Nevada Cuts Medicaid Fee-For-Service Rate By 6%; Expects Annual Savings Of $53 Million

On August 15, 2020, the Nevada Medicaid program implemented a 6% rate cut to fee-for-service (FFS) rates. The Medicaid rate reduction is expected to save the state about $53 million over the coming fiscal year. The rate cut was directed by Assembly Bill 3 enacted by the Nevada Legislature during a Special Session to address a budget shortfall due to the coronavirus disease 2019 (COVID-19) pandemic and its subsequent economic impact. The state was facing a budget shortfall of nearly $1 billion. Assembly Bill 3 made a total of $130 million in cuts to the Medicaid program.

The state’s Medicaid managed care capitation rates will be amended by Nevada’s Actuary to include the impact of the 6% reduction to the FFS Fee Schedules, with an effective date of August 15, 2020. The total Medicaid caseload as of July 2020 is 716,981. About 27% (196,256 people) of these recipients are served through the fee-for-service program.

The 6% rate reduction affects behavioral health outpatient treatment, special clinic-addiction treatment agency model, psychologist, behavioral health rehabilitative treatment, applied behavior analysis, and inpatient psychiatric/substance abuse treatment services provided by a general acute hospital. However, rates will not be cut for the following behavioral health provider types and services:

  • Freestanding psychiatric hospital
  • Certified community behavioral health center
  • Residential treatment center
  • Federally Qualified Health Center

On August 14, 2020, the Nevada Department of Health and Human Services (DHHS) Division of Health Care Financing and Policy (DHCFP) notified provider organizations that it was also amending the application for the Home- and Community-Based (HCBS) Frail Elderly (FE) and Physical Disability (PD) Waiver to reflect the rate reduction. All FE and PD Waiver services will remain the same. The amendment must be submitted to the Center for Medicare and Medicaid Services (CMS) for approval. Comments will be accepted through September 14, 2020.

A link to the full text of “Nevada Medicaid Draft Home- and Community-Based Frail Elderly Waiver Amendment” may be found in the OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/081520nvdrafthcbsfewaiveramend.htm.

A link to the full text of “Nevada Medicaid Draft Amendment For Home &Community Based Waiver For Persons With Physical Disabilities” may be found in the OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/081520nvdrafthcbspdwaiveramend.htm

A link to the full text of “Nevada Assembly Bill #3: An Act Relating To State  Financial Administration” may be found in the OPEN MINDS Circle Library at www.openminds.com/market-intelligence/resources/071920nvassemblybill3.htm.

For more information, contact:

  • Division of Health Care Financing and Policy, Nevada Department of Health and Human Services, 1100 East William Street, Suite 101, Carson City, Nevada 89701; 775-684-3676; Fax: 775-687-3893; Email: dhcfp@dhcfp.nv.gov; Website: http://dhcfp.nv.gov/Contact/Contact_Home/
  • Submit comments on the draft waiver amendment to: Nevada Division of Health Care Financing and Policy, ATTN: LTSS – FE/PD Waiver Amendment, 1050 E William Street, Suite 435, Carson City, Nevada 89701; Fax: 775-687-8724; Email: hcbs@dhcfp.nv.gov

Success With VBR: What Provider Organization Execs Should Consider

Making the new gainsharing, value-based partnerships between health plans and provider organizations work requires changes from both parties, and a clear understanding of what success requires. Yesterday, I touched on some suggestions for health plan executives to make that equation work (see Making VBR A Success: What Health Plans Can Do). This discussion, which echoes my presentation during the 2019 OPEN MINDS Executive Leadership Retreat (see The Complexity Challenge: How To Position Your Organization For Success In A New Era), was prompted by a new report from Harvard and UnitedHealthcare with a three-dimension framework for building these new payer/provider partnership relationships (see A 3D Model For Value-Based Care: The Next Frontier In Financial incentives And Relationship Support).

The framework is built on performance incentives for cost reduction, performance incentives for consumer outcomes improvement, and the provider infrastructure needed to make value-based reimbursement (VBR) work. For provider organization executives to succeed in these new relationships, that ‘provider infrastructure’ brings a few key requirements – shared data, increased care management capacity, collaborative and innovative program design, and organizational evolution and leadership.

In yesterday’s article, shared data was front and center along with providing care coordination tools for provider organization partners. But having the data and tools isn’t enough for success. Provider organizations need to develop care management skills to ensure access, improve consumer outcomes, and develop a value equation (the balance between performance improvement and cost reduction). While there is ongoing contention about the responsibility for care coordination, the more provider organizations are at financial risk, the more robust provider-led care coordination is essential.

Another issue is innovation. Most executives of provider organizations that have active risk-based (particularly case rates and sub-capitated arrangements) reimbursement arrangements cite the ability to do something new and creative to improve consumer outcomes as the greatest benefit of VBR. These new provider-payer organization relationships can facilitate innovative program development by providing financial upside through aligned goals (see How To Build Value-Based Payer Partnerships).

Finally, there is the issue of organizational change and the leadership required to implement it. Delivering on VBR requires an entirely different type of organization. Every detail of the day-to-day running of provider operations needs to be reconfigured to succeed with VBR, which is why a leadership commitment is so essential. My colleague, Richard Louis III, OPEN MINDS vice president, noted in a recent session that many health and human service organizations will need to add new team members – both clinical professionals and administrative staff. And, many times, new approaches to care are required along with an enhanced tech infrastructure to ensure that data can be tracked and used in actionable ways (see Using Data To Follow The Money & Stay True To The Mission). He advises executive teams to assess their capacity for success early on and ask about a range of organizational competencies – including intake and eligibility determination systems, care managers who can conduct concurrent reviews, and the ability to collect deductibles and copayments (see The OPEN MINDS Value-Based Reimbursement Readiness Assessment).

The move to value-based care is changing the relationship between health plans and provider organizations. Ultimately, the relationships that are most successful will have leaders (on both sides of the equation) who understand that the commodity-oriented network model of the past is (slowly) being replaced by mutually-dependent partnerships. To learn more about preparing for VBR, check out the following resources in the OPEN MINDS Circle Library:

  1. Making VBR A Success: What Health Plans Can Do
  2. 4 Lessons From ACOs For Managing Downside Financial RiskVBR @ Scale—Changes Required
  3. Preparing For The Very Glacial VBR Rollout In Some Markets
  4. Proving Your Unique Value To Payers: Data Speaks Louder Than Words
  5. VBR @ Scale—Changes Required
  6. The New Directions VBR Model
  7. CFOs On The VBR Path
  8. Crawl, Walk, Run To VBR
  9. The Pace Of VBR Is Picking Up
  10. What Are Health Plans Doing About VBR?

And join us February 12 for the session “How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans” during the 2020 OPEN MINDS Performance Management Institute.