STRATEGIC HEALTHCARE ANALYTICS Medi-Cal Transformation: Understanding the risks and opportunities...
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STRATEGIC HEALTHCARE ANALYTICS Medi-Cal Transformation: Understanding the risks and opportunities presented by the unprecedented transformation of the Medi- Cal Program HOOPER HEALTHCARE CONSULTING ABSHER HEALTHCARE CONSULTING MANAGED CARE SUPPORT SYSTEMS Presentation to HFMA Southern California August 16, 2012
STRATEGIC HEALTHCARE ANALYTICS Medi-Cal Transformation: Understanding the risks and opportunities presented by the unprecedented transformation of the
STRATEGIC HEALTHCARE ANALYTICS Medi-Cal Transformation:
Understanding the risks and opportunities presented by the
unprecedented transformation of the Medi-Cal Program HOOPER
HEALTHCARE CONSULTING ABSHER HEALTHCARE CONSULTING MANAGED CARE
SUPPORT SYSTEMS Presentation to HFMA Southern California August 16,
2012
Slide 2
MEDI-CAL MANY MOVING PIECES Medi-Cal Transformation Managed
Care in Rural Areas SPD Enrollment in Managed Care FFS to APRDRG
Dual Eligible Pilots APRDRG Expansion to Managed Care Childrens
Health Pilots AUGUST 1, 20122
Slide 3
MEDI-CAL MANY MOVING PIECES Other Key Items Related to Medi-cal
Current Implementation of Low Income Health Program Medicaid
Expansion in 2014 California Health Benefit Exchange Establishment
of a Basic Health Plan for those between 133-200% of FPL? AUGUST 1,
2012 3
Slide 4
MEDI-CAL POPULATION RESPONSIBILITY AUGUST 1, 2012 4 Source:
OSHPD Annual Financial Data Reports
Slide 5
DHCS indicates that 22% of acute Inpatient Days would shift to
Managed Care as the patients are Classified as an Aid Code of
Seniors and Persons with Disabilities. This is from 2009 Data Set
Makes financial planning much more difficult than in years past to
determine impact of the transition and financial planning related
to Utilization The range across facilities of a percentage of SPDs
varies widely from low of ~5% to high of 80% Managed Care to be
expanded into rural counties, plus recent expansion between
2010-2012 in other counties. Currently Managed Care available in 28
counties AUGUST 1, 2012 5 MEDI-CAL POPULATION RESPONSIBILITY
Slide 6
CALIFORNIA MEDI-CAL FFS APRDRG APRDRG All Patient Refined DRG
Originally developed by 3M and National Association of Childrens
Hospitals and Related Institutions 314 Base DRGs, with 4 levels of
severity assigned 29 Base Neonate and Normal Newborn DRGs 12 Base
Obstetrics DRGs Will require separate submission of mother and well
baby claims No interim bills less than 30 days Discontinuation of
daily TAR process Impact of Medi-Cal Recovery Audit Contractor
Program? Contract Awarded in April 2012 Beginning Scope is limited,
but could expand AUGUST 1, 20126
Slide 7
CALIFORNIA MEDI-CAL APRDRG Intended as a budget neutral payment
method DSH and Supplemental funding excluded Elements of
Californias APRDRG payment method DRG with national weights Wage
index adjuster Outliers Policy Adjusters Rural designation
Adjustment Attempt to hold harmless at 5% corridor for group AUGUST
1, 20127
Slide 8
CALIFORNIA MEDI-CAL APRDRG Program built based on 2009 database
built by ACS/Xerox Required significant integration of multiple
data sources to assign the DRG Will drive the financial exposure
limits through transitional pricing corridors Significant
assumptions made including the methodology for eliminating the SPDs
from the database and the exclusion of claims without a discharge
State will not update the data prior to implementation AUGUST 1,
20128
Slide 9
CALIFORNIA MEDI-CAL APRDRG Policy Adjusters 1.25 for Neonate,
Pediatric Care 1.75 for Neonatal Care provided at a CCS Approved
Neonatal Surgery NICUs DHCS has stated intent to monitor continued
appropriateness of policy adjusters related to patient access
Transfers No post-acute transfer adjustments Transfers to acute
care subject to per diem based payment based on average length of
stay AUGUST 1, 2012 9
Slide 10
CALIFORNIA MEDI-CAL APRDRG 4-year phased implementation
beginning July 1, 2013 Financial exposure mitigation through
transitional pricing corridors: +/- 5% maximum FY13-14 +/- 10%
maximum FY14-15 +/- 15% maximum FY15-16 Full DRG payment FY16-17
and beyond AUGUST 1, 201210
Slide 11
DHCS DATABASE BUILDING BLOCKS 2009 Paid Claims All Medi-Cal FFS
paid claims Excluded denials 2009 OSHPD Discharge File Match to
paid claims Provided diagnostic information Assumptions Inferred
newborn claims Exclusion of managed care eligible Exclusion of
incomplete claims AUGUST 1, 201211
Slide 12
CRITICAL ANALYTICAL SHORTCOMINGS Inadequacy of data used to
build the program and potential ramifications Inaccurate Base Rate
Setting Change in utilization of services since 2009 Limitations on
losses or gains as a result of transition Key payment drivers
(i.e., adjusters, outliers, wage index) Impact of moving large FFS
populations to managed care Pilot enrollment of dual eligible
population; prospects for expansion Rogers rate implications
Adoption by managed care plans AUGUST 1, 201212
Slide 13
MEDI-CAL APRDRG DHCS DATASET AUGUST 1, 2012 13 48% of FFS
Revenue will come from Obstetrics, nursery and neonatal care
However a significant amount of care will still be delivered
through the FFS system for adults and pediatric cases.
Slide 14
STATE DATA VS. HOSPITAL DATA What changes in case mix and
services rendered to Fee- For-Service beneficiaries occurred in
subsequent years? State has signaled that they will not create
databases for 2010, 2011, or 2012 Has there been any change in the
Fee-for-Service population at a given hospital? AUGUST 1,
201214
Slide 15
HOSPITAL DATA: 2009 VS. 2010 AUGUST 1, 201215
Slide 16
2009 APRDRG PRICING NON SPDS Critical to review services by
Care Category to measure efficiencies, areas to improve in, and to
consider adjusting AUGUST 1, 201216
Slide 17
CALIFORNIA MEDI-CAL APRDRG: MANAGED CARE Rogers Rate: Plans to
pay out of network providers at DRG rates Plans to be paid based on
projected expenses related to DRGs Plausible that plans will shift
to DRG based payment Have seen this play out in other states
Potential Implications? AUGUST 1, 2012 17
Slide 18
DUAL ELIGIBLE PILOT PROJECTS Dual Eligibles Who are they? There
are 1.1 million dual eligibles in CA What services are they
utilizing? What will be the impact on Utilization? DHCS projects a
20% decrease in inpatient utilization by dual eligible
beneficiaries enrolled in Medi-Cal HMOs The state estimates $675
million in general fund savings in year 1 of demonstration AUGUST
1, 201218
Slide 19
DUAL ELIGIBLE PILOT PROJECT AUGUST 1, 201219 Implementation
begins no earlier than March 2013 and no later than June 2013 CA
plans to start with following 8 counties: Los Angeles, Orange, San
Diego, San Mateo, San Bernardino, Riverside, Alameda and Santa
Clara CMS has announced that they will likely limit Dual Pilots
Nationwide to about 2 Million Enrollees (States have thus far
proposed 3 Million Enrollees) Possibility that some counties may
not proceed as anticipated given CMS statements and increasing
political pressure Rate Setting and Contract Negotiations with
plans September October 2012 Beneficiary and Provider Outreach
October 2012-June 2013
Slide 20
DUAL ELIGIBLE PILOT PROJECT AUGUST 1, 2012 20
Slide 21
DUAL ELIGIBLE PILOT PROJECT AUGUST 1, 2012 21 What can
hospitals do to monitor and act strategically?
Slide 22
DUAL ELIGIBLE PILOT PROJECT: CALIFORNIA STATISTICS AUGUST 1,
2012 The initial enrollment will include 685,000 beneficiaries
Medicare FFS Days 22
Slide 23
Health Benefit Exchanges THE PERFECT STORM? AUGUST 1, 2012 23
Medicare DSH Cuts Medi-Cal DSH Cuts Medi-Cal DSH Cuts Medi-Cal
Expansion Medi-Cal DRG Dual Eligible Pilots Quality Assurance Fee
Medi-Cal Managed Care Changing Payor Mix Impact on Supplemental
Funding
Slide 24
STRATEGIC HEALTHCARE ANALYTICS Our Industry is data rich, but
we continue to face many challenges using data effectively With
declining reimbursements, and growing demands from payers,
effective, actionable analytics become all the more important
Integrating and analyzing data from disparate systems/sources can
be the key to creating useful analytics AUGUST 1, 2012 24
Slide 25
UTILIZING ANALYTICS Service line specific analysis Workgroup
input Appeals process Trade group input Cost containment strategies
Data capture and coding Projecting fiscal impact DRG vs. HMO
Reimbursement Budgeting Operational Improvements Strategic Planning
Advocacy AUGUST 1, 201225
Slide 26
WHERE DO YOU GO FROM HERE? AUGUST 1, 201226
Slide 27
CONTACT INFORMATION AUGUST 1, 2012 27 Bryan Hooper Hooper
Healthcare Consulting, LLC Email:[email protected] Phone: (714)
871-3494 Matt Absher Absher Healthcare Consulting, LLC Email:
[email protected] Phone: (530) 231-5305