DCS Comprehensive Health Plan

Subcontractor Delegated Oversight

Statement/Purpose

The Department of Child Safety Comprehensive Health Program (DCS CHP) manages oversight requirements for delegated entities/Managed Care Organizations, which include annual performance monitoring and reporting, resolving non-compliance issues and corrective action plans, termination (if applicable), deliverables, and other requirements of state and federal Regulators.

Definitions

Administrative Services Subcontract/Subcontractor: an agreement that delegates any of the requirements of the contract with AHCCCS, including, but not limited to the following:

• Claims processing, including pharmacy claims;

• Pharmacy Benefit Manager (PBM),

• Dental Benefit Manager

• Credentialing, including those for only primary source verification (i.e. Credential Verification Organization [CVO]);

• Management Service Agreements;

• Medicaid Accountable Care Organization;

• Service Level Agreements with any Division or Subsidiary of a corporate parent owner; and

• CHP and DDD subcontracted health plan.

Delegated Agreement: A type of subcontract agreement with a qualified organization or person to perform one or more functions required to be performed by the Contractor.

Managed Care Organization: An entity that has, or is seeking to qualify for, a comprehensive risk Contract as specified in 42 CFR Part 438 and 42 CFR 438.2:

1. A Federally qualified Health Maintenance Organization (HMO) that meets the advance directives requirements as specified in subpart I of 42 CFR Part 489, or

2. Any public or private entity that meets the advance directives requirements and is determined by the Secretary to also meet the following conditions:

   1. Makes the services it provides to its Medicaid enrollees as accessible (in terms of timeliness, amount, duration, and scope) as those services are to other Medicaid beneficiaries within the area served by the entity, or

   2. Meets the solvency standards as specified in 42 CFR 438.116.

Provider: Any individual or entity that is engaged in the delivery of services, or ordering or referring for hose services, and is legally authorized to do so by the State in which it delivers the services as specified in 42 CFR 457.10 and 42 CFR 438.2.

Subcontractor: An individual, agency or organization with which DCS CHP, or its contracted MCO, has contracted or delegated some of its management/administrative functions or responsibilities.

Policy

DCS CHP delegates full or partial authority to perform certain functions, such as but not limited to claims processing or provider credentialing. When all or part of a function is delegated, DCS CHP remains accountable for the quality of care, services performed, and the decisions made on its behalf. DCS CHP is also accountable for confirming that the delegated organization performs the delegated function appropriately.

Procedure

Delegated Subcontractor Agreement Analysis and Selection

DCS CHP evaluates each subcontractor’s ability to perform delegated activities including but not limited to review of:

• Proposal for the scope of work;

• Previous compliance audits with state regulations, other Arizona contracted entities, and AHCCCS requirements;

• Previous compliance audits with state regulations and requirements in states other than Arizona;

• Reports from the subcontractor’s internal Quality Management and Process Improvement (QM/PI) activities; and

• Confirmation that the subcontractor maintains a Business Continuity and Recovery Plan.

Approval of Subcontracts

DCS CHP submits all Management Services Agreements (MSA) and Administrative Services Subcontracts to AHCCCS DHCM for review and approval. Upon request, DCS CHP submits copies of Request for Proposals (RFPs) at the time of formal issuance to the public including any:

• RFP amendments,

• Final, signed copies of each contract and any subsequent amendments within 30 days of signature date,

• Ensure its Administrative Services Subcontractors communicate with the provider network regarding program standards, changes in laws, policies, and contract changes, and

• Cover letter that contains a high-level summary of the proposed changes when providing an amendment to an Administrative Services Subcontract.

If the prospective subcontractor meets criteria, DCS CHP, through the DCS State Procurement process, establishes a written agreement that specifies the activities and reporting responsibilities delegated to the subcontractor, in compliance with state regulations and AHCCCS requirements. The written agreement also includes provisions for revoking delegation or imposing other sanctions if the subcontractor’s performance is inadequate. DCS CHP retains the authority to direct and prioritize any delegated contract requirements.

Subcontractor Ongoing Performance Monitoring and Evaluation

DCS CHP evaluates delivery of services for delegated entities on an ongoing basis through joint monthly business review meetings and scheduled reporting. In addition, DCS CHP conducts annual reviews/audits to ensure compliance with state regulations and AHCCCS requirements.

Evaluations and audits include:

• Annual evaluation of the subcontractors’ performance of the delegated functions;

• Member and provider satisfaction (if applicable); and

• QOC concerns.

A change in organizational structure of an Administrative Services Subcontractor requires notification to prior approval of AHCCCS. AHCCCS reviews the notification and determines if a complete Attachment A submission is required. If required, DCS CHP follows the process for the review and approval of newly proposed Administrative Services Subcontracts as defined in this Policy.

If at any time during the period of the Administrative Service Subcontract the delegated entity is non-compliant, DCS CHP notifies the subcontracted entity of the identified deficiencies and requests a corrective action plan (CAP). DCS CHP monitors the implementation and completion of the CAP. DCS CHP notifies AHCCCS within 30 days of the areas of non-compliance and the effect or estimate of impact to members’ quality of care, as well as a CAP to bring the subcontractor into compliance.

Reporting Requirements

DCS CHP requires its delegated entities to report all potential Quality of Care issues and AZ State regulations or AHCCCS requirement breeches to DCS CHP immediately upon discovery. DCS CHP maintains evaluation reports, annual monitoring reports, and corrective action plans in accordance with Federal, State and AHCCCS requirements.

The results of the performance review and any correction action plans are communicated to AHCCCS upon completion on an annual basis or when needed.