A4688 —

A4688 3R FISCAL ESTIMATE   LEGISLATIVE FISCAL ESTIMATE [Third Reprint] ASSEMBLY, No.

4688 STATE OF NEW JERSEY 219th LEGISLATURE   INTRODUCEDDATED: SEPTEMBER 21, 2020     Sponsored by:

Assemblyman JUNE DANIEL29, R.2021     SUMMARY   Synopsis:

BENSONCodifies Districtand 14establishes (Mercercertain network adequacy standards for pediatric primary and Middlesex)specialty Assemblyman care ANTHONYin S.Medicaid program.

VERRELLIType Districtof 15Impact: (Hunterdon and Mercer) Assemblywoman  VALERIE VAINIERI HUTTLE District 37 (Bergen)   Co-Sponsored by:

AssemblymanIndeterminate Johnson,impact Assemblywomenon Reynolds-Jackson,State Dunn,Medicaid Lampitt,Costs Timberlake, Swain and AssemblymanRevenue. Tully         SYNOPSIS      Codifies and establishes certain network adequacy standards for pediatric primary and specialty care in Medicaid program.

 Agencies CURRENTAffected: VERSION OF TEXT      As reported by the Assembly Budget Committee on June 21, 2021, with amendments.

  Department Anof ActHuman concerningServices, networkDivision adequacy of pediatricMedical providersAssistance in the Medicaid program and supplementingHealth 2[P.L.1997,Services. c.192 (C.26:2S-1 et al.)] Title 30 of the Revised Statutes2.

        BeOffice Itof EnactedLegislative byServices Estimate Fiscal Impact Annual   State Cost Impact Indeterminate   State Revenue Impact Indeterminate         ·         The Office of Legislative Services (OLS) concludes that the Senatebill will result in an indeterminate impact on State costs and Generalrevenues Assemblydue to the countervailing effects of enhancing network adequacy standards for pediatric primary and specialty care, as established under the Statebill, on the capitation rates paid by the Division of NewMedical Jersey:Assistance and Health Services (DMAHS) to the Medicaid managed care organizations (MCOs).  To the extent that State Medicaid expenditures are matched by federal Medicaid funds, State revenues may also be affected under this bill.

 The      OLS 1. notes, a. however, 2[Pursuantif toMCOs sectionare 19granted waivers of P.L.1997,any c.192network (C.26:2S-18),adequacy theprovision, commissioneras shallauthorized onlyunder approvethe bill, the networkfiscal adequacyimpact of aenhancing managedsuch carenetwork planadequacy providedstandards bywill abe managedadjusted.  care  organization·         contractedThe with]OLS Atalso theestimates nextthat regular opportunity,2 the DivisionDMAHS ofmay Medicalincur Assistancecertain andindeterminate Healthexpenses Servicesto inestablish thea Departmentwaiver ofprocess Humanand Servicesa 2[tosystem provideto benefitsassess underMCO Medicaidcompliance ifwith the plannetwork has]adequacy shallstandards amendoutlined in the Medicaid managedcontract.  careTo organizationthe contractextent that these provisions onoverlap networkwith adequacythe todivision’s require2:current efforts, such costs may be minimized.

      (1)  ·         aIt sufficientis possible that any expenses incurred may be partially offset by an increase in State revenue due to the collection of fines imposed under the bill.  However, the OLS cannot determine the nature and number of such infractions and, therefore, the amount of revenue that may be generated.  BILL DESCRIPTION         This bill codifies and establishes certain network adequacy standards for pediatric primary and specialty care physiciansin (PCPs)the Medicaid program.  The bill defines network adequacy to assuremean that:the adequacy of the provider network with respect to the scope and type of health care benefits provided by the managed care plan, the geographic service area covered by the provider network, and access to medical specialists pursuant to the standards in the regulations promulgated pursuant to State law and in the existing contract between a MCO and the DMAHS in the Department of Human Services.

          (a)  Currently, atpursuant leastto twothe physicianscontract eligiblebetween asMedicaid PCPsMCOs and the DMAHS, all MCO networks are required to ensure that 90 percent of the enrollees must be within fivesix miles orof 10two minutesprimary drivingcare timephysicians or(PCPs) publicin transiturban time,counties, whicheverand isthat less,85 percent of 90enrollees percentmust be within 15 miles of two PCPs in non-urban counties.  Under the managedcontract, careno plan’senrollee pediatricis enrolleesto whobe livemore inthan urbanminutes counties;from a PCP.

          (b)  The atexisting leastnetwork twoadequacy physiciansrequirements eligiblefor asmedical PCPsspecialists are withinoutlined 10under milesState orregulation.  15Specifically, minutesall drivingMedicaid timeMCO ornetworks publicare transitrequired time,to whicheverensure isthat less, of 90 percent of theenrollees managedmust carebe plan’swithin pediatricminutes enrolleesor who45 livemiles inof non-urbaneach counties;type of medical specialist.

and          Under (c)  the 100bill, percentthe ofDMAHS, allat pediatricthe enrolleesnext liveregular noopportunity, moreis thanrequired 30to minutesamend fromthe atMedicaid leastMCO onecontract physicianprovisions eligibleon asnetwork aadequacy PCP;to require:

          (2)  1) a a sufficient number of pediatric medicalPCPs specialists to assure:assure that:

    (a) (a)  at accessleast two physicians eligible as PCPs are within 15five miles or 3010 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in urban counties;  (b) at least two physicians eligible as PCPs are within 10 miles or 15 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in non-urban counties;

and     (c) (b)  percent accessof withinall 40pediatric milesenrollees orlive 60no minutesmore drivingthan time30 orminutes publicfrom transitat time,least whicheverone isphysician less,eligible ofas 90a percentPCP; of the managed care plan’s pediatric enrollees who live in non-urban counties;

          (3)  2) a a sufficient number of pediatric oncologistsmedical andspecialists developmental and behavioral pediatricians 2and psychiatrists2 to assure:

    a) (a)   access within 1015 miles or 2030 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in urban counties;

and     b) (b)   access within 3040 miles or 4560 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in non-urban counties;

and          3)   (4)  a thesufficient followingnumber types of pediatric medicaloncologists specialtiesand representeddevelopmental withinand thebehavioral plan’spediatricians network:and psychiatrists to assure:

a) access within 10 miles or 20 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in urban counties;

and b) access within 30 miles or 45 minutes driving time or public transit time, whichever is less, of 90 percent of the managed care plan’s pediatric enrollees who live in non-urban counties;

and       4)  the following types of pediatric medical specialties represented within the plan’s network:

1psychiatry,1psychiatry; emergency medicine;

emergency medicine;

1[orthopaedics]orthopedics; orthopedics1;

     b.   Under 3[2[Athe managedbill, in each reporting period, a MCO may seek a waiver of a specific network adequacy provision established in paragraphs 2) and 3) above from the DMAHS.  The division is required to establish a waiver process where, at a minimum, the MCO must demonstrate both an active, good faith effort to meet requirements for applicable specialties in each applicable county, and certify to the division which specialty or specialties, and in which counties, for which insufficient providers exist.  The division is also required to direct each MCO to establish a process by which a patient or provider may submit a grievance regarding the adequacy of the provider network.   When a MCO is notified that care organizationis needed for a Medicaid beneficiary in a county where the MCO was unable to certify that violatesit anymeets, provisionor received a waiver of, the network adequacy standards as required under the bill, the MCO is to initiate negotiations with non-participating providers of thisthat actservice, shalland provide timely authorization to ensure services can be liableprovided to the beneficiary without delay and consistent with timeframes defined in the managed care contract for penaltiesall describedroutine underand sectionurgent 16services.        Finally, the bill directs the division to establish an enhanced system to assess the network adequacy of 1[P.L.2018,a c.MCO contracted with the division to provide benefits under Medicaid, including, but not limited to, requiring the MCO to certify, at a minimum on an annual basis, that the MCO meets the network adequacy requirements contained in their contract.  The division is to enforce appropriate sanctions for non-compliance with the bill, including, but not limited to, financial penalties that accrue during the period of non-compliance.

32]  P.L.1997,  c.1921FISCAL (C.26:2S-16)]ANALYSIS No  out-of-stateEXECUTIVE pediatricBRANCH specialty  hospital      shallNone bereceived. denied the right to participate in a managed care organization network under the same terms and conditions currently applicable to all other contracting providers, provided the pediatric specialty hospital is willing to accept 125 percent of its home state Medicaid fee-for-service rate and accepts the terms and conditions of the contract.

Nothing  OFFICE OF LEGISLATIVE SERVICES         The OLS concludes that the bill will result in an indeterminate impact on State costs and revenues due to the countervailing effects of enhancing network adequacy standards for pediatric primary and specialty care, as established under the bill, on the capitation rates paid by the DMAHS to the Medicaid MCOs.  To the extent that State Medicaid expenditures are matched by federal Medicaid funds, State revenues may also be affected under this sectionbill.  shallThe precludeOLS notes, however, if MCOs are granted waivers of any providernetwork fromadequacy negotiatingprovision, as authorized under the bill, the impact of enhancing such network adequacy standards will be adjusted.        The division pays MCOs based on a higherper-beneficiary orper lowermonth ratecapitation rate.  Federal regulations require that capitation rates be approved by the Centers of Medicare and Medicaid Services and be actuarially sound, meaning the rates are projected to provide for anyall servicereasonable, orappropriate, setand attainable costs that are required under the terms of services2.the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract.

      When c.  developing 2Nocapitation out-of-staterates, or in-state pediatric specialty provider shall be denied the rightcontracted toactuary participateutilizes inencounter aclaims manageddata carefrom organization network under the samefiscal termsyear andthat conditionsis currentlytwo applicableyears prior to all other contracting providers, provided the out-of-staterate orsetting in-stateperiod, pediatricMCO specialtyfinancial providerreports, isand willingmonthly tobeneficiary acceptdata 100collected percentby of the StateMCOs Medicaid fee-for-service rate and accepts the termsdivision. and conditions of the contract.

Nothing      inThe thisOLS sectionassumes shallthat precludeover anytime providerthe fromenhanced negotiatingnetwork aadequacy higherstandards orimposed lowerunder the bill would influence capitation rate setting through the application of both downward and upward pressure.  For example, research demonstrates the potential for anylong‐term servicereduction orin setutilization ofand services. costs      with d.]3 better Inpatient eachaccess reportingto period,primary acare, managedas provided for under the bill.  Essentially, ready access to primary care organizationwould appropriately shift care away from more intensive and expensive care provided in urgent care, emergency departments, specialty departments, and inpatient settings.  The resultant lower costs may seekprovide for a waiverdecreased ofcapitation arate.  specificSimilarly, networkimproved adequacyaccess provisionto establishedspecialty care, as provided for under the bill, can result in paragraphsimproved (2)medical throughoutcomes, (3)while ofalso subsectionavoiding a.potentially higher costs from emergency department visits and hospitalizations.

of      thisConversely, sectionin fromorder theto Divisioncomply ofwith Medicalthe Assistanceincreased andaccess Healthstandards Services. required Theunder division shall establish a waiver process where, at a minimum, the managedbill, careparticularly organizationregarding mustcostly demonstratespecialty bothcare, anMCOs active,may goodhave faith effort to meetincrease requirementsprovider forreimbursement applicablerates specialties in each applicable county, and certify to draw the divisionnecessary which specialty or specialties, and in which counties, for which insufficient providers exist. into       3[e.] c.3    The Division of Medical Assistance and Health Services shall require each managed care organization to establish a process by which a patient or provider may submit a grievance regarding the adequacyMedicaid of its provider network.  ThisGenerally, processlow shallMedicaid includereimbursement responserates timeframes,are butthe nomain morebarrier thanfor 30beneficiaries days,to andaccess reportingspecialty definedcare in thea managedtimely caremanner. contract, including documentation of specific provider availability addressing each grievance.

     However, 3[f.]d.3    the InOLS orderdoes tonot providehave timelyaccess services to patients,current when a managed care organizationrates, isand notifiedcannot  3[bypredict athe providermagnitude of theirthe willingnessimpact tothe participatebill undermay thehave provisionson ofsuch subsectionsrates b.and, as a result, on any increase in the MCO capitation rate.

and      c.]The thatOLS carealso isestimates needed for a Medicaid beneficiary in a county where a managed care organization was unable to certify that it meets, or received a waiver of, the networkDMAHS adequacy standards as required in subsection a.3 of this section, the managed care organization shall initiate 3[contracting] negotiations with non-participating providers of that service,3 and 3shall3 provide timely authorization to ensure services can be provided to the beneficiary without delay and consistent with timeframes defined in the managed care contract for all routine and urgent services.  Balance-billing of Medicaid beneficiaries shall be prohibited.  Any copayments or other forms of cost-sharing imposed on services rendered under this paragraph shall be limited to the maximum amount allowed under State law for the Medicaid program.  3The Commissioner of Human Services may promulgateincur rulescertain orindeterminate regulationsexpenses to resolveestablish in a timelywaiver mannerprocess contracting disputes that arise under this subsection.3        3[g.]e.3     The Division of Medical Assistance and Healtha Services shall establish an enhanced system to assess theMCO networkcompliance adequacy of a managed care organization contracted with the division to provide benefits under Medicaid, including, but not limited to, requiring the managed care organization to certify, at a minimum on an annual basis, that the managed care organization meets the network adequacy requirementsstandards containedoutlined in theirthe Medicaid contract.  TheTo divisionthe shallextent enforcethat appropriatethese sanctionsprovisions foroverlap non-compliance with thisthe section,division’s including,current butefforts, notsuch limitedcosts to,may financialbe penaltiesminimized. that accrue during the period of non-compliance.

      3[h.]It f.3   is Apossible managedthat careany organizationexpenses shallincurred annuallymay providebe apartially reportoffset ofby an increase in State revenue due to the numbercollection of out-of-networkfines contractsimposed andunder waiversthe soughtbill.  andHowever, grantedthe byOLS pediatriccannot specialty,determine asthe listednature inand paragraphnumber (4)of such infractions and, therefore, the amount of subsectionrevenue a.that may be generated.      Section:

ofHuman thisServices section,Analyst: and county to the Division of Medical Assistance and Health Services, who shall make that information publicly available by request.

    Sarah 3[i.]Schmidt g.3Senior 2  Research ForAnalyst theApproved: purposes of this section:

    Thomas "Medicaid"Koenig meansLegislative Budget and Finance Officer     This legislative fiscal estimate has been produced by the programOffice establishedof pursuantLegislative Services due to P.L.1968,the c.413failure (C.30:4D-1of etthe seq.).Executive Branch to respond to our request for a fiscal note.

      "NetworkThis adequacy"fiscal meansestimate thehas adequacybeen 1of1prepared the provider network with respect to the scope and type of health care benefits provided by the managed care plan, the geographic service area covered by the provider network, and access to medical specialists pursuant to theP.L.1980, standardsc.67 in(C.52:13B-6 theet regulationsseq.). promulgated pursuant to section 19 of P.L.1997, c.192 (C.26:2S-18) and in the existing contract between a managed care organization and the Division of Medical Assistance and Health Services in the Department of Human Services.