Learn out about CMS' performance-based payment options for employment services.


CMS Announces Performance-Based Payment Options for Employment Services


Source: NASDDDS Federal News Brief September 4, 2015

At the HCBS Conference, the Centers for Medicare and Medicaid Services (CMS) announced new performance-based options for funding employment supports through a §1915(c) waiver. In essence, the option allows states to pay for employment outcomes based on a data-based average amount of time expected to take to complete the service (based on actual data) and the cost per hour of service determined by the state.


CMS would accept a payment structure that includes outcome payments for Discovery or Supported Employment Assessment Service and Report, or Job Development, Placement, Customized Employment Position, as a single unit of service as long as the service is time-limited, has a defined tangible outcome (such as a report or career plan in the first instance, or an actual job in the second). The state must articulate a rate for the service, then use data to develop an estimate of the average amount of service time needed to achieve the outcome. The outcome payment would then be based on the rate times the estimated number of hours. Under this structure, states can also make milestone payments in addition to fee-for-service to reimburse providers when certain employment outcomes are achieved. Payment must be based on fair estimate of effort (based on data) a provider must put in to produce these “above average” outcomes. CMS would also approve a plan to pay per hour worked by the supported employee as long as such payment is based on average percentage of job coaching time necessary to enable a person to retain employment (supported by data at outset and verified at intervals on an on-going basis).


CMS also said they would accept tiered outcome payments based on an assessment of an individual’s level of disability. The state must explain in their waiver application or amendment the number of tiers and how the state will determine the appropriate tier for each waiver participant. If a state doesn’t use tiers and instead has one reimbursement rate for everyone, CMS will ask if the state can demonstrate that people at all levels of acuity are getting access to the service and using the service to the same degree.


These payment options, CMS, said, “require fiscal integrity structures that ensure a regular look behind at actual hours spent working with individuals to ensure that the estimates used to set payments remain accurate.” CMS would not accept payment for a unit “where there is no expectation that any amount of service will be delivered by the job coach.” CMS also requires that any structure that involves paying per hour worked by the supported employee must expect fading of paid supports over time, since CMS expects that the longer an individual is in a job, the fewer supports they will need to maintain employment. In addition, payment adjustment is required when a job coach works with multiple individuals in a job site. In the presentation at the HCBS conference, CMS officials stated that this was to avoid incentivizing congregate work arrangements. CMS will also require that there is no organizational or financial relationship between the job coach and the person centered care planner/case manager.

FMI: CMS officials promised that formal guidance on these options will be issued soon. In the meantime, the CMS/ODEP joint presentation from the HCBS conference is available here.


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