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Medicaid Agencies → Rate Setting

 

Rate Setting

 

Information about cost and reimbursement for the National Diabetes Prevention Program (National DPP) lifestyle change program can inform rate setting and design delivery.

 

Costs

According to CDC, $500 is the approximate cost of administering the National DPP lifestyle change program to a participant who completes all 22 sessions of the yearlong program (16 weekly sessions during the first six months and six monthly sessions during the second six months). This does not include the cost of incentives or additional services such as child care, healthy snacks, and transportation.

Activities that drive program cost include facility costs, and direct program delivery costs including staffing costs. Some of these delivery costs may be higher in a Medicaid context than in other populations. For example, because the population can be more transient, it may be more time and labor intensive to reach potential participants and determine their eligibility. In addition, transportation is more likely to be a barrier to participation and program retention than for other populations, and lifestyle coaches may need to spend more time outside of actual classes to follow up with participants and to ensure that they continue to participate.
 


 

Costs in Practice

 

Montana

A program manager from the Montana Department of Public Health and Human Services (Montana DPHHS) indicated the following about their reimbursement rate relative to actual cost:

“The $500 covers the basic education, the facility cost, and interactions between the coach and the participants. It may not cover some extra services which may be financed by in-kind contributions or donations. A lot of the DPP provider organizations add different value-added services such as a gym membership. Montana Medicaid has a benefit so that a beneficiary can call to get a ride or can secure reimbursement for gas. To address child care needs, we have not yet found a universal solution, but some facilities have onsite child care (e.g., YMCA). A few sites have provided incentives.”

Direct medical costs for the original DPP clinical trial were $2,780 per participant over three years. However, this featured an individual (rather than group) coaching model facilitated by case managers.
 

YMCA

The YMCA program fee is $429 for the yearlong program. Consumers pay in a variety of ways, and YMCAs work with them if financial assistance is needed. Some payers pay a flat $429 fee regardless of how much of the program a participant completes. For claims-based reimbursement, a performance-based fee schedule is used, and payers pay claims based on the achievement of specific milestones. Average cost for the program are comprised of fixed and variable costs. When there are more participants in the program to absorb the fixed costs, the average cost can be substantially lower, but volume is key.
 

Denver Health

The Community Epidemiology and Program Evaluation Group conducted a cost analysis of the National DPP lifestyle change program at Denver Health in 2015, which was compiled in a report prepared for the State of Colorado. Micro-costing and program information for the Denver Health National DPP lifestyle change program was provided by Denver Health for costs incurred from October 2012 to the end of calendar year 2014. Nearly half of the program participants were Medicaid beneficiaries. Component costs included the following:

  • Community health worker (CHW)/lifestyle coach staffing
  • Program management and supervision
  • Other program support staff
  • Training
  • HR costs
  • Other direct costs
  • Facility and other indirect costs
  • Program development costs

The evaluation authors estimated that costs equaled $552 per participant who attended at least one session, and $1,428 per participant who attended at least nine sessions. About 50% of the cost was attributable to coach staffing, and another 19% to program management and supervision. The remaining 25% was attributable to facility and other indirect costs. Program development costs constituted a relatively small percentage.
 


 

Reimbursement Models

To date, payers covering (or proposing coverage) of the National DPP lifestyle change program have provided reimbursement on a per session basis, or on the basis of some combination of completed sessions and outcomes, such as weight loss and weight loss maintenance. Many private insurers use a pay-for-performance model with payments made at various points including initial enrollment, completion of at least nine weekly sessions during the first six months, completion of at least three monthly sessions during the second six months, and when weight loss goals are met. In some instances, payment is made after session one, after session four, after session nine, and after some number of sessions post session 16.
 


 

Reimbursement Models in Practice

 

Montana

Montana Medicaid reimburses for the National DPP lifestyle change program according to the following schedule:

  • $21.88 per weekly class in first six months ($350 total for completion of all 16 weekly classes)
  • $25 per monthly class in last six months ($150 total for completion of all 6 monthly classes)

 

Minnesota

The Minnesota Department of Human Services reimburses for the National DPP lifestyle change program for fee-for-service beneficiaries according to the following schedule:

$13.62/class (core and maintenance) ($300 for 22 classes)
 

Medicare Diabetes Prevention Program (MDPP) Expansion Model

In CMMI’s proposed expansion of the model tested with the YMCA of the USA (Y-USA) DPP within Medicare, the CMS Office of the Actuary (CMS OACT) certification report referenced the following schedule of proposed payments. The schedule is driven both by outcomes and session attendance. The maximum year one reimbursement would be $450 for a given participant. The report assumed that CMS would, on average, pay $300 in year one for a given participant.

Note: the proposed MDPP payment schedule varies slightly from the table below and is not yet finalized. See the proposed payment schedule on the MDPP Final Rule page.
 

Table included in the CMS OACT certification report; reformatted for this site. See the CMS OACT certification report here.

Note: The payments in this table were developed for a Medicare population, and may not reflect the costs of delivering the program to the Medicaid population. Anecdotal information from a small sample of organizations that have experience delivering the program to low-income populations indicates that additional costs may double the projected Medicare costs. Medicaid participants may take longer to achieve the same weight loss as Medicare members; conversely, they may fail to achieve the weight loss target in the amount of time of the standard program. Data from the CDC cited in the CMS OACT certification report indicates that Medicare participants had a higher adherence rate (i.e., attend more classes on average) and had a higher rate of weight loss than younger age groups.
 


 

Summary cost and reimbursement table

 

 


 

Rate Setting

In the course of implementing the National DPP lifestyle change program for Medicaid beneficiaries, states will need to fund the intervention and/or negotiate increases in rates paid to participating MCOs. Rates may need to account for the work MCOs will undertake in establishing and maintaining contracts with CDC-recognized organizations, cost-reporting, as well as the uncertainty relative to program costs within Medicaid.

States and their MCO partners may determine to make the rate for the National DPP lifestyle change program a per-member-per-month (PMPM) add-on to the total capitated rate for adults over 18. This may aid in creating visibility around the rate as it is refined over time. Rates may be negotiated in the context of discussions between the state’s actuarial subgroup, the health plan’s actuaries, and financial staff from the relevant CDC-recognized organizations. As noted above, some CDC-recognized organizations may be willing to accept payment contingent on participant outcomes such as weight loss.

An alternative would be to carve out the program from the capitation structure, and to pay for it on a pay-for-performance or fee-for-service model based on session attendance or other milestones.
 

In addition to the cost and reimbursement information presented above, see Statistics on Enrollment and Retention in the Enrollment and Retention section.