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This is an update of the quality initiative required when the Legislature directs the Health Care Authority (HCA) to increase provider rates paid by managed care organizations (MCO) via a state directed payment (SDP).
Washington State’s Legislature occasionally directs the Health Care Authority (HCA) to increase provider rates paid by managed care organizations (MCO) for family planning through SDPs. These payments must comply with federal rules from the Centers for Medicare & Medicaid Services (CMS) and include an evaluation plan.
What are state directed payments?
CMS generally doesn’t allow states to tell MCOs exactly how to spend money for services covered under the state and MCO contract. However, 42 CFR 438 identifies specific circumstances where a state can require an MCO to pay providers at a certain rate or in a specific way. This is called a state directed payment (SDP). The Washington State Legislature uses SDPs to authorize HCA to increase rates for certain family planning services.
To be approved by CMS, an SDP must meet several criteria:
- Payments must align with the Washington State managed care quality strategy, advancing at least one of HCA’s goals; and
- The SDP program must include an evaluation plan to measure the impact of the rate increase on quality outcomes.
Evaluation plan
The required evaluation plan must measure whether raising rates improves quality outcomes. Providers who receive these increased rates are tracked on various performance measures to see if outcomes improve at a statewide level.
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CMS wants to ensure rate increases via SDPs support care outcomes. CMS has updated federal rules that require more oversight of quality initiatives to evaluate the effectiveness of SDPs. The new rules include:
- A requirement that quality metrics outlined in the evaluation plan demonstrate maintenance or improvement over baseline statistics.
- Additional reporting requirements for larger state directed payments that exceed 1.5 percent of total capitation payments. See 42 CFR 438.6 for more details. These changes are being applied prospectively, meaning they will influence new or updated SDPs moving forward.
Family planning rate increases
Recently implemented family planning rate increases for which quality initiatives have been identified in the SDP evaluation plans include:
2025 measure selection
Selecting quality and utilization performance measures for the evaluation plan is required for each individual SDP. The selection process uses multiple criteria, including:
- CMS criteria.
- State priorities for care and data collection burden.
- Prioritizing metrics that are already collected such as claims data.
HCA’s Quality Measurement and Monitoring Improvement (QMMI) program guides which measures are selected.
Family planning measures for 2025 SDPs
The Sexual and Reproductive Health Program (SRHP) the plan focuses on measuring:
There are challenges involved in quality improvement work, and it takes time it takes to see results. SRHP providers are essential partners in this process because they can help drive the results by improving quality outcomes. Washington State is a leader in adopting new and innovative ways to improve access to quality health care for our citizens.
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