Medicaid Managed Care: CMS Should Improve Oversight of Access and Quality in States' Long-Term Services and Supports Programs
Published: 2017-08-14T00:00:00

Fast Facts:
Medicaid beneficiaries who need long-term care can get it in their homes, community settings, or an institution such as a nursing home. Many states contract with managed care organizations to provide this care.
The 6 states we reviewed used various methods (e.g., beneficiary surveys) to monitor access and quality in managed long-term care programs. However, the Centers for Medicare & Medicaid Services did not always require the states to report information it needs for oversight, such as beneficiary concerns or whether there are enough providers.
We recommended that CMS improve its oversight.

Highlights:
section_title: Why GAO Did This Study
paragraphs: Twenty-two states use MLTSS programs to provide care for Medicaid beneficiaries who need long-term support. Using managed care to deliver long-term services and supports can be a strategy for states to expand home- and community-based care, which many beneficiaries prefer, and to lower costs. However, given the potential vulnerability and needs of beneficiaries in these programs, oversight is crucial to ensure their access to quality care.
GAO was asked to review states' implementation and CMS's oversight of MLTSS programs. In this report, GAO (1) described how selected states monitored MLTSS access and quality, and (2) examined the extent to which CMS oversees MLTSS access and quality in selected states.
GAO reviewed federal regulations, guidance, and internal control standards. For six states selected for variation in location, program size and duration, and other factors, GAO reviewed reporting requirements, reports to CMS, and other documents. GAO also reviewed data from these states on beneficiary appeals and grievances from 2013 through 2015—the most recent data available—and interviewed state and CMS officials.
section_title: What GAO Found
paragraphs: In Medicaid, long-term services and supports are designed to promote the ability of beneficiaries with physical, cognitive, or mental disabilities or conditions to live or work in the setting of their choice, which can be in home or community settings, or in an institution such as a nursing facility. States are increasingly delivering such services through managed care, known as managed long-term services and supports (MLTSS). In MLTSS, as with most Medicaid managed care programs, states contract with managed care organizations (MCO) to provide a specific set of covered services to beneficiaries in return for one fixed periodic payment per beneficiary. In addition, beneficiaries have the right to appeal an MCO decision to reduce, terminate, or deny their benefits, or file a grievance with an MCO regarding concerns about their care.
The six states GAO reviewed—Arizona, Delaware, Kansas, Minnesota, Tennessee, and Texas—used a range of methods for monitoring access and quality in MLTSS programs. To oversee beneficiaries' care, GAO found that states used—to varying levels—external quality reviews, beneficiary surveys, stakeholder meetings, and beneficiary appeals and grievances data. For example, while all six states used external quality reviews and beneficiary surveys, GAO found that states varied in the extent to which—and how—they used appeals and grievances data to monitor beneficiaries' concerns about quality and access in their MLTSS programs.
The Centers for Medicare & Medicaid Services (CMS)—the federal agency responsible for overseeing Medicaid—did not always require the six selected states to report the information needed to monitor access and quality in MLTSS programs. CMS primarily relied on its reviews of state-submitted reports to monitor MLTSS programs for compliance with federal regulations and state-specific reporting requirements, and what states are required to report to CMS can vary by state. Although CMS highlighted certain elements that it deemed essential to developing and maintaining high quality MLTSS programs in its 2013 guidance, GAO found that CMS did not require all selected states to report on these elements—namely, provider network adequacy; critical incidents, which are events that may cause abuse, neglect or exploitation of beneficiaries; and appeals and grievances. CMS did not require three of the six states that GAO reviewed to regularly report on network adequacy or provide summaries of critical incidents. Further, although CMS requires all selected states to report on their quality assurance efforts, GAO found that states often report general descriptions of their planned and ongoing quality assurance activities for MLTSS or their entire comprehensive managed care programs. Consequently, state reporting did not always provide CMS with information needed to assess state oversight of key elements. Gaps in reporting requirements may mean that CMS does not always have information needed to monitor key aspects of MLTSS access and quality among selected states and it may not be able to reliably detect state or MCO practices that do not meet CMS's guidance.
section_title: What GAO Recommends
paragraphs: GAO recommends that CMS take steps to identify and obtain information to oversee key aspects of MLTSS access and quality, including network adequacy, critical incidents, and appeals and grievances. HHS concurred with GAO's recommendation.

section_title: Letter
paragraphs: In Medicaid, long-term services and supports are designed to promote the  ability of beneficiaries with physical, cognitive, or mental disabilities or  conditions to live or work in the setting of their choice, which can be in  home or community settings, or in an institution such as a nursing  facility. States are increasingly delivering such services through  managed care, known as managed long-term services and supports  (MLTSS). In MLTSS, as with most Medicaid managed care programs,  states contract with managed care organizations (MCO) to provide a  specific set of covered services to beneficiaries in return for one fixed  periodic payment per beneficiary—typically, per member per month. As  of May 2017, 22 states had enrolled beneficiaries in MLTSS programs  and 5 additional states planned to implement such programs. In fiscal  year 2015, the most recent year for which data were available, MLTSS  accounted for an estimated $29 billion of the $158 billion in total Medicaid  spending on long-term services and supports.
Given the potential vulnerability and significant needs of the Medicaid  beneficiaries who use long-term services and supports, federal and state  oversight of MLTSS programs is crucial for ensuring their access to  quality care—that is, the provision of health care services that promote  desired health outcomes and are consistent with current professional  knowledge. The types of beneficiaries eligible for MLTSS programs vary  by state, but can include the elderly; adults with physical, intellectual, or  developmental disabilities; and children with disabilities. These  beneficiaries may have limited ability to care for themselves, and may  need support such as nursing care or assistance with eating or dressing.  Many beneficiaries prefer to receive support in home- and community- based settings, and MLTSS programs can be a strategy for states to  expand access to home- and community-based care, potentially at a  lower cost than institutional care. MLTSS programs can also provide an  opportunity for states to better integrate Medicaid long-term services and  supports with acute care or other services. At the same time, however,  the use of managed care to meet MLTSS beneficiaries’ needs assumes  that the provision of appropriate services can be achieved in a cost- effective manner for a population that is among the most vulnerable and  has particularly high health care needs.
As with Medicaid generally, the states and the Centers for Medicare &  Medicaid Services (CMS)—within the Department of Health and Human  Services (HHS)—share responsibility for overseeing MLTSS programs,  including monitoring beneficiaries’ access to and quality of care. States  are responsible for the operation of MLTSS programs and for monitoring  the MCOs that provide the care. CMS is responsible for approving and  monitoring states’ MLTSS programs to ensure that they comply with all  applicable federal requirements. For example, among other beneficiary  protections to help ensure access to care, MLTSS beneficiaries have the  right, by law, to appeal an MCO’s decision to reduce, terminate, or deny  payment for services, such as a decision to deny coverage for a specific  service or reduce the hours of MLTSS services. MLTSS beneficiaries  may also file a grievance with an MCO about their care, such as to  express dissatisfaction about difficulty getting an appointment with an  MLTSS provider or concerns about the quality of MLTSS care. In  addition, CMS may set state-specific requirements for an individual  MLTSS program, which are generally known as special terms and  conditions. For example, in state programs’ special terms and conditions,  CMS may establish reporting requirements in which states must  periodically report to CMS on specific aspects of their MLTSS programs,  such as on measures of access to care or quality.
You asked us to provide information on how states are implementing  MLTSS and on CMS oversight of MLTSS programs. In January 2017, we  issued a report that examined how selected states structured financial  incentives in their MLTSS programs and CMS’s policies and procedures  for overseeing states’ payment structures. In this report, we  1.  describe how selected states monitored access and quality in their  MLTSS programs, including their use of beneficiary appeals and  grievances; and  2.  examine the extent to which CMS oversees MLTSS access and  quality in selected states.
To describe how states monitored access and quality in their MLTSS  programs, including their use of beneficiary appeals and grievances, we  reviewed selected states’ documentation of their MLTSS monitoring  efforts as well as relevant federal regulations and guidance regarding  state oversight. Out of the 21 states with established MLTSS programs as  of calendar year 2013, we selected 6 states—Arizona, Delaware, Kansas,  Minnesota, Tennessee, and Texas—whose MLTSS programs were  authorized under a section 1115 demonstration or section 1915 waiver  and reflected a range of experiences in terms of the length of time they  had been in place; the number of beneficiaries receiving MLTSS in fiscal  year 2013; the percentage of MLTSS spending on services provided in  the home and the community—referred to as home- and community- based services (HCBS)—in fiscal year 2013; and geographic region. The  fiscal year 2013 data on MLTSS programs and their number of  beneficiaries and spending were the most recently available state-level  data at the time we selected states for review. The 6 states represented  over 30 percent of all Medicaid beneficiaries in MLTSS programs as of  July 2015. We collected information on the methods these states used to  monitor access and quality in MLTSS programs, such as quality  improvement strategies and external reviews, and examined states’ uses  of beneficiary appeals and grievances. We reviewed documentation, such  as state contracts with MCOs—which specify what services MCOs are  required to provide and what information MCOs are required to report to  the state, among other responsibilities—and state quality strategies. We  also reviewed state data on beneficiaries’ appeals and grievances and  states’ compliance actions in calendar years 2013 through 2015, and the  outcomes of beneficiaries’ appeals for calendar year 2015. We  interviewed state Medicaid officials about their monitoring efforts, and  discussed state oversight with CMS officials. Neither the MLTSS  programs in these six states nor the methods they use to monitor access  and quality that we examined are generalizable to other states.
To examine the extent to which CMS oversees MLTSS access and  quality in selected states, we reviewed documents regarding CMS’s  monitoring efforts, including Medicaid managed care regulations and  CMS guidance on MLTSS programs. In addition, for our 6 selected  states, we reviewed their MLTSS special terms and conditions, including  CMS’s reporting requirements regarding MLTSS access to and quality of  care, and examined the variation in those requirements across states. We  focused on states’ reporting requirements related to the section 1115 and  1915 demonstrations and waivers, the most commonly used authorities  for MLTSS programs. We also reviewed the states’ quarterly and annual  reports to CMS about their MLTSS programs, and assessed whether  those reports were consistent with CMS’s state-specific reporting  requirements. We also interviewed CMS and state officials about MLTSS  monitoring and oversight efforts. We assessed CMS’s monitoring efforts  using agency guidance that lists key elements of effective MLTSS  programs, which CMS uses to review state applications for new MLTSS  programs as well as existing MLTSS programs. For our analysis, we  focused on a subset of key elements that were directly related to access  and quality of care, and could be reviewed in the context of state  reporting requirements. We also considered the extent to which CMS’s  monitoring efforts are consistent with relevant Standards for Internal  Controls in the Federal Government, specifically, those related to  monitoring. In addition, we interviewed officials with HHS’s  Administration for Community Living, which is responsible for increasing  individuals’ access to community supports.
We conducted this performance audit from September 2015 to August  2017 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Prevalence and Characteristics of Medicaid Managed Long- Term Services and Supports Programs
paragraphs: States’ increasing use of managed care for Medicaid beneficiaries  needing long-term services and supports is a significant change from how  states have historically met the needs of these vulnerable populations.  While many states have extensive experience with using managed care  programs to provide physical or behavioral health care services, states  have not typically included beneficiaries needing long-term care  services—especially seniors and adults with physical or developmental  disabilities—in managed care programs. In 2004, only 8 states had  implemented MLTSS programs. In contrast, as of May 2017, 27 states  either had implemented MLTSS programs or were planning to implement  them. (See fig. 1.) The most recent enrollment data available at the time  of our study, from July 2015, showed that MLTSS programs in 18 states  collectively served around 1 million Medicaid beneficiaries that year.
Long-term services and supports include a broad range of health and  health-related services and non-medical supports for individuals who may  have limited ability to care for themselves because of physical, cognitive,  or mental disabilities or conditions—and who need support over an  extended period of time. Individuals needing long-term services and  supports have varying degrees of difficulty performing activities of daily  living, such as bathing, dressing, toileting, and eating, without assistance.
They may also have difficulties with preparing meals, housekeeping,  using the telephone, and managing money. Long-term services and  supports to address these needs are generally provided in two settings:  institutional facilities, such as nursing facilities and intermediate care  facilities for individuals with intellectual disabilities; and home and  community settings, such as individuals’ homes or assisted living  facilities. HCBS cover a wide range of services and supports to help  individuals remain in their homes or a community setting, such as  personal care services to provide assistance with activities of daily  living.
MLTSS programs can vary due in part to the flexibility that Medicaid  allows states in establishing their programs. For example, states have  flexibility in determining which populations to include in their MLTSS  programs and whether to use mandatory or voluntary enrollment. States  also have flexibility in determining what services to include. In addition,  states may choose to have MLTSS as part of a broader, comprehensive  managed care program that also provides acute care or behavioral health  care, or to have MLTSS as a separate managed care program. See table  1 for characteristics of MLTSS programs in the six states we selected for  review. (App. I provides more information on the MLTSS programs in our  selected states.)
section_title: Delivery of MLTSS and State Oversight
paragraphs: Within MLTSS programs, MCOs are responsible for coordinating the  delivery of services to beneficiaries. To be eligible for MLTSS,  beneficiaries must meet income and asset requirements, and also meet  state-established criteria on the level of care needed, such as needing an  institutional level of care. Once a person is determined eligible, the  individual can be enrolled to receive MLTSS from an MCO. The MCO  then works with the beneficiary to develop a service plan that addresses  the beneficiary’s needs and preferences, including determining the type  and amount of services the beneficiary needs. (See fig. 2.) For example,  for a beneficiary receiving care in the home, the MCO determines if  personal care services are needed and, if so, the amount of services,  such as the number of hours needed per week. The MCO is then  responsible for implementing this service plan and coordinating the  beneficiary’s care.
Although MCOs are responsible for coordinating MLTSS beneficiaries’  care, states remain responsible for the operation of MLTSS programs and  must monitor the MCOs. State contracts establish MCO responsibilities  with respect to the services the MCO is responsible for providing, the  beneficiary protections that must be in place, and the information the  MCO must report to the state. States then monitor MCO actions for  compliance with contractual requirements. States may take compliance  actions if they find that MCOs are not complying with contractual  requirements and if they identify issues with MCOs’ provision of care.  Compliance actions range in severity and can include informing MCOs of  problems through letters or notices, issuing corrective action plans for the  MCO to implement, or assessing intermediate sanctions.
section_title: Federal Role in MLTSS Programs
paragraphs: States are required to seek CMS approval for their MLTSS programs,  which they can implement through several different authorities. Among  the most commonly used authorities are section 1115 demonstrations  and section 1915(b) waivers. Before approving an MLTSS program, CMS  works with the state to shape the program design, including how the  program will align with CMS guidance. In 2013, CMS issued guidance  that set expectations for states seeking approval of MLTSS programs  through section 1115 demonstrations or section 1915(b) waivers. In  particular, CMS listed 10 key elements of effective MLTSS programs that  the agency expects states to incorporate into both new and existing  MLTSS programs. These elements address a range of topics, including  qualified providers (or network adequacy), participant protections  (including appeals and grievance processes and a critical incident  management system with safeguards to prevent abuse, neglect, and  exploitation), and quality (implementation of a comprehensive quality  strategy for MLTSS). For example, states must ensure that MCOs  maintain a network of qualified long-term services and supports providers  that is sufficient to provide adequate access to covered services;  establish safeguards to ensure beneficiary health and welfare; and  develop mandatory MCO reports on MLTSS quality of care performance  measures, analyze those reports, and take corrective actions if needed.  CMS’s guidance noted that if a state incorporated these 10 elements it  would increase the likelihood of having high-quality MLTSS programs.  CMS uses these elements to review and approve states’ MLTSS  programs.
When CMS approves an MLTSS program under a section 1115  demonstration or section 1915 waiver, it establishes state-specific  requirements for the program and also specifies how it will oversee the  program on an ongoing basis. For example, CMS may require a state to  conduct specific MCO monitoring activities. In addition, CMS may require  a state to submit quarterly and annual performance reports to CMS.  These reports may address state-specific measures of quality and  access, including information on appeals and grievances. Within CMS,  oversight of MLTSS programs is a joint responsibility of the agency’s  central and regional offices.
In addition to state-specific requirements, states with MLTSS programs  are also subject to broader quality requirements that apply to all Medicaid  managed care programs. For example, states must have an external  quality review process to assess the quality of care MCOs provide to all  managed care beneficiaries, including MLTSS beneficiaries. States may  use an external quality review organization (EQRO)—an independent  organization specializing in external quality reviews—to conduct several  required external quality review activities, and must use an EQRO for an  annual quality review. States must also have a quality strategy for  MLTSS programs that includes, for example, a discussion of performance  measures, performance improvement projects, and state quality oversight  plans. Changes to requirements for states regarding Medicaid managed  care quality are slated to take effect in July 2017 or later, under CMS’s  2016 Medicaid managed care final rule, which was the first major change  to Medicaid managed care regulations since 2003.
section_title: Beneficiary Appeals and Grievance Processes
paragraphs: The beneficiary appeals and grievance processes are important  beneficiary protections for MLTSS programs. By law, MCOs must have  an internal appeals process in place so that MLTSS beneficiaries may  challenge certain MCO actions, such as decisions to terminate services,  as well as a process for MLTSS beneficiaries to file a grievance with the  MCO regarding their care.
Appeals. A beneficiary can file an appeal in response to an MCO’s  decision to, among other things, reduce services, terminate services, or  deny payment for services. For example, a beneficiary could appeal an  MCO’s decision to deny coverage for a specific type of MLTSS care, such  as personal care services, or to reduce the number of personal care  attendant hours a beneficiary will receive. After the beneficiary submits an  appeal, the MCO will either approve the appeal (meaning that the MCO,  through its internal appeals process, overturns its original decision and  resolves the appeal in favor of the beneficiary), or deny the appeal  (meaning that the MCO upholds its original decision). If an MCO denies  the appeal, the beneficiary can request that the state review the MCO’s  decision through the state’s fair hearing process, in which state officials  rule on whether the MCO’s decision should be upheld.
Grievances. A beneficiary can file a grievance with an MCO to express  dissatisfaction about any matter not covered by appeals. For example, a  beneficiary could file a grievance about difficulty getting an appointment  with an MLTSS provider, concerns about the quality of MLTSS care, a  provider or MCO not respecting a beneficiary’s rights, or a provider not  treating the beneficiary respectfully. Beneficiaries may also submit  grievances directly to the state, in a manner determined by the state,  such as to the state Medicaid agency or state long-term care  ombudsman. After receiving information about the beneficiary’s  grievance, the MCO conducts an independent review and determines  what, if any, steps are needed to resolve the grievance.
Appeals and grievances processes are slated to change, beginning in  July 2017, due to changes specified in CMS’s May 2016 Medicaid  managed care final rule. For example, there is a new requirement that  MCOs maintain records about each grievance or appeal, including a  general description of the reason for the appeal or grievance, the date  received and reviewed, and the resolution at each level of the grievance  or appeal. MCOs must maintain these records in a manner accessible to  the state and provide them to CMS upon request.Previously, states  have been required to maintain information on appeals and grievances,  and the final rule specified what those records must include.
section_title: Selected States Used Multiple Methods to Oversee MLTSS Care, and Varied in the Extent to Which They Used Beneficiary Appeals and Grievances to Monitor Access and Quality
subsections: section_title: Selected States Used a Range of Methods, Including External Reviews, to Oversee MLTSS Access and Quality
paragraphs: The six states we reviewed used a range of methods to oversee MLTSS  beneficiaries’ access to and quality of care. States’ oversight methods  included implementing external quality reviews, tracking performance  measures, surveying beneficiaries, and reviewing medical charts, among  other activities. In some cases, these oversight methods were specific to  MLTSS programs, while in other cases the methods addressed MLTSS  as well as other state managed care programs. Examples of state  oversight methods included the following:  External quality reviews: All six states implemented the external quality  reviews that CMS requires, which involves assessments of MCOs’  compliance with requirements related to quality, and validating MCO  performance measures and performance improvement projects. In each  of these states, the state’s EQRO assessed MCO compliance with quality  requirements and reported to the state on their findings. Examples of  EQROs’ findings included:
The Texas EQRO 2014 report found weaknesses in the state’s  performance measures on effectiveness of care and made  recommendations to the state to improve the care provided through  the state program that provides both MLTSS and acute care for  elderly beneficiaries. These included steps to improve performance on  measures such as the rates of potentially preventable hospital  admissions and emergency department visits.
The Delaware EQRO assessed aspects of quality and access across  the two MCOs that operated both MLTSS and non-MLTSS services.  The EQRO’s 2014 report to the state reported, for example, that both  plans were compliant with Medicaid managed care regulations  regarding quality assessment and performance improvement, but that  they could improve in managing the grievance and appeals process,  and ensuring appropriate resolution and communication with  beneficiaries and providers.
In addition to required EQRO reviews, five of the six states reported that  they had their EQROs conduct other quality oversight activities. For  example, Delaware’s EQRO took part in a task force that provides a  forum for sharing best practices, and identifies and implements quality  improvement strategies. Tennessee contracted with its EQRO to prepare  an annual report on national initiatives that may affect managed care, and  conduct educational meetings for state quality staff and MCOs.
Use of MCO performance measures and beneficiary surveys: All six  states tracked performance measures, which varied by state, but included  measures such as rates of hospitalization, timely MCO response to  beneficiary grievances, and the proportion of beneficiaries receiving  certain services. For example, Texas tracked the proportion of grievances  that were resolved within certain time frames, and Kansas tracked the  proportion of beneficiaries receiving HCBS care who received a flu  vaccine. The states also used beneficiary surveys to help monitor MLTSS  care. For example, one state’s survey asked beneficiaries about their  satisfaction with and ability to access services. States generally used  surveys that were designed by the state or by their EQRO. The states  used established surveys, or incorporated questions from established  surveys, such as the National Core Indicators–Aging and Disability survey  and the Consumer Assessment of Healthcare Providers & Systems in  their surveys.
Reviews of beneficiary information such as medical charts or case  files: Five of the six states reported that they had efforts to review or  audit MLTSS beneficiary information, such as medical charts, case files,  or other information, to identify potential issues with MLTSS care. The  frequency of their efforts ranged from quarterly to once every 3 years. For  example, Arizona conducted medical chart reviews at least every 3 years,  reviewing a sample of charts for MCO compliance with case management  requirements in areas such as timeliness, assessments of care, and the  services provided to beneficiaries. Delaware conducted quarterly on-site  reviews, which included reviews of beneficiaries’ case files, level of care  assessments, and each MCO’s critical incident management system, to  ensure that beneficiaries were receiving necessary services and that  MCOs were complying with requirements regarding MLTSS care.
Reviews of provider networks: Officials in all six states reported  conducting their own assessments of MLTSS provider networks or  requiring MCOs to report on their MLTSS provider networks. Kansas,  for example, conducted provider network adequacy assessments and  annual audits about access. Minnesota, every 2 years, surveys  geographic areas to identify provider gaps, and assesses provider  networks and providers’ ability to deliver services; it shares information on  any identified provider gaps with its MCOs. Arizona required MCOs to  submit an annual plan about provider network development, including  information on any network gaps, and to report any changes in networks  which would affect more than five percent of beneficiaries within one  geographic service area.
Stakeholder meetings: Officials in all six states told us that they met with  stakeholders, such as state long-term care ombudsmen, beneficiary  advocates, or providers, on a regular basis to discuss beneficiaries’  experiences with MLTSS care.
section_title: Selected States Varied in the Extent to Which They Used Appeals and Grievances to Monitor Beneficiaries’ Concerns about MLTSS Access and Quality
paragraphs: The six states we reviewed varied in the extent to which—and how—they  used appeals and grievance data to monitor beneficiaries’ concerns about  quality and access in their MLTSS programs. We found variation, for  example, in the extent to which states were collecting and using data on  appeals and grievances specifically related to MLTSS care, calculating  appeals and grievance rates, and monitoring the outcomes of  beneficiaries’ appeals.
Collecting and using MLTSS-specific data: Two of the six states– Arizona and Texas—did not separate MLTSS appeals and grievances  from those related to other managed care services or beneficiaries. In  these two states, MCOs that provide MLTSS also provide non-MLTSS  services, such as acute care. While both states collected and used data  on managed care appeals and grievances, they did not require MCOs to  report MLTSS appeals and grievances separately from those for other  managed care services and beneficiaries, or in a way that allowed the  states to identify all MLTSS-specific appeals and grievances. In the  other four states—Delaware, Kansas, Minnesota, and Tennessee—the  MCOs reported MLTSS appeals and grievances separately from appeals  and grievances related to other managed care services and  beneficiaries. Within these four states, monitoring practices varied.  Officials in one of these four states, for example, reviewed monthly  reports on MLTSS appeals. They said appeals data helped them  understand what was happening with beneficiaries on a regular basis,  identify any systemic patterns in appeals, and take action if needed. They  also noted that, as one way of measuring access to care, they review  appeals and grievance data for any beneficiary complaints about not  having access to providers. In Kansas, officials said that they regularly  reviewed appeals and grievances separately for all beneficiaries receiving  HCBS; they reviewed appeals and grievances for beneficiaries receiving  MLTSS care in a nursing facility as part of their review of the state’s  broader managed care population.
Calculating appeals and grievances rates: Three states—Kansas,  Minnesota, and Tennessee—calculated rates of MLTSS appeals and  grievances as a proportion of beneficiary enrollment, so that they could  track patterns or changes in appeals and grievances independent of  changes in enrollment, while one state, Delaware, calculated a rate of  grievances as a proportion of beneficiary enrollment but did not calculate  a rate of appeals. Officials in one of these states told us that calculating  rates—rather than by looking only at the numbers of appeals and  grievances—allowed more meaningful comparisons of appeals and  grievances across MCOs. Officials in this state provided an example of  when the state took an action based on appeals rates. The state identified  that one MCO had a significantly higher appeals rate than other MCOs,  and as a result, put a temporary moratorium on the MCO’s  implementation of reductions in or terminations of certain services. The  state examined the reasons for the high appeals rate—which involved the  MCO’s process for managing beneficiaries’ use of services—and lifted  the moratorium after the MCO addressed the issues. After the state lifted  the moratorium, the MCO’s appeal rate dropped to a rate similar to that of  the other two MCOs. The remaining two states, Arizona and Texas, did  not calculate rates of appeals and grievances based on beneficiary  enrollment.
We analyzed grievance rates in one state and found that one MCO— identified as MCO B in figure 3—consistently had a lower number of  grievances than other MCOs in the state. However, when grievances  were calculated as a proportion of enrollees, MCO B—which had fewer  enrollees than other MCOs—had a higher grievance rate than most other  MCOs. See figure 3 for an illustration of the difference in grievance  numbers and grievance rates for two of the MCOs in this state.
Using categories of appeals and grievances: The six states varied in  the extent to which—and how—they used categories of appeals or  grievances to identify beneficiary concerns about specific types of  services or access to care issues. States can request that MCOs report  beneficiary appeals and grievances in categories based on the type of  beneficiary concern. For example, a beneficiary appeal about a reduction  in private duty nursing service hours could be categorized as being  related to that particular type of service, and a grievance about late  transportation services that caused the beneficiary to miss an  appointment could be categorized as being related to transportation  services. State officials told us that using categories can help them  identify patterns or changes in appeals and grievances, and highlight  areas where the state could take action to address beneficiary concerns.  All states required MCOs to report categories of grievances and four  states—Arizona, Kansas, Minnesota, and Texas—required MCOs to  report categories of appeals. In the two remaining states, each state was  able to review appeals decisions directly and so did not rely on MCOs to  categorize appeals.
Examples of Appeals and Grievances  Categories  Minnesota had managed care organizations  (MCO) categorize appeals and grievances by  setting of care, type of service, and the type of  issue the beneficiary raised. For example,  regarding the types of issues MCOs could  report:
Appeals categories included services and  benefits; failure to provide services within  contractual timelines; and billing and  financial issues, among others. coordination of care; and technical  competence and appropriateness, among  others. quality of care, quality of service, and case management. State  officials said they regularly review MCOs’ grievance data and evaluate  the grievance categories, working to refine the categories to make  them as useful as possible. For example, they evaluate MCOs’  explanations for grievances they categorized as an “other” type of  grievance (as opposed to a specific category), in order to identify new  types of beneficiary concerns.
Arizona used several categories of grievances, such as access to  care, medical services provision, and transportation. State officials  provided an example of how they adjusted categories to reflect  emerging areas of concern. They explained that transportation  services, which enable MLTSS beneficiaries and other beneficiaries to  access care, had the highest number of grievances. As a result, the  state required MCOs to work more closely with transportation  providers. In addition, the state refined its grievance categories to  better track specific types of transportation concerns, such as the  timeliness of pick up, unsafe driving, and missed or late appointments.
Monitoring appeals outcomes: The six states varied in the extent to  which they monitored whether the appeals that MLTSS beneficiaries filed  were ultimately approved or denied by MCOs—that is, whether MCOs  reversed their initial decisions to reduce or terminate services or to deny  coverage for MLTSS care. Officials from one state said that data on  appeals outcomes, particularly decisions where the MCO reversed its initial decision, are as important as the data on the appeals themselves.  They noted that if MCOs often reverse their decisions, it indicates a  problem with beneficiaries being put through appeals unnecessarily. Four  states—Delaware, Kansas, Minnesota, and Tennessee—monitored the  outcomes of MLTSS appeals. Arizona monitored the outcomes of appeals  for its managed care programs generally, though its appeals outcome  data did not distinguish all MLTSS-related appeals from other types of  appeals. Finally, one state—Texas—had not previously required MCOs to  report information about appeals outcomes, but began requiring MCOs to  do so during the course of this study, starting in September 2016.
Two of the six states’ Medicaid agencies—in Delaware and Tennessee— were actively involved in determining appeals outcomes. In Delaware,  nursing staff with the state Medicaid agency reviewed each appeal and  represented the state as a voting member on MCO panels for appeals  decisions. In Tennessee, the state directly receives and processes all  appeals and shares them with the MCO, which then reconsiders its  original decision. If the MCO upholds its decision, the state completes its  own review and determines whether to uphold or overturn the MCO’s  decision. Officials from both states said state involvement helped the  state identify trends in appeals and address issues, and Delaware  officials believed that their involvement was facilitated by the relatively  small size of the state. In the remaining four states—Arizona, Kansas,  Minnesota, and Texas—appeals outcomes were decided by MCOs  without state involvement, though beneficiaries in all states had the right  to request a state fair hearing, which could overturn the MCO’s decision.
States varied in the extent to which appeals resulted in MCOs’ decisions  being upheld or reversed. In the two states where the state Medicaid  agency was actively involved in the appeals process, a greater share of  beneficiary appeals were resolved in favor of the beneficiary—in other  words, a greater share of MCOs’ initial decisions were overturned—than  in the other states. Other factors, such as the type of services being  appealed, or the beneficiary populations included in the appeals data,  may also affect the rate of appeals approved. (See fig. 4.)
section_title: Selected States Reported Using Different Types of Compliance Actions to Resolve Issues Affecting MLTSS Beneficiaries
paragraphs: All six states reported taking compliance actions against MCOs in  response to issues they identified that affected MLTSS beneficiaries,  though to varying degrees. States identified issues through their MCO  monitoring efforts and other means. States took various actions to resolve  those issues, ranging from warning letters or notices to MCOs to financial  penalties. For example, in Delaware, the state Medicaid agency issued a  formal notice to an MCO about deficiencies the state identified in its  quarterly reviews of beneficiaries’ medical charts. Delaware found  deficiencies with respect to beneficiary contact with behavioral health  providers, and difficulty in scheduling timely coordination of care  meetings. Arizona assessed financial penalties in response to an MCO’s  failure to coordinate medically necessary transportation. The state  identified the issue through hundreds of beneficiary grievances related to  transportation services, which the state tracked to a transportation  provider that served MLTSS and other beneficiaries. The prevalence of  compliance actions varied across our selected states; some states, for  example, reported over 20 instances in which they required MCOs to  submit corrective action plans to address issues that affected MLTSS  beneficiaries, while other states reported using few corrective action plans  from 2013 through 2015.
section_title: CMS’s Oversight Relied Primarily on State Reporting, but Selected States Were Not Always Required to Report Key Information on MLTSS Access and Quality Needed for CMS Oversight
paragraphs: CMS generally depends on quarterly and annual reporting requirements  as stipulated in states’ special terms and conditions as a framework to  monitor access and quality in their MLTSS programs. CMS’s reporting  requirements are customized for each state, and as such, the content and  specificity of reports can vary by state. CMS officials told us that as state  reports are received, the central and regional office staff reviews them for  compliance with federal regulations and the state’s particular reporting  requirements. Agency officials explained that after reviewing the state  reports, regional office staff can contact state Medicaid officials as  necessary with questions or concerns. CMS officials indicated that all six  of our selected states were compliant with their reporting requirements,  and that the agency did not request additional reports from the states  from 2013 through 2015. Also, all of our selected states were required to  have meetings with CMS at varying intervals, depending on the state. The  frequency of these meetings was determined when CMS approved the  states’ special terms and conditions, and ranged from bimonthly to  quarterly.
While CMS has specified certain parameters for state oversight of  MLTSS, the agency did not always require the six selected states to  report the information needed to monitor this oversight. CMS’s 2013  guidance for MLTSS programs highlights the 10 elements that it deems  essential for developing and maintaining high-quality programs, which  CMS uses when reviewing or approving state MLTSS programs. In  particular, this guidance establishes key elements to ensure access and  quality, including qualified providers (which includes an adequate network  of qualified providers), participant protections (which includes appeals  and grievance processes and reporting of critical incidents), and quality.  Further, CMS’s guidance says that states should provide reports to CMS  to demonstrate their oversight of these elements. In addition, federal  internal control standards stipulate that agencies conduct monitoring and  evaluation activities. In our review of the reporting required of our  selected states, however, we found that CMS did not require all states to  report on certain areas related to those key elements—namely network  adequacy, that is, the sufficiency in the number and types of long-term  care providers serving beneficiaries in the managed care plans; critical  incidents, which are events or situations that cause or may cause harm to  a beneficiary’s health or welfare, such as abuse, neglect, or exploitation;   and appeals and grievances. As a result, we found cases where state  reporting did not allow CMS to assess state adherence with federal  guidance and oversight of MLTSS access and quality.
Network adequacy. CMS did not require three of our six selected  states—Arizona, Minnesota, and Tennessee—to regularly report  information on network adequacy, but it did require Delaware,  Kansas, and Texas to report such information. As part of states’  oversight responsibilities of MCOs, CMS requires states to ensure  that MCOs maintain a network of providers that is sufficient to provide  adequate access to all covered services, and includes network  adequacy as 1 of the 10 elements it uses to review, approve and  renew MLTSS waivers. CMS regulations direct MCOs to submit  assurances of network adequacy to the state. However, CMS  currently does not require that states report this information to the  agency unless it is stipulated in the state’s reporting requirements, or  if CMS requests it. CMS officials said that the agency can request  network adequacy information from the states, even though it may not  be part of the reporting requirements in the states’ special terms and  conditions. Given that in recent years CMS has not requested that any  of our selected states provide additional information, including  network adequacy assurances, the agency may miss potential  network adequacy issues in states where there are no specific  reporting requirements. Without ongoing monitoring of network  adequacy, CMS may not be able identify when enrollment or other  trends begin to erode beneficiary access to MLTSS.
Critical incidents reports. CMS required three of our six states— Delaware, Kansas, and Minnesota—to submit analyses or summaries  of their MCOs’ critical incidents reports, but did not require the other  three states—Arizona, Tennessee, and Texas—to do so. Even though  Delaware was required to submit information on critical incidents, in  our review of two of the state’s 2015 quarterly reports, we did not find  summaries or data on critical incidents. In addition, Delaware’s annual  report did not provide any information on critical incidents in the state,  but described how the state collects and tracks critical incidents and  their outcomes on a monthly basis. This gap in Delaware’s reporting,  and the lack of a requirement to report in Arizona, Tennessee, and  Texas, means that CMS cannot directly monitor the degree to which  critical incidents are occurring in these states or how the states are  tracking and resolving incidents that involve reports of abuse, neglect,  or exploitation of vulnerable beneficiaries.
Appeals and grievances. CMS required all states to report  information on complaints or problems reported by consumers, of  which appeals and grievances are an important part. However, the  level of detail CMS required from each state varied. For example,  CMS’s reporting requirements for Delaware, Kansas, and Minnesota  specifically included a request for MCO appeals and grievance reports  with outcomes or overturn rates, which represent the extent that  MCOs reverse their decisions to deny certain services, and which can  indicate potential access problems. However, for the other states,  Arizona, Texas, and Tennessee, CMS only requires that they report a  summary of the types of complaints or grievances that consumers  identified about the program in a quarter, including any trends,  resolutions of complaints or grievances, and any actions taken or  planned to prevent other occurrences. In addition, CMS included  language in Texas that required the state to report on appeals, but not  necessarily appeals outcomes. A lack of specificity in the reporting  requirements may result in CMS not receiving necessary information  on beneficiary appeals and grievances. For example, CMS’s use of  such a broad reporting requirement yielded the following reporting  responses from the three states:
Arizona provided appeals and grievance summaries for two  specific programs, but not for the MLTSS population as whole.  CMS officials acknowledged that the grievance and appeals data  included in Arizona’s quarterly and annual reports were only for  those two programs, which aligned with reporting requirements in  the state’s special terms and conditions. CMS officials told us that  they can request additional reports from states at any time, but  they had not done so.
Texas did not require its MCOs to report appeals outcomes as of  April 2016. However, Texas officials indicated that as of  September 2016, they began to require MCOs to report appeals  outcomes.
Tennessee provided appeals data including appeals outcomes in  its quarterly report.
As noted earlier, a number of selected states examined MLTSS- related appeals and grievance data—including the rates and  categories of appeals and grievances by managed care plans, as well  as appeals outcomes—to identify potential areas for greater MCO  oversight. Even though the rates of appeals or grievances were  available in four of our selected states, CMS did not require any of the  states to report them. Furthermore, without requiring states to report  readily available information on the rates of appeals and grievances  and appeals outcomes, CMS may not be able to identify trends in  consumer complaints and denied appeals in a timely manner, and  may not be able to identify MCOs that may be inappropriately  reducing or denying services.
Example of One State’s Reporting  Requirements on Events That May Affect  Access to Care   Events occurring during the quarter or  anticipated to occur in the near future that  affect health care delivery, including but not  limited to: systems and reporting issues,  approval and contracting with new plans;  benefits; enrollment; grievances; proposed or  implemented  changes; quality  of care; changes in provider qualification  standards; access; proposed changes to  payment rates; health plan financial  performance and the implementation of  managed long-term services and supports,  that is relevant to the demonstration; pertinent  legislative activity; and other operational  issues.
We also found cases where CMS’s reporting requirements lacked detail,  which may have limited the usefulness of the information states provided  in certain sections of their reports. Although CMS required all of our  selected states to report on “events that may affect access to care” (see  sidebar), as well as quality assurance efforts, the requirements were  broadly written, and as such, they may not garner the information needed  for CMS to monitor access and quality. For example, CMS used the  same, or similar, statement to indicate that all states should report on  quality assurance efforts: “Identify any quality assurance and monitoring  activities in the quarter.” In response to this, we found that four states  reported general descriptions of their planned and ongoing quality  assurance activities for MLTSS or their comprehensive managed care  programs as a whole, and often repeated the same or similar information  in subsequent quarterly reports. For example, in Minnesota’s quarterly  reports, the state provided little information about its quality assurance  efforts other than a description of how the state has a team that meets  twice a year to review and analyze performance measure and  remediation data. Furthermore, the same information is repeated in  multiple quarterly reports.
The Centers for Medicare & Medicaid  Services’ (CMS) Onsite Review of  KanCare.  In response to hundreds of complaints from  beneficiaries, providers, and advocates voiced  directly to CMS between late 2015 and mid- 2016, in October 2016, the agency conducted  a detailed, on-site review of KanCare,  Kansas’s comprehensive managed care  program that includes managed long-term  services and supports (MLTSS). For this  review, CMS requested documentation from  the state beyond what the state is required to  report—such as managed care organization  (MCO) oversight policies and procedures. The  agency also reviewed information on specific  complaints, and met with state officials in  multiple state agencies to discuss overarching  concerns and to remediate individual  complaints.  As a result of this review, CMS found  systemic, longstanding program deficiencies  in Kansas’s state oversight that it had not  previously identified from the information  obtained through the state’s required  reporting. Specifically, CMS found that the  Kansas state agency was substantively out of  compliance with federal statutes and  regulations as well as with its approved state  plan, and that this noncompliance “placed the  health, welfare, and safety of KanCare  beneficiaries at risk and required immediate  action.” CMS also found that Kansas’s state  agency’s oversight of its MCOs had  diminished since the beginning of its  operation, that it did not seem to be analyzing  access to care reports, and that it did not have  a comprehensive system for reporting and  tracking critical incidents, among other issues.  As of July 2017, Kansas was implementing a  corrective action plan to address these issues. external quality review, CMS does not have one consistent approach for  monitoring MLTSS programs. Instead, CMS customizes its monitoring of  MLTSS to each state’s program to accommodate the variability among  MLTSS programs. The customized approach to monitoring is reflected  in the quarterly and annual reporting requirements in the program’s  special terms and conditions. When asked about differences in content  and specificity in reporting requirements for the same elements across  states, agency officials said that these differences could be partly due to  changes in the staff who write the reporting requirements. They also said  that terminology of requirements may evolve as state programs age with  later versions, reflecting more refined language. Also, states with more  recently approved programs may have requirements that reflect lessons  CMS staff has learned about the programs. However, any gaps in  reporting requirements, and gaps in state reporting from what CMS has  required, may mean that CMS does not always have the data to monitor  key aspects of MLTSS access and quality among selected states and  may be unable to reliably detect state or MCO practices that do not meet  CMS’s guidance. See sidebar for an example of how oversight of access  and quality is diminished when CMS does not obtain necessary  information.
The new 2016 managed care final rule will require states to report  annually on their managed care programs, beginning one year following  the release of new CMS guidance. The managed care rule specifies that  annual reports must include, among other things: appeals, grievances,  and state fair hearings; access and availability of services; MCO  performance on quality measures; and results of any corrective action  plans, sanctions, or other actions taken by the states. At the time of our  review, the specific requirements were not yet known, including whether  states would need to address MLTSS programs separately from  managed care programs for acute care services, which have different  networks of providers. As of July 2017, HHS had not yet issued guidance  clarifying the format of the annual reports.
section_title: Conclusions
paragraphs: Using managed care to deliver long-term services and supports offers  states an opportunity to allow Medicaid beneficiaries with significant  health needs to live and receive care in the setting of their choice, expand  access to home and community-based care, and provide such care at a  potentially lower cost than institutional care. Although states’ increasing  use of MLTSS can yield benefits for improved access to quality care, it  also heightens the importance of federal and state oversight, which is  critical to ensure that the potentially vulnerable populations served by  these programs—such as the elderly and adults with physical or  developmental disabilities—are able to obtain the care they need, when  they need it. States rely on MCOs to coordinate MLTSS care, but remain  responsible for monitoring beneficiaries’ access to and quality of care.  Along with the states, CMS plays an important role in establishing  requirements for MLTSS programs and overseeing states’ programs. To  monitor MLTSS programs, CMS relies in large part on states’ reports on  different aspects of their programs. CMS’s reporting requirements are  critical to CMS’s oversight because they establish the foundation for the  information CMS will receive about MLTSS programs and the  beneficiaries they serve. However, on the basis of our review, CMS’s  requirements for state reporting do not always include key elements  necessary for the agency to monitor certain key aspects of MLTSS  beneficiaries’ access and quality of care, including data related to appeals  and grievances, network adequacy, and critical incident tracking. As a  result, these requirements do not ensure CMS has information for all of  the key areas identified in its 2013 guidance for MLTSS. Without state  reporting requirements that provide CMS with necessary information on  MLTSS programs, CMS’s ability to monitor programs, identify potential  problems, and take action as needed, may be limited.
section_title: Recommendation
paragraphs: To improve CMS’s oversight of states’ MLTSS programs, we recommend  that the Administrator of CMS take steps to identify and obtain key  information needed to oversee states’ efforts to monitor beneficiary  access to quality services, including, at a minimum, obtaining information  specific to network adequacy, critical incidents, and appeals and  grievances.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to HHS for comment. In its comments,  which are reprinted in appendix II, HHS concurred with our  recommendation and described certain of its efforts to address it. HHS  also stated that it is in the process of reviewing its May 2016 Medicaid  managed care regulations in order to prioritize beneficiary outcomes and  state priorities, and will take our recommendation into consideration as  part of that review. HHS stated that it takes seriously its effort to oversee  access and quality in MLTSS programs and that it shares responsibility  with states to protect beneficiaries. HHS also provided technical  comments, which we incorporated as appropriate.
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If you or your staff members have any questions about this report, please  contact me at (202) 512-7114 or at iritanik@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff that made key contributions to  this report are listed in appendix III.
section_title: Appendix I: Characteristics of States’ MLTSS Programs Selected for Our Review
paragraphs: Our six selected states—Arizona, Delaware, Kansas, Minnesota,  Tennessee, and Texas—have managed long-term services and supports  (MLTSS) programs that varied across a number of characteristics, such  as program start year, cost, and enrollment. For example, the MLTSS  programs in Delaware and Kansas both began within the last five years,  while the MLTSS program in Arizona began over 25 years ago. In  addition, in 2015, total capitated payments to managed care  organizations (MCO) for MLTSS, as reported by the six states, ranged  from $438.9 million in Delaware to $3.6 billion in Texas. Also, the number  of MLTSS beneficiaries reported by the states ranged from 6,340  beneficiaries in Delaware to almost 98,000 beneficiaries in Texas. (See  table 2.) The number of beneficiaries in some programs has changed in  recent years. For example, between 2013 and 2015, Texas increased the  number of MLTSS beneficiaries by over 145 percent, after the state  expanded its community-based MLTSS program to rural areas in 2014  and began including beneficiaries receiving nursing facility care in the  program in 2015.
section_title: Appendix II: Comments from the Department of Health and Human Services
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Susan Barnidge and Leslie V.  Gordon (Assistant Directors), Shamonda Braithwaite, Robin Burke,  Caroline Hale, Corissa Kiyan-Fukumoto, and Laurie Pachter made key  contributions to this report. Also contributing were Vikki Porter and Emily  Wilson.