Lynn A. Kovich, Assistant Commissioner Raquel Mazon Jeffers, Deputy Director March 27, 2012 The Comprehensive Waiver Application Overview & Health Care Reform

NJ-DHS Why Do We Need a Waiver? 2 Medicaid programs are matched – in part – with federal funding; all changes to the program must be approved before implemented NJ has 8 Medicaid waivers (including CCW) for various programs/services; need to consolidate to reduce administrative burden Medicaid grew in cost by 18% over 3 years; state must spend resources efficiently

NJ-DHS The Patient Protection and Affordable Care Act (PPACA), signed into law by President Obama in March 2010, reshapes the nations health system. The law requires coverage of mental health and substance use disorders in the minimum benefit package and the new Medicaid expansion provision for childless adults up to 133% of Federal Poverty Level (FPL). 3 NJ-DHS The Patient Protection and Affordable Care Act

NJ-DHS Mental health and substance use disorder benefits must be no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan… and there are no separate cost sharing requirements than are applicable only with respect to mental health or substance use disorders benefits. 4 NJ-DHS Mental Health Parity and Addiction Equity Act

NJ-DHS What is a Comprehensive Waiver? The Comprehensive Waiver is a collection of reform initiatives designed to: sustain the program long-term as a safety-net for eligible populations rebalance resources to reflect the changing healthcare landscape prepare the state to implement provisions of the federal Affordable Care Act in

NJ-DHS Comprehensive Waiver Development 6 February Governor Chris Christie calls for a Medicaid reform plan during FY12 budget address February 2011 to May 2011 – DHS, DHSS, DCF review every facet of the program, examine other states plans, look at every possible opportunity to improve and to reform May Waiver concept paper is released May 2011 to August Extensive public input process August 2011 to September 2011 – Input is reviewed/concept paper revised/waiver application drafted and finalized September Waiver is submitted to CMS/posted on DHS website January 25, 2012 – Final draft of Standard Terms and Conditions submitted to HHS

NJ-DHS Waiver Highlights 7 Model for reform and innovation Streamlines program administration and operation Preserves eligibility and enrollment Does not include ER co-pay Enhances and coordinates services to specialty populations Rewards efficiency in care The full waiver application can be found online at:

NJ-DHS The Details by Category 8 WHAT DOES IT ALL MEAN?

NJ-DHS Need for Care Integration Currently, BH care under Medicaid FFS is fragmented with an over-reliance on institutional, rather than community- based care Consumers receive care through managed care organizations (MCOs) with limited or no formal protocols for coordination between medical and behavioral health delivery systems Approximately two-thirds of Medicaids highest cost adult beneficiaries have MI and one-fifth have both MI and a substance use disorder 9

NJ-DHS Need for Care Integration (cont) 10 Individuals with untreated substance use disorders have higher medical costs than those without such disorders, especially for emergency department visits and hospitalizations. Generally, these individuals use about 8 times more healthcare services. Similarly, families of untreated individuals with substance use disorders also have significantly higher medical costs than other families; up to 5 times more health care driven by hospitalizations, pharmacy costs and primary care visits. for example: children of alcoholics who are admitted to the hospital average 62 percent more hospital days and 29 percent longer stays

NJ-DHS Some Interesting Facts 11 National studies estimate that during a 1 year period up to 30% of the US adult population meets criteria for one or more MH problems, particularly mood (19%), anxiety (11%, and substance use (25%) MH problems are 2 to 3 times more common in patients with chronic medical illnesses such as diabetes, arthritis, chronic pain, headache, back and neck problems and heart disease Left untreated, MH problems are associated with considerable functional impairment, poor adherence to treatment, adverse health behaviors that complicate physical health problems and excess healthcare costs Most MH treatment is provided in primary care settings, and the percentage provided solely in these settings is rapidly growing

NJ-DHS What Does Medicaid Waiver Mean for Behavioral Health Services? Integrates behavioral health and primary care Develops innovative delivery systems – MBHO, ASO Supports community alternatives to institutional placement Braids funding Provides opportunities for rate rebalancing No-risk model transitions to risk-based model Increased focus on SAI and consumers with developmental disabilities 12

NJ-DHS Managed behavioral health systems are typically organized around the following processes or core functions The state, providers, members, and the MBHO each have specific roles and responsibilities within these processes These may vary based on what the state opts to delegate to the MBHO and what it retains Some processes may not be delegated to the MBHO; (ie, verification of Medicaid eligibility) 13 Roles and Responsibilities in a Managed Behavioral Health System

NJ-DHS Eligibility Network Development and Management Assessment and Referral Utilization Review Claims Administration Data Analytics Care Management Quality Management Financial Management 14 Roles and Responsibilities in a Managed Behavioral Health System

NJ-DHS Aspects of the Risk Model Non-entitlement services remain non-risk Advantages of going risk Greater budget predictability Greater flexibility Rates Services Reinvestment Aligned incentives 15

NJ-DHS Safeguards of the Risk Model Federally mandated consumer protections in a risk model grievance procedures fraud and abuse civil and monetary penalties enrollee rights and must be informed and re-informed of rights quality assurance programs mandatory external Quality review prohibition against provider incentive to decrease care or tie compensation to utilization decisions Other protections could include: consumer bill of rights Post-stabilization requirements 16

NJ-DHS Waiver Impact on Access, Quality, Outcomes State establishes policy and standards for: MBHO mission/vision to serve BH consumers MBHO performance Provider network participation and performance Consumer outcome indicators and related process measures Allows for consumer and family participation in the design of access and quality standards and ongoing monitoring of performance and outcome Per the medical loss ratio provision, MBHO must spend majority of resources on care Sets minimum amount on services Limits maximum administrative spending Limits maximum profit to be earned Reinvestment in new capacity 17

NJ-DHS Delivery System Innovations Uniform screening and level of care determination Tiered care management Behavioral health homes Special initiatives MATI and DDD 18

NJ-DHS Bottom Line – Good News Integrated care SA/MH and BH/PH Opportunities for rate rebalancing Increase FFP Service expansion for SA services Reinvestment of some savings Reimbursement for community-based services instead of acute care Better access, enhanced quality, improved outcomes 19

NJ-DHS Stakeholder Involvement 20 Stakeholder Involvement DMHAS, in partnership with NJ Medicaid, have developed a stakeholder input process to: Inform the Department of Human Services values and vision regarding the design and implementation ASO/MBHO Elicit broad stakeholder input regarding the design and development of the various components of the ASO/ MBHO Initiate a targeted workgroup process to inform more detailed level components of the ASO/MBHO Identify and leveraging opportunities under Health Care Reform to support a transformed system

NJ-DHS The Steering Group meets March 30, 2012 to discuss the Workgroup reports and advance its recommendations to DMHAS and DMAHS The final Steering Committee report and recommendations will be completed and posted in April Stakeholder Involvement

NJ-DHS What are the Next Steps? 22 July 2012 – ASO/MBHO RFP Posted January 2013 – RFP Awarded January –April ASO/MBHO Readiness Review July 2013 – ASO/MBHO implementation

NJ-DHS Stakeholder Involvement 23 Updates on the development of the MBHO and the Steering group can be found at: To provide comment to DMHAS on the proposed changes to behavioral health services under the Waiver,