907 KAR 1:705. Demonstration project: services provided through regional managed care partnerships (1115 Waiver).

907 KAR 1:705. Demonstration project: services provided through regional managed care partnerships (1115 Waiver).

RELATES TO: KRS 205.520, 205.6334

STATUTORY AUTHORITY: KRS Chapter 47, Appendix A, Part 1, Sec. G, GB, 51b, 194A.025(1), 194A.030(2), 194.050(1), 205.520(3) 205.6320, 205.6332, 205.6334, 205.6336, 205.8453, 42 U.S.C. 1315, EO 2004-726

NECESSITY, FUNCTION, AND CONFORMITY: EO 2004-726, effective July 9, 2004, reorganized the Cabinet for Health Services and placed the Department for Medicaid Services and the Medicaid Program under the Cabinet for Health and Family Services. The Cabinet for Health and Family Services, Department for Medicaid Services, has the responsibility to administer the Medicaid Program. KRS 205.520(3) empowers the cabinet, by administrative regulation, to comply with any requirement that may be imposed or opportunity presented by federal law for the provision of medical assistance to Kentucky's indigent citizenry. This administrative regulation sets forth the terms and conditions under which the Department for Medicaid Services shall provide Medicaid services pursuant to a waiver granted by the Secretary, United States Department of Health and Human Services following a request made by the department pursuant to KRS 205.6334. The waiver provides for the development of a statewide system of capitated, comprehensive risk managed care partnerships and establishes standards for access and quality in accordance with KRS 205.6320.

Section 1. Definitions. (1) "Behavioral health services" means clinical, rehabilitative, and support services in inpatient and outpatient settings to treat a mental illness, emotional disability, or substance abuse disorder.

(2) "Capitation payment" means the total per member, per month payment amount.

(3) "Department" means the Department for Medicaid Services or its contractor.

(4) "Emergency care" means care for a condition as defined in 42 U.S.C. 1395dd.

(5) "Encounter" means a health care contact or service delivered by a health care provider in a partnership to a member.

(6) "Family planning services" means counseling services, medical services, and pharmaceutical supplies and devices to aid those who decide to prevent or delay pregnancy.

(7) "Maternity care" means prenatal, delivery, postpartum and complications of delivery care.

(8) "Medical detoxification" means management of symptoms during the acute withdrawal phase from a substance to which the individual has been addicted.

(9) "Member" means a Medicaid recipient who is enrolled in a partnership plan.

(10) "Partnership" means an entity that meets the criteria as established in Section 5 of this administrative regulation, and under contract with the department in accordance with KRS Chapter 45A, agrees to provide, or arrange for the provision of, health services to members, on the basis of prepaid capitation payments.

(11) "Partnership region" means a grouping of counties designated by the department as a geographical coverage area of a partnership health plan in Kentucky.

(12) "Primary care provider" means a licensed or certified health care practitioner who meets the description as established in Section 3(2) of this administrative regulation.

(13) "Recipient" means an individual who is eligible to receive Medicaid services.

(14) "Rural area" means those areas outside of the urban areas.

(15) "Urban area" means a metropolitan statistical area, as designated by the U.S. Office of Management and Budget, which contains an urban nucleus of at least 50,000 population, along with adjacent counties which have a high degree of economic and social ties, for a total metropolitan population of at least 100,000.

(16) "Urgent care" means care for a condition not likely to cause death or lasting harm but for which treatment should not wait for a normally scheduled appointment.

Section 2. General. (1) The department shall implement, within the Medicaid Program, a prepaid capitation managed care system to be known as the Kentucky Health Care Partnership Program. Partnerships shall be implemented and administered in accordance with the terms and conditions of the waiver granted by the Secretary, United States Department of Health and Human Services under the authority granted by 42 U.S.C. 1315.

(2) The Kentucky Health Care Partnership Program shall be implemented incrementally beginning in two (2) partnership regions. The department shall not initiate a competitive bid in any partnership region prior to January 1, 1999, except in a partnership region where an operational partnership is dissolved or is terminated. After this date, the Cabinet for Health and Family Services may arrange for the provision of Medicaid services as established in subsection (1) of this section.

Section 3. Recipient Participation. (1) Recipients required to participate in partnerships, unless excluded as established in Section 4 of this administrative regulation, shall include individuals who would have been eligible to receive Aid to Families with Dependent Children (AFDC) and Medicaid in accordance with AFDC requirements as in effect as of July 16, 1996, as subsequently amended in accordance with 42 U.S.C. 1396u-l, and individuals who are eligible to receive Medicaid under the following Medicaid categories:

(a) Children and family related;

(b) Aged, blind, and disabled Medicaid only;

(d) Poverty level pregnant women and children;

(e) State supplementation for aged, blind, and disabled;

(f) Supplemental security income (SSI);

(g) Each child under the age of twenty-one (21) years and in a psychiatric residential treatment facility (PRTF);

(h) Each child under the age of eighteen (18) years, placed in foster care as defined in 907 KAR 1:011 and under supervision of a Kentucky public or private child welfare agency shall be phased into the Partnership Program as a plan of care for the child is developed and implemented by the partnership; and

(i) Each child under the age of eighteen (18) years, adopted and has special needs shall be phased into the Partnership Program as a plan of care for the child is developed and implemented by the partnership.

(2) A member shall be allowed to select, from at least two (2) primary care providers serving the member's assigned partnership, one (1) of which shall be a physician, a primary care provider who shall:

(a) Be a licensed or certified health care practitioner, including a doctor of medicine, doctor of osteopathy, advanced registered nurse practitioner, including a nurse practitioner, nurse midwife and clinical specialist, physician assistant, or clinic, including a primary care center and rural health clinic, that functions within the scope of licensure or certification;

(b) Have admitting privileges at a hospital or a formal referral agreement with a provider possessing admitting privileges;

(c) Agree to provide twenty-four (24) hours a day, seven (7) days a week primary health care services to individuals; and

(d) For a member who has gynecological or obstetrical health care needs, disabilities or chronic illness, be a specialist who agrees to provide or arrange for all appropriate primary and preventive care directly or through linkage with a primary care provider.

(3) The primary care provider voluntarily selected by the member shall be a primary care provider who participates in the member's assigned partnership.

(4) If voluntary selection of a primary care provider is not made by the member, the member's partnership shall assign the member to a primary care provider who:

(a) Has historically provided services to the member and meets the criteria of subsection (2) of this section and is a participating provider in the member's assigned partnership;

(b) Participates in the partnership and is within thirty (30) miles or thirty (30) minutes from the member' residence or place of employment in an urban area or within forty-five (45) miles or forty-five (45) minutes from the member's residence or place of employment in a rural area; or

(c) If there is no participating primary care provider that meets the criteria listed in paragraphs (a) and (b) of this subsection, participates in the partnership in a county adjoining the member's county of residence or within the partnership region or an adjoining region.

(5) Upon request of the member or the member's primary care provider, the partnership may reassign the member to another participating primary care provider who meets the criteria in subsection (2) of this section following the completion of the member's due process and appeal procedures in accordance with KRS Chapter 13B.

(6) A member shall have an initial six (6) months guaranteed eligibility to receive partnership services regardless of loss of eligibility for Medicaid during the six (6) month period, except in circumstances set forth in subsection (10)(a) of this section, provided the member resides in a partnership region and is not an inmate in a penal institution in accordance with 907 KAR 1:011.

(7) Upon enrollment in a partnership, a member shall have the right to change the primary care provider after the initial visit and once a year regardless of reason, and at any time for any reason as approved by the member's partnership.

(8) A member who receives health services from providers not participating with the member's assigned partnership without prior approval of the partnership or the department in accordance with complaint, grievance and appeal rights in Section 9 of this administrative regulation shall be responsible for the payment of expenses incurred except for emergency services provided in accordance with 42 CFR 431.52.

(9) Only the department shall have the authority to disenroll a member from a partnership pursuant to this subsection and subsections (10) and (11) of this section and 907 KAR 1:675. Disenrollment of members shall:

(a) Become effective on the first day of the month following the disenrollment procedure; and

(b) Occur if the member:

1. No longer resides in the assigned partnership region;

2. Becomes incarcerated or deceased;

3. Resides in a nursing facility for more than thirty-one (31) days; or

4. No longer qualifies for partnership services under one (1) of the aid categories as provided in subsections (1) and (6) of this section.

(10) A partnership may recommend to the department that a member be disenrolled, if the partnership becomes aware that a member:

(a) Is found guilty of fraud in a court of law or administratively determined to have committed fraud related to the Medicaid Program;

(b) Is abusive or threatening as defined by and reported in accordance with the Guidelines for Preventing Workplace Violence for Health Care and Social Service Workers;

(d) No longer resides in the assigned partnership region or Kentucky.

(11) A member shall not be disenrolled by the department, nor shall the partnership recommend disenrollment of a member due to adverse changes in a member's health.

(12) For purposes of selecting a primary care provider, filing complaints, grievances or appeals, and otherwise acting on behalf of the child in interactions with a partnership, a parent, custodial parent, person exercising custodial control or supervision, or an agency with legal responsibility for a child by virtue of voluntary commitment or emergency or temporary custody orders shall be allowed to act on behalf of a child member, prospective member, or former member. A legal guardian appointed pursuant to KRS 387.500 to 387.770 shall be allowed to act on behalf of a ward as defined in that statute, and a person authorized to make health care decisions pursuant to KRS 311.629 and 311.631 shall be allowed to act on behalf of a member, prospective member, or former member.

(13) A member, as specified in subsection (1)(h)(i) of this section, shall be phased into the Partnership Program as a plan of care for the member is developed and implemented by the partnership.

Section 4. Recipient Exclusions. A recipient may be excluded from participation in partnerships if he is required to spend down to meet eligibility income criteria or is an individual who is:

(1) Medicaid eligible and have been in a nursing facility as defined in 907 KAR 1:022 for more than thirty-one (31) days;

(2) Determined eligible for Medicaid due to a nursing facility admission;

(3) Served under the alternative intermediate services for individuals with mental retardation or developmental disabilities (AIS-MR-DD) waiver as defined in 907 KAR 1:140, home and community based waiver in accordance with 907 KAR 1:160, or for a recipient who is continuously ventilator dependent, but not residing in a nursing facility or served through a home and community based waiver;

(4) Receiving benefits only as qualified Medicare beneficiaries (QMBs), specified low income Medicare beneficiaries (SLMBs) or qualified disabled working individuals (QDWIs);

(5) In an intermediate care facility for mentally retarded (ICF-MR);

(6) In a psychiatric facility, excluding a PRTF; or

(7) Excluded from the Partnership Program by the department for cause.

Section 5. Partnership Requirements. Each partnership shall:

(1) Be a coalition of consumers and health care providers in both the public and private sectors.

(2) Be licensed, or contain an entity that shall be licensed with, and meet minimum requirements of the Kentucky Department of Insurance as a provider sponsored integrated health delivery network in accordance with KRS 304.17A-300, or a health maintenance organization in accordance with KRS 304.38;

(3) Meet requirements established by KRS 304.17A-110(3);

(4) Meet requirements established by 42 CFR 417.479 and 434.44 through 434.70;

(5) Meet requirements related to fiscal solvency and accessibility in accordance with 42 U.S.C. 1396b, including maintenance of an adequate number of health care providers to provide covered services to its members as required by Section 7(1) of this administrative regulation;

(6) Establish a governance body, or board of directors, that shall:

(a) Assume responsibility for establishing and implementing policies and procedures regarding health services delivery to members of the partnership;

(b) Broadly represent the partnership region's health services providers, including currently enrolled Medicaid providers and other providers, including hospitals, primary care providers, specialty providers, nonphysician health professionals, dentists, primary care centers, public health departments, and the University of Louisville and University of Kentucky medical centers for regions in which they are located;

(c) Include at least four (4) consumer representatives who shall be members of the partnership and represent each of the following categories of Medicaid recipients:

1. Children and family related;

2. Children with special health care needs;

3. Aged; and

4. Disabled or blind adults.

(d) Be approved, in terms of composition as established by paragraphs (b) and (c) of this subsection, by the department.

(7) Demonstrate adequate protection against insolvency by establishing and maintaining an insolvency reserve equal to the amount of the partnership's net worth determined in accordance with specifications for a provider-sponsored integrated health delivery network set forth in KRS 304.17A-310. A partnership's reserve requirement shall be:

(a) Reduced by up to fifty (50) percent of an amount equal to the anticipated cost of health care services to be provided by hospitals that execute contracts with the partnership that contain requirements for continuation of services to members following partnership insolvency until the end of the period for which Medicaid capitation payments were received by the partnership.

(b) Met by any one (1) or a combination of the following methods:

1. Establishing an insolvency reserve in the amount of the partnership's net worth as specified in this subsection;

2. Maintaining insolvency insurance that shall be obtained through a reinsurer approved by the department and shall provide coverage for expenses incurred for members' health services from the date of insolvency until the end of the period for which Medicaid capitation payments were received by the partnership;

3. Providing the department with a bank letter of credit for an amount up to fifty (50) percent of the insolvency reserve amount; or

4. Providing a written guarantee to the department for the insolvency reserve amount from a regulated guarantor or provider sponsor or sponsors if the sponsor or sponsors restrict a portion of their assets equivalent to the value of the expenses or required reserves that the sponsor agrees to cover.

(8) Be required to:

(a) Submit monthly financial statements to the department within forty-five (45) days of the end of each month during the first year of operation and on a quarterly basis, or as designated by the department, thereafter. The financial statement shall include:

1. A balance sheet;

2. A statement of revenue and expenses;

3. Changes in partnership plan equity;

4. A certification statement; and

5. Other financial reports relating to financial conditions and status.

(b) File a financial disclosure report, as required by the Health Care Financing Administration and pursuant to 42 CFR Part 455, with the department within 120 days of the end of the contract year and within forty-five (45) days of entering into, renewing, or terminating any transaction with an affiliated party;

(c) Make available all books, records, and information related to member services and financial transactions of the partnership for review, inspection, auditing, and photocopying by authorized federal and state agency reviewers and auditors. The books, records, information, and partnership staff shall be available upon request of these reviewers and auditors during routine business hours at the place of operations;

(d) Maintain all books, records, and information related to partnership providers, members and member services and financial transactions for a minimum of five (5) years in accordance with 907 KAR 1:672, Section 4(3) and (4), and for any additional time period as required by federal and state laws; and

(e) Immediately notify the department of anticipated or projected failure to meet partnership financial insolvency reserve requirements as established in subsection (7) of this section.

(9) Be required to cooperate with the department, Office of the Inspector General within the Cabinet for Health and Family Services, and the Office of the Attorney General, in the control of fraud and abuse related to the medical assistance program as defined in KRS 205.8451 and in accordance with KRS 205.8453 and 194.030, Section 12, as required by Section 1128A-7(b)(11) of the Social Security Act, 42 CFR 455.21 and 42 CFR 1001.1301.

(10) Include specified providers in the partnership network or submit for the department's approval, documentation which establishes that services and service sites, as required by Section 7(6) of this administrative regulation, shall adequately meet the needs of members if the specified providers are not included in the network. These providers shall include:

(a) Teaching hospitals located in the partnership region;

(b) Primary care centers, including federally qualified health centers and rural health clinics, that serve the partnership region;

(d) Public health departments that serve the partnership region.

(11) Use public health departments in the partnership network to:

(a) Provide at least the direct access services as established in Section 7(5)(a), (b), (f), and (g) of this administrative regulation;

(b) Collaborate in assessment of the health and health care needs of the member population and partnership region;

(d) Serve on the partnership governance body as established in subsection (6)(b) of this section and on the quality and access recipient advisory committee as established in Section 10(1)(c) of this administrative regulation.

(12) If a partnership as defined in Section 1(10) of this administrative regulation is not established in a partnership region and the Cabinet for Health and Family Services arranges for the provision of health services through a partnership formed as a result of the competitive bid process in accordance with KRS Chapter 45A, the resultant partnership shall meet all requirements as established in this administrative regulation except for requirements specified in subsections (1) and (6)(b), (c), and (d) of this section.

(13) Be required to establish a program integrity (fraud) unit to identify and refer to the Cabinet for Health and Family Services, Office of Inspector General any suspected fraud activities concerning the health care services of members. The functions of this unit shall include, but not be limited to, the following:

(a) Identify Partnership Program vulnerabilities;

(b) Take appropriate remedial action; and

(c) Report actions taken concerning identified situations involving possible fraud to the Cabinet for Health and Family Services, Office of Inspector General.

(14) Public requests for financial information concerning partnership operations shall be submitted to the department.

Section 6. Partnership Payments. (1) The department shall provide each partnership a per month, per member capitation payment, except as established in subsection (2) of this section, whether or not the member receives services during the period covered by the payment. The payment shall be based on a standard rate setting methodology that complies with the Health Care Financing Administration's upper payment limit requirements. The department's rates negotiated with the partnership in accordance with KRS Chapter 45A shall be based on computations of a certified actuary using national actuarial standards, principles and appropriate actuarial factors which may include category of aid, geographic area, category of service and other demographic and administrative factors such as age, gender, and service trends. The payment shall be adjusted by the department if the scope of Medicaid services is increased or decreased as mandated by Health Care Financing Administration. Written notification of any increase or decrease in coverage shall be provided to the partnership by the department prior to implementation.

(2) The department may also contract with a partnership for payment of Medicaid services provided to recipients prior to the actual enrollment of these individuals in the partnership on a capitated or other basis as part of the partnership contract, or for other Medicaid services as designated by the department in accordance with KRS Chapter 45A.

(3) If a member's total acute care hospital costs exceed $75,000 in one (1) contract year, the department shall provide, upon request of the responsible partnership, seventy-five (75) percent of the costs over this threshold, and the partnership shall provide the remaining twenty-five (25) percent of the costs.

(4) The department shall provide financial incentive payments to partnerships upon achievement of health care outcomes as specified in Section 10(1)(a)2 of this administrative regulation. These outcomes shall be selected in collaboration with each partnership and based upon the demographic characteristics and health status of members in the partnership region. The incentive payment shall be an amount up to one (1) percent of the capitation payment and made annually by the department.

(5) Payment provisions established in Medicaid payment administrative regulations 907 KAR Chapters 1 and 3, shall not be applicable for partnership services.

Section 7. Covered and Noncovered Services Under Partnerships. (1) Each partnership shall provide, or arrange for the provision of, medically necessary health services, including emergency services as established in subsection (2) of this section, to the extent the services are covered, for recipients under the Kentucky State Medicaid Plan, as established by 907 KAR Chapter 1 and 907 KAR 3:005, and as required by federal and state laws. The department shall consider medically necessary health services as those which are reasonable and necessary to diagnose and provide preventive, palliative, curative or restorative treatment for physical or mental conditions in accordance with professionally recognized standards of health care generally accepted at the time services are provided, in accordance with 42 CFR 440.230 and including services for children authorized under 42 U.S.C. 1396d(r). The department shall provide a listing of these services, including services of federally qualified health centers (FQHCs), public health departments and the Commission for Children with Special Health Care Needs, to each partnership.

(2) Emergency care services provided to members shall be covered by each partnership even though the services may be received outside the member’s regional partnership in accordance with 42 CFR 431.52.

(3) Medical detoxification services shall be covered by partnerships for members.

(4) Partnerships shall not be required to provide, or arrange for the provision, of:

(a) Health care services to any member who resides in a nursing facility after disenrollment from the partnership.

(b) Behavioral health services except for those psychiatric services covered for current enrolled, nonpsychiatrist Medicaid physicians and as established in subsection (3) of this section;

(c) School-based health services for members aged three (3) to twenty-one (21) years, as determined eligible under provisions of 20 U.S.C. Chapter 33, and in accordance with 707 KAR Chapter 1; and

(d) Early intervention program services for members age birth to three (3) years as determined eligible under the provisions of 908 KAR 2:120, Section 2.

(5) The following covered services within a member's partnership, and others as designated by individual partnerships or the department, shall be accessible to a member without referral from the primary care provider:

(a) Immunizations to members under twenty-one (21) years of age;

(b) Maternity care for members under eighteen (18) years of age in accordance with KRS 214.185;

(d) Primary care vision services and fitting of eyeglasses provided by ophthalmologists, optometrists, and opticians;

(e) Screening, evaluation, and treatment for sexually transmitted diseases, tuberculosis, and other communicable diseases as defined by 902 KAR 2:020;

(f) Testing for Human Immunodeficiency Virus (HIV) and other HIV related conditions; and

(g) Voluntary family planning in accordance with federal and state laws and judicial opinions.

(6) Partnerships shall make services, service locations, and services sites available and accessible in terms of timeliness, amount, duration, and personnel sufficient to provide, or arrange for the provision of, all covered services on an emergency or urgent care basis, twenty-four (24) hours a day, seven (7) days a week. This shall include:

(a) Primary care delivery sites:

1. That are no more than thirty (30) miles or thirty (30) minutes from members in urban areas, and for members in rural areas, no more than forty-five (45) minutes or forty-five (45) miles from residence or place of employment.

2. With member to primary care provider ratios not to exceed 1500:1.

3. With appointment and waiting times, not to exceed thirty (30) days from date of a member's request for routine and preventive services and forty-eight (48) hours for urgent care.

(b) Specialty care. Referral appointments to specialists, except for specialists providing behavioral health services, shall not exceed thirty (30) days for routine care or forty-eight (48) hours for urgent care. Specialists shall be available for subpopulations designated in Section 10(1)(a)4 of this administrative regulation and include sufficient pediatric specialists to meet the needs of members under twenty-one (21) years of age.

(c) Emergency care. All emergency care shall be provided immediately, at the health care facility most suitable for the type of injury, illness or condition, regardless of contracts.

(d) Hospitals. Except as provided by subparagraphs 1 and 2 of this paragraph, transport time shall not exceed thirty (30) minutes.

1. In rural areas, transport time shall:

a. Not exceed sixty (60) minutes; or

b. Be equivalent to that of recipients residing in a partnership region but not served by the partnership.

2. Transport time to physical health services associated with behavioral health and physical rehabilitative services shall not exceed sixty (60) minutes.

3. Exceptions established by this paragraph shall be justified and documented by the partnership.

(e) General dental services.

1. Transport time shall not exceed one (1) hour except as provided by subparagraph 2 of this paragraph.

2. In rural areas, transport time shall be equivalent to that of recipients residing in a partnership region, but not served by the partnership.

3. Exceptions established by this paragraph shall be justified and documented by the partnership.

4. Appointment and waiting times shall not exceed three (3) weeks for regular appointments and forty-eight (48) hours for urgent care.

(f) General vision, laboratory and radiology services.

1. Transport time shall not exceed one (1) hour except as provided for in subparagraph 2 of this paragraph.

2. In rural areas, transport time shall be equivalent to that of recipients residing in a partnership region but not served by the partnership.

3. Exceptions established in this paragraph shall be justified and documented by the partnership.

4. Appointment and waiting times shall not exceed three (3) weeks for regular appointments and forty-eight (48) hours for urgent care.

(g) Pharmacy services.

1. Transport time shall not exceed one (1) hour except as provided by subparagraph 2 of this paragraph.

2. In rural areas, transport time shall be equivalent to that of recipients residing in a partnership region, but not served by the partnership.

3. Exceptions established by this paragraph shall be justified and documented by the partnership.

(h) Other services. Transport time to all covered services not specified in paragraphs (a) through (g) of this subsection shall be equivalent to that of recipients residing in the partnership region, but not served by the partnership.

(7) If a partnership fails to meet access standards as established in subsection (6) of this section, the partnership shall be required to submit a corrective action plan for approval by the department prior to implementation of the plan in order to improve members' access to services.

Section 8. Partnership Internal Grievance Procedure. (1) The partnership shall have an internal grievance procedure in place to resolve members' complaints with respect to health care services provided to them.

(2) The partnership grievance procedure shall be subject to approval by the department, and shall include the following components:

(a) Established written policies and procedures for the receipt, handling and disposition of complaints and grievances which shall:

1. Be approved by the partnership's governance body or board of directors;

2. Provide for participation in the process of individuals with authority to require corrective action;

3. Include a routine process for evaluation of patterns of complaints and grievances for impact on partnership policy and procedures;

4. Establish procedures for maintenance of records of complaints, grievances and appeals separate from member medical records;

5. Inform members and subcontractors about internal and state agency complaint, grievance and appeal processes;

6. Provide members with assistance in filing complaints and grievances, if the member requests assistance; and

7. Include assurances that there shall be no discrimination against a member solely on the basis that the member filed a grievance or made a complaint.

(b) An informal complaint process;

(d) A procedure for logging and reporting on all complaints and grievances filed; and

(e) A time frame for resolution of complaints or grievances of:

1. An urgent nature, that is complaints and grievances relating to matters which could place the member at risk or which could seriously jeopardize the member's health or well being, within forty-eight (48) hours or less; and

2. Nonurgent nature, within thirty (30) days of the initial filing.

(f) A method for informing all members of the grievance procedures verbally and in writing.

(3) Each partnership shall submit a quarterly report of member complaints and grievances to the department.

Section 9. Complaint, Grievance and Appeal Rights. (1) If dissatisfied with any actions taken with respect to:

(a) Health care services, involving denial, reduction or termination of partnership services, members shall be entitled to a complaint, grievance or appeal with either their respective partnerships, or the department, to be conducted in accordance with 907 KAR 1:560 provided that partnerships and the department process complaints, grievances or appeals in a time frame that shall not place the member at risk or seriously jeopardize the member's health or well being.

(b) Actions of the department, partnerships, or participating providers, members shall be entitled to a complaint, grievance or appeal with either their respective partnerships, or the department, to be conducted in accordance with 907 KAR 1:560.

(2) Members shall be informed in writing of their rights and procedures for due process by the:

(a) Partnership at the time of enrollment and following any denial, reduction or termination of services;

(b) Department upon Medicaid application and at any time there is a change in eligibility status; and

(3) The department shall establish and maintain:

(a) A toll-free telephone number for members who seek prompt responses to questions regarding Medicaid services and resolution of verbal complaints about partnership services; and

(b) A procedure for logging and reporting to the quality and access recipient advisory committee and to the department, the management of all complaints and grievances filed.

(4) The Cabinet for Health and Family Services shall operate, either directly or by contract in accordance with KRS Chapter 45A, a Medicaid managed care ombudsman function, independent of the department and partnerships, to assist members who request assistance. The Medicaid managed care ombudsman shall perform the following functions on behalf of partnership members:

(a) Assist members in filing grievances and appeals through partnership or department grievance, appeal or hearing procedures;

(b) Identify, investigate and resolve member complaints about health care services under the Partnership Program;

(d) Educate consumer organizations that inquire about managed care and the Partnership Program; and

(e) Provide information and referral services to members as necessary to perform functions as established in this subsection.

Section 10. Quality Improvement. (1) The department shall:

(a) Establish a quality improvement program which evaluates, on a continuing basis, access, continuity of care, health care outcomes, and services provided, or arranged for, by partnerships to members. The evaluation shall be based on information related to the partnership population and shall address the following subjects:

1. The quality improvement program of the partnership as established in subsection (4) of this section.

2. Health care outcomes, including members' risk factors, functional status, morbidity and mortality, readmission to health care facilities, satisfaction with care, and effect of education programs. The health care outcomes shall be based on the performance indicators and standards set forth in specified portions of the Health Plan Employer and Data Information Set (HEDIS). To achieve these health outcomes, the department shall develop a list of benchmarks for which financial incentive payments may be received by the partnership and a list of benchmarks that partnerships shall be required to meet or show progress toward meeting. The lists of incentive benchmarks shall be provided by the department in collaboration with each partnership on an annual basis.

3. Utilization of all health care services in all settings provided by the partnership and its subcontractors;

4. Services and health care outcomes of all subpopulations, including member's category of Medicaid, type of disability and chronic illness, race, ethnicity, gender and age;

5. Access to and coordination of care based on requirements as established in Section 7(6) of this administrative regulation;

6. Clinical treatments and procedures that are high risk to members which are demonstrated through morbidity and mortality data;

7. Adverse incidents, including complications and iatrogenic disease;

8. Member and provider satisfaction; and

9. Early and periodic screening, diagnosis and treatment (EPSDT) services as defined in 907 KAR 11:034.

(b) Establish a quality improvement advisory council, composed of individuals who represent:

1. Behavioral health providers;

2. Kentucky Commission for Children with Special Health Care Needs;

3. Medicaid recipients and advocates;

4. Health care practitioners;

5. Health care researchers;

6. Hospitals;

7. Public health departments;

8. Quality assurance experts; and

9. Rural health centers.

(c) Establish a quality and access recipient advisory committee composed of public health representatives and Medicaid recipients and advocates; and

(d) Collect reports and encounter data from partnerships for quality improvement in the Medicaid population and subpopulations as specified in paragraph (a)4 of this subsection. These reports and data shall include at least the following:

1. A quality improvement plan;

2. Health care outcomes as specified in paragraph (a)2 of this subsection;

3. Access to services and providers, including the services and providers for subpopulations as specified in paragraph (a)4 of this section;

4. Member and partnership provider satisfaction information, including number, type and resolution of complaints, grievances and appeals;

5. Utilization of services in all settings, including acute care hospital, ambulatory, emergency and urgent care, perinatal, EPSDT, behavioral health and pharmacy services, by member's category of Medicaid and type of disability or chronic illnesses;

6. Health education program participation by members;

7. Clinical studies related to primary health care and chronic illness;

8. Adverse health care incidents; and

9. Continuity of care, including coordination of physical and behavioral health services.

(2) The department's quality improvement advisory council shall:

(a) Advise the department about and recommend standards for the department's quality improvement and access plan;

(b) Advise the department about the selection of quality indicators, benchmarks and health care outcomes to monitor in partnerships;

(c) Review and make recommendations to the department about trends related to utilization of and access to services, findings from quality improvement studies, and member and partnership provider grievances; and

(d) Advise partnerships on quality improvement initiatives and studies.

(3) The department shall annually conduct an external retrospective medical audit based on reports and health services data received from partnerships which evaluates:

(a) Acute care hospital, ambulatory and emergency care;

(b) Access to care based on requirements as established in Section 7(6) of this administrative regulation; and

(4) Each partnership shall:

(a) Establish a quality improvement program which continually evaluates access to care, continuity of care, health care outcomes and services provided, or arranged by, the partnership. The quality improvement program shall be approved on an annual basis by the department. Modifications to the program shall be approved in writing by the department. Functions of the program shall include:

1. Monitoring and evaluation of access and continuity of care, including partnership provider ratios, points of access to specialists, distance to care and waiting periods for services as established in Section 7(6) of this administrative regulation, and appropriate physical and language support in accordance with 20 U.S.C. Chapter 33;

2. Monitoring and evaluation of procedures and criteria to credential and recredential partnership providers on a biennial basis. The criteria shall include verification of individual provider's:

a. License or certificate to practice;

b. Drug Enforcement Administration (DEA) number or certificate;

c. Graduation from medical school and completion of a residency, or accredited nursing, dental or vision program;

d. Professional board certification, eligibility for certification, or graduation from a training program to serve children with special health care needs under twenty-one (21) years of age;

e. Employment history;

f. Professional liability claims' history;

g. Clinical privileges and performance in good standing at the hospital designated by the provider as the primary admitting facility. This requirement may be waived for providers whose practice does not require admitting privileges;

h. Current, adequate malpractice insurance;

i. Revoked or suspended state license or DEA number;

j. Limited or suspended medical staff privileges;

k. Penalties imposed by the Medicare or Medicaid Program;

l. Censure by the state or county professional association;

m. Status in the national practitioner data bank and the state boards of examiners; and

n. Status among professional peers, including statements about physical or behavioral health conditions or illnesses, loss of license, felony convictions, loss or limitation of privileges or any disciplinary activity and attestation to correctness or completeness of the application to become a partnership provider.

3. Monitoring and update of goals and objectives of the partnership quality improvement program;

4. Establishing methods for taking corrective actions relating to quality improvement;

5. Integrating quality improvement with other management activities, including changes in the access to partnership providers and member services; and

6. Monitoring and evaluation of health care outcomes, including at least the members' risk factors, functional status, morbidity, mortality, readmissions to health care facilities, adverse incidents and complications, satisfaction with care and effect of education programs. The health care outcomes shall be based on the performance indicators and standards set forth in the HEDIS, as specified in subsection (1)(a)2 of this section.

(b) Be accredited by a national accrediting agency of managed care organizations by the end of five (5) consecutive years of contracting with the department.

Section 11. Fiscal Penalties. (1) Subsequent to the testing and demonstration of the performance of the department's management information systems, if a partnership knowingly fails to submit health care data from processed claims, as required and specified by the department, the department may withhold up to ten (10) percent of the partnership's capitation rate in the month following nonsubmission of data. This amount withheld shall be returned to the partnership upon receipt and processing of the data within five (5) days of receipt by the department.

(2) If a partnership fails to submit financial statements and reports required in Section 5(8)(a) of this administrative regulation the department shall impose the financial penalty established in subsection (1) of this section. The amount withheld shall be returned to the partnership within five (5) days of receipt by the department of the financial statements and reports.

Section 12. Termination of a Partnership Contract. The department shall terminate a partnership contract in accordance with KRS Chapter 45A.

Section 13. Termination of Partnership Providers or Subcontractors. (1) Any partnership provider or subcontractor of a partnership who engages in activities that result in their suspension, termination, or exclusion from the Medicare or Medicaid Program shall be terminated from participation in the Partnership Program.

(2) If a health care provider is suspended, terminated, or excluded from participation in the Kentucky Medicaid Program, partnerships shall be notified by the department.

Section 14. Liability for Actions Taken Against Partnerships. Individual partnerships and any partnership providers, or subcontractors, shall be required to hold harmless the Commonwealth, its officers and employees, and members from incurring any liability for their Medicaid related services and debts.

Section 15. Partnership Insolvency. If a partnership fails to meet the insolvency reserve requirements as established in Section 5(7) of this administrative regulation, is terminated from the Kentucky Medicaid Program contract negotiated in accordance with KRS Chapter 45A, or ceases to operate, the department shall:

(1) Immediately notify partnership providers and members;

(2) Arrange for the provision of Medicaid services to members in the partnership region, using the insolvency reserve amount as specified in Section 5(7) of this administrative regulation; and

(3) Assume responsibility for paying partnership providers directly, after the end of the partnership’s obligation and at the partnership rates, for services to members until a new partnership becomes established and operational.

Section 16. Partnership Participating Provider and Member Representation and Advocacy. Each partnership shall be required to develop and implement a plan to assure appropriate member and partnership provider participation in the establishment of partnership policies and procedures. The plan shall be approved by the department and include:

(1) The establishment of an ongoing quality and access recipient advisory committee composed of individuals, as specified in Section 10(1)(c) of this administrative regulation, who review and make recommendations about:

(a) Medicaid and partnership policies affecting members;

(b) Quality improvement of and access to services; and

(2) Mechanisms for involving partnership providers, which may include provider membership on the governance body, separate provider advisory committees and ad hoc provider work groups.

Section 17. Marketing. Regional partnerships, or any subcontractors, shall:

(1) Conduct member marketing and enrollment activities only with recipients residing in a partnership region;

(2) Be prohibited from:

(a) Direct telephone marketing or direct mail advertising to members, or to recipients who are not enrolled in a partnership;

(b) Offering or granting any reward, favor or compensation as an inducement to select a particular provider; and

(3) Submit a marketing plan on an annual basis to the department for approval;

(4) Submit a plan and develop procedures to log and resolve marketing complaints;

(5) Prepare and distribute marketing materials which factually represent the partnership and which shall be:

(a) Available in appropriate foreign languages if more than ten (10) percent of the members speak a particular language;

(b) Prepared so that members who read at a sixth grade level may understand;

(d) Updated annually.

Section 18. Confidentiality. Partnerships shall be required to maintain confidentiality of all member eligibility information and medical records, and prevent unauthorized disclosure of this information for any reason in accordance with KRS 194.060, 434.840 to 434.860 and 42 CFR 431, Subpart F.

Section 19. Partnership Performance. (1) A partnership shall be required to:

(a) Provide, or arrange for the provision of, all medically necessary health services to members as specified in Section 7 of this administrative regulation and to adhere to all other requirements designated herein; and

(b) Report to the department the delivery of health services to members and maintain documentation as required by federal and state laws to substantiate Medicaid services' delivery, or support the nondelivery of members' health services in those unique cases where services are neither authorized, nor provided.

(2) Upon failure of a partnership to adhere to the requirements as established in this administrative regulation, the department:

(a) Shall take action necessary to preserve and maintain access to member services and program integrity; and

(b) May take one (1) or more of the following actions:

1. Recoup payments;

2. Assess liquidated damages; or

3. Terminate participation in the Partnership Program.

(3) The department shall require a corrective action plan on the part of the partnership if:

(a) Any report, survey or audit indicates that the partnership or any subcontractor, or supplier, failed to adhere to partnership requirements; or

(b) The department receives a substantiated complaint regarding the quality of health care provided.

(4) Partnerships shall develop the corrective action plan as specified in subsection (3) of this section within fifteen (15) days of receipt of any written deficiency issued by the department and specify the time and manner in which the deficiency shall be corrected.

(5) If a partnership fails to file a corrective action plan, or file a corrective action plan that is approved by the department, or implement the corrective action plan as required by subsections (3) and (4) of this section and correct any deficiencies, the department shall issue a written notice to the partnership which:

(a) States the violations; and

(b) Notifies that failure to take the necessary action to correct the deficiencies within the time period specified by the department shall result in one (1) or more of the following:

1. Suspension of recipient enrollment;

2. Suspension or recoupment of the capitation payment; or

3. Termination of participation in the Partnership Program.

Section 20. Material Incorporated by Reference. (1) The following material shall be incorporated by reference:

(a) "Health Plan Employer and Data Information Set (HEDIS) (January 1997 edition)", National Committee for Quality Assurance:

1. Chapters one (1), two (2) and four (4), and sections of chapter three (3), including pages twenty-seven (27) through fifty-one (51), fifty-nine (59) through sixty-three (63) and sixty-five (65) in Volume One (1): Narrative;

2. Pages nineteen (19) through sixty-seven (67) on effectiveness of care, pages 125 through 210 on use of services, page 217 on new member orientation and appendix one (1) in Volume Two (2): Technical Specifications; and

3. Summary of changes pertaining to materials as specified in subsection (1)(a) and (b) of this section.

(b) "Guidelines for Preventing Workplace Violence for Health Care and Social Service Workers (1996 Edition)", United States Department of Labor:

1. Pages four (4) through six (6): Hazard Prevention and Control; and

2. Page eight (8): Recordkeeping.

(2) This material may be inspected, copied or obtained at the Department for Medicaid Services, Cabinet for Health and Family Services, 275 East Main Street, Frankfort, Kentucky 40621.

(3) This material shall be available for review during the normal business week, Monday through Friday, 8 a.m. through 4:30 p.m.

(4) Each partnership shall be provided one (1) copy of the material incorporated by reference and appropriate updates following the incorporation by reference. Additional copies may be obtained from the Department for Medicaid Services upon payment of an appropriate fee in accordance with KRS 61.872. (23 Ky.R. 2651; Am. 3370; 3578; 3787; eff. 3-19-1997; TAm eff. 4-28-2011.)