Author: Lainey Morrow, Founder of Medicaid Saves Lives
Direct quotations from  Interview with Melissa Stone at her office on October 6, 2016
Forrest Steele, Assistant Director was also present.

I was again able to meet with Ms. Melissa Stone, Director of Disability Services (a Division of DHS), and she answered some more of your questions. Some questions required other people to answer, and I’m still waiting on that information. I invite you to comment on the answers given because Ms. Stone has agreed to meet with me again this week. I’d like to take some of your comments back to her.

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Is Independent Assessment on the table now?

Melissa: “It’s completely separate from this entire rule change. So I think we talked a little bit last time about transformation efforts within the special needs population, which would be Division of Developmental Disabilities, Behavioral Health, and Division of Aging and Adult Services. We are constructing a request for a proposal (RFP), which is the state vehicle to put a contract in place. There’s a lot that goes with a request for a proposal or request for qualifications (RFQ). You have to put out a document of kind of what you’re trying to buy, so that we can allow competitive bidders to bid on it. And there’s an entire process on how we rank them, and it’s very in depth, and it’s overseen by the Department of Finance and Administration. And that’s the only way we put contracts in place. Before we even put the contract in place, that particular RFP or RFQ is reviewed by the legislature. So we are in the beginning stages of… getting together the requirements for that vehicle, and we hope – it’s actually going to be run for us by the Department of Finance – and we hope that a draft version is out on our website next month so people can submit comments on that particular contract vehicle. So what we know for sure right now is back in 2008, the Center for Medicare and Medicaid, which we’ll refer to as CMS, passed a regulation that’s commonly referred to as Conflict Free Case Management. Conflict Free Case Management has essentially four elements, and what it says is if you pay for home and community based services under a waiver, which we operate a waiver here, because we have 4200 people on a waiver, if you pay through a waiver, [the Federal government is] going to mandate that you come into compliance, all states, with Conflict Free Case Management. One of the essential elements of Conflict Free Case Management is an independent, third party assessment. So that’s where this started. It’s a requirement. We are out of compliance. When I got into this seat, we had been operating on extensions. For various reasons, we had to get off of those extensions, and we’re having to come into compliance, and it’s been this long journey that we have been on with the providers who own and operate and run home and community based programs for clients on our waiver.”
Forrest: “And when that mentions conflict, does that talk about conflict of interest?”
Melissa: “Yes, thank you, Forrest. So we’re talking about the, it’s to eliminate any appearance or any actual conflict of interest. So not only do they say you need to do an independent third party assessment, you also need to have someone that does the client’s case management that’s in no way, shape, or form associated with the organization who provides direct day-to-day services. So this is a total shift on how we’ve been operating because up until, and even to this day, if you choose a provider, you can choose them to do your case management and your direct care. There we have a requirement they can’t be the same person but you can pick the same provider. So this has been like I said a journey to get providers on board with this idea, in agreement with how we’re going to move forward to comply with this regulation. We had several large stakeholder meetings with this group of individuals, these people who own and operate waiver programs, we have about 90 of them I would say, and they decided that they felt like contracting it out, and I agree with them, would be the cleanest, easiest way to comply with this regulation. So that’s how this process started for us. Those clients meet an eligibility criteria called Institutional Level of Care. It’s the same eligibility criteria that you have to meet to be a resident at an intermediate care facility. So the state of Arkansas, DDS, operates 5 intermediate care facilities, which are commonly referred to as human development centers.  And then there’s private intermediate care facilities. The people on the waiver, and the people at the private and the human development centers are all deemed to be institutional level of care. Because of that reasoning, we are moving forward with doing independent assessments, the same independent assessment, on that entire eligibility population. So that is the only thing that is 100% for sure. And that’s what I’ve been talking about at stakeholder meetings and I’ve talked about over at the legislature. Those are the things we would like to move forward with for reasons of federal compliance. But as far as any other population of people with developmental disabilities or delays, we have not decided on that. And I know that a lot of the comments are wrapping these two together, and I understand why. I understand why they’re being wrapped together. Because it’s all being discussed at the same time. But I will say that for this rule, this rule is completely separate from anything going on with Independent Assessment.”
Lainey: “So there will be an opportunity to comment on this?”
Melissa: “We’ll put it up on the website, and we will actually send out notice. And it will be up there for 30 days.”

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What other cuts have been considered before these?

Melissa: “We have been working for a long time at the department to come up with ways that we can transform the services that we provide here across all divisions, not just across Medicaid divisions. So we, and I think Cindy Gillespie, the director, has really made vast improvements. She came in and did a shared service model, where we rather than having a group of people within each division who do contracts, and a group of people within each division who do finance, and a group of people who do human resource and hiring… she has designed a shared service model, which is just as simplistic as it sounds which is they are just floating out here to the left, each one of the divisions utilizes those offices for those functions, but every division is not silo’d in doing their own hiring, their own contracting, their own finance. And what it’s done for us so far, and it went into effect in July, and of course, we are still implementing because, you know, we have over 7,000 employees here. So you know, you’re turning a gigantic ship when you do a transformation like this. We have already seen the benefit of being able to start looking at bulk contracting to save money. So instead of DDS buying bread and Behavioral Health buying bread, we now are looking at, could we get bigger bang for our buck by putting in a bigger contract, negotiating it well, and getting a better price for all of us to get bread. And that is in the beginning stages, and we can already see a difference. And the same thing with finance. It’s not the DD budget versus the DCFS budget. Okay, let’s look at where your funding is coming from. How can we maximize federal dollars more appropriately across the department. So now that it’s a shared service model, there’s one financial officer division, he’s looking across the entire department to see what could we do differently to utilize our dollars better, and we’re already seeing that occurring. So there’s estimated savings with both of those shared services… we fully anticipate seeing savings from just operating our administrative functions differently like this.

I know that it feels very personal to OT, PT, and Speech, but we’re talking about a DDS transformation that we’re trying to accomplish to ensure better quality of care across all programs. The same thing is happening with Division of Aging Adult Services and with Behavioral Health because those three divisions are the highest spending in Medicaid. It’s the fewest amount of people, but it’s the highest dollar amount. And you would expect that. Those are people who need services, those populations, but we are looking at ways that we can be more efficient with those 3 populations.”

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If this current proposal fails, will this be moving to managed care?

Melissa: “I think it’s premature to make that kind of correlation. Of course, we’re hoping this passes, but I would not make that correlation. And I wouldn’t want to assume anything.
Lainey: “So what do you say to people who are afraid of that?”
Melissa: “Managed care has been on the table for some time now. We actually were under managed care several years ago for a period of time. I think it’s just a reaction or a possible remedy to what we’re facing right now when it comes to Medicaid sustainability. We are trying to put transformation efforts in place that will help sustain Medicaid, and this [proposal] is one of them. But managed care is also an option that’s being discussed that would help sustain the program.”
Forrest: “I think at this point, people who are having these discussions aren’t really eliminating anything as a potential option that’s so important. Keeping the options open as we move forward.”

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What area in DDS in the biggest concern?

Are there more modifications coming that we need to be aware of?

Melissa: “I would say that the modification that is coming that is being discussed that we just went over is the Independent Assessment process. And like I said, the only 2 programs that we have definitively come out and said we would like to pursue in terms of Independent Assessment are the clients that are on the waiver and the ones entering intermediate care facilities. I wouldn’t say that one area is more concerning than the other. I mean, we are literally looking at every program within DDS to see how we can make it more efficient. But we have been doing that for over, I mean literally, since maybe the past 2 years that I’ve been really involved with it. And I’ll tell you, based on looking at those areas, we’ve put processes in place in our human development centers, we’ve moved to this shared service model, we’re looking at the therapy thresholds and the Independent Assessments right now with those 2 populations.”

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How much do you plan on reducing our TEFRA premium?

Melissa: “There is no proposed plan to reduce the TEFRA premium at this time.”

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What will happen when the therapy centers cannot afford to hire someone to do all these prior authorizations?

Melissa: “I just want to reiterate that the PA process, like I said the provider workgroup is putting together specs. We’re not trying to make this as difficult as possible. I don’t anticipate there being that kind of paperwork to turn in that would require hiring additional staff to handle it.”
Lainey: “Well, this person said that they were told that all of the kids would have to be seen at the cap that is being set even when they need more because they won’t have enough staff.”
Melissa: “Well, I hope a therapist didn’t say that because if a child needs more, and is deemed to need more under evaluation, I would hope that they would turn the paperwork in to get a child more.”

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Say they do an evaluation, and the child needs 120 minutes. That means they have to submit a PA for the extra. So what if they begin treatment for the full amount until they get the approval, and when it comes, Medicaid would back-pay that? But if not, the center would owe the money. That would mean that they would be very confident in the PAs they’re sending in.

Melissa: “So this is a provider that clearly does business with Medicaid frequently. This is a practice that we have in place for other programs. We don’t have the specs back, but I’m going to log that in as a comment.”
Lainey: “That’s the way that it worked with our daughter while we were waiting for TEFRA. Is that how this will work because it already works that way in a lot of cases?”
Melissa: “Well, it’s a very good suggestion.”
Forrest: “And it does sort of fit the norm.”
Melissa: “And it does fit kind of what we do in other programs.”
Lainey: “It does, I just think the concern would be staffing. Can they sustain – it just depends on the turn around time with the proposal, which you’re going to write in is really a short time like you intend, then it wouldn’t be that long. But with the TEFRA approval it’s 2-3 months, and her provider was treating her and paying their people out of their own budget until they get that money back. Three months is a long time to hold that.”

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We’ve heard that Independent Assessments might only be applied to day-treatment centers like Access, Easter Seals, and the Allen School. There are many other centers out there that could need quality control. That doesn’t seem fair to us or the centers. Why as a parent wouldn’t I just take my kid to a center that isn’t going to be subjected to this?

Melissa: “There will be no carve out for certain providers or certain clinics. Anything that is implemented will be across the board for a program, not a private company.”
Lainey: “Do you think they meant PA? Because from your description, Independent Assessment doesn’t…”
Melissa: “I think there’s fear out there about Independent Assessments. They have been discussed. They have been mentioned by the Stephens group. They have been discussed. Their initial recommendation was for Independent Assessments across Medicaid programs, so there’s been talk of this Independent Assessment that’s concerned providers for months. So it’s unclear to me whether or not they’re talking about PA process or Independent Assessment.”
Lainey: “Yeah, the terminology is hard to get…”
Melissa: “But regardless, it’s the same answer because anything implemented by DHS will be for a program, and there won’t be special exceptions for a private entity.”

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Who will this additional entity be and what credentials do they possess? Are their credentials any greater than mine?

Melissa: “So the provider workgroup, that is made up of these clinicians OT, PT, and Speech, have said from the very beginning, and I fully agree, that whoever is brought on board to review Prior Authorization paperwork, they will need to be qualified, and they will need to be clinicians. But here again, these are specs that would be in that [RFP] or [RFQ] document that we have not begun drafting that I anticipate will be out for a draft for public comment in the spring. And these are things that we can put into that, we can put requirements in there of what kind of credentials the people would possess as well as the turn-around time. And all of those specifics.”

Is this team superseding the physicians?

Melissa: “So within Medicaid, we have a medical necessity definition for everything that Medicaid does, and Medicaid is made up of doctors, clinicians, nurses who are very familiar with this process of sometimes 2 doctors do not agree. Sometimes our Medicaid doctors and an outside doctor do not agree. That’s why there’s always a very clear appeal process in place. There will be such an appeal process in place for this.”
Lainey: “So when they disagree, do they contact the doctor? Or do they just deny it?”
Melissa: “Whoever they’re not agreeing with is notified of course because they have a right to appeal. And so they are given paperwork that shows how they go through that process.”

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Ms. Stone has said, “If a child needs more therapy, then they’ll receive more therapy.” How does that support Medicaid Sustainability if we are assured the child will receive what they need?

Melissa: “Qualified recipients who need therapy will be allowed therapy.”
Lainey: “Basically, I guess she’s saying if nothing is changing, then there would be no cost savings.”
Melissa: “We anticipate cost savings.”
Lainey: “That sounds scary. My daughter [because of her diagnosis] in most cases gets the max… but not everyone’s kid is that kid. There are people who are [worried], namely people whose children don’t have a diagnosis.”
Melissa: “And I feel that from the comments, it’s mostly the kids that are just like my own.”
Lainey: “Is it okay [for me to share] that?”
Melissa: “Yeah. We went to the Dennis Development Center, and they can’t pinpoint exactly why he’s delayed, but he gets OT and Speech. And those are the cases that are scaring the families. But I have no doubt in my mind that the therapists who see him during their evaluation, which a standard, nationally-used speech and OT evaluation is what they used on him, that those evaluations wouldn’t speak for themselves. And they do if I’m trying to receive Prior Authorizations through my insurance. The therapists that have come to me that aren’t concerned, such as Access Schools who sent out an email to their families, they feel like they can justify the need. They’re professionals, they stand behind the minutes they’ve been prescribing, and they’re confident that their children won’t receive disruption.”

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Is there any wiggle room with the 90 minute threshold?

Melissa: “We are getting that comment, and we’re looking at that.”
Lainey: “So you might consider that? Would that start this whole thing over?”
Melissa: “Yes. We are looking at that as well.”
Lainey: “I think that would satisfy some people to know that you’re at least considering 120.”
Melissa: “Absolutely, we’re considering every comment… we’re going to spend time based on the comments looking at the data to see what’s appropriate – if we need to come off the 90 minutes and how we need to react to the public comment based on the data.”

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Federal CMMS puts out a report on improper payments and their impact on costs. The 2015 report said…less than 60% were due to Administrative error; about 30% were due to inability to authenticate eligibility. Less than 1 percent was due to not being deemed as medically necessary. We would have to have many deemed as not medically necessary to achieve the projection shown in the public notice.

Melissa: “This is showing a lot of reasons why the federal government and that would trickle down to why the state is looking to put some quality control metrics in place when you see that there’s that many millions of dollars that were administrative or process error, and you go down and only one million of improper payments was due to not medically necessary. It’s showing that it’s not that they’re denying it because it’s not medically necessary. They’re denying claims because of these other reasons, and the dollar amounts are actually astounding. In my mind, that supports the idea that quality control is needed and could be very useful.”
Lainey: “So what do you say to their point that the smallest number is not medical necessity, which is their view of why we’re doing PAs?”
Melissa: “Well, we’ve never come out and said that medical necessity is the reason we’re doing PAs. We’ve consistently messaged that we’re doing this as a quality control. The reasons that are laid out in this question show the need for quality control, and it doesn’t show that it’s because we are going to deny therapy that’s medically necessary to save money.

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Why don’t consumers or guardians get to see what charges are being made in their names or their children’s names?

Melissa: “We need to talk about this with the Medicaid person. That’s definitely worth looking at.”

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The Governor just created a taskforce to investigate fraud within the system itself – provider fraud. This office looks at people receiving maximum services to establish medical need. The office is staffed by highly qualified nurses and medical professionals. What is this office finding that might prompt a state-wide cut of services? Was this office consulted when determining the medical necessity for 90 minutes?

Melissa: “So the Medicaid Integrity Unit is run by a man named John Park, who they do investigate allegations of waste, fraud, and abuse. He would not be involved with programmatic changes such as this.”

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The following questions were asked, but they require someone from the Medicaid office to answer them. I have requested the name and number of someone who can answer:

• Why is Medicaid cutting back on my daughter’s hearing aids and supplies?
• Why is TEFRA lumped in with Medicaid?
• I’d like to know how they reached the number of $56 million in savings. The DMS 640 says that the TOTAL spent on all 3 therapies in 2015 was $151 million. That’s a 37% cut in spending. Is the information on the DMS 640 not representative of actual costs for these therapies?
• Are they going to reduce our TEFRA premiums?
• What’s going to happen to the behavioral health people who just had their services cut?