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Contracting With MCOs Under Community Health Choices

In order to implement Pennsylvania's Community Health Choices ("CHC") initiative, the Commonwealth has selected three managed care organizations ("MCOs") to maintain CHC provider networks and distribute MA funds accordingly. The MCOs selected by Pennsylvania are AmeriHealth Caritas, Pennsylvania Health and Wellness (Centene), and UPMC for You.

The Pennsylvania Department of Human Services (DHS) has also imposed a rate floor on fee for service per diem payments from the managed care organizations to nursing facilities for the first thirty-six (36) months after the implementation of CHC. The rate floor will be set as the average of each nursing facility's per diem rates in effect for the four quarters immediately preceding CHC's implementation. Rates may be set higher based on resident acuity and the availability of nursing facility care. An MCO and a provider must adhere to this payment structure unless the parties mutually agree to an alternate payment structure, such as pay for performance. The MCOs must enroll all willing and qualified providers during the first eighteen (18) months of the program, but enrollment after the eighteen month mark is not similarly guaranteed. Providers are encouraged to be proactive and reach out to the MCOs to begin the process of developing a contract to operate in the MCO's provider network. Provider Summits are currently scheduled for the southwest zone for July 24, 25, and 26.

MCOs are in the process of disseminating model agreements, which the MCOs and individual nursing facilities will eventually negotiate and sign. It is critical that facilities review these model agreements and seek the advice of counsel when attempting to negotiate contractual provisions with the MCOs. These agreements will govern the MCO-provider relationship under CHC, so it is essential to ensure that providers understand the terms of the agreements and are able to negotiate the most favorable terms possible.

Please do not hesitate to contact our office with any questions or concerns that you have regarding the "form" agreement furnished by one of the three MCOs, and its implications for your organization.

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Latsha Davis & Marshall P.C.
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