A Managed Care Essential – Selective Contracting Arrangement

One of the key components of the California DMC-ODS 1115 Waiver approved by CMS in August 2015, is the use of selective contracting arrangements to create a network of providers meeting the Terms and Conditions of the Waiver. Selective Contracting is one of the primary means used by health care insurers to control costs in a managed care environment vs. contracting practices used in a grant environment. Selective Contracting limits beneficiary freedom of choice to those providers within the selected network. On December 5, 2016, the staff of the CIBHS DMC-ODS Forum and the CIBHS DMC Training Project, hosted a Webinar on Selective Contracting. Bill Manov, Ph.D. and three county administrators, each at different stages of the application and implementation process, were invited to provide the fundamentals and lessons learned over the past year.

Selective Contracting entails the county Prepaid Inpatient Hospital Plan (PHIP) contracting with DMC Certified providers to provide American Society of Addiction Medicine defined levels of care at county service rates approved by DHCS. The provider contracts will require compliance with all Medicaid 42 CFR Section 438 regulations, including comprehensive centralized utilization and quality assurance management. Dr. Manov presented an overview of the core objectives and requirements of Selective Contracting in the Drug Medi-Cal Organized Delivery System. Counties are well versed in conducting a provider selection process within defined county purchasing guidelines or policies for sole source, letter of interest, request for qualifications, and request for proposals options. However, the federal requirements for a fair and efficient provider selection process adds conditions previously undefined. Dr. Manov pointed out that the most important and different considerations that the county selection process must cover include:  

  1. Beneficiary access cannot be limited in any way when counties select providers. Standards for access include:
    1. Timeliness
    2. Geographic distribution of care
    3. Threshold language and cultural competence
    4. Physical access for disabled beneficiaries
    5. Coordination of physical and mental health services with waiver services at the provider level
    6. Assessment of beneficiaries’ experiences
  2. Access to State Plan services must remain at the current level or expand
  3. Written policies and procedures for selection and retention of providers that are in compliance with the terms and conditions and Section 438 (Attachment 1)
  4. Policies and procedures applied equally to all providers regardless of public, private, for-profit or non-profit status
  5. Counties may contract with providers in another state
  6. Counties may contract individually with licensed practitioners of the healing arts to provide services in the network
  7. Counties must not discriminate in the selection, reimbursement, or indemnification of any provider who is acting within the scope of their Department of Healthcare Services Drug Medi-Cal certification. This does not preclude county from not contracting with providers beyond the number necessary to meet the needs of its enrollees; use different reimbursement amounts for different specialties or for different practitioners in the same specialty, or establish measures to maintain quality of services and control costs

Nicole Ebrahimi Nuyken of Nevada County described the challenges of a small county with multiple gaps in local services and three county staff, including herself, to complete the planning for the DMC-ODS. She stated that despite these challenges Nevada County will be ready to submit its Implementation Plan in the next few weeks. She noted that many of the stakeholders, social service agencies, and the county hospital identified the need to expand SUD services and formed a collaborative over a year ago to find solutions to this significant gap in services. The DMC-ODS gives them options that were not available in the past. She has built strong community partners and county support through this collaboration. 

The county has agreed to provide a newly renovated building to expand residential services. Given that there were no providers locally, Nicole took on an initiative to generate interest with providers in surrounding counties to open services in Nevada County. She has developed a list of 42 agencies to whom she will send the RFP when it is issued. Nicole did not wait for everything to fall into place and has forged ahead in an uncertain environment with the support of her partners to create change in Nevada County. She states she will need to do some backtracking in the development of the solicitation policies and procedures but it is a small concern given the progress that has been made to increase access to services.

Paula Nannizzi indicated that the San Mateo County Behavioral Health and Recovery Services network had many of the administrative and program features of the Organized Delivery System in place. All provider contracts were rebid last year. The county purchasing policies allow the current provider contracts to be amended to further reflect the DMC-ODS Terms and Conditions. The challenge has been to ensure that residential services are available at the level needed. The county has taken two innovative approaches to this challenge. She shared a County Notice that allows the Department of Health Services to sole source for Residential Services. Additionally, the Department was granted the authority to use single case agreements to purchase out of county services. The Department plans to rebid the network next year once utilization experience has been gained and can be used to project needs. 

Erik Dubon reported that San Francisco County issued a request for proposal using its current well-developed county purchasing policies and procedures. San Francisco proceeded in issuing full RFPs to meet the county’s DMC-ODS implementation timeline and begin services in the Spring. He did advise that the most important step in a sound selective contracting process is the bidder’s conference. While the bidder’s conference and county response slowed down the process, it answered many provider questions and provided documented clarification of many of the waiver terms and conditions. He stated most appeals are based on errors made by the county in the process so it must be very well managed. 

Dr. Manov closed the webinar with several key points:

  1. make sure that the current purchasing policies and procedures of each county are aligned with the Section 438 requirements and terms and conditions of the State-County Agreement
  2. make the solicitation process as clear and transparent as possible 
  3. Keep the application simple focusing on provider attestation to meet a requirement vs. explanation of procedures in the request for proposals
  4. Providers must assure and plan for meeting key elements of DMC-ODS Terms and Conditions
  5. Request a line item budget for all charges in order to justify unit of services rates
  6. Only contract with providers that can document fiscal and management stability

Dr. Manov pointed out that there is no requirement to contract with all DMC Certified agencies if capacity is adequate. This means that the oversight of utilization and access to services is paramount.


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