Common use of Reduction in State Spending Growth Clause in Contracts

Reduction in State Spending Growth. The State and CMS will work together to agree to a detailed methodology for calculating the State’s reduction in spending growth. In general, the State will, by CY2022, be accountable to a 2.1% reduction in PMPMs for the ACO-enrolled population, off of “trended PMPMs” (described below). The State’s trend line over the course of the DSRIP program will be 4.4% annually, which is the “without waiver” trend rate calculated by CMS based on the 2017 President’s Budget Medicaid Baseline smoothed per capita cost trend with all populations combined (2017-2022). This trend rate will be applied to the base PMPM rate in CY2017 (i.e. pre-ACO). The trend will be compounded over the five Budget Periods, and the percent reduction will be determined according to the following calculation: percent reduction = (trended PMPM minus actual PMPM) / (trended PMPM). Prior to CY2022, the State will have target reductions smaller than 2.1% off of the trended PMPM. Prior to CY2019, spending reduction targets will be adjusted to reflect CY2017 baseline performance. In the detailed methodology that CMS and the State will agree to, these measurements of PMPM spend will: Be for the ACO-enrolled population For the population enrolled in MCO-Contracted ACOs, be based on actual MCO expenditures for services to the population attributed to the ACO (categories to be agreed upon by CMS and the State), and not on the State’s capitated payments to the MCO Include reductions in DSTI supplemental payments to safety net hospitals Exclude Hepatitis C drugs, other high-cost emerging drug therapies (such as cystic fibrosis drugs and biologics), long-term services and supports (LTSS) costs, and other potential categories agreed upon by CMS and the State Allow for adjustments based on changes in population or acuity mix Allow for adjustments based on higher than anticipated growth in MassHealth spending due to economic conditions in the state or nationally, or other reasons as agreed upon by CMS and the State.

Reduction in State Spending Growth. The State and CMS will work together to agree to a detailed methodology for calculating the State’s reduction in spending growth. In general, the State will, by CY2022, be accountable to a 2.1% reduction in PMPMs for the ACO-enrolled population, off of “trended PMPMs” (described below). The State’s trend line over the course of the DSRIP program will be 4.4% annually, which is the “without waiver” trend rate calculated by CMS based on the 2017 President’s Budget Medicaid Baseline smoothed per capita cost trend with all populations combined (2017-2022). This trend rate will be applied to the base PMPM rate in CY2017 (i.e. pre-ACO). The trend will be compounded over the five Budget Periods, and the percent reduction will be determined according to the following calculation: percent reduction = (trended PMPM minus actual PMPM) / (trended PMPM). Prior to CY2022, the State will have target reductions smaller than 2.1% off of the trended PMPM. Prior to CY2019, spending reduction targets will be adjusted to reflect CY2017 baseline performance. In the detailed methodology that CMS and the State will agree to, these measurements of PMPM spend will: Be for the ACO-enrolled population For the population enrolled in MCO-Contracted ACOs, be based on actual MCO expenditures for services to the population attributed to the ACO (categories to be agreed upon by CMS and the State), and not on the State’s capitated payments to the MCO Include reductions in DSTI supplemental payments to safety net hospitals Exclude Hepatitis C drugs, other high-cost emerging drug therapies (such as cystic fibrosis drugs and biologics), long-term services and supports (LTSS) costs, and other potential categories agreed upon by CMS and the State Allow for adjustments based on changes in population or acuity mix Allow for adjustments based on higher than anticipated growth in MassHealth spending due to economic conditions in the state or nationally, or other reasons as agreed upon by CMS and the State.. Gap to Goal Methodology. CMS and the State will agree on the detailed methodology two quarters before CY2018. The State will calculate its performance compared to the trended PMPM, and the domain score will be determined according to a gap-to-goal methodology for each Budget Period, as detailed below: If Actual Reduction < (50% * Reduction Target), then Measure Score = 0% If Actual Reduction ≥ (Reduction Target), then Measure Score = 100% If Actual Reduction ≥ (50% * Reduction Target) AND < (Reduction Target), then Measure Score is equal to: (Actual Reduction - (50% * Reduction Target)) / (Reduction Target - (50% * Reduction Target)) For example, if the State achieves less than 50% of the Reduction Target, then the measure score will be equal to 0%. If the State achieves 75% of the Reduction Target, then the measure score will be equal to (75%-50%) / (100%-50%) = 50%