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Connecticut Department of Social Services Prospectus: Health Care Contracting Opportunities Charter Oak HUSKY A HUSKY B October 2007 M. Jodi Rell, Governor Michael P. Starkowski, Commissioner

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Connecticut Department of Social Services DSS Prospectus 1 Prospectus - Table of Contents Section Page Introduction 4 n Purpose 5 n Opportunity 7 n HUSKY A/B/Plus 9 n Charter Oak11 n Procurement14 n Timeline16 n Process18 n Rate Setting21 Section Page 10. Program Design27 11. Target Population37 12. Benefits52 13. Network56 14. Becoming an MCO60 15. Sample Contracts64 16. Appendices66 a) Websites67 b) Sample RFP Library68 17. Contact Info69

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Connecticut Department of Social Services DSS Prospectus 2 My goal is to make sure that every adult and child in Connecticut has access to health insurance. Governor M. Jodi Rell (December 27, 2006)

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Connecticut Department of Social Services DSS Prospectus 3 Introduction: DSS to Release RFP in November 2007 n Connecticut Department of Social Services (DSS) anticipates releasing a Request For Proposal (RFP) in November 2007 for qualified carriers and managed care organizations to provide health care services to the combined HUSKY and Charter Oak programs n This prospectus is intended to provide interested parties with background information about the upcoming opportunity to win a contract under DSSs competitive procurement to provide health care services to an estimated 350,000 Connecticut citizens

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Connecticut Department of Social Services DSS Prospectus 4 1. PURPOSE

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Connecticut Department of Social Services DSS Prospectus 5 Purpose: Competitively Procure Health Care Contracts July 1, 2008 n Section 23 of Public Act 07-02 (June Special Session) authorized DSS to enter into contracts with carriers and managed care organizations effective July 1, 2008, to provide services for the newly created state- sponsored health coverage program known as the Charter Oak Health Plan Charter Oak, designed to provide premium assistance in the form of premium subsidies to uninsured adults, with incomes up to 300% of the federal poverty level (FPL), is one piece of the states commitment to provide universal access to affordable health insurance for Connecticut adults of all incomes n DSSs existing managed care programs, HUSKY A & HUSKY B, have approximately 320,000 covered lives. DSS will enter into new contracts with carriers and managed care organizations, effective July 1, 2008

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Connecticut Department of Social Services DSS Prospectus 6 2. OPPORTUNITY

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Connecticut Department of Social Services DSS Prospectus 7 Opportunity: Combined HUSKY/Charter Oak Procurement n A combined procurement for HUSKY and Charter Oak will cover an estimated 350,000 Connecticut citizens for a period of at least 3 years and up to 5 years, with a total contract value projected to be in excess of $3.5 billion over the five-year contract n Successful bidders will be required to meet the network, operational, contractual, and financial standards as laid out in the RFP and provide services for both HUSKY programs, as well as the Charter Oak program n All 350,000 lives will potentially be available under this new contract. New contractors will have the opportunity to enroll individuals and families through an initial open enrollment period and receive newly eligible individuals and families

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Connecticut Department of Social Services DSS Prospectus 8 3. HUSKY A HUSKY B/HUSKY PLUS

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Connecticut Department of Social Services DSS Prospectus 9 DSS Health Care Programs: HUSKY Plan n HUSKY A Comprehensive health care coverage serving low-income children, parents, relative caregivers with incomes up to 185% of FPL Includes pregnant women with incomes up to 250% of FPL Traditional Medicaid health coverage n HUSKY B Health coverage for uninsured children in moderate and higher income families, 185% - 300% of FPL (unsubsidized group rate coverage over 300% of FPL) n HUSKY Plus A supplemental program for children with special medical needs available to participants enrolled in HUSKY B (185% -300% of FPL). HUSKY Plus benefits are paid on a feefor-service basis through DSS contracts

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Connecticut Department of Social Services DSS Prospectus 10 4. CHARTER OAK HEALTH PLAN

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Connecticut Department of Social Services DSS Prospectus 11 DSS Health Care Programs: Charter Oak Health Plan n Charter Oak is designed to provide an affordable health insurance product to adults of all incomes at a target total premium of $250 per member per month n Charter Oak is not Medicaid: benefits will be based on a commercial model, with enforceable deductibles, co-pays, and coinsurance n For individuals with incomes less than 300% of FPL, premium will be subsidized by the state according to a fixed sliding scale

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Connecticut Department of Social Services DSS Prospectus 12 Charter Oak: FPL Table and Projected Enrollment Total Cost of Monthly Premium Total Clients SFY09 Average 8,700 SFY10 Average 21,400 SFY11 Average 32,800

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Connecticut Department of Social Services DSS Prospectus 13 5. PROCUREMENT

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Connecticut Department of Social Services DSS Prospectus 14 Procurement: Combined to Balance Risk and Simplify Administration n DSS will release a Request for Proposals for the combined HUSKY A, HUSKY B and Charter Oak programs in November 2007 n DSS is combining the procurement to allow the successful bidders to balance the familiar risk and large size of the HUSKY enrollment with the less familiar and less predictable size of the Charter Oak enrollment n DSS has a long, proven track record, having administered Medicaid Managed Care since 1995, and the HUSKY Plan (A/B) since 1998. Using this established infrastructure will allow for simplified administration of the combined procurement and reduce the risk to successful bidders by utilizing an existing, known implementation process

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Connecticut Department of Social Services DSS Prospectus 15 6. TIMELINE

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Connecticut Department of Social Services DSS Prospectus 16 Timeline: HUSKY/Charter Oak Procurement n Release of ProspectusOctober 2007 n Release of RFPNovember 2007 n RFP Bidders ConferenceDecember 2007 n RFP Bids DueJanuary 2008 n RFP NegotiationsFebruary 2008 n RFP AwardsMarch 2008 n Open EnrollmentMay 2008 n Contract Effective DateJuly 2008

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Connecticut Department of Social Services DSS Prospectus 17 7. PROCESS

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Connecticut Department of Social Services DSS Prospectus 18 Process: Soliciting Feedback and Partnering n DSS is soliciting feedback and interest from qualified carriers and managed care organizations up to the release of the RFP in November 2007. Where appropriate, DSS will incorporate the feedback into the RFP n DSS will make the data available electronically used in the HUSKY rate setting process to help interested parties more fully understand the risk of the HUSKY program and assist in projecting risk of the Charter Oak program n DSS will conduct a Bidders Conference and will provide a question and answer process to allow interested parties to interact with the States health policymakers and more fully understand the HUSKY and Charter Oak programs

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Connecticut Department of Social Services DSS Prospectus 19 Process: Soliciting Feedback n Simultaneous with this prospectus, the Department is finalizing the RFP for the combined HUSKY and Charter Oak procurement. Per the attached timeline, DSS expects to release the RFP within the next 30 days. To solicit comments on the procurement prior to the RFP release, DSS has established the DSS.HealthCare@ct.gov mailboxDSS.HealthCare@ct.gov n Interested parties should e-mail their comments to this mailbox. All comments will reviewed by the Agency. Any comments requiring responses will be sent to all interested parties that register by submitting an e-mail labeled Request for Registration to the above mailbox

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Connecticut Department of Social Services DSS Prospectus 20 8. RATE SETTING

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Connecticut Department of Social Services DSS Prospectus 21 Rate Setting Methodology: HUSKY A & HUSKY B n Rates required to be Actuarially Sound per CMS Requirements n Rates set for State Fiscal Year (SFY). Rates Effective July 1, 2008 will be in effect for SFY09 (July 1, 2008, to July 1, 2009) n Rates are based on Health Plan Financials and Encounter data, adjusted for: Demographics Unpaid Claims Liability Program Changes Trend

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Connecticut Department of Social Services DSS Prospectus 22 Rate Setting Methodology Changes: Under Consideration HUSKY A & HUSKY B n January 1, 2008 Maternity and newborn kick payments n Future Rate Years - Changes Under Consideration Risk-Adjusted Rates Pay-for-Performance Incentives Minimum Loss-Ratio Standards Quality/Evidence-Based Payment Incentives

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Connecticut Department of Social Services DSS Prospectus 23 Rate Setting Methodology: Charter Oak n Rates will be Actuarially Sound and able to meet CMS Requirements n Rates will be set for State Fiscal Year (SFY). Rates Effective July 1, 2008 will be in effect for SFY09 (July 1, 2008 to July 1, 2009) n Rates will be based on HUSKY A adults data, adjusted for differences in: Demographics Plan Design Underlying Risk/Acuity Reimbursement Trend

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Connecticut Department of Social Services DSS Prospectus 24 Rate Setting Methodology: Charter Oak n Incentives/Sanctions DSS is considering placing funds at-risk for contractor performance standards in several areas, including: Geographic distribution of key provider types for overall network access requirements Availability of scheduled appointments for primary care and specialty physicians for meeting appointment scheduling waiting standards Telephonic wait times, call abandonment and resolution rates for member and provider customer service standards Claims adjudication times for meeting claims payment timeliness requirements

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Connecticut Department of Social Services DSS Prospectus 25 HUSKY A Actuarially-sound Fiscal Year 2005 2007 Capitation Rates HUSKY A Fiscal Year Rates AgeFY05* FY06* (First Half) FY06** (Second Half)FY07**