A Review of the Mississippi Division of Medicaid’s Non-Emergency Transportation Program
Executive Summary
Introduction
MISS. CODE ANN. Section 43-13-117 (1972) makes the Office of the Governor, Division of Medicaid responsible for providing non-emergency transportation (NET) for approved medical services to Medicaid beneficiaries who have no other means of transportation available.
In November 2006, the Division of Medicaid (DOM) outsourced the provision of non-emergency transportation services to LogistiCare Solutions LLC, a private, for-profit corporation. Subsequently, during the 2007 Regular Session, the Legislature mandated that PEER determine the impact of this new method of service delivery on the NET program’s costs and service quality.
Fieldwork Constraints
During the course of this review, PEER was confronted with two atypical problems that resulted in delays of the project’s completion:
Apparently, contractors who are concerned about their competitors obtaining their companies’ confidential information sometimes obtain protecting orders such as the one that affected progress of this project.
After PEER’s discussions with staff of both the Division of Medicaid and LogistiCare, involvement of the Attorney General’s Office, and PEER’s issuance of subpoenas for personal appearances and documents, LogistiCare expressed its willingness to work with PEER to provide an understanding of its contract with the division. PEER agreed to treat all protected health information as confidential and not to report any such information.
What is the Non-Emergency Transportation Services Program and how has service delivery changed since November 2006?
The Non-Emergency Transportation Services (NET) program is a federally mandated program for providing non-emergency transport to approved medical services for Medicaid beneficiaries who have no other means of transportation. Since November 2006, a private, for-profit organization has operated Mississippi’s NET program. This brokered arrangement offers the potential for greater cost stability, improved risk avoidance in a volatile operating environment, reduction in administrative costs, and improved fraud prevention procedures. Beneficiaries should experience no detectable changes in program operation.
To obtain the answer to this question, PEER addressed two related, more specific questions, each addressed below.
What is the Non-Emergency Transportation Services Program and who is eligible to receive services?
The Non-Emergency Transportation Services is a federally mandated program for providing non-emergency transportation for approved medical services to Medicaid beneficiaries who have no other means of transportation available.
Federal regulations allow states flexibility concerning how they will operate their NET programs. The Mississippi Division of Medicaid’s NET provider manual defines NET services as:
…medically necessary transportation for any beneficiary who has no other means of transportation available to any Medicaid-reimbursable service for the purpose of receiving treatment, medical evaluation, obtaining prescription drugs or medical equipment.
In Mississippi, to be eligible for NET services, a Medicaid beneficiary must be receiving covered services from a Medicaid-approved provider; have no other means of getting to and/or from the provider for a Medicaid-covered service; not have exceeded any service limits associated with the covered service; and not receive transportation services to medical services from any other source. Individuals in certain Medicaid-eligible categories (such as individuals with Medicare dual eligibility) are excluded from NET eligibility. As of June 2007, the number of eligible beneficiaries for the NET program in Mississippi was approximately 460,000.
What changes have occurred in service delivery since November 2006 and why did they occur?
From May 1998 to November 1, 2006, the Division of Medicaid operated the NET program as an in-house program. Since that time, LogistiCare Solutions, a for-profit corporation, has served as broker for the program.
The Division of Medicaid’s Previous In-House Operation of the NET Program
Under the Division of Medicaid’s in-house NET program, division officials established eligibility for service, retained service providers, scheduled trips, paid providers through a fiscal agent on a fee-for-service basis, and ensured service quality. The division operated the program under a 1915(b) waiver1 that allowed the state to claim transportation costs (payments to providers) at the Federal Medical Assistance Percentage (FMAP) match rate (the rate in Fiscal Year 2007 was 75.89%) and the costs of administering the program could be matched at the administrative match rate of 50%.
Factors Influencing the Division’s Change in Method of Service Delivery
Higher Federal Match Rate
Because of changes in federal law, by contracting with a broker to operate the NET program, the DOM is now able to claim administrative expenses for the NET program at a higher federal match rate than was previously available when the division operated the program in-house. The DOM can now claim all expenses at the higher FMAP rate, which for Mississippi for Fiscal Year 2008 is 76.29%.
Recommendations of Inspector General’s and PEER Committee’s Reports
A 1997 report by the federal Office of the Inspector General for the Department of Health and Human Services recommended that the states implement a brokered NET program. Also, a 2002 PEER Committee report recommended that the DOM make changes in the NET program to control costs.
Anticipated Opportunities to Stabilize or Reduce Costs and Improve Data Management
Although the division did not conduct a formal needs assessment or cost analysis prior to its decision to change the service delivery method, the Division of Medicaid asserts that contracting NET services to a private broker yields greater achievement of cost stability, a degree of risk avoidance in a volatile operating environment, a reduction in administrative costs, and an improved system for preventing fraud.
LogistiCare’s Provision of NET Services
LogistiCare is responsible for operating a NET call center, authorizing and coordinating medical transportation for qualified Medicaid beneficiaries; ensuring that the most economical mode of transportation is used and is appropriate to meet the medical needs of the beneficiary; contracting with and paying providers of transportation; monitoring providers; and assisting beneficiaries and providers with complaints or other issues regarding transportation.
The DOM pays the broker through a capitated arrangement, as the broker is paid a fixed rate for each eligible beneficiary, with a cap on the total program cost for each year. The broker pays the transportation providers from the funds it receives from the DOM (i. e., from the capped amount).
Comparison of In-House and Brokered Service Delivery Models for NET Services
The purpose and goal of the Medicaid NET program and Mississippi’s operation of it have not changed. Most beneficiaries would not notice a change in how the program is operated. A qualifying individual who needs the service still contacts the call center, is picked up by a contracted transportation provider and delivered to the medical service appointment, and is returned home by a provider.
The most notable difference in the two models is that under the previous arrangement, the DOM contracted with transportation providers directly and paid, through a fiscal agent, a fee-for-service amount. Now, the broker contracts with and negotiates the payment rate. The broker is responsible for obtaining transportation (rather than the DOM). Also, transportation providers do not have exclusive regions of service and must compete with other providers to contract with the broker.
How have the costs of providing NET services changed under brokered service delivery?
Using a conservative method of estimation, PEER projects that the Division of Medicaid’s brokered contract yielded $1.1 million in cost avoidance during the last eight months of FY 2007. In the future, such a contract should achieve at least a comparable amount annually.
To determine the difference in cost between the DOM’s in-house service delivery and the brokered method of service delivery, PEER compared actual costs of the brokered program to estimated costs the DOM would have incurred under the in-house program. PEER analyzed actual payments for the period November 1, 2006, to June 30, 2007, during which LogistiCare provided NET services. During this period, LogistiCare provided 471,258 trips to eligible NET beneficiaries. To establish an in-house basis for comparison, the DOM estimated the costs that the division would have incurred if it had paid transportation providers for the same number of trips at the in-house rates.
Exhibit A below summarizes the cost comparison of the two service delivery models. As shown in Exhibit A, payments to LogistiCare for NET services were greater than payments to NET providers would have been under the DOM in-house program. However, significant cost avoidance was realized by the elimination of the DOM’s NET administrative costs. As a result of contracting to broker NET services, the DOM avoided costs of approximately $1.1 million for the period November 2006 to June 2007.
| Actual Costs under LogistiCare- Administered NET Program | Estimated Costs under the DOM’s In-House Program | Estimated Cost Avoidance | |
| NET Transportation Payments | $18,445,984 | $18,155,588 | $(290,396) |
| Administration Costs | $0 | $1,534,605 | $1,534,605 |
| One-Time Implementation Costs | $180,000 | $0 | $(180,000) |
| Total | $18,625,984 | $19,690,193 | $1,064,209 |
SOURCE: PEER analysis of information provided by the Division of Medicaid.
NOTE: This exhibit shows the total of actual payments from the DOM to LogistiCare for operating the NET program from November 2006 through June 2007 and the estimate of what the DOM would have paid to transportation providers from November 2006 through June 2007 had the NET program remained in-house at the DOM, as well as the DOM’s estimates of administrative costs of the NET program during the eight-month period.
PEER believes that annual cost avoidance at least comparable to that amount should be achievable in the future. Future years’ cost avoidance would not include the one-time implementation costs, but would be reduced by the DOM’s contract monitoring costs, which PEER estimates to be at least $7,000 annually.
Is the broker rendering appropriate services under the current method of service delivery?
PEER found no basis for concern that service delivery of the NET program has suffered under the brokerage contract between the Division of Medicaid and LogistiCare. However, PEER notes minor administrative deficiencies regarding the accurate coding of denials and the validity of timeliness data that have not affected the delivery of services.
To obtain the answer to this question, PEER addressed several related, more specific questions, each addressed below. LogistiCare’s data system was able to provide reports directly targeted at the questions PEER posed. PEER’s analytic task was to determine whether it could sufficiently replicate these reports by using a sample of source data.
Due to time constraints, PEER chose exploratory purposive sampling as the most efficient method to test the reliability of LogistiCare’s data system. Purposive sampling is a sampling methodology by which items are selected based on the purpose of the study. Although purposive sampling does not allow researchers to project the sample’s findings to the body of information sampled, it does allow researchers to study aspects of the sampled material. In this case, the use of purposive sampling allowed PEER to review information relating to denials, timeliness of services, provider payment, and complaints to ensure that LogistiCare’s stated policies and procedures were in fact in place and operational. PEER utilized varying ranges of dates chosen to yield the most viable information for the records under analysis.
Does LogistiCare arbitrarily deny transportation services to NET beneficiaries?
PEER found no evidence of arbitrary denial of transportation services to NET beneficiaries.
From November 2006 to August 2007, LogistiCare approved 98.2% of the trips requested. The remaining trips were denied based on reasons authorized in the DOM’s provider manual.
PEER’s exploratory sample provided no basis for challenging LogistiCare’s reported adherence to provisions of the Division of Medicaid’s NET provider manual regarding service denial. However, PEER noted problems with LogistiCare’s data system coding that did not affect eligibility or cause denials of service (see page 21 of the report).
Does LogistiCare provide transportation services in a timely manner?
Based on PEER’s exploratory sample, LogistiCare’s providers have delivered beneficiaries to appointments for approved medical services in a timely manner. However, ambiguities in the provider manual and in LogistiCare’s procedures allow for the possibility that reported timeliness information might not be accurate.
Although PEER’s exploratory sample found that LogistiCare’s providers were not as timely in picking up beneficiaries as in dropping them off for their appointments for approved medical services, the sample rates were generally comparable. Since drop-offs represent the time the beneficiary arrived at the approved destination, PEER chose not to challenge LogistiCare’s reported adherence to policy regarding service timeliness.
However, LogistiCare’s requirement that the beneficiary sign a transportation log does not clearly constitute a certification that services were rendered at the times recorded on the log (see page 24 of the report).
Does LogistiCare pay transportation providers in a timely manner to help assure adequate provider participation?
PEER’s exploratory sample found no basis for challenging LogistiCare’s reported adherence to the provider manual regarding timely payments to transportation providers.
In addition to providing reasonable customer service to beneficiaries, prompt payment of transportation providers is necessary to ensure an adequate number of providers, which in turn is necessary for operating an effective statewide program.
Under the DOM’s NET Provider Policy Manual, the broker is to pay ninety-nine percent of all “clean claims” within ninety days following receipt. A “clean claim” is one that can be processed without additional information from the provider or a third party.
From November 2006 through August 2007, LogistiCare paid over 484,000 clean claims to transportation providers. According to information provided by LogistiCare, the company exceeded the requirements of the provider manual by paying 99.997% of clean claims within ninety days of receipt.
Does the complaints process reveal any problems with service quality not revealed by LogistiCare’s reports or PEER’s exploratory review of records?
PEER’s analysis of the complaints process does not reveal any concerns regarding service quality that conflict with LogistiCare’s reports or PEER’s exploratory sample.
As with all services, complaints are received regarding the NET program. From January 2007 through July 2007, LogistiCare’s complaint rate regarding the NET program was approximately three-tenths of one percent for all trips.
According to PEER’s review of the records of complaints received between May and August 2007, LogistiCare maintained adequate records to investigate complaints and followed appropriate procedures in receiving and investigating complaints.
How has the Division of Medicaid assured that the broker has provided appropriate and timely service delivery?
Although the DOM’s state plan for the NET program notes that the broker will be subject to regular auditing and oversight to ensure the quality of transportation services provided and the adequacy of beneficiary access to medical care and services, the Division of Medicaid did not implement formal, documented quality assurance processes until the contract had been in effect for a full year.
Federal requirements mandate that the states ensure the quality of NET services through auditing and oversight. When questioned by PEER, DOM officials stated they were performing informal monitoring procedures (e. g., reviewing LogistiCare-generated management reports and noting areas of concern).
Recommendations
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1 Under Section 1915(b) of the Social Security Act, the Health Care Financing Administration [now CMS] may grant waivers to allowed states to restrict freedom of choice of providers, selectively contract with certain providers, and operate their programs differently in different areas of the state. States can claim a 1915 (b) waiver to operate all or part of the NET program under the state’s plan as a medical expense and restrict statewide scope, comparability, and freedom of choice.