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AHCCCS Update

Tribal Consultation MeetingMarch 31, 2011

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Topics to Cover

Tribal ConsultationUpdated Economic DataFederal Response to State Concerns Budget Update Health Care ReformOther Opportunities

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Tribal ConsultationAHCCCS Tribal Consultation Policy AHCCCS and Indian Tribes in the State of Arizona share the common goal of decreasing health disparities and maximizing access to critical health services. In order to achieve this goal, it is essential that the AHCCCS Administration and Indian Tribes engage in open, continuous, and meaningful consultation on a government-to-government basis.Agency has regular Tribal Consultation Meetings

4 in current Calendar Year – 3rd meeting on Tribal lands12 in 20107 in 20096 from 2006-2008

All information from previous meetings is available on web

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American Indians in AZ & AHCCCS

Arizona Residents

Arizona population: 6,343,952285,183 AI Arizona residentsAIs comprise 4.5% of Arizona’s total population.

AHCCCS Members

AHCCCS members: 1,373,279141,092 AI AHCCCS membersAIs comprise about 10% of AHCCCS members.

*Almost half of AIs in Arizona are enrolled in AHCCCS.

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AI Enrollment in AZ Medicaid

115,818

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Reimbursements to IHS/638s

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Employment

7

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49

Perc

ent C

hang

e fro

m P

eak

Empl

oym

ent

Number of Months After Peak Employment

ArizonaJob Loss Non-Farm Seasonally Adjusted

LowpointSept 2009 (296,000)

CurrentDec2010 up 35,300 from Lowpoint

National

8

0

10000

20000

30000

40000

50000

60000

Jan‐02

Mar‐02

May‐02

Jul‐0

2Sep‐02

Nov‐02

Jan‐03

Mar‐03

May‐03

Jul‐0

3Sep‐03

Nov‐03

Jan‐04

Mar‐04

May‐04

Jul‐0

4Sep‐04

Nov‐04

Jan‐05

Mar‐05

May‐05

Jul‐0

5Sep‐05

Nov‐05

Jan‐06

Mar‐06

May‐06

Jul‐0

6Sep‐06

Nov‐06

Jan‐07

Mar‐07

May‐07

Jul‐0

7Sep‐07

Nov‐07

Jan‐08

Mar‐08

May‐08

Jul‐0

8Sep‐08

Nov‐08

Jan‐09

Mar‐09

May‐09

Jul‐0

9Sep‐09

Nov‐09

Jan‐10

Mar‐10

May‐10

Jul‐1

0Sep‐10

Nov‐10

Housing - Foreclosures

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Maricopa County 2002 – 2010 Source: The Information Market

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Housing – Negative Equity

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0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Philadelphia, PA

Baltimore‐Towson, MD

St. Louis, MO‐IL

Newark‐Union, NJ‐PA

Bethesda, MD

Chicago, IL

Denver,CO

Washington‐Alexandria, VA

Sacramento, CA

Phoenix, AZ

Las Vegas, NV

10

9

4

15

2

10

3

7

Job Growth 2006

11

15

6

228

Source: US BLSSource: US BLS

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Jobs growing

Jobs declining

Top 10

Hawaii

Alaska

11

5

49

23

3545

4

32

8

24

47

50

44

1

16

3

Alaska 2

13

1830

Job Growth 2009

Source: US BLSSource: US BLS

46

Jobs growing

Jobs declining

Top 10

Hawaii

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Enrollment Growth FY 2001 to FY 2010

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20.2%

51.1%

23.5%34.3%

133.4%

4.6%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

Total Pop1,072,000

Corrections13,677

K‐12199,168

Universities31,770

Medicaid778,724

Revenue$285 M

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The Budget: Summary

Budget ReductionsMedicaid Reform $541.5Universities $170.0DES $91.0Provider Rate Reduction $89.0K‐12 $83.7Community Colleges $72.9Convention Center Payment $15.0DJC $7.2Other  $7.2Total $1,077.5

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Education FundingK12 Education

Arizona per pupil support is ranked 49th in the countrySince FY 2008: Reduced per pupil expenditures by 18 percent

Eliminated full-day kindergarten -Reduced equipment 77%FY 2012 proposal - $83.7 M cut

UniversitiesReduced per student support by 25 percentAverage tuition increase: 53%FY 2012 proposal - $170 million cut (additional 22%)

Community CollegesSince FY 2008 Reduced GF support 19.3%FY 2012 proposal - $72.9 M Cut (additional 52%)

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AHCCCS Capitation Trends

6.73

2.5

-2.45-4.2

6.495.85

-6

-4

-2

0

2

4

6

8

CYE '07 CYE '08 CYE '09 CYE '10 CYE'11 5 Yr Avg.

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Secretary Sebelius ChecklistFebruary 3, 2011 Letter recognizing significant fiscal

constraints faced by States and need for flexibilityBenefits

Eliminate Optional Benefits – DoneLimit Benefits – Done – IP 10-1-11Cost Sharing – Done – beyond federal limits through waiver – still awaiting final SPA approval (13 months)

Manage CareIntegrate Acute and Long Term Care – DoneEmphasize HCBS – DonePrimary Care/Medical Home – DoneACA – 90% Health Home – Community 1st Choice Option -Ready

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Secretary Sebelius ChecklistPharmacy

Reduce Spend – Done - # 1 in CountryProgram Integrity

Ongoing – Analytics – Increased resources – PERM results – OIG recognition – date of death –Grant request OMB

Duals Eligible Members National Leader with aligned managed care model and applied for CMMI contract authority

Executive Budget makes painful reductions throughout State Government but still $500 million short in FY 2012– Now What? How does Medicaid become sustainable for States?

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HHS Response to ArizonaLetter dated February 15, 2011

MOE does not require State to renew demonstration in current form. State may make changes upon expiration (9-30-11)Letter offers assistance with regards to provider feeLetter encourages integration of physical and mental health careLetter states that there may be legal issues with regards to MOE waiverBottom Line – State provided with flexibility to terminate coverage for two waiver populations

Adults without Children (221,254 members)Spend Down Members (5,785 members)

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Governor’s Medicaid Proposal(FY 2012 GF Projected Savings)

Proposal seeks to grandfather coverage while establishing sustainable program -5-1-11 MED Freeze – 10-1-11 End - $70m 7-1-11 Childless Adult (CA) Freeze - $190m10-1-11 Parents >75% FPL Freeze - $17mSeeking authority from CMS to exempt changes to Native Americans receiving services at I.H.S. and 638 facilities10-1-11 Terminate FES coverage - $20mDoes not impact Native American population10-1-11 Six Month Rede (CA) – $15m

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Medicaid Changes Cont10-1-11 Mandatory Copays (TMA Methodology) – Native Americans would be exempt

Parents- $2.7mChildren - TBD

10-1-11 Benefit Limits – $40 m 25 day IP – Respite – ED visits – Office Visits – Non Emergency Transportation (Urban Counties) – TransplantSeeking authority from CMS to exempt services provided at I.H.S. and 638 facilities

10-1-11 5% Provider Reductions – Outlier – MCO Reductions -$95m

Would exempt services provided by I.H.S. and 638 facilitiesMedicare Liability - $40m

Does not impact members of providers

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PROJECTED MEMBERSHIP DECLINEAHCCCS Care, MED, and TANF over 75%May 2011 to July 2012 (Capitated and IHS)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

May-11Jun-1

1Jul-1

1Aug-1

1Sep-11Oct-

11Nov-1

1Dec-

11Jan

-12Feb-12Mar-

12Apr-1

2May-12

Jun-12

Jul-12

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Status of ChangesMED Elimination

Rule posted – 30 Day Public Comment Phase Down Plan – Version 2.0 @ CMS – Requires CMS Approval prior to Implementation

Waiver Request – Today?Covers Childless Adults Freeze – Parents Freeze – Rede Change – Mandatory Copays – Medicare – Exemption for Tribal members and I.H.S. and 638 facilities

Benefit Team working on new limitsTeam working on Reimbursement changesAwaiting Final Budget Agreement and authoritySupreme Court will have final say over $200 m of

eligibility changesProvider Assessment – Politically Challenged

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What about eliminating AHCCCS?

SB 1519 Proposed Eliminating AHCCCS Passed Senate AppropriationsNothing in federal law mandated Medicaid system in Arizona$7 billion in federal health care spending eliminated Economic devastation would be crippling. Arizona at competitive disadvantageCurrent GF Medicaid commitment is approximately $2.0 BFunding for ALTCS (50,000 members) - $2.2 billionUnless we are going to eliminate coverage for some ALTCS members then 1.3 million Arizonans currently covered would be uninsured

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Health Care Reform UpdateHealth Insurance Exchange

AHCCCS evaluating system gapsState Legislation StalledExecutive Branch Efforts

Drug Rebates Issued contract – Filed 3 Quarters worth of claims with Pharma – State benefit still unknown

Payment Reform Grants Health Homes – just awarded $500,000 planning grant – tied to SMI integrationEvaluation multiple proposals for Prevention Grant Funding

Recovery Audit Contractors Moving through process to develop scope of work with RAS

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Integration IssuesSpecial Needs Children

Begun discussions with SLHI to staff community and family discussions on payer integrationPursuing model change as part of 2013 Acute RFP

Behavioral Health Working on Specialty Plan concept for SMIsEvaluating Model as part of Health Home proposalWant Plan to be fully integrated including MedicareWant to Start in Maricopa

Dual Eligible Members Pursuing Study with MathematicaAZ not awarded CMS grants – Still plenty to do

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Other FY 2011 ChallengesSupplemental Payments

GME/IME – June 30th DeadlineDSH – Additional Private Allocation

Program Integrity – Pursuing Model Program FundingALTCS RFPs –Sunset Audit – 2011 & 2012

Eligibility and COBWaiver Renewal – Oct 2011 – Budget Change –Payment ReformsSystem Issues - 5010- ICD 10Workforce – Employee SurveyStakeholder Communication

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At the End of DayAHCCCS must work to Preserve the Core

Viable health plans to maintain managed care model – it worksProviders in the system/NetworkDelivery of Quality Health CareAdministrative capability

Nationally – Country must have an adult conversation on sustainability of entitlement programs