Department of Health and Human Services

Commissioner’s Office
221 State Street
# 11 State House Station
Augusta, Maine 04333-0011
Tel: (207) 287-3707
Fax (207) 287-3005; TTY: 1-800-606-0215

BRIEFING MEMO

TO: Interested Parties

FROM: Mary C. Mayhew, Department of Health and Human Services

DATE: March 4, 2011

RE: MaineCare Targeted Case Management (TCM) Services

This memo is intended to summarize MaineCare policy concerns around Targeted Case Management in
view of the recent finding against the Department in Maine DHHS v. United States Department of Health
and Human Services, U.S. District Court (Maine) Docket no 1:10-cv-77. The case before the court was
an appeal of a disallowance by the U.S. Department of Health and Human Services for certain Medicaid
expenses in federal fiscal years 2002 and 2003, which would require Maine to pay back $29.7 million to
the federal government. The payments were to reimburse Maine for part of the cost of providing case
management services to children in foster care and in the child protective system. The Centers for
Medicare and Medicaid Services (CMS) determined that the rate for these services was excessive and not
based on the cost of providing the services; that Maine improperly charged for “direct social services”
rather than case management; and that Maine improperly charged for certain administrative expenses.
Maine argued that the rate was based on an agreement between officials of CMS and the Maine DHHS;
that the auditors’ determination of what constitutes a case management activity was arbitrary and not in
keeping with the statutory definition; and that the disallowance of certain administrative costs was
arbitrary and contrary to law. Maine must determine by April 29, 2011 whether an additional appeal will
be filed in First Circuit Court of Appeals in Boston.

This memo summarizes current status in remedying this and recommends further steps. Most importantly,
the Department has conducted a time study to assure that no administrative expenses are improperly
charged. Additionally, there have been MaineCare changes since this time period to assure compliance.

Current Status of Targeted Case Management Services under MaineCare Benefits Manual (MBM),
Section 13: The Department made significant changes to TCM policy in November 2009. The
Department eliminated many of the previously covered target groups (reduced from 17 to 9 target
groups), imposed a one case manager limit, and standardized several of the rates for this service. The
Department also clarified record keeping and care plan documentation to assure sufficient detail. These
changes were all necessary to resolve CMS concerns for both the court case and for a MaineCare state
plan amendment currently in process. Additional TCM changes were made again upon implementation
of the MIHMS system, on September 1, 2010 to eliminate all monthly payments for TCM. The
Department has had several meetings with other staff to discuss further changes, including staff at the
Office of Child and Family Services and Adult Protective Services.

Regulatory Compliance: The Department submitted a state plan amendment (SPA) to the Centers for
Medicare and Medicaid Services (CMS) in 2009 that has not yet been approved. The Department has
continued to work with CMS on approval of the SPA for the period of November 2009 to present, but
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Caring..Responsive..Well-Managed..We are DHHS.
CMS has ongoing concerns about the medical necessity of services for several of the target groups; wants
further clarification around the distinction between direct services and targeted case management, and
also stated that it will not approve monthly rates for targeted case management. Several sets of Requests
for Additional Information (RAIs) have been issued to the Department, and responses were submitted
accordingly. The Department continues to seek approval of the SPA for the period of November 2009 to
present. Finalization of the court proceedings should influence CMS’ willingness to move to final
processing of the SPA.

Recommended Changes to TCM: The Department should consider making additional changes to TCM
that would make the service finally approvable to CMS. These changes include:

further consolidation some of the target groups,

strengthening medical necessity definitions for the target groups and
distinguishing direct services from care coordination.
standardize all TCM rates for all staff, including agency and State staff

The Department is currently operating at financial risk by reimbursing these TCM services without
approval of the SPA.