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Today’s Presentation

Workers’ Compensation Insurance Coverage in the Massachusetts Personal Care Attendant (PCA) Program US DHHS/ASPE sponsored Government and Vendor F/EA Workshop November 1, 2007. Presented by Lois Aldrich, MS, LCSW Director of Community Services, MassHealth Office of Long Term Care

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Today’s Presentation

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  1. Workers’ Compensation Insurance Coverage in theMassachusetts Personal Care Attendant (PCA) ProgramUS DHHS/ASPE sponsored Government and Vendor F/EA WorkshopNovember 1, 2007 Presented by Lois Aldrich, MS, LCSWDirector of Community Services, MassHealth Office of Long Term Care Executive Office of Elder Affairs

  2. Today’s Presentation • Overview of the MassHealth PCA program - Fiscal Intermediary (FI) Services (Vendor F/EA services) • Provision of Workers’ Compensation Insurance in the MassHealth PCA Program • Lessons Learned • Contact Information

  3. Overview of the MassHealth PCA Program • Massachusetts Medicaid state plan service • Consumer- directed since inception in 1970’s - Surrogates allowed since 1980’s • 28 Personal Care Management (PCM) Agencies - Performance based contracts with MassHealth - PCMs provide assessment and evaluation; intake and orientation; functional skills training • 3 Fiscal Intermediaries (FI) - Performance based contracts with MassHealth - FIs provide PCA payroll services on behalf of all “Option One” PCA consumers

  4. Overview (continued) • 19% of consumers are under 22 years old • 55% are between the age of 22 and 64 • 26% are 65 years old or older (fastest growing population) • 62% of consumers have surrogates • 3,314 new consumers began receiving services in FY 2007 • PCA regulations amended March 1, 2006 to allow family members, except legally responsible relatives, to be paid as PCAs. 2,000 family members hired as PCAs since September, 2006.

  5. Fiscal Intermediary (FI) Services

  6. Fiscal Intermediary Services(continued) • The FIs operate as Vendor Fiscal/Employer Agents under Section 3504 of the IRS code and IRS Revenue Procedure 70-6 and as modified by Proposed Notice 2003-70 • FI model began with 4 FIs in 1999, 3 now operating • Performance based contracts with MassHealth • FI services include: - Customer Service • Administrative functions • Payroll - Contract Management - Financial Management

  7. Fiscal Intermediary Services(continued) • FI payroll functions - Receiving, reviewing and processing PCA timesheets • Pay period is every two weeks • Over 10,000 timesheets processed weekly - Withholding, filing and paying federal and state income tax withholding and employment taxes and issuing IRS Forms W-2* - Facilitating resolution of tax issues * FIs subcontract with a reporting agent to peform these tasks

  8. Fiscal Intermediary Services (continued) • Issuing PCA checks to consumers, including providing a “check stub” identifying hours worked and rate of pay * - Direct deposit available for PCAs • Purchasing workers’ compensation insurance * FIs subcontract with a reporting agent to perform these tasks

  9. Workers’ Compensation (WC) • Background • Key Players and Their Roles • Challenges in Securing WC Coverage • MA-specific 0918 Classification Code • Workers’ Compensation Insurance Data • Lessons Learned • Contact Information

  10. Background • Massachusetts General Laws c. 152 requires all employers to provide workers’ compensation (WC) insurance coverage to employees. • Workers are covered by WC insurance if they are injured on the job or contract a work-related illness. - Workers’ compensation insurance pays for any necessary medical treatment related to the injury, and also pays partial compensation for lost wages, after the first five days of disability.

  11. Background (continued) • MassHealth FI contract requires FIs to purchase WC coverage for each PCA consumer. • PCA consumers are the common law employers of their workers • FIs purchase WC for all “Option One” consumers through single insurance broker and insurance carrier

  12. Background(continued) • All Option One consumers are covered immediately upon enrollment with FI. • WC rate is based on per $100 of payroll and applies to payroll for whole program during coverage period (Feb.1- Jan. 31). • Payroll estimates are provided by FIs at beginning of coverage year; audit is conducted at end of coverage year to reconcile any differences. • Premium paid 2/1/06-2/1/07: $3,849,000 (averages $286 per policy)

  13. Key Players • Workers’ Compensation Rating and Inspection Bureau of Massachusetts (WCRIB) • Division of Insurance (DOI) • Division of Industrial Accidents (DIA) • Hub International New England, LLC ( insurance broker) • Atlantic Charter (insurance carrier) • 3 Fiscal Intermediaries

  14. Key Players(continued) • Workers’ Compensation Rating and Inspection Bureau of Massachusetts (WCRIB) • Private, non-profit association of insurers that is licensed by the Massachusetts Division of Insurance as a rating organization for workers’ compensation insurance in Massachusetts (since 1915). • Collects policy, claims and financial data from all carriers licensed to sell WC insurance in Mass.

  15. Key Players(continued) • Files rates, classifications, and rating plans with the Division of Insurance on behalf of member insurers. • Acts as WC statistical agent and Assigned Pool Risk Administrator for the Division of Insurance. • Acts as coverage verification entity for the Department of Industrial Accidents. • Issues experience modifications and classification rulings for employers.

  16. Key Players(continued) • Massachusetts Division of Insurance (DOI) - Oversees insurance market in Massachusetts - Serves as consumer representative in hearings on the appropriateness of rates filed by insurance industry - Collects and analyzes data - Reviews rates filed by the WCRIB and other insurance entities - Approves, disapproves or limits rate filings and classifications

  17. Key Players(continued) • Division of Industrial Accidents (DIA) - Administers Massachusetts’ WC system - Ensures employers meet the requirements of M.G.L. c. 152 - Ensures prompt and fair compensation to victims of occupational injuries and illness - Provides dispute resolution of workers’ compensation cases through due process and adjudication

  18. Key Players(continued) • Hub International New England, LLC - Broker for all Option One PCA consumers in the MassHealth PCA Program - Secured a voluntary WC insurance carrier for program - Represents the buyer (MassHealth, FIs, and each PCA consumer) in coordinating all aspects of services for the program - Calculates pricing of WC in PCA program based on data supplied by FIs

  19. Key Players(continued) - Processes enrollments and disenrollments - Coordinates audit at end of each coverage period - Attends claims reviews with Atlantic Charter on open active claims - Supplies MassHealth with rate information and summary reports for overall program - Monitors any changes coming out of the WCRIB and informs MassHealth of such changes

  20. Key Players(continued) • Atlantic Charter - Voluntary workers’ compensation insurance carrier for all Option One PCA consumers in the MassHealth PCA program - Writes WC insurance policies for consumers policyholders - Pays WC claims for consumer policyholders - - Provides data to WCRIB • Massachusetts specific code 0918 is currently used solely by MA Medicaid PCA program

  21. Key Players(continued) • Fiscal Intermediaries • Inform Hub when consumers enroll or disenroll • Provide Hub and Atlantic Charter with historical payroll information as needed • Provide Hub with annual estimates of payroll at beginning of coverage period • Provide Hub with final payroll figures at end of coverage period to complete and reconcile WC audit • Provide feedback on individual cases as needed • Pay WC premiums as calculated by Hub on monthly basis

  22. Challenges in Securing WC Coverage • Exposure and risks unknown • No experience history • No applicable job classification code • Qualifications, training, knowledge, skills and proficiency of PCAs not known • Hiring practices not clearly defined • Insurer cannot physically look at risk involved (such as stairs in home, whether or not consumer is on 2nd floor, equipment used, etc.)

  23. Mass-Specific 0918 Classification Code • Developed by WCRIB in 1999 • Rate is per $100 of payroll, subject to manual rates • Division of Medical Assistance (MassHealth) and Executive Office of Health and Human Services advocated with WCRIB and DOI to assign a new code specific to work performed by PCAs - Government administered program providing consumer-directed services to disabled population and distinct from home health

  24. Mass-Specific 0918 Classification Code (continued) - Needed to collect data and establish experience ratings specific to PCA program - Size of exposure was considerable (over 6,000 workers) • Needed to ensure that all PCAs were covered • Concerned about the potential of 5,000 applications being submitted to the risk pool (WCRIB administers risk pool)

  25. Mass-Specific 0918 Classification Code (continued) • FIs agreed one insurance broker for whole program would work most efficiently. • FIs contacted C.J. McCarthy Insurance (now Hub International) to find the best carrier(s) for the PCA program. - C.J. McCarthy successfully marketed to First Return, then to Atlantic Charter when First Return went out of business.

  26. Mass-Specific 0918 Classification Code (continued) Domestic Workers—Inside—Physical Assistance Applies to domestic workers who provide physical assistance in activities of daily living to the elderly or to persons who are convalescent, acutely or chronically ill, or physically or mentally disabled. For purposes of assigning code 0918, physical assistance in activities of daily living shall mean the performance of one or more of the following functions: physically assisting a household member with…… In addition to providing physical assistance with activities of daily living, a domestic worker properly assignable to this new classification may also perform functions such as cooking, laundry, shopping, housekeeping, providing transportation or assistance with paperwork or reading.* * WCRIB Circular letter # 1824 issued July 13,1999

  27. Mass PCA Program Workers’ Compensation Insurance Data • Premium Development • Historic Rates • Claims History • Ad hoc Reports

  28. WC Data: Premium Development • The WC premium is calculated by Hub International prior to beginning of new coverage period, based on estimated payrolls provided by the FIs for the coming year.

  29. WC Data: Premium Development(continued) Example (2006-2007) • Estimated payroll: $216,500,000 • Total policies: 12,900 • Average payroll per policy: $16,783 • $16,783 X .76 (WCRIB rate) $128 per policy • + additional WC costs ($158) $286 per policy • $286 X 12,900 $3,689,400 total annual premium

  30. WC Data: Premium Development(continued) • PCA program rate = $1.704 per $100 payroll - Total annual / premium total payroll - Incorporated into the MassHealth PCA hourly rate paid to the FIs

  31. WC Data: Historic Rates

  32. WC Data: Claims History

  33. WC Data: Ad hoc Reports • Ad hoc reports are provided upon request. • Multiple claims filed by PCAs for same consumer - Possible training issue - Possible need for skills training • Multiple claims filed by PCA for different consumers • Common reasons for filing claim -Car accidents, lifting - Pre-existing medical condition of PCA

  34. Lessons Learned • Assign a specific job classification code for work performed by PCAs - Establishes ratings based solely on experience for work performed by PCAs - Loss ratios are easily documented • Premium basis per payroll, not per capita • Use one insurance broker and one carrier to provide WC coverage for the whole program - Regular accountability to MassHealth and to rating bureau on all WC data - All consumers have coverage for their PCAs immediately upon enrollment in PCA program - Carrier tracks claims activity; identifies trends/patterns/issues

  35. Lessons Learned (continued) • Calculate annual premium based on estimated payroll for whole program, not individual employers - Streamlines payment and billing of WC - Annual audit ensures premiums paid accurately reflect payroll - Ensures timely WC coverage for all consumers - Facilitates establishment of MassHealth hourly rate for PCA • Incorporate FI WC responsibilities into FI contract

  36. Contact Information • Workers’ Compensation Rating and Inspection Bureau (WCRIB) 101 Arch St. Boston MA 02110 617-439-9030 www.wcribma.org/mass

  37. Contact Information (continued) • Massachusetts Division of Insurance One South Station, 5th floor Boston MA 02110-2208 617-521-7794 www.mass.gov

  38. Contact Information (continued) • Massachusetts Department of Industrial Accidents 600 Washington St. 7th floor Boston MA 02111 617-727-4900 www.mass.gov/dia

  39. Contact Information (continued) • Hub International New England, LLC 299 Ballardvale St. Wilmington MA 01887 John Riley, Sr. Vice President 978-661-6648 john.riley@hubinternational.com

  40. Contact Information • Fiscal Intermediaries - Cerebral Palsy of Massachusetts (CPMA) 43 Old Colony Ave. Quincy MA 02170 Larry Spencer, FI Manager 617-479-7443 X 111 - Stavros Center for Independent Living 210 Old Farm Rd. Amherst MA 01002 Seren Derin, FI Manager 413-253-4236 - North Shore ARC (NSARC) 6 Southside Rd. Danvers MA 01923 Vade Mohammed, FI Manager 978-762-8307

  41. Contact Information (continued) • MassHealth Office of Long Term Care (OLTC) 1 Ashburton Place Boston MA 02108 • Lois Aldrich, Director of Community Services 617-222-7440 Lois.Aldrich@state.ma.us • Judith Nest-Pasierb, Program Manager 617-222-7431 Judith.Nest-Pasierb@state.ma.us

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