Washington’s MCO RFP: This is a signal to the market

 

Last week, the HCA released a new RFP to add MCOs to regions in Washington State that didn’t have all of the five MCOs participating.

That move didn’t make a lot of sense to me last week, and caught a number of providers and plans that I spoke with off guard. Over the weekend, I wrote about some of the concerns I heard:

Providers and plans in regions have, for the most part, established good working relationships with the existing health plans in their market. This is particularly true for the “early adopter” and mid-adopter” regions which have been in place for years.

Moreover, it’s these providers that will primarily bear the brunt of the Medicaid wave. Adding more plan partners to providers actually adds complexity to clinical administrators. It will require more back room costs and complexity at the precise time that the wave hits.

As a result, this will likely do more harm than good to Medicaid providers as they have to re-allocate resources away from patient care to manage new levels of complexity.

For my first post, I spoke with a range of providers, but only among traditional physical health providers. It turns out that had I talked with behavioral health and SUD providers, I may well have had a different take.

After having had additional conversations, my thinking on this RFP has evolved. This RFP is a signal of a much bigger conversation on the horizon for Washington State medicaid.

 

 

Here is what I think may be going on.

First, I think there is real concern – indeed frustration – about the performance of the Medicaid MCOs to fully execute on a fully integrated delivery model that includes both clinical and financial integration.

Physical health providers are used to the managed care system. That system has codes for services, contractual accountability and technology to support managed care like EMRs. That isn’t always the case with behavioral health providers and is even less often the case with SUD providers.

Bringing those providers less familiar with managed care into an integrated care and financing model requires extra help and support.

 

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The HCA, I think, believed that its MCO partners would have done more to bring providers unfamiliar with managed care along, with the necessary support and aid.

In general, that was the case. MCOs and providers got to work to solve integration and implementation problems.

Still, a significant number of providers had back claims that weren’t getting paid in a timely way. Some BH and SUD providers are still struggling to adapt to the MCO model. Not having an EMR or finding the need for significant reprograming of an EMR, for example, can make getting paid difficult under the MCO system.

But, the HCA would argue that leaving the providers without payment, even when they don’t yet have all of the necessary tools in place, is not a constructive way of dealing with this challenge.

Yet, in some cases that appears to be what is happening.

Jason McGill is the Assistant Director of Medicaid Program Operations and Integrity. He brought me up to speed on some of the ongoing challenges of driving towards an integrated model in Medicaid.

This RFP is meant to ensure the highest performing managed care standards. I don’t want to have to deal with claims timeliness ever again. This is 2020. I remember dealing with this in the early part of the previous decade when the system was moving to EMRs and I thought we got it all figured out back then.

This is a quick RFP. Responses are due July 1 for execution January 1, 2021. But, if transparency and competition is important, this may be a better pathway than the alternative.

There is language in state law that allows the HCA to contract with any plan it wants to meet the policy goals set out by the legislature. No RFP is needed. Moreover, plans can petition to enter a market, particularly when they are already contracted for services in other parts of the state. One can argue that statute requires that the HCA must be responsive to any plan that can meet contracting requirements.

So, within this context, moving to an RFP, no matter how quick the move, is probably better for transparency than simply contracting with plans directly.

 

 

Second, this feels a bit like 2009. That was two years before what was the State of Washington’s first large scale open RFP for Medicaid MCOs in a generation. In fact, HCA had never done a statewide procurement like that. And, while the former Medical Assistance Administration was at DSHS, before the agency move to the HCA, the agency hadn’t conducted a statewide procurement since 2001. Prior to that 2001 procurement, it was 1994 when the first Healthy Options model of managed care for Medicaid was rolled out.

These kinds of procurements don’t happen very often, perhaps once every ten years or so in a given state. And, while Washington State has just gone through a significant RFP process over the last few years, that might be best viewed as a restucturing of the existing model as it was only limited to the incumbent plans in the market.

So, as the ten-year hour glass starts to empty, it feels like the wheels are starting to turn towards a new statewide and open re-procurement.

Four characteristics were present in the last open procurement that are present again today.

First, there was a dominant market player that the HCA was working to balance with other plan participants. That continues to be the case in 2020

Second, there was considerable political interest nationally in health reform in 2009, a full year before the ACA was signed. In 2020, health care is one of the most important political issues in this year’s presidential race, and it’ll be at least a full year before significant federal health reform is signed.

Third, 2009 was two years before the Gregoire administration really jumped into the process to earn a new 1115 waiver for Medicaid transformation. Washington State’s current 1115 waiver expires at the end of next year. Washington has yet to fully start that re-imagining of what health care will look like in the next waiver.

 

 

Finally and perhaps most importantly, in 2009, providers were on the cusp of deep frustrations with some of the health plans in the state, including contentious, market-shifting lawsuits in some cases. Back then, the plans appeared to the providers to have all the power. Medicaid at the time was clear that they didn’t want to get in between plan and provider contracting arrangements, so they largely stayed out of those. What they could do, however, to force the MCO market to be more provider-centric, was move to an RFP.

In a statement, Medicaid Director MaryAnne Lindeblad said this RFP was specifically about supporting providers.

The steps we are taking are meant to support health care provider viability so we sustain access to care for Apple Health clients, particularly behavioral health care.

The RFP itself essentially says the HCA will only add plans in regions where providers say more plans should be added, creating a unique point of leverage for providers.

In this RFP, HCA is seeking bids from MCOs to operate in RSAs in which (1) there are less than five MCOs currently operating and (2) the community of medical and behavioral health providers has indicated to HCA that it supports the potential addition of more MCOs for the IMC program.

Ultimately, of the six MCOs in the market in 2011, only two remained by July 2012: Molina and Community Health Plan of Washington. In other words, while the HCA didn’t want to take sides in plan and provider contracting disputes, they were willing to play the biggest card they had to impact the balance in the market: an open RFP that required demonstrations of network adequacy and proof of performance.

 

 

Bottom line:  To put this a little more directly, I think the HCA is tired of getting provider complaints about claims not getting paid.

Even if the vast majority of claims are paid on time, and the vast majority of plan-provider relations are positive and constructive across the state, there were significant issues with behavioral health providers.

MaryAnne Lindeblad sent me a note that, I think, signals to the market that significant changes are on the table.

I’ve been working on these issues for a long time. It’s important that we use all the tools we have to improve performance. Managed care provides great value to the state, it has brought value to our members, improving both access and the quality of care. We must do all we can to keep performance high, especially as we move to whole person care.

While COVID and a looming wave of Medicaid beneficiaries are certainly contextual to this RFP, it would seem that all of that could go away and this RFP might still be a step the HCA was primed to take.