns about the IGT methodology, in particular IGT commitment agreements. Without those agreements, HHSC will require that IGT be provided in advance of when MCO rates are approved, so that the Commission will not be committed to MCO rate levels if IGT is not provided. That means IGT contributions would be needed three months prior to when MCO rates would start flowing, and that six months’ worth of IGT payments would be required at a time. This approach, among other things, would lock up IGT funding for up to nine months and require it on a rotating cycle.

NAIP Detail: 

The 83rd Legislature approved, through HHSC Riders 79 and 80, the creation and implementation of the Network Access Improvement Program (NAIP) NAIP was intended to increase the availability, quality, coordination and effectiveness of primary care for Medicaid clients by providing incentive payments administered by the managed care organizations (MCOs) to participating health related institutions (HRIs) and public hospitals.

Participation in the program is voluntary and has been conditioned on intergovernmental transfers from or on behalf of public HRIs and hospitals. HHSC incorporates NAIP into existing Medicaid Managed care contracts and blends these NAIP costs into the capitation rates. HHSC also requires participating MCOs to make per member per month or other incentive payments for achieving certain program objectives.

NAIP Initiatives began in March of 2015. Funds for this program are not appropriated through the General Appropriations Act and are off -budget. The program is estimated to be $527.7 million in All Funds annually in the 2016–17 biennium, according to the Legislative Board Fiscal Size Up. As of May FY 2016, NAIP initiatives has received $173 million in AF for 2016.[2] Alarmed by the size of the proposed program increase, CMS has begun to conduct reviews on existing NAIP programs.

The Nursing Facility Minimum Payment Amount Program (MPAP) also began in March of 2015 and used IGT to fund enhanced Medicaid rates at qualifying public skilled nursing facilities (SNFs) with access to IGT funding.  Some THOT members saw this program as providing an opportunity to partner with SNFs for better and more effective care. For example, Parkland was able to create partnerships enabling it to secure SNF access for uninsured patients needing that level of care who would otherwise be kept in a more costly hospital bed. Parkland invested in quality and safety improvements in its partner SNFs, generating improved access and program savings. The Texas Legislature last session mandated that MPAP evolve to a QIPP by September 2016 to specifically drive quality improvements and to be available for public and private nursing facilities. Like NAIP, the MPAP program grew quickly. HHSC Waiver renewal budget neutrality documents show an increase from $119 million in FY 2015 to an estimated $535 million in 2016.[3]

Also like NAIP, MPAP/QIPP has run into CMS challenges that will result in the program being pended; possibly until September 2017.  HHSC submitted a QIPP concept paper to CMS in early 2016. CMS concerns, including access to IGT, halted the proposed approach. HHSC has been working with stakeholders to find options to address CMS concerns and recently submitted a revised QIPP concept paper. (LINK HERE? Sent Friday 8.5.2016 from MM). CMS’ prohibition on “No Pay to Play” which prohibits requiring access to an IGT agreement as the basis for program participation, is also affecting this program. HHSC is considering having public entities IGT for all providers and then allocating program funds among all participating providers based on IGT contributed. THOT’s Chris Dockal and Keri Disney Story from Parkland are representing our members on the QIPP workgroups and we’ll continue to monitor and report back.

MPAP & QIPP in More Detail: 

The Nursing Facility Minimum Payment Program became effective in March of 2015 to provide enhanced payment rates to participating qualified skilled nursing facilities through the use of Intergovernmental transfers and matching funds. The additional funds are supposed to be equal to the difference between Medicare Part A and the amount they would have received under Medicaid.

Funds for this program were estimated to provide $560.1 million in all funds annually during the 2016-17 biennium, according to the Legislative Budget Board fiscal size up. In fiscal year 2017, HHSC is required to transition MPAP from a program based on enhanced payment rates to publicly owned nursing facilities to a Quality Incentive Payment Program (QIPP) for all nursing facilities that have a source of public funding for the non-federal share of the payment. HHSC Rider 97 in the state budget directed the transition to QIPP no later than September 1, 2016.

QIPP Detail:

Under QIPP, additional payments to nursing facilities should be based upon improvements in quality and innovation in the provision of nursing facility services, including but not limited to payment incentives to establish culture change, small house models, staffing enhancements and outcome measures to improve the quality of care and life for nursing facility residents.

HHSC prepared a concept paper in December 2015, and in February 2016 HHSC received feedback from CMS stating that it would not approve certain sections of the paper. HHSC and CMS have been negotiating over the terms of the program. On March 11, 2016 HHSC decided to delay the implementation of QIPP six months to March 1, 2017 to allow for a resolution to be reached with CMS.   HHSC had intended for MPAP to be extended for six months through February 28, 2017 at 100 percent for existing MPAP participants only.  HHSC is now targeting September 2017 as the earliest that a QIPP program could be implemented.

HHSC submitted a revised QIPP concept paper (QIPP Concept Paper pdf) to HHSC earlier this month. The proposal would allow two classes of facilities to participate:

non-state government owned nursing facilities and private nursing facilities. The two classes of facilities will have separate eligibility criteria. Most notably, HHSC intends to limit private nursing facility eligibility to such facilities that have a certain level of Medicaid utilization to ensure that QIPP funds are focused on the Medicaid population. HHSC is exploring other characteristics by which to define eligibility and increase program participation as much as possible while improving quality.

HHSC also intends to use certain quality measures that are currently utilized by CMS’ own star ratings for nursing facilities. Nursing facilities would be required to make incremental improvements in those measures to receive payments.

The Concept Paper (QIPP Concept Paper pdf) also proposed the creation of three separate components for managed care capitations rates.

Funds from Component #1 are only available to facilities in the non-state government-owned nursing facility class. Funds from Components #2 and #3 are available to all qualified participants from either class. Required quality improvements increase in difficulty from Component #1 to Component #3. The non-federal share of all components is provided through intergovernmental transfers (IGTs) from local governmental entities. Implementation and operation of this program is subject to the availability of federal funds.  No state General Revenue will be used in the event that federal funding decreases or is eliminated.

THOT is a part of these workgroups and will continue to advocate on behalf of its members participating in these programs.

[1] http://www.hhsc.state.tx.us/1115-docs/93015/TX_1115_TransformationWaiverExtensionApplicationSept2015_Final.pdf

[2] https://www.hhsc.state.tx.us/about_hhsc/reports/2016/April.pdf

[3] Ibid.