Case Study: Behavioral Health Services

The Client:
State of New York Office of Mental Retardation and Developmental Disabilities (OMRDD)

The Project:
Consultation on the State’s new Options for People Through Services (OPTS) healthcare delivery system. Development of rate setting methodologies for OPTS services.

The Challenge:
Because OPTS was an entirely new Organized Health Care Delivery System (OHCDS), OMRDD was challenged with how to determine rates for the program, which operates on a voluntary basis for waiver service providers. Service providers submit proposals to participate, and OMRDD needed to set appropriate Medicaid reimbursement rates for these services. The agency wanted to set rates that would:

• Not require the calculation of a separate rate for each of the anticipated OPTS proposals;
• When possible and appropriate, use historical reimbursement as the basis for the rate methodology;
• Account for the anticipated increases in payment rates associated with the goals of OPTS;
• Recognize the administrative costs incurred by the OMRDD to administer all aspects of the OPTS program.

The PCG Approach:
OMRDD sought to test numerous methodologies based on historic and current data before selecting a rate setting methodology to bill Medicaid for OPTS services. A main goal was to eliminate provider-specific rates and instead develop consolidated rates in order to more efficiently manage the program.

PCG provided consultation on CMS rules and regulations regarding the state’s MR/DD care delivery system. PCG evaluated OMRDD’s compliance with federal reimbursement requirements, and also provided research, advice, and assistance to OMRDD staff.

PCG modeled many different rate methodologies based on:

• Service type;
• Statistical models;
• Administrative Component.

The Result:

Rate Setting Methods
After numerous trials of methodologies for Medicaid billing rate calculation, two methods were selected:

• Two Tiered Method;
• Simple Average Method.

Database Implementation
PCG also helped OMRDD develop a comprehensive database to manage the OPTS program. It monitors proposals and active contracts, assigns Medicaid rates to each contract, coordinates data flows within the Cost and Revenue Department and with other state offices, and produces reports for OPTS program fiscal planning. PCG’s project was extended to help OMRDD expand the tracking and reporting capabilities of the new database.