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Clarification of TCM Moratorium
August 28, 2008

The Centers for Medicare and Medicaid Services (CMS) issued guidance regarding implementation of the interim final rule on Medicaid (MA) case management services, which PCPA received through the National Council for Community Behavioral Healthcare. The Supplemental Appropriations Act of 2008 established a moratorium on implementation of the interim final rule and prohibited CMS from applying any more restrictive requirements. However, the Deficit Reduction Act of 2005 (Public Law 109-171,§ 6052) definitions of case management and targeted case management (TCM) services are to be implemented to the extent that they are not more restrictive than the policies contained in a July 25, 2000 State Medicaid Director Letter  (SMDL) and a January 19, 2001 letter to State Child Welfare and State Medicaid Directors. The guidance document on the Supplemental Appropriations Act and Targeted Case Management identifies requirements that continue in effect during the moratorium:

  • MA case management services are defined as services that assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services.
  • Case management services include assessment, care plan development, referral, monitoring, and follow-up.
  • MA case management services do not include payment for the provision of direct services (medical, educational, or social) to which the MA eligible individual has been referred.
  • Federal Financial Participation (FFP) is available for contacts with non-eligible or non-targeted individuals when the purpose of the contact is directly related to the management of the eligible individual’s care.
  • MA is liable for the cost of otherwise allowable case management services only if there are no other third parties responsible to pay.
  • Payment methodology for TCM services must adhere to CMS policies for development of economic and efficient rates.
  • FFP is available for the provision of case management services for community transition during the last 180 consecutive days of a Medicaid eligible person’s institutional stay. Payment can be made for transitional case management regardless of whether the resident successfully transitions.
  • Policy related to administrative activities as described in SMDLs dated July 25, 2000 and 1994 is in effect.  CMS will continue to review states’ Cost Allocation Plans (CAPs) and administrative claims to ensure compliance with prior administrative claiming guidance.
  • Claims (including those related to case-management services) must not duplicate payments
  • made to public agencies or private entities under the state plan, 
  • other services or program authorities, or
  • for administrative expenditures.

 The following interim final rule provisions (http://edocket.access.gpo.gov/2007/pdf/07-5903.pdf) will not be enforced:

  • Case management services are comprehensive as required in § 441.18(a) (5) of the interim final rule.
  • Use of a single case manager as required in §441.18(a) (5).
  • Development of a specific care plan that meets requirements of § 440.169(d) (2).
  • Case record documentation required in §441.18(a) (7).
  • Fourteen and 60-day limits on case management services for persons intending to transition from inpatient to community placement specified in §441.18(a) (8).
  • The prohibition on claims payment for those who do not successfully transition in §441.18(a) (8).
  • The prohibition on use of staff from other programs to provide MA case management services.
  • Requirements for billing in 15-minute increments, although states must demonstrate that the rate does not reimburse for non-MA costs or services and the rate accurately reflects the cost of services that are actually received.  

Further guidance is provided in a Question and Answer document from the Center on Budget and Policy Priorities and the Georgetown Health Policy Institute. A few key points are addressed below.

  • What does it mean that nothing more restrictive than case management rules in effect as of December 3, 2007 may be enforced by CMS?  Even though the interim final rule was in effect from March through June, the moratorium prevents CMS from requiring states to show that they were in compliance with the interim final rule during this period. If the moratorium is lifted with no changes made, CMS may be able to disallow claims during this period when the rule was in effect, but it is unlikely that a new administration or Congress would permit that.
  • What is addressed in the SMDL of January 19, 2001?  Among other issues, the letter states that Medicaid is liable for payment only if there are no other liable third parties. It further states that because Title IV-E foster care does not cover assessment, care planning, and monitoring medical care and services, MA can be billed as part of case management services. But, Title IV-E does pay for other case management activities, such as referrals to medical providers; therefore MA could not be billed for this service. States must allocate the costs of case management accordingly. The SMDL issued on July 25, 2000, addresses guidance on using case management services to assist individuals with transitioning from institutional to community settings. Specifically, states cannot limit access to such case management services to less than 180-days of an institutional stay, nor can payment be withheld until the individual is fully transitioned to the community. Furthermore, limitation to a single case manager is not permitted.
  • The prohibition on payment for direct delivery of service under case management does not prohibit payment of direct delivery of service under another MA category.

Because of concerns that the inclusion in the moratorium of the “intrinsic element test” found in § 441.18(c)(4) of the interim final rule was unclear, Senator Max Baucus, chair, Senate Committee on Finance, and Representative John Dingell, chair, House Committee on Energy and Commerce, requested clarification from the Department of Health and Human Services. The letter stated that Congress rejected a CMS proposal to establish an integral component or intrinsic element test like the test included in the interim final rule. The letter can be viewed by accessing the link.  

CMS also provided a revised State Plan Amendment template for states. Questions can be addressed to Betty Simmonds.

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