2017 Session

Budget Amendments - SB900 (Committee Approved)

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Manged Care Requirements and Oversight (language only)

Item 306 #14s

Item 306 #14s

Health and Human Resources
Department of Medical Assistance Services


Page 311, after line 41, insert:

"WWWW.1. Effective January 1, 2018, the Department of Medical Assistance Services shall include in all its contracts with managed care organizations (MCOs) the following:

a. A provision requiring the MCOs to return one-half of the underwriting gain in excess of three percent of Medicaid premium income up to 10 percent.

b. A requirement for detailed financial and utilization reporting. The reported data shall include: (i) detailed income statements that show expenses by rate cell and detailed service category; (ii) balance sheets; (iii) related-party transactions; and (iv) service utilization metrics.

c. Behavioral health-specific metrics to identify undesirable trends in service utilization.

d. A report on their policies and processes for identifying behavioral health providers who provide inappropriate services and the number of such providers that are disenrolled.

2. For rate periods effective January 1, 2018 and thereafter, the Department of Medical Assistance Services shall direct its actuary as part of the rate setting process to:

a. Identify potential inefficiencies in the Medallion program only and adjust capitation rates for expected efficiencies. The department is authorized to phase-in this adjustment over time based on the portion of identified inefficiencies that MCOs can reasonably reduce each year.

b. Monitor medical spending for related-party arrangements and adjust historical medical spending when deemed necessary to ensure that capitation rates do not cover excessively high spending as compared to benchmarks.

c. Adjust capitation rates only in the Medallion program to account for a portion of expected savings from required initiatives.

d. Allow negative historical trends in medical spending to be carried forward when setting capitation rates.

e. Annually rebase administrative expenses per member per month for projected enrollment changes.

f. Annually incorporate findings on unallowable administrative expenses from audits of MCOs into its calculations of underwriting gain and administrative loss ratios for the purposes of ongoing financial monitoring, including enforcement of the underwriting gain cap.

g. Adjust calculations of underwriting gain and medical loss ratio by classifying as profit medical spending that is excessively high due to related-party arrangements.

3. The Department of Medical Assistance Services shall report to the General Assembly on spending and utilization trends within Medicaid managed care, with detailed population and service information and include an analysis and report on the underlying reasons for these trends, the agency's and MCOs' initiatives to address undesirable trends, and the impact of those initiatives.  The report shall be submitted each year by September 1.

4. The Department of Medical Assistance Services shall develop a plan to implement cost-sharing requirements based on family income for individuals eligible for long-term services and supports through the optional 300 percent of SSI eligibility category and apply to the Centers for Medicare and Medicaid Services for approval to implement the cost-sharing plan.

5. The Department of Medical Assistance Services shall assess and report on additional or different resources needed to implement recommendations in the Joint Legislative Audit and Review Committee (JLARC) report Managing Spending in Virginia's Medicaid Program. The department shall submit its report to the Chairmen of the House Appropriations and Senate Finance Committees no later than November 1, 2017.”


(This amendment includes budget language directing the Department of Medical Assistance Services to implement various JLARC recommendations related to oversight of the Medicaid managed care programs.)