NEWS RELEASE
March 1, 2000
Medicaid Managed-Care Re-Bid is Released
Michigan Department of Community Health Director James K. Haveman, Jr., today announced that the re-bid to select the Qualified Health Plans to serve the medical needs of Michigan Medicaid beneficiaries has been released.
"I was extremely supportive of Senator Dan DeGrow and Senator Joel Gougeon's suggestion to re-bid the Medicaid managed-care contracts," said Governor Engler. "The high standards called for in this re-bid means that we will see improved access to health services as well as improved quality of care for Medicaid beneficiaries. Its extensive reporting and accountability processes will ensure that high standards of care are being met."
"The 1999 Consumer Satisfaction Survey told us that persons receiving Medicaid are pleased with the services they are receiving not only from their doctor, but from their Qualified Health Plan," said Haveman. "With only licensed health maintenance organizations allowed to apply with the requirement to meet current and future capital and solvency requirements, the re-bid will serve as an important tool in our efforts to continue to improve services to children and families. In addition, we look forward to Legislative approval of strengthened capital and solvency requirements recommended by Insurance Commissioner Frank Fitzgerald."
Contracts will be awarded to at least two Qualified Health Plans in every region of the state. In order to minimize the number of plans serving Southeast Michigan and to emphasize economies of scale successful bidders must have the capacity to serve at least 25,000 beneficiaries and enroll 25,000 beneficiaries (Medicaid, Medicare and commercial) by January 1, 2000. Contracts will be awarded based on competitive price that is actuarially sound, evidence of quality of medical care and administrative performance. Preference will be given to plans that are nationally accredited and excel on key quality of care and administrative measures.
Qualified Health Plans must demonstrate prior to the implementation of the contracts that they have sufficient provider networks under contract to deliver all required benefits and to meet required access and quality standards.
Bidders must submit certification from independent actuaries that their bids are actuarially sound and all bids will be reviewed by the Insurance Commissioner as part of the proposal review process in order to determine the impact of the bid on the financial condition of the Health Maintenance Organization (HMO). A contract will not be awarded if the price bid is determined to adversely affect the financial condition of the plan or is determined to be unreasonable.
All successful bidders (HMO's) operating under the terms of the contract must be able to accept claims electronically from providers on standard claim forms and use standard coding structures for diagnoses and procedures consistent with the time frames outlined in the contract. Health care providers will be expected to submit claims electronically on these forms using these codes and the HMO instructions for prior authorization and necessary documentation to reasonably settle the claims.
Clean claims, as defined by the federal Health Care Financing Administration for the Medicare program, must be processed promptly. 90% of clean claims must be processed within 30 days unless otherwise stipulated by state or federal legislation or agreed to between providers and the HMO. Financial penalties and enrollment limitations will be imposed on plans that are not in substantial compliance with this standard.
Successful bidders must agree to submit claims payment decisions disputed by providers to an independent binding arbitration process after appeals within the HMO internal process have been exhausted.
The Department of Community Health will require that all successful bidders become accredited by either the National Committee on Quality Assurance or the Joint Commission on Accreditation of Health Care Organizations and they must participate in annual External Quality Review of Health Plan provider records.
The Department of Community Health will continue its semi-annual site visits of each plan and require monthly encounter data reporting that will track all health plan beneficiary utilization of services. Plans must provide quarterly and annual financial reports to the Insurance Commissioner.
Bids will be due to the Department of Management and Budget by May 1, 2000. Bids are expected to be awarded by the State Administrative Board by early summer for expected implementation by October 1, 2000.