907 KAR 1:710. Managed behavioral health care initiative (1915b Waiver).

907 KAR 1:710. Managed behavioral health care initiative (1915b Waiver).

RELATES TO: KRS 45A.095, 45A.690-45A.725, 61.872, 61.874, 61.876, 147A.050, 200.020(37), 200.503(2), 200.509, 202A.011(12), 202A.028, 202A.041, 202A.051, 202A.061, 205.520, 205.6334, 205.8451, 205.8453, 209.010, 210.005(2), (3), 210.290(1), 210.370-210.460, 211.463, 281.607-281.760, 287.011, 289.021, 290.015, 291.030, 294.032, 304.1-010-304.1-070, 304.05-130, 304.05-140, 304.17A-110(3), 304.17A-300, 304.17A-310, 304.38-030, 304.38-035, 304.38-060, 311.623, 311.625, 311.627, 311.629, 311.631, 387.510(15), 387.530(1), (2), 387.540(1)- --(10), 387.570(1)- (6), 387.580(1)- (3), 387.600(1)- (2), 422.317, 600.020, 620.030, 645.120, 42 C.F.R. 417.479, 431.52, 431.300-307, 434.44-.70, 455.21, 455.100-.105, 1001.1301, 42 U.S.C. 1396b, d(r), n(b)(1), (3), (4), u-1, 10801, March 7, 1997, HCFA waiver approval letter

STATUTORY AUTHORITY: KRS 194A.030(2), 194A.050, 205.520(3), 42 U.S.C. 1396n, Pub.L. 105-33 sec. 4710(c), EO 2004-726, March 7, 1997, HCFA waiver approval letter

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) authorizes the cabinet, by administrative regulation, to comply with a 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 recognizes the historical role of the regional mental health-mental retardation boards in the planning, development and coordination of mental health programs for citizens of Kentucky as established in KRS 210.370 to 210.460 and establishes the standards of participation in the Kentucky Access Program. Additionally, this administrative regulation establishes 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. This administrative regulation establishes a statewide system of capitated, comprehensive risk-bearing managed care plans for behavioral health and establishes standards which are intended to increase access and improve quality. The cost savings anticipated from more appropriate use of the behavioral health care resources or other efficiencies of managed behavioral health care will permit the reinvestment of savings into more cost efficient, community-based alternatives.

Section 1. Definitions. (1) "Adult with severe mental illness" means an individual over eighteen (18) years of age who has chronic mental illness as defined in KRS 210.005(2) and (3).

(2) "Behavioral health care provider" means a licensed or certified individual or a facility, agency, institution, organization, or business that is employed by or has entered into an agreement with an MBHO to deliver behavioral health services.

(3) "Behavioral health services" means clinical, rehabilitative, or support services in an inpatient or outpatient setting to treat a mental illness, emotional disability, or substance abuse disorder.

(4) "Behavioral health region" means a partnership region or a grouping of partnership regions which may contain one (1) or more area development districts or, a portion of an area development district as established in KRS 147A.050, and is designated by the department as a geographical coverage area of an MBHO in Kentucky.

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

(6) "Child with a severe emotional disability" is defined in KRS 200.503(2).

(7) "Coalition" means an entity composed of public and private providers which shall include:

(a) A representative of:

1. A regional mental health-mental retardation board;

2. An acute care hospital with an inpatient psychiatric service; and

3. A community-based agency or a psychiatric residential treatment facility;

(b) A qualified mental health professional; and

(c)1. The Chairman of the Department of Psychiatry at the University of Kentucky School of Medicine, if Lexington is within the behavioral health region; or

2. The Chairman of the Department of Psychiatry at the University of Louisville School of Medicine, if Louisville is within the behavioral health region.

(8) "Department" means the Kentucky Department for Medicaid Services or its agent.

(9) "Department of Juvenile Justice (DJJ) population" means children who are placed under the custodial control or supervision of the Kentucky Justice Cabinet as defined in KRS 600.020 and who are Medicaid eligible.

(10) "Department for Social Services (DSS) population" means children in foster care and children receiving adoption assistance as established by 907 KAR 1:011, and adult wards for whom the Kentucky Cabinet for Families and Children has been appointed the legal guardian pursuant to KRS 387.600(1) or 210.290(1).

(11) "Emergency care" means immediate care for a condition of mental illness or emotional disability which may result in serious jeopardy to the life or health of the individual, harm to another person by the individual, or inability of the individual to seek food and shelter.

(12) "Encounter" means a behavioral health care contact or service provided to or arranged for a member by an MBHO in a behavioral health region.

(13) "Evidence-based clinical care standard" means a clinical care standard which has been validated by a national health care organization or through an authenticated clinical study.

(14) "Managed behavioral healthcare organization (MBHO)" means an entity that meets the requirements established in Section 8 of this administrative regulation and, under contract or subcontract with the department in accordance with Section 2(3) or (6) of this administrative regulation, agrees to provide, or arrange for the provision of, a behavioral health service to a member on the basis of an at-risk prepaid capitation payment.

(15) "Member" means a Medicaid recipient who is enrolled in an MBHO.

(16) "Mental health disciplines" means psychiatry, social work, counseling, psychology, nursing, art therapy or marriage and family therapy.

(17) "Organizer" means a mental health provider that serves in a behavioral health region and volunteers to represent a coalition in that region within ten (10) days of the publication of a legal notice as established in Section 3(1) of this administrative regulation, or after ten (10) days, shall be a representative of a regional mental health-mental retardation board.

(18) "Partnership" means an entity that meets the criteria established in 907 KAR 1:705, Section 5, and under contract with the department in accordance with KRS 45A.095 and 45A.690 to 45A.725, agrees to provide, or arrange for the provision of, health services to a member on the basis of an at-risk, prepaid capitation payment.

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

(20) "Qualified mental health professional" is defined in KRS 202A.011(12).

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

(22) "Regional interagency council" means a council established pursuant to KRS 200.509.

(23) "Regional mental health-mental retardation board" means a board established pursuant to KRS 210.370.

(24) "Rural area" means an area outside of the urban area, which is 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.

(25) "Telemedicine technology" means the use of an electronic signal to transfer medical information from one (1) site to another.

(26) "Urgent care" means care that is needed within a twenty-four (24) hour period for a condition of mental illness or emotional disability and does not pose a serious jeopardy to the life or health of the individual, threat of harm to another person by the individual, or immediate inability of the individual to seek food and shelter.

Section 2. General. (1) The department shall implement, within the Medicaid Program, a prepaid capitation managed behavioral health care system to be known as Kentucky Access. Kentucky Access 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. 1396n(b)(1), (3), and (4).

(2) Kentucky Access shall be implemented statewide, by the establishment of an MBHO concurrently or immediately following the implementation of a partnership to ensure the continuity of physical and behavioral health care.

(3) In order to maintain the existing community-based programs which provide behavioral health services to citizens of Kentucky, the department shall initiate a contract with an MBHO organized by a coalition in accordance with the requirements established in Section 3 of this administrative regulation and in accordance with KRS 45A.095 and 45A.690 to 45A.725.

(4) The following shall participate in the design and implementation of an MBHO organized by a coalition:

(a) The regional mental health-mental retardation boards; and

(b)1. The Department of Psychiatry at the University of Kentucky School of Medicine, if Lexington is within the behavioral health region; or

2. The Department of Psychiatry at the University of Louisville School of Medicine, if Louisville is within the behavioral health region.

(5) A coalition may be organized to serve more than one (1) partnership region pursuant to the completion of the application process established in Section 3 of this administrative regulation.

(6) A contract to provide, or arrange for the provision of, a behavioral health service in accordance with KRS 45A.690 to 45A.725 shall be negotiated by the department if the department:

(a) Fails to receive or approve an application of a coalition as required in Section 3(5) of this administrative regulation; or

(b) Terminates a contract with a coalition in accordance with Section 16 of this administrative regulation.

(7) Except for the requirements established in Section 3 of this administrative regulation, an entity that agrees to provide, or arrange for the provision of, a behavioral health service under contract with the department in accordance with KRS 45A.690 to 45A.725 shall meet the requirements established in this administrative regulation.

Section 3. Coalition Application Process. (1) The department shall publish a legal notice which requires an organizer to represent the behavioral health care providers and groups established in paragraph (c) of this subsection. An organizer shall register, within sixty (60) days of the publication date of the legal notice, an intent to form or the formation of a coalition in the behavioral health region. A registration shall be in the form of a letter addressed to the commissioner of the department and include:

(a) A proposed name of the MBHO;

(b) A proposed geographical area to be served by the MBHO;

(c) The names of the major health care providers and groups participating in the coalition planning efforts including the entities identified in Section 1(7) of this administrative regulation;

(d) The proposed governance structure and information relating to the governance as required by Section 8(6)(a), (b)1, and (c)1 of this administrative regulation;

(e) A proposed target date for implementation of the MBHO;

(f) The name, address and telephone number of the organizer to contact regarding the letter of registration;

(g) Except as required by paragraph (h) of this subsection, evidence of endorsement from the entities identified in paragraph (c) of this subsection; and

(h) A letter of endorsement from each of the following:

1. A representative of a mental health-mental retardation board that serves the behavioral health region;

2.a. The Chairman of the Department of Psychiatry at the University of Kentucky School of Medicine, if Lexington is within the behavioral health region; or

b. The Chairman of the Department of Psychiatry at the University of Louisville School of Medicine, if Louisville is within the behavioral health region; and

3. A representative of a hospital with an inpatient psychiatric service.

(2) Upon receipt of a letter of registration of a coalition, the department shall initiate a registration review to determine if the requirements established in subsection (1) of this section have been met. If more than one (1) letter of registration that meets the requirements established in subsection (1) of this section is received by the department for the same behavioral health region, the department shall:

(a) Immediately suspend the registration review for thirty (30) days in order to permit the organizers to form one (1) coalition; and

(b) On the date of suspension:

1. Notify each organizer in writing of the thirty (30) days suspension of the registration review;

2. Advise each organizer that the department shall approve one (1) registration of a coalition in a behavioral health region to provide, or arrange for the provision of, a behavioral health service in accordance with KRS 45A.095 and 45A.690 to 45A.725;

3. Identify the name and address of each organizer who submitted a letter of registration; and

4. Advise each organizer that prior to the end of the thirty (30) days suspension period that he shall notify the department in writing that he is withdrawing his registration from consideration or consolidating with another organizer to form one (1) coalition. If an organizer fails to notify the department within the thirty (30) days suspension period, the department shall automatically disqualify the nonreplying organizer.

(3) Upon the completion of the departmental review and approval of a registration of one (1) coalition that meets the requirements established in subsection (1) of this section, the department shall:

(a) Notify the organizer of the coalition of the approval of the registration;

(b) Provide an application for response to the organizer; and

(c) Request a response to the application within ninety (90) days of receipt of the approval from the organizer of the coalition.

(4) Upon the receipt of notification of a departmental approved registration of a coalition, an organizer shall submit the response to the application in writing in accordance with subsection (3)(c) of this section to the commissioner of the department.

(5) The application submitted by a coalition shall include a plan for the MBHO which specifies activities, persons responsible and time frames for the:

(a) Establishment of a board of directors in accordance with Section 8(6)(a), (b)1, and (c)1 of this administrative regulation;

(b) Development of a provider network which assures a member of a choice of behavioral health care providers and access to a service as required by Section 8(5) of this administrative regulation;

(d) Development of a management information system capable of producing the data and reports as required by Sections 8, 10, 11, 13, 14, 15 and 22 of this administrative regulation; and

(e) Proposed date of implementation of an MBHO which shall be within three (3) months of the approval of an application of the coalition.

(6) If the coalition is not operational as an MBHO within three (3) months of the department's approval of the application, the coalition may request an extension of up to three (3) months of this provision by submitting to the department a reapplication which meets the requirements established in this subsection and subsection (5) of this section by the end of the third month following the department's approval of the original application.

Section 4. Recipient Participation. (1) A recipient shall be enrolled in an MBHO, including:

(a) An individual who receives Aid to Families with Dependent Children (AFDC) and Medicaid using AFDC methodologies in effect on July 16, 1996, as subsequently amended in accordance with 42 U.S.C. 1396u-1; and

(b) An individual who is eligible to receive Medicaid as follows:

1. Kentucky Transitional Assistance Program (K-TAP) and family related Medicaid;

2. Aged, blind, and disabled Medicaid;

3. Identified in 907 KAR 1:011, Section 2(2)(h), (i) and (3)(h);

4. Poverty level pregnant women and children;

5. State supplementation for aged, blind, and persons with a disability;

6. Supplemental security income (SSI);

7. Children under the age of twenty-one (21) years and in a psychiatric facility in accordance with 907 KAR 1:011;

8. DSS population, including:

a. A foster child for whom the Cabinet for Families and Children has legal responsibility and whose DSS case is managed by a DSS office in the behavioral health region who shall be enrolled, or remain enrolled, in that region's MBHO if an individual plan of care is jointly developed and implemented by DSS and the MBHO;

b. An adult ward who shall be enrolled, or remain enrolled, in the MBHO that serves the region of his residence if an individual plan of care is developed and implemented by the MBHO in consultation with DSS;

c. A child receiving adoption assistance who shall be enrolled, or remain enrolled, in the MBHO that serves the region of his residence if an individual plan of care is jointly developed and implemented by his parent and the MBHO; and

d. A child receiving adoption assistance who is placed outside of Kentucky who shall be enrolled, or remain enrolled, in the MBHO in which he was enrolled prior to placement outside of Kentucky; and

9. DJJ population. Each person in this category shall be enrolled in the MBHO serving the county in which the case is managed by DJJ if an individual plan of care is jointly developed and implemented by DJJ and the MBHO.

(2) An initial evaluation of a member for an MBHO service shall be performed by a qualified mental health professional. A member shall select or be assigned in accordance with subsection (4) of this section for an initial evaluation in accordance with Section 10(8) of this administrative regulation from a list of qualified mental health professionals who are authorized by the MBHO to conduct an initial evaluation. A member who presents himself to the emergency department of a hospital for an initial evaluation for emergency or urgent care shall be deemed to have selected a qualified mental health professional on the hospital staff for his initial evaluation. If a hospital does not have a qualified mental health professional on staff, a referral to the MBHO for an initial evaluation shall be made.

(3) Except for an initial evaluation or an evaluation for emergency care or urgent care as authorized by Section 10(8)(b) and (c) of this administrative regulation if a member presents himself to the emergency department of an acute care hospital, a member shall be allowed by the MBHO to select from the lists of behavioral health care providers established in Section 8(18) of this administrative regulation who shall be:

(a) A qualified mental health professional who is authorized by the MBHO to provide a service in accordance with Section 10(8) of this administrative regulation if the need for an evaluation is determined; and

(b) A behavioral health care provider that is authorized by the MBHO to provide the recommended service in accordance with Section 10(2) of this administrative regulation if the member's plan of care is implemented.

(4) A member shall select a behavioral health care provider for a behavioral health service provided by the MBHO in accordance with Section 10(2) of this administrative regulation from a list of behavioral health care providers who are authorized by the MBHO for that service.

(5) If voluntary selection of a behavioral health care provider is not made by the member, the MBHO shall make the selection for the member based upon the:

(a) Proximity of the member to the provider;

(b) Age-group specialty of the provider;

(d) Individual factors identified by the qualified mental health professional during the evaluation of the member's behavioral health service needs.

(6) A member may change his behavioral health care provider upon his request to the MBHO. The MBHO shall have a policy and procedure for a member to request a change of provider. The policy and procedure shall:

(a) Be provided to each member by the MBHO at the time of enrollment and annually thereafter; and

(b) Specify that coordination of services in accordance with Section 8(20) of this administrative regulation shall be provided if a member voluntarily changes behavioral health care providers more than two (2) times within a twelve (12) month period.

(7) Except for an emergency service in accordance with 42 C.F.R. 431.52 or an evaluation for emergency care authorized by Section 10(8)(b) of this administrative regulation, a member shall be required to obtain approval from the MBHO before receiving a covered behavioral health service. A member shall be provided with the toll free telephone number required by Section 10(7) of this administrative regulation for requesting approval of an MBHO service.

(8) A member who receives a behavioral health service without the required prior approval of the MBHO shall be responsible for the payment of charges for the service except for:

(a) A service that does not require prior approval as required by subsection (7) of this section; or

(b) A service authorized as a result of and in accordance with the complaint procedure established in Section 11 of this administrative regulation or the appeals procedures as established in 907 KAR 1:560.

(9) For the purpose of selecting a behavioral health care provider, filing a complaint or an appeal, or otherwise acting on behalf of a child in an interaction with an MBHO, a parent, custodial parent, person exercising custodial control or supervision as defined in KRS 600.020(37), or an agency with legal responsibility for a child by virtue of voluntary commitment or an emergency or temporary custody order shall be allowed to act on behalf of a child member, prospective member, or former member.

(10) A legal guardian who is authorized to make a health care decision and appointed pursuant to KRS 210.290(1), 387.530(1), (2), 387.540(1) through (10), 387.570(1) through (6), 387.580(1) through (3) or 387.600(1), (2) shall be allowed to act on behalf of a ward as defined in KRS 387.510(15). A person authorized to make a health care decision pursuant to KRS 311.629 or 311.631 shall be allowed to act on behalf of a member, prospective member, or former member.

Section 5. Recipients Excluded from an MBHO. A recipient may be excluded from participation in an MBHO if he is required to spend down to meet eligibility income criteria or is an individual who is:

(1) Medicaid eligible and has 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)(a) Served under the:

1. Alternative intermediate services for an individual with mental retardation or developmental disabilities (AIS-MR-DD) established by 907 KAR 1:140; or

2. Home and community-based waiver established by 907 KAR 1:160; or

(b) A recipient who:

1. Is continuously ventilator dependent;

2. Does not reside in a nursing facility; and

3. Is not served through a home and community-based waiver;

(4) Receiving benefits as a qualified Medicare beneficiary (QMB), specified low income Medicare beneficiary (SLMB) or qualified disabled working individual (QDWI);

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

(6) Excluded from participation by the department for cause.

Section 6. Member Rights and Responsibilities. Each MBHO shall have a written policy that is approved by the department to assure that:

(1) Each member is:

(a) Treated with respect and dignity;

(b) Guaranteed privacy and confidentiality in accordance with Section 21 of this administrative regulation;

(c) Provided with clear information relating to the MBHO's services and providers, and the member's rights and responsibilities in the form established by Section 19(3) of this administrative regulation;

(d) Permitted to select a behavioral health care provider of his choice in accordance with Section 4(2), (3), and (4) of this administrative regulation;

(e) Informed of the complaint procedures as specified in Section 11 of this administrative regulation and appeals process in accordance with 907 KAR 1:560;

(f) Provided access to:

1. Advocacy services as established by 42 U.S.C. 10801;

2. Protection services as established by KRS 209.010 and 620.030; and

3. Ombudsman services in accordance with Section 12 of this administrative regulation.

(g) Served in a safe, clean, and humane environment;

(h) Permitted to formulate advance directives in accordance with KRS 311.623, 311.625, and 311.627;

(i) Provided access to:

1. His medical records in accordance with 908 KAR 3:010, Section 2; and

2. A copy of his medical records in accordance with KRS 422.317;

(j) Permitted to refuse a behavioral health service in accordance with KRS 202A.191 without reprisal by the MBHO;

(k) Provided access to a service site that provides therapeutic rehabilitation if he is an adult with severe mental illness in accordance with Section 8(2) of this administrative regulation;

(l) A participant in the development and revision of his treatment plan that uses language he can understand;

(m) Served by the behavioral health care provider without physical, verbal, sexual, or psychological abuse, exploitation, coercion, reprisal, intimidation or neglect;

(n) Permitted to choose a service for a mutually agreeable treatment plan from an array of services provided by the MBHO;

(o) Permitted to exercise the rights as established in this subsection without reprisal from the MBHO; and

(p) If he is a child, accompanied by a person as specified in Section 4(9) and (10) of this administrative regulation in the development or revision of his treatment plan.

(2) Each member is responsible for:

(a) Providing information needed by a behavioral health care provider; and

(b) Following instructions and guidelines as specified in his individual treatment plan.

Section 7. Member Disenrollment from an MBHO. (1) The department shall disenroll a member from an MBHO pursuant to this section and in accordance with 907 KAR 1:560 and 1:675. Except as established in Section 4(1)(b)8 and 9 of this administrative regulation, disenrollment of a member from an MBHO 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 behavioral health region;

2. Is incarcerated or deceased;

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

4. No longer qualifies for behavioral health services under one (1) of the categories established in Section 4(1) of this administrative regulation;

(2) Except as established in Section 4(1)(b)8 and 9 of this administrative regulation, an MBHO shall recommend disenrollment if a member:

(a)1. Is found guilty of fraud in a court of law if the fraud is related to the Medicaid Program; or

2. Is administratively determined to have committed fraud or abuse related to the Medicaid Program;

(b) Is deceased; or

(3) A member shall not be disenrolled, nor shall the MBHO recommend disenrollment of a member, due to an adverse change in the member's physical or behavioral health.

Section 8. Requirements for an MBHO. Each MBHO shall:

(1)(a) Have experience in the management of capitated risk-based contracts for a comprehensive behavioral health service; or

(b) Subcontract with an entity that shall have experience in the management of capitated risk-based contracts for a comprehensive behavioral health service;

(2) Make services, service locations, and service sites available and accessible in terms of timeliness, amount, duration, and personnel sufficient to provide, or arrange for the provision of, all covered services;

(3) Meet the requirements of KRS 304.17A-110(3);

(4) Meet the requirements of 42 C.F.R. 417.479 and 434.44 through 434.70;

(5) Meet the requirements relating to 42 U.S.C. 1396b, including the maintenance of sufficient behavioral health care providers to provide covered services in accordance with Section 10(8) and (9) of this administrative regulation;

(6) Have a board of directors, that shall:

(a) Establish and direct implementation of policies and procedures regarding financing and delivery of behavioral health services to members;

(b) Include:

1. If Kentucky Access is implemented in accordance with Section 2(3) of this administrative regulation, at least five (5) persons selected by the MBHO who have completed an orientation approved by the department and developed in collaboration with consumers and behavioral health care providers and who shall be:

a. Two (2) adults with severe mental illness, one (1) of whom shall be a current or former recipient;

b. A parent, spouse or sibling of an adult with severe mental illness;

c. A parent of a child with a severe emotional disability; and

d. A foster parent of a child in the custody of the Cabinet for Families and Children. The foster parent shall be selected by the MBHO based upon recommendations of the DSS; or

2. If Kentucky Access is implemented in accordance with Section 2(6) of this administrative regulation, at least two (2) persons selected by the MBHO who shall be:

a. One (1) adult consumer of behavioral health services or the guardian of an adult consumer of behavioral health services; and

b. One (1) parent, guardian or foster parent of a child who is under the age of twenty-one (21) years and a consumer of behavioral health services;

1. If Kentucky Access is implemented in accordance with Section 2(3) of this administrative regulation:

a.(i) Two (2) representatives of one (1) regional mental health-mental retardation board which serves one (1) or more counties in the behavioral health region; or

(ii) One (1) representative from each of two (2) regional mental health-mental retardation boards which serve one (1) or more counties in the behavioral health region;

b.(i) Two (2) representatives of a hospital with a psychiatric bed within the behavioral health region; or

(ii) One (1) representative from each of two (2) hospitals with inpatient psychiatric beds within the behavioral health region;

c.(i) The Chairman of the Department of Psychiatry at the University of Kentucky School of Medicine, if Lexington is within the behavioral health region; or

(ii) The Chairman of the Department of Psychiatry at the University of Louisville School of Medicine, if Louisville is within the behavioral health region; and

d. Service on the board of an entity awarded a contract to administer a managed behavioral health program, absent a financial or other personal interest in a decision on administration of the contract, shall not constitute a conflict of interest for a representative of a mental health-mental retardation board. Upon the determination that a conflict of interest exists, the representative in question who serves on the board shall recuse himself from participation in a decision on the matter; or

2. If Kentucky Access is implemented in accordance with Section 2(6) of this administrative regulation:

a. One (1) representative of a regional mental health-mental retardation board which serves one (1) or more counties in the behavioral health region. Service on the board of an entity awarded a contract to administer a managed behavioral health program, absent a financial or other personal interest in a decision on administration of the contract, shall not constitute a conflict of interest for a representative of a mental health-mental retardation board. Upon the determination that a conflict of interest exists, the representative in question who serves on the board shall recuse himself from participation in a decision on the matter; and

b. One (1) representative of a hospital with an inpatient psychiatric service;

(7) Comply with the applicable requirements in accordance with KRS 304.17A-300 or 304.38-030 and 304.38-060 relating to licensure of entities that accept prepaid, at-risk capitation payments for comprehensive health services;

(8) Meet the requirements of financial solvency for a provider-sponsored integrated health delivery network as established in KRS 304.17A-310;

(9) Demonstrate adequate protection against insolvency by establishing and maintaining an insolvency reserve equal to the amount of the MBHO's net worth determined in accordance with specifications for a provider sponsored integrated health delivery network established in KRS 304.17A-310(2)(b) and (c). An MBHO's reserve requirement shall be:

(a) Available to the department for paying behavioral health care providers if the MBHO becomes insolvent;

(b) Met by at least one (1) of the following methods:

1. Establishing an insolvency reserve required by this subsection to be held by a regulated financial institution as established by KRS 304.1-010 to 304.1-070 or 304.38-030;

2. Maintaining insolvency insurance that shall:

a. Be obtained through a reinsurer as identified in KRS 304.05-130 and 304.05-140 and approved by the department; and

b. Provide coverage for expenses incurred for members' behavioral health services from the date of insolvency until the end of the period for which Medicaid capitation payments were received by the MBHO;

3. Providing the department with a bank letter of credit made payable to the State Treasurer of Kentucky 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 as required by KRS 287.011, 289.021, 290.015, 291.030, or 294.032, or provider sponsor if the sponsor restricts a portion of the assets equivalent to the value of the expenses or required reserve that the sponsor agrees to cover.

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

(10) Submit a monthly financial statement 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 requested by the department following the first year of operation. The financial statement shall include:

(a) A balance sheet;

(b) A statement of revenue and expenses;

(d) A certification statement; and

(e) A written report as requested by the department relating to financial conditions and status;

(11) File a financial disclosure report, as required by the Health Care Financing Administration and pursuant to 42 C.F.R. 455.100-105, 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 a transaction with an entity, other than an individual practitioner or group of individual practitioners, with which the MBHO contracts for the provision of management functions, supplies, equipment or health-related services;

(12) Make available all books, medical records, and information relating to member services, quality of care, and financial transactions for review, inspection, investigation, auditing, and photocopying by authorized federal and state agency reviewers, investigators and auditors.

(a) The books, records, information, and MBHO's staff shall be available upon request of a reviewer, investigator, or auditor during routine business hours at the site of operation; and

(b) If required by a reviewer, investigator, or auditor, an interview of the MBHO's staff shall be conducted in-private at the site of operation during routine business hours;

(13) Maintain all books, records, and information relating to behavioral health care 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 an additional time period as required by federal and state laws;

(14) Submit for the department's approval, a plan which shall address MBHO financial insolvency and specify the method for:

(a) Continuation of services to members through the end of the period for which capitation payments have been made;

(b) Continuation of inpatient facility services to a member until discharge from the facility occurs; and

(c) Immediate notification to the department of anticipated or projected failure to meet financial insolvency reserve requirements as established in subsection (9) of this section;

(15) Cooperate with the department, Office of the Inspector General within the Cabinet for Health 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(6) and in accordance with KRS 205.8453, and as required by 42 U.S.C. 1320a-7(b)(11), 42 C.F.R. 455.21, and 42 C.F.R. 1001.1301;

(16) Establish a program integrity function which shall:

(a) Develop a program integrity plan;

(b) Identify MBHO vulnerabilities;

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

(e) Identify and refer to the department, Office of Inspector General within the Cabinet for Health Services, and Office of the Attorney General, suspected fraudulent activity concerning services provided by the MBHO;

(17) Refer a public request for financial information relating to the MBHO's operations to the department. The department shall respond to the request in accordance with KRS 61.872, 61.874, and 61.876;

(18) At the time of enrollment and annually thereafter, provide each member with:

(a) The toll free telephone number required by Section 10(7) of this administrative regulation;

(b) A list of participating qualified mental health professionals that specifies each provider's name, license, certification, or other qualifications, and areas of expertise; and

(c) Information on how a list may be obtained from an MBHO of participating behavioral health care providers, including each provider's name, license, certification or other qualifications, and services the provider is authorized by the MBHO to provide;

(19) If a member requires continuing behavioral health services following an evaluation by an MBHO's qualified mental health professional, ensure that the qualified mental health professional:

(a) Informs the member of the recommended plan of care; and

(b) Provides information relating to the Health Care Partnership Program services as identified in 907 KAR 1:705;

(20) Identify a person to coordinate the provision of behavioral health care services to a member who is:

(a) An adult with a severe mental illness;

(b) A child with a severe emotional disability; or

(21) Provide a member who meets the criteria established by subsection (20) of this section with the name and telephone number of the coordinator who shall be:

(a) A licensed or certified person who is a behavioral health care provider and participates in the MBHO;

(b) A case manager as defined in 907 KAR 1:515, Section 5, and 907 KAR 1:525, Section 5, who participates in the MBHO; or

(c) An employee of the MBHO or its subcontractor who performs the triage function established in Section 10(6) and (7) of this administrative regulation;

(22) Send a written request in sufficient time to allow participation of the following in the review or revision of the individual plan of care for a member as required by Section 4(1)(b)8 and 9 of this administrative regulation:

(a) DSS, if the member is a foster child or adult ward;

(b) DJJ, if the member is in the DJJ population; or

(23) Develop a process that is approved by the department that requires a decision to be reviewed and either affirmed or denied with two (2) working days if the decision would lead to one (1) of the following circumstances:

(a) An action of the MBHO may result in a court order; or

(b) The responsibility for the service reimbursement may shift to an entity other than the department or the MBHO.

Section 9. MBHO Payments. (1) The department shall provide each MBHO a per month, per member capitation payment regardless of the member's receipt of services.

(2) A capitation payment shall be based upon a standard rate setting methodology as established in subsection (3) of this section that complies with the Health Care Financing Administration's upper payment limit requirements.

(3) The payment rate shall be:

(a) Negotiated by the department with the MBHO in accordance with Section 2(3) or (6) of this administrative regulation; and

(b) Based upon computations of a certified actuary using national actuarial standards, principles and appropriate actuarial factors which include a member's:

1. Category of aid;

2. Geographic area;

3. Category of service; and

4. Other demographic and administrative factors, including age, gender, and service trends.

(4) A capitation payment shall be adjusted by the department if the scope of Medicaid services is increased or decreased as mandated by the Health Care Financing Administration. Written notification of an increase or decrease in coverage shall be provided to the MBHO by the department prior to implementation.

(5) The department may contract with an MBHO for payment of Medicaid services provided to a recipient prior to the actual enrollment of a recipient in the MBHO on a capitated or other basis as part of the MBHO's contract, or for other Medicaid services as designated by the department in accordance with Section 2(3) or (6) of this administrative regulation.

(6) The payment provisions established in 907 KAR Chapters 1 and 3 for Medicaid shall not be applicable for an MBHO service.

Section 10. Provision of Services Under an MBHO. (1) An MBHO shall provide or arrange for the provision of a medically necessary behavioral health service, including:

(a) A behavioral health service required by 907 KAR Chapters 1 and 3, federal, and state laws;

(b) A behavioral health service to a member under twenty-one (21) years of age in accordance with 42 U.S.C. 1396d(r); and

(2) A medically necessary behavioral health service shall be:

(a) Recommended by a behavioral health care provider;

(b) Reasonable and necessary to:

1. Prevent, diagnose, correct, reduce, stabilize, or ameliorate a condition of a:

a. Mental illness;

b. Emotional disability; or

c. Substance abuse disorder in accordance with subsection (4) of this section; and

2. Restore the member to his best possible functional level;

(c) Recognized as within the applicable standard of practice for the modality and as appropriate to the mental illness, emotional disability, or substance abuse disorder of the member at the time the service is provided; and

(d) The intensity, frequency, and duration of an available service which is safe and cost-effective.

(3) An emergency service in a psychiatric hospital in accordance with 42 C.F.R. 41.52, or an evaluation for emergency care in accordance with subsection (8)(b) of this section shall be provided within or outside the behavioral health region.

(4) A substance abuse service shall be provided in accordance with subsection (1) of this section to a member:

(a) Under the age of twenty-one (21) and authorized under 42 U.S.C. 1396d(r); or

(b) With a primary diagnosis of mental illness that requires a substance abuse service to effectively treat the mental illness.

(5) The MBHO shall not be required to provide or arrange for the provision of a:

(a) Substance abuse service except as required by subsection (4) of this section;

(b) Inpatient hospital service for medical detoxification as defined in Section 1(8) of 907 KAR 1:705;

(d) Partnership covered service in accordance with 907 KAR 1:705, Section 7;

(e) School-based health service for a member age three (3) to twenty-one (21) years, as determined eligible under the provisions of 907 KAR 1:715;

(f) Early intervention program service for a member age birth to three (3) years as determined eligible under the provisions of 908 KAR 2:120, Section 2;

(g) Psychiatric service covered for a currently enrolled, nonpsychiatrist Medicaid physician, including a physician employed by a public health department, primary care center or rural health center, including a federally qualified health center;

(h) Behavioral health service provided by a hospice agency;

(i) Supporting psychiatric service provided by a home health agency as defined in 907 KAR 1:030;

(j) Targeted case management service in accordance with 907 KAR 1:525, provided to a member served by a regional interagency council; or

(k) Service authorized under 907 KAR 3:020.

(6) The MBHO shall have a plan developed in accordance with evidence-based clinical care standards as required by Section 14(1)(c) of this administrative regulation for the triage of requests for or referrals to a behavioral health services into the categories of emergency care, urgent care, or routine care that does not meet the definition of emergency or urgent care services.

(7) An MBHO shall:

(a) Meet the standards of utilization review established by KRS 211.463 and 906 KAR 1:080; and

(b) Maintain a toll free telephone number for triage purposes to receive a referral or request for emergency, urgent, routine or continuing care that is staffed twenty-four (24) hours per day by a person with at least a master's degree in one (1) of the mental health disciplines who shall be authorized by the MBHO to receive a request or referral as required by subsection (6) of this section.

(8) The following provision of service requirements shall be met by an MBHO:

(a) The consultation service or initial evaluation shall be performed:

1. Face-to-face; or

2. By telemedicine technology in accordance with subsection (14) of this section.

(b) The evaluation for emergency care in a location other than the emergency department of a hospital shall be initiated within three (3) hours of the:

1. MBHO's notification of the emergency from the referring party; or

2. Time of the member's presentation to a licensed mental health care facility.

(c) The evaluation for urgent care in a location other than the emergency department of a hospital shall be initiated within twenty-four (24) hours of the:

1. MBHO's notification of the member's urgent care need from the referring party; or

2. Time of the member's presentation to a licensed mental health care facility.

(d) The evaluation for routine care shall be initiated within seven (7) days of the referral from triage or request for a service by a member.

(e) The evaluation of a member for involuntary hospitalization pursuant to KRS 202A.028, 202A.041, 202A.051, and 202A.061, or 645.120, shall be performed within the time frame for an evaluation for emergency care as established in paragraph (b) of this subsection.

(9)(a) Except as provided in subsection (b) of this section, the transport time to a service relating to behavioral health shall not exceed one (1) hour;

(b) In a rural area, the transport time shall be equivalent to the amount of time taken to transport a person:

1. Residing in a behavioral health region, but not served by the MBHO; and

2. Taken over the same route by a motor carrier with a certificate to transport a person in accordance with KRS 281.607 through 281.760.

(10) A behavioral health care provider authorized by the MBHO to provide rehabilitation or a support service covered under 907 KAR Chapters 1 and 3 or which may be covered as an early and periodic screening, diagnosis and treatment (EPSDT) service in accordance with 907 KAR 11:034, shall be a community mental health center licensed in accordance with 902 KAR 20:091, or an organization that shall be:

(a) Accredited by a national accrediting organization for agencies that provide behavioral health services; or

(b) Assessed on site prior to providing an MBHO service and at least every three (3) years thereafter by the MBHO using standards of participation approved by the MBHO's board of directors.

(11) An organization that meets the requirements established by subsection (10) of this section shall define in a written document approved by the MBHO the:

(a) Plan for providing a behavioral health service;

(b) Organizational structure, including the responsibility, function, and interrelationship of each unit and line of administrative and clinical authority;

(c) Method by which a person who provides a rehabilitation, support, case management, or other service shall be credentialed, recredentialed, supervised, monitored, and sanctioned; and

(d) Method by which a member shall be assisted to access a related vocational, rehabilitation or employment service, a housing service, and educational service, medical or dental care, or other support service, if needed by the member.

(12) An organization identified in subsection (10) of this section shall adhere to the applicable requirements of a facility as adopted by the respective agency authority as follows:

(a) Federal and state law requirements for making a building or facility accessible to a person with a disability; and

(b) Current approval by the Fire Marshal's Office in accordance with the life safety code.

(13) The MBHO staff who perform preauthorization, triage and continuing review functions shall:

(a) Report to the MBHO's physician medical director who shall be:

1. Certified, or eligible for certification, in psychiatry by the American Board of Psychiatry and Neurology; and

2. Appointed by the MBHO's board of directors; and

(b) Provide a report of the numbers and types of requests, referrals and denials for MBHO services quarterly to the MBHO's quality improvement program.

(14) Telemedicine technology may be used for an evaluation, consultation, or direct treatment of a member if:

(a) A plan for telemedicine is approved by the medical director of the MBHO and the department; and

(b) The qualified mental health professional who provides the telemedicine service is authorized by the MBHO for the telemedicine procedure.

Section 11. Complaint and Appeals Procedures. (1) The MBHO shall establish a procedure that meets the requirements of this section for receiving and resolving a complaint of a member. This procedure shall not replace the member's right to a fair hearing in accordance with 907 KAR 1:560.

(2) Each member shall receive written information about the MBHO's procedures for making a complaint, the toll free telephone number of the Kentucky Access Ombudsman, and the department's procedure for a fair hearing in accordance with 907 KAR 1:560 if:

(a) The member is enrolled in the MBHO;

(b) An adverse action, other than a utilization review denial, is taken by the MBHO; or

(3) The written information required by subsection (2) of this section shall include the:

(a) Name, address, telephone number and office hours of the person to whom a member may file a complaint or appeal;

(b) Prohibition of reprisal by the MBHO on the basis that the member filed a complaint or appeal; and

(4) The MBHO shall require in the public area of each facility in which a behavioral health service is provided, the display of written information about:

(a) The MBHO's policy to assure the member's rights and responsibilities established by Section 6 of this administrative regulation;

(b) The procedure to access a form approved by the MBHO's board of directors for filing a complaint; and

(5) Except for an adverse action that may result from utilization review as required in Section 10(7) of this administrative regulation, if a member files a complaint relating to an adverse action of the MBHO, the MBHO shall:

(a) Within forty-eight (48) hours, respond and resolve a complaint that relates to a matter which could place a member at risk or which could seriously jeopardize the health or well-being of the member; or

(b)1. Within ten (10) working days, respond that a complaint of a nonurgent nature has been received; and

2. If substantiated, the complaint shall be resolved within thirty (30) days.

(6) If a member is dissatisfied with the MBHO's response as required in subsection (5) of this section, the member may submit a written request for review of the MBHO's response and include additional information to the MBHO.

(7) An MBHO:

(a) May appoint a person or a committee to review the responses of the MBHO; and

(b) Shall respond in writing to a member within ten (10) working days.

(8) Except for a utilization review denial that shall be appealed to the Cabinet for Health Services pursuant to KRS 211.464, a member may appeal to the department pursuant to 907 KAR 1:560:

(a) Following an adverse decision by the MBHO; or

(b) During the complaint, response and review processes established by subsections (5), (6), and (7) of this section.

(9) The MBHO shall:

(a) Establish a management information system for documenting:

1. Member complaints;

2. The response to a complaint; and

3. Reviews by the person or committee established in subsection (7) of this section; and

(b) Submit to the department a quarterly report of the information required by paragraph (a) of this subsection.

(10) If a member requests a reconsideration pursuant to Section 5(1)(a) of 906 KAR 1:080 of an MBHO's decision to deny prior authorization for a voluntary or involuntary inpatient psychiatric service, a reconsideration decision by the MBHO shall be rendered within twenty-three (23) hours of the member's request for a reconsideration. Until the reconsideration decision is rendered, the MBHO shall provide and reimburse the behavioral health care provider for an admission of the member to outpatient observation. Prior to rendering a final decision on the reconsideration, the MBHO shall confer with the behavioral health care provider to determine the health status of the member. The behavioral health care provider who provides information relating to the health status of the member shall be the provider who is directly involved in the provision of medical care to the member.

Section 12. Kentucky Access Ombudsman. The Cabinet for Health Services shall operate either directly or indirectly through a contract in accordance with KRS 45A.690 to 45A.725, an ombudsman function independent of the department and MBHOs to assist members. The ombudsman shall perform the following functions on behalf of a member:

(1) Maintain a toll-free telephone number for a member who seeks a response to an inquiry relating to a Medicaid or behavioral health service;

(2) Provide assistance to a member, if requested, in filing a complaint to the MBHO in accordance with Section 11 of this administrative regulation or an appeal to the department pursuant to 907 KAR 1:560;

(3) Advocate for member interests or rights under Kentucky Access;

(4) Educate consumer organizations that inquire about managed care and Kentucky Access; and

(5) Provide an information service to a member as necessary to perform the functions established in this section and Section 11 of this administrative regulation.

Section 13. Monitoring for Quality and Access. The department shall:

(1) Establish a quality improvement program which monitors and evaluates, on a continuing basis, access, continuity of care and behavioral health care outcomes relating to a service provided or arranged by the MBHO. The monitoring and evaluation shall be based upon:

(a) Demographic characteristic, risk factors, functional status, comorbidities and behavioral health status of a member;

(b) Access to a behavioral health service by a member in accordance with Section 10(8) and (9) of this administrative regulation;

(d) Prevention of mental or substance abuse disorders;

(e) Satisfaction of a member with a service;

(f) Adverse incidents and complications; and

(g) EPSDT services related to behavioral health established by 907 KAR 11:034;

(2) Monitor and evaluate each MBHO's quality improvement program to ensure that the requirements established in Section 14 of this administrative regulation are met;

(3) Establish a department quality and access advisory committee that shall:

(a) Be composed of persons who represent:

1. Primary care providers;

2. Consumers. At least five (5) persons on the committee shall be consumers, including:

a. Two (2) adults with severe mental illness, one (1) of whom shall be or has been a recipient;

b. A parent, spouse or sibling of an adult with severe mental illness;

c. A parent of a child with a severe emotional disability; and

d. A foster parent of a child in the custody of the Cabinet for Families and Children;

3. Behavioral health care providers;

4. Behavioral health care researchers;

5. Psychiatric hospitals;

6. Regional mental health-mental retardation boards;

7. Quality assurance professionals;

8. DSS;

9. DJJ;

10. Department of Public Advocacy; and

11. A representative of each MBHO;

(b) Make recommendations to the department based upon the review of information required by subsection (1) of this section, provided by the MBHOs and compiled by the department;

(c) Evaluate the effectiveness of the MBHO in ensuring access to needed services in accordance with Section 10(8) and (9) of this administrative regulation; and

(d) Make recommendations to the department relating to needed quality improvement studies designed to increase the effectiveness of the MBHO; and

(4) Annually conduct an external retrospective medical audit based upon information from the MBHO which evaluates:

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

(b) Access to care based upon the requirements established in Section 10(8) and (9) of this administrative regulation; and

Section 14. MBHO Quality Improvement. An MBHO shall:

(1) Establish a quality improvement program which continually evaluates quality, access, continuity of care, and health outcomes relating to a service provided or arranged by an MBHO. The quality improvement program shall establish a plan which shall be approved annually by the department and shall:

(a) Systematic data collection to:

1. Identify the performance levels of an MBHO relating to a specific function, process and outcome;

2. Identify an area for measurement and improvement;

3. Evaluate the utilization and appropriateness of care;

4. Measure the utilization of a clinical resource relating to overutilization, underutilization or inefficient utilization;

5. Evaluate the coordination of care among an MBHO provider, partnership provider and community-based service agency;

6. Continuously measure the process associated with an adverse clinical event;

7. Evaluate the satisfaction of a member and provider of an MBHO, including the number, type and resolution of complaints or appeals; and

8. Evaluate the effectiveness of a corrective action implemented by an MBHO;

(b) The methods to monitor and evaluate behavioral health services established specifically for the improvement of quality and access of a member who is:

1. An adult with severe mental illness. The monitoring and evaluation shall include:

a. A service established to promote recovery and use of peer support and self-help;

b. Coordination of a medical, dental, social, housing, vocational, or rehabilitative service with the behavioral health service;

c. Coordination with the community support systems of a regional mental health-mental retardation board;

d. Continuity of care with state-operated psychiatric hospitals and personal care homes; and

e. Outreach to members who are homeless as defined in 42 U.S.C. 256(r)(2);

2. A child with severe emotional disabilities. The monitoring and evaluation shall include:

a. Coordination of educational, juvenile and family services with behavioral health services;

b. Coordination with the regional interagency council;

c. Transition to the adult services system, if indicated, at the approach of the age of majority; and

d. Access to therapeutic rehabilitation services;

3. Diagnosed with coexisting mental illness and substance abuse disorder. The monitoring and evaluation shall include coordination with the substance abuse program of a regional mental health-mental retardation board;

4. Hearing impaired;

5. Requesting a provider who shares a common cultural heritage or gender;

6. A victim of the following:

a. Domestic violence;

b. Physical or sexual abuse; or

c. Rape or sexual assault;

7. Identified by Section 1(9) and (10) of this administrative regulation; or

8. Identified by the MBHO as having special needs. The monitoring and evaluation shall include outreach and case management;

(c) The methods to monitor and evaluate the quality and appropriateness of behavioral health care and services using evidence based clinical care standards approved by the medical director of the MBHO and the department; and

(d) The method to:

1. Identify, recommend and monitor the implementation of an activity as required by paragraph (d) of this subsection and the correction of a problem relating to quality and performance that is identified by the MBHO or the department;

2. Integrate quality improvement into other MBHO management functions; and

3. Update the goals and objectives of the quality improvement program plan as required in subsection (1) of this section;

(2) Establish an internal quality committee that:

(a) Shall be staffed by a full-time employee of the MBHO;

(b) Meets at least quarterly; and

(3) Have access to records of a behavioral health care provider relating to the provision of a service covered by the MBHO, which shall be kept confidential, and to data generated by the MBHO relating to:

(a) Behavioral health services utilization;

(b) Behavioral health care outcomes;

(d) The number, type and resolution of complaints, including data for a member as identified in subsection (1)(b) of this section and other subpopulations identified in the quality improvement plan;

(4) Through its quality improvement program as specified in subsection (1) of this section:

(a) Submit to the MBHO's board of directors for approval:

1. The written quality improvement plan required by subsection (1) of this section;

2. Quarterly reports of the quality improvement program; and

3. An annual written report of the quality improvement program;

(b) Disseminate the annual report required by paragraph (a)3 of this subsection to participating behavioral health care providers and the department and provide the report free of charge to a member upon request;

(5) Establish a regional quality and access advisory committee that shall:

(a) Review and make a recommendation about:

1. An MBHO policy affecting a member;

2. The quality of and access to a service; and

3. The grievance and appeals process;

(b) Be staffed by a person in the quality improvement program of the MBHO;

(d) Document findings for the MBHO's board of directors and the department; and

(e) Be composed of representatives of:

1. Primary care providers;

2. Consumers. At least fifty-one (51) percent of the persons serving on the committee shall be consumers of behavioral health services or consumer advocates, including:

a. Two (2) adults with severe mental illness, one (1) of whom shall be or has been a recipient;

b. A parent, spouse or sibling of an adult with severe mental illness;

c. A parent of a child with a severe emotional disability; and

d. A foster parent of a child in the custody of the Cabinet for Families and Children;

3. Behavioral health care providers;

4. Behavioral health care researchers;

5. Psychiatric hospitals;

6. Regional mental health-mental retardation boards;

7. Quality improvement professionals;

8. DSS;

9. DJJ;

10. The Department of Public Advocacy; and

11. An MBHO;

(6) Receive accreditation by a national accrediting agency of managed care organizations within three (3) years of implementation of the MBHO;

(7) Develop and implement a plan to verify credentials of each behavioral health care provider who shall be a:

(a) A licensed or certified professional in a mental health discipline; or

(b) Facility, agency, institution, organization or business that is:

1. Qualified in accordance with 907 KAR 1:671, to deliver Medicaid services; or

2. A state licensed entity which may contract for a service covered under 907 KAR Chapters 1 and 3 or for a service which may be covered as an EPSDT service in accordance with 907 KAR 11:034;

(8) Arrange for the verification of education or training of an individual other than an individual identified in subsection (7) of this section who may choose to be a provider of a behavioral health rehabilitation or support service in the MBHO; and

(9) Except as provided in paragraph (a) of this subsection, at least every two (2) years credential and recredential a behavioral health care provider who participates in the MBHO. The credentialing and recredentialing process shall include information from the quality improvement program of an MBHO and, if applicable to the provider, the verification of:

(a) On an annual basis, the:

1. License or certificate of a provider to practice in accordance with applicable state licensure laws, including restrictions and history of a loss of license or certificate in a state; and

2. Disclosure of ownership of a provider in accordance with KRS 205.8477;

(b) Drug Enforcement Administration number and certificate, and a revoked or suspended number or certificate in a state;

(c) Graduate degree with completion of residency, nursing, supervisory, or other preparatory program required for licensure or certification;

(d) Professional board eligibility or certification;

(e) Employment history;

(f) Current professional liability insurance, current scope of coverage and claims history, including pending and successful claims;

(g) Hospital staff privileges, scope of privileges, and history of limited or suspended privileges;

(h) Record of continuing professional education credits earned;

(i) Valid Medicaid and Medicare provider numbers, federal tax identification number, and Social Security number;

(j) Physical accessibility for persons with disabilities, provisions for emergency care or back-up, and the location, telephone number, and hours of operation for each office;

(k) Areas of expertise and cultural or linguistic capabilities;

(l) Compliance with evidence-based clinical care standards;

(m) Review of member satisfaction and complaints;

(n) Penalties imposed by the Medicare or Medicaid Program;

(o) Censure by the state or county professional association;

(p) Status in the national practitioner data bank and the state boards of examiners;

(q) Status among professional peers, including statements about physical or behavioral health conditions or illness;

(r) Loss of license, felony convictions, loss or limitation of privileges or disciplinary activity;

(s) Police and child abuse record searches; and

(t) Attestation to correctness or completeness of the application to become a behavioral health care provider.

Section 15. Fiscal Penalties. (1) Subsequent to the testing and demonstration of the performance of the department's management information systems, if an MBHO knowingly fails to submit health care encounter data from a processed claim as required by the department, the department:

(a) May withhold up to ten (10) percent of the MBHO's capitation rate in the month following nonsubmission of data; and

(b) Shall return the amount withheld to the MBHO upon receipt and processing of the data within five (5) days of receipt by the department.

(2) If an MBHO fails to submit a financial statement or report required by Section 8 of this administrative regulation, the department shall:

(a) Impose the financial penalty established in subsection (1) of this section; and

(b) Return the amount withheld to the MBHO within five (5) days of receipt by the department of the financial statement or report.

Section 16. Termination. (1) The department shall terminate an MBHO contract in accordance with Section 2(3) or (6) of this administrative regulation.

(2) An MBHO provider or subcontractor of an MBHO who engages in an activity that results in the suspension, termination, or exclusion from the Medicare or Medicaid Program shall be terminated from participation in Kentucky Access.

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

Section 17. Liability for Actions Taken Against an MBHO. An individual MBHO and an MBHO provider, or subcontractor, shall be required to hold harmless the Commonwealth, its officers and employees, and members from incurring a liability for their Medicaid related services and debts.

Section 18. MBHO Insolvency. If an MBHO fails to meet the insolvency reserve requirement established in Section 8(9) of this administrative regulation, is terminated from the Kentucky Medicaid Program contract negotiated in accordance with Section 2(3) or (6) of this administrative regulation, or ceases to operate, the department shall:

(1) Immediately notify the behavioral health care providers and members;

(2) Arrange for the provision of Medicaid behavioral health services to members in the behavioral health region, using the insolvency reserve amount required by Section 8(9) of this administrative regulation; and

(3) Assume responsibility for paying MBHO providers directly, after the end of the MBHO's obligation and at the MBHO's rates, for a service to a member until a new MBHO becomes established and operational.

Section 19. Health Education and Outreach. An MBHO shall:

(1) Conduct health education and outreach activities with a recipient residing in the behavioral health region;

(2) Submit an education and outreach plan on an annual basis to the department for approval; and

(3) Prepare and distribute health education and outreach materials which factually represent the MBHO and shall be:

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

(b) Prepared so that a member who reads at a sixth grade level may understand;

(d) Updated annually.

Section 20. Marketing. An MBHO, or MBHO subcontractor, shall:

(1) Conduct member marketing with a member residing in a behavioral health region;

(2) Not engage in:

(a) Direct face-to-face or telephone marketing, or direct mail advertising to a member, or to a recipient who is not enrolled in an MBHO;

(b) Offering or granting a 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 a marketing complaint; and

(5) Prepare and distribute marketing materials which factually represent the MBHO and meet the requirements established in Section 19(3) of this administrative regulation.

Section 21. Confidentiality. An MBHO shall be required to maintain confidentiality of member eligibility information and medical records, and prevent unauthorized disclosure of this information in accordance with KRS 194.060, 434.845, 434.850, 434.855, and 434.860, and 42 C.F.R. 431.300 through 431.307.

Section 22. Performance of an MBHO. (1) An MBHO shall be required to:

(a) Provide, or arrange for the provision of, a medically necessary behavioral health service to a member as required by Section 10 of this administrative regulation; and

(b) Report to the department the delivery of a behavioral health service to a member and maintain documentation as required by federal and state laws to substantiate the delivery of a Medicaid behavioral health service, or support the nondelivery of a member's behavioral health service if the service is not authorized or provided.

(2) Upon failure of an MBHO to adhere to the requirements 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 the MBHO's participation in Kentucky Access in accordance with Section 2(3) or (6) of this administrative regulation.

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

(a) A report, survey, investigation or audit indicates that the MBHO, subcontractor, or supplier failed to adhere to MBHO requirements; or

(b) A complaint regarding the quality of behavioral health care provided is received and substantiated by the department.

(4) An MBHO shall develop and submit to the department a corrective action plan as required by subsection (3) of this section within fifteen (15) days of receipt of a written deficiency issued by the department, and specify the time frame for correction of the deficiency and manner in which the deficiency shall be corrected.

(5)(a) The department shall issue a written notice that complies with the requirements established by paragraph (b) of this subsection if the MBHO fails to:

1. File a corrective action plan;

2. File a corrective action plan that is approved by the department;

3. Implement the corrective action plan as required in subsections (3) and (4) of this section; or

4. Correct a deficiency.

(b) The written notice shall:

1. State the violation; and

2. Notify that failure to take the necessary action to correct the deficiency within the time period established by the department shall result in one (1) or more of the following:

a. Suspension of recipient enrollment;

b. Suspension or recoupment of the capitation payment; or

c. Termination of the MBHO's participation in Kentucky Access in accordance with Section 2(3) or (6) of this administrative regulation.

Section 23. Incorporation by Reference. (1) "HCFA Waiver Approval Letter", March 7, 1997, Department of Health and Human Services, is incorporated by reference.

(2) It may be inspected, copied, or obtained at the Department for Medicaid Services, 275 East Main Street, 6 W-A, Frankfort, Kentucky 40621, Monday through Friday, 8 a.m. to 4:30 p.m. (23 Ky.R. 4285; Am. 24 Ky.R. 629; 1276; eff. 11-19-1997; TAm eff. 4-28-2011.)