HAP Resource Center

Comment Letter: Office of Medical Assistance Programs, HealthChoices RFP

May 31, 2019

Deputy Secretary Sally Kozak Department of Human Services
Office of Medical Assistance Programs
P.O. Box 2675 Harrisburg, PA 17050

Dear Deputy Secretary Kozak:

On behalf of The Hospital and Healthsystem Association of Pennsylvania (HAP), which represents approximately 240 member institutions statewide, we are writing to formally request that the Department of Human Services (DHS) incorporate the following series of recommendations and comments into the Request for Proposal (RFP) process as it moves forward to renew the HealthChoices physical health care program.

HealthChoices, Pennsylvania’s mandatory managed care program for physical health services, has proven to be a successful program for vulnerable citizens who benefit from the care and services it provides as well as for Pennsylvania taxpayers who ultimately contribute to part of the cost for this care. However, that success is not accidental, it occurs largely due to mutually productive and effective partnerships between the managed care organizations (MCO) selected by the commonwealth to administer the program and their network providers.

The health care landscape in Pennsylvania, and across the nation, is dramatically different now than it was when HealthChoices began, and many significant changes have occurred even since the last RFP. There is increasing emphasis at both the federal and state levels regarding alternative payment models designed to link quality outcomes to reimbursement, paying for value, not volume, and implementing true shared risk arrangements. As different models are designed and tested, one fact has remained the same and become increasingly clear—the relationship between MCOs and providers is more important than ever and neither party can be truly successful without the other.

In the spirit of partnering to achieve the best possible outcomes for Pennsylvania Medicaid enrollees, the hospital community offers the following recommendations for DHS’ consideration:

  1. Provider Feedback—Prior to the “best and final offer” discussion with select MCOs, DHS should consider provider input about each bidder as part of the criteria for making final selections. This input could be obtained through short, electronic surveys with a limited number of questions about key program areas, telephone interviews with a minimum number of providers doing business in each zone in which the MCO operates, or review of summary ratings and comments from a HAP provider survey. We stand ready to collect and submit provider input for DHS review in any way that it deems appropriate to comply with RFP requirements.

This information would be valuable to DHS because a program described in writing for an RFP document can be implemented very differently in real life. When this disconnect occurs, enrollees usually are impacted in a negative way and DHS staff, MCO staff, and provider staff must work together to research and address the issues. Those steps introduce an increased amount of administrative work and cost, some of which could likely be avoided, or at the very least mitigated, with more provider input during the RFP process. The experiences of providers with MCO communication, responsiveness, and willingness to work together to address concerns as they arise can vary significantly from MCO to MCO, and these directly impact the overall HealthChoices program.

For bidders that may not yet be doing business in Pennsylvania, the surveys, questions or process could be sent to or conducted with a subset of their current providers to obtain the same information. Again, HAP is offering to work with other state hospital associations as needed to assist DHS in this process.

  1. Standardization—This RFP provides unique and significant opportunities for DHS to drive positive results for Pennsylvania to support initiatives that DHS has established as commonwealth priorities. While the current program encourages parties to work together and requires a few common areas of focus, this RFP could clearly define specific initiatives for all selected parties to address and it could require the MCOs to engage actively with providers and other stakeholder groups to achieve those goals.

​One easy example where specific requirements could yield dividends is in the realm of quality initiatives and value-based purchasing. DHS could craft RFP language that drives the MCOs toward a greater number of common program goals, and to greater consistency in the approaches to meeting those goals, specifically related to the quality metrics that are used in the programs.

The provider community recognizes the need for change and is invested in partnering with payors to achieve shared goals. However, the reality is that private and public payors alike are instituting value-based payment (VBP) programs, each with a unique set of measurement characteristics.

The proliferation of quality metrics and variances and the ways in which they are measured creates undue administrative burdens upon providers and distracts them from focusing about what will actually create better outcomes at lower costs for the patients they serve.

In advance of the next RFP release, we recommend that DHS facilitate a working session during which the commonwealth, the payors, and the providers can collectively discuss, and hopefully reach some agreement about the specific quality metrics and methodology to be included so everyone truly is working together to maximize program outcomes.

  1. Data Sharing—Health care, like other industries, is increasingly dependent on data. The ability to access and analyze data from diverse sources is essential for providers to create holistic views of patients, personalize treatment, effectively coordinate care, and ultimately improve health outcomes. These are the goals that the commonwealth consistently talks about and defines as priorities.

Information sharing between plans and providers is critically important to provide quality care for Pennsylvania citizens. In order to provide high quality, efficient care to their patients, providers need timely and actionable data, not all of which may be housed in their electronic medical records. The marriage of clinical data and claims data provides a more complete picture of the care patients are receiving both inside and outside of a health system, as well as providing the pharmaceutical experience.

While the current MCO contracts call for data sharing when hospitals are engaged in value- based contracts, there are varying degrees to which this requirement is in compliance across MCOs. In addition, the exact data specifications are not delineated in the contract.

HAP recommends that the contract language be strengthened to eliminate any potential ambiguity regarding data sharing requirements, and asks that bidders describe in detail how they will share claims-level data with providers. These RFP responses will, once the procurement process is completed, become contract requirements that can be enforced by DHS.

In addition, HAP recommends that DHS convene stakeholders including MCOs, DHS, and providers to determine the format (including identifying which claims fields are critical) and frequency of claims feeds. HAP is willing to assist DHS with this process.

We cannot overstate the importance of provider access to MCO data as HealthChoices moves forward. Data exchange and sharing is the foundation that will enable Pennsylvania to maintain its leadership position on many current initiatives, achieve success on new initiatives, and to serve our most vulnerable citizens to the very best of our abilities.

  1. Inappropriate Payment Denials—Claims denials and payment delays—for medically necessary services delivered in good faith—are putting extreme financial pressure upon hospitals, which jeopardizes access to care.

For the past several years, hospitals have continued to experience an increasing number of situations where insurers may utilize the prior authorization process as a means for non-payment of medically necessary services provided to patients. Ultimately, the patient is disadvantaged when prior authorization is delayed or used as a means to deny payment for a service. HAP is working with the Pennsylvania Medical Society to seek amendments to Act 68 to implement legislative protections against these inappropriate payor practices.

In addition to these proposed legislative changes (which may or may not be implemented), we recommend that DHS make changes to the HealthChoices contract to address the following MCO issues:

  • Downgrading inpatient admissions to “observation” status thereby underpaying hospitals for medically necessary services for patients
  • Denying payment for medically necessary services based solely on administrative errors on the claim with limited to no process to remedy the errors (e.g. wrong date of service, performed by a physician partner instead of the one that is on the authorization, slightly different but commonly and appropriately substituted procedure code, etc.)
  • Failure of an MCO to communicate reasons for denials limiting a provider’s ability to effectively appeal the denial
  • Failure of an MCO to indicate a service attempting to be pre-authorized by a provider is an uncovered service and will result in non-payment
  • Failure of an MCO to update online tools which it requires providers to reference for patient eligibility in a timely fashion
  • Denying a claim after prior authorization was obtained based upon information that was not available at the time of obtaining the prior authorization
  • Denying a claim for a service which is medically necessary, but was not pre-authorized because it was identified during the course of treating patient for an authorized service
  • Failure of an MCO to provide timely determinations especially after hours and weekends

HAP will provide specific recommendations for changes to the HealthChoices contract to address these issues in the near future.

  1. Telemedicine—As you know, telemedicine is the delivery of health care services provided through telemedicine technologies to a patient by a remote health care provider. Two-way video, smartphone, wireless tools, and other forms of telecommunications technology can be used to deliver high-quality health care that has the potential to increase Pennsylvanians’ access to specialized care, save time and costs, and decrease unnecessary readmissions.

Telemedicine allows patients to access specialists located across the state while remaining in their own communities, surrounded by their own support systems. Telemedicine solves problems in rural and urban areas. Services delivered through telemedicine can also save time and money, as well as improve health outcomes and population health. One example is its ability to amplify the reach of providers capable of intervening in the opioid crisis.

HAP and other provider groups have been advocating for telemedicine parity legislation for several years. Thirty-eight states and the District of Columbia have legislation related to payment for health care delivery via telemedicine and forty-nine states and the District of Columbia have some form of Medicaid reimbursement for telehealth in their public program.

We also know that Pennsylvania’s Medicaid Program is supportive of this concept, and that the Centers for Medicare and Medicaid Services (CMS) has sent a clear message that they do not think that the status quo is good enough. While some telemedicine is being reimbursed by some insurers, many insurers—including Medicaid managed care organizations—are lagging behind.

The re-procurement of the HealthChoices Program provides a tremendous opportunity to advance the provision of telemedicine in the Commonwealth. Specifically, we request that the Department include a question in the RFP requiring each prospective bidder to outline the extent to which they provide services via telemedicine, and describe whether the reimbursement rate for the provision of these services is commensurate with similar services delivered “face-to-face.” The commitments included in the proposal response will, as you know, become part of the agreement between DHS and the MCO.

In addition, we request that DHS include, within revised MCO agreements, telemedicine “parity” language. This language will, consistent with statutory language in other states, require Medicaid managed care plans to provide coverage and reimbursement for services delivered via telemedicine if those same services are covered and reimbursed “in-person.”

  1. Credentialing–DHS has taken strides in addressing credentialing delays by including a requirement that HealthChoices plans process “clean” credentialing applications within sixty days. Despite this requirement, a number of HAP member hospitals have indicated that compliance remains a problem.

In addition to pursuing targeted enforcement efforts relating to this issue, HAP requests that DHS include specific language in the RFP requesting that bidders outline the steps they will take to ensure that they comply with the sixty-day requirement, and promote consistent credentialing approaches across the program.

Thank you for your consideration and please feel free to reach out with any questions or for additional clarifications.


Jeffrey Bechtel
Senior Vice President, Health Economics and Policy


Ms. Leesa Allen, Executive Deputy Secretary, Pennsylvania Department of Human Services Ms. Laurie Rock, Bureau Director, Managed Care Operations
Ms. Jolene Calla, Vice President, Health Care Finance and Insurance
Ms. Kate Slatt, Senior Director, Innovative Payment and Care Delivery
Ms. Judy Miller, Director, Financial Systems Analysis


Topics: Access to Care, Insurance, Value-based Care

Revision Date: 5/31/2019

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