SENATE, No. 3365

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED JANUARY 24, 2019

 


 

Sponsored by:

Senator  NELLIE POU

District 35 (Bergen and Passaic)

Senator  JOSEPH P. CRYAN

District 20 (Union)

 

 

 

 

SYNOPSIS

     Establishes perinatal episode of care pilot program in Medicaid.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act establishing a Medicaid perinatal episode of care pilot program.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    As used in this act:

     “Commencement date” means the date in which the perinatal episode of care pilot program is first implemented pursuant to this act, which shall be no later than January 1, 2020.

     “Division” means the Division of Medical Assistance and Health Services in the Department of Human Services.

     “Perinatal episode of care” or “episode” means all pregnancy-related care including prenatal care, labor and birth, and postpartum care provided to a mother and infant, beginning 40 weeks prior to the delivery and ending 60 days after the delivery of the infant, or as otherwise defined by the perinatal episode of care learning network, as established pursuant to section 2 of this act, and approved by the division.

     “Perinatal episode of care learning network” or “learning network” means a group of ten or more members including but not limited to Medicaid managed care organizations, maternity healthcare providers, and division representatives, convened by the division or a multi-stakeholder entity well versed in alternative payment models designated by the division.

     “Perinatal episode of care payment model” means a provider reimbursement model based on target total cost of care for services provided within a perinatal episode of care.

     “Medicaid” means the Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

     “Participating provider” means an obstetrical provider or group of obstetrical providers approved to participate in the Medicaid program that meet a specified minimum volume of Medicaid live births per year, as defined by the learning network and approved by the division, and that has entered into a voluntary provider agreement with a Medicaid managed care organization to participate in the perinatal episode of care pilot program. 

     “Total cost of care” means all costs for a perinatal episode of care as calculated by claims data, with a risk adjustment for clinical factors that affect the cost of delivering an episode for specific patients.

 

     2.    a.  The division shall establish a perinatal episode of care learning network.  The learning network may be administered by the division, or a designated entity, at the division’s discretion.  Any entity designated by the division to administer the learning network shall enter into a data sharing agreement with the division in order to fulfill the provisions of this act.

     The learning network shall consist of ten or more members with knowledge regarding alternative payment methodologies for pregnancy-related services within Medicaid, including but not limited to:  the Director of the division, or the director’s designee; representatives from each of the current Medicaid Managed Care Organizations contracted with the division to provide Medicaid benefits; and at least three maternity healthcare providers, representing Northern, Central, and Southern New Jersey, approved to participate in Medicaid.

     b.    The learning network, as approved by the division, shall develop the parameters for a three year perinatal episode of care pilot program within Medicaid.  The purpose of this pilot program is to improve perinatal health care outcomes and to reduce the cost of perinatal care.  To effectuate the goals of the program, the learning network shall design a perinatal episode of care payment model, which shall be approved by the division and implemented by Medicaid managed care organizations (MCOs), according to section 3 of this act. 

     c.     Subject to the approval of the division, the learning network shall:

     (1)   Identify the services to be covered under each episode, including wrap around patient support services, such as childbirth education and community doula services for the mother; 

     (2)   Establish patient volume minimums for participating providers;

     (3)   Identify quality metrics and quality metric targets to be included in the episode;

     (4)   Establish a methodology to calculate the target total cost of care for an episode and the distribution of any shared savings between a MCO and a participating provider.  The methodology for shared savings shall align payments to a participating provider with the quality metrics and quality metric targets, as determined by the learning network, regarding the provider’s provision of care; and

     (5)   Establish additional episode parameters including the episode trigger, duration, principal accountable provider, exclusions, adjustments, and quality reporting methodology between providers and managed care organizations.

     d.    The learning network shall report to the Governor, and to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), four years following the commencement date, on the effectiveness of the perinatal episode of care pilot program in improving the quality and reducing the cost of maternity and infant care and make any recommendations that the learning network deems appropriate to revise, restrict, or expand the program.  The division shall make copies of the learning network’s report available to the public on the Department of Human Services’ website.

     3.    A managed care organization that has contracted with the division to provide benefits under the Medicaid Program shall enter into a provider agreement with an obstetrical provider or group of obstetrical providers to implement the perinatal episode of care payment model, as established by the learning network, and approved by the division, pursuant to section 2 of this act.

 

     4.    a. A participating provider shall submit all information required to fulfill the provisions of this act to the learning network, in a format and at a frequency to be determined by the learning network and approved by the division.

     b.    A participating provider shall conduct a risk assessment for all episodes using the Perinatal Risk Assessment form, as used by the division, to determine each mother’s level of need for State sponsored support services.  When the assessment tool indicates a need for services, the provider shall provide the mother with the appropriate referrals.  The referral of services shall include, but not be limited to: home visitation programs, mental health and substance use disorder treatment, domestic violence support and intervention; transportation and housing assistance; and group prenatal counseling.

 

     5.    The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure federal financial participation for State Medicaid expenditures under the Medicaid program.

 

     6.    The Commissioner Human Services, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to implement the provisions of this act. 

 

     7.    This act shall take effect immediately, with the pilot program commencing no later than January 1, 2020, and shall expire upon the submission of the report by the learning network to the Governor and the Legislature pursuant to subsection d. of section 2 of this act.

 

 

STATEMENT

 

     This bill implements a three-year perinatal episode of care pilot program in Medicaid, to be developed by the perinatal episode of care learning network, as established under the bill.  Under the bill the learning network is to design a perinatal episode of care payment model, also known as a bundle payment model, in which provider reimbursement is based on target total cost of care for services provided within a perinatal episode of care, rather than on individual services provided within the episode of care.  The bill defines a “perinatal episode of care” as all pregnancy-related care including prenatal care, labor and birth, and postpartum care provided to a mother and infant, beginning 40 weeks prior to the delivery and ending 60 days after the delivery of the infant. 

     Pregnancy, childbirth, and newborn care are the costliest and most common hospital visits covered by Medicaid. In 2014, Medicaid covered 42 percent of all births in New Jersey at an estimated annual cost of nearly $700 million. The cost of maternity care varies depending on the type of delivery and hospital. Care coordination is essential to improving quality and reducing costs in maternity care, but is complicated because prenatal care, labor, and birth are often paid for and delivered as three distinct periods.

     The Centers for Medicaid and Medicare Services uses value based payment models, such as the episode of care payment model, which is designed to aggregate prenatal care, labor, and birth services and properly align the financial incentives to improve quality, access, and care coordination. A well designed episode of care model for perinatal care that incorporates new models for engaging patients will address many of the challenges facing the fragmented system of maternal health in New Jersey. Furthermore, unlike other payment models, research has demonstrated that episode of care payment models reduce the incentive to overuse unnecessary services within the episode, and give health care providers the flexibility to decide what services should be delivered, rather than being constrained by fee codes and amounts. 

     Specifically, the bill directs the Division of Medical Assistance and Health Services in the Department of Human Services to establish a perinatal episode of care learning network.  The learning network may be administered by the division, or a designated entity, at the division’s discretion.  Any entity designated by the division to administer the learning network is to enter into a data sharing agreement with the division in order to fulfill the provisions of this act.

     The learning network is to consist of ten or more members with knowledge regarding alternative payment methodologies for pregnancy-related services within Medicaid, including but not limited to:  the Director of the division, or the director’s designee; representatives from one of each of the current Medicaid Managed Care Organizations contracted with the division to provide Medicaid benefits; and at least three maternity healthcare providers, representing Northern, Central, and Southern New Jersey, approved to participate in Medicaid.

     The learning network, as approved by the division, is required to develop the parameters for a three year perinatal episode of care pilot program within Medicaid.  The purpose of this pilot program is to improve perinatal healthcare outcomes and to reduce the cost of perinatal care.  To effectuate the goals of the program, the learning network is to design a perinatal episode of care payment model, approved by the division and implemented by Medicaid managed care organizations (MCOs).   

     Subject to the approval of the division, the learning network is required to:

     (1)   Identify the services to be covered under each episode, including wrap around patient support services, such as childbirth education and community doula services for the mother; 

     (2)   Establish patient volume minimums for participating providers;

     (3)   Identify quality metrics and quality metric targets to be included in the episode;

     (4)   Establish a methodology to calculate the target total cost of care for an episode and the distribution of any shared savings between a MCO and a participating provider.  The methodology for shared savings shall align payments to a participating provider with the quality metrics and quality metric targets, as determined by the learning network, regarding the provider’s provision of care; and

     (5)   Establish additional episode parameters including the episode trigger, duration, principal accountable provider, exclusions, adjustments, and quality reporting methodology between providers and managed care organizations.

     The learning network is also required to report to the Governor and the Legislature four years following the commencement of the pilot program on the effectiveness of the pilot program in improving the quality and reducing the cost of maternity and infant care, and make any recommendations that it deems appropriate to revise, restrict, or expand the program.  The division is also directed to make copies of the learning network’s report available to the public on the Department of Human Services’ website.

     The bill also requires a MCO that has contracted with the division to provide benefits under the Medicaid Program to enter into a provider agreement with an obstetrical provider or group of obstetrical providers to implement the perinatal episode of care payment model, as established by the learning network, and approved by the division, pursuant the bill. 

     Finally, the bill directs participating providers to submit all information required to fulfill the provisions of the bill to the learning network, in a format and at a frequency to be determined by the learning network and approved division.  The bill also requires a participating provider to conduct a risk assessment for all episodes using the Perinatal Risk Assessment form, as used by the division, to determine each mother’s level of need for State sponsored support services.  When the assessment tool indicates a need for services, the provider must provide the mother with the appropriate referrals.  The referral of services shall include, but not be limited to: home visitation programs, mental health and substance use disorder treatment, domestic violence support and intervention; transportation and housing assistance; and group prenatal counseling.

     The bill would take effect immediately upon enactment, with the pilot program commencing no later than January 1, 2020, and would expire upon the submission of the report by the division to the Governor and Legislature, as required by the bill.