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AAHAMTexas Bluebonnet Chapter
Annual State Institute
August 4, 2016
Presented by:
John Berta
Texas Hospital Association
What is up and coming from our State
Medicaid Program?
What could this election bring?
Medicaid Re-enrollment 9/24/2016
Texas Medicaid must revalidate the enrollment of all
providers in state Medicaid programs. For Texas Medicaid,
this means all providers, including ordering and referring
providers, who have not met all PPACA revalidation
requirements must do so through re-enrollment by Sep.
24, 2016
To avoid disenrollment on Sep. 25, 2016, and possible
disruption in claims payment, providers should submit a
re-enrollment application to the state or TMHP today.
http://www.tmhp.com/Pages/Topics/Reenrollment.aspx
Today’s Discussion
November 8th Election
85th Texas Legislature & the State Budget
Trauma funding
Medicaid waiver
Other Items
Vote
Tuesday, November 8, 2016 - Election Day
7:00 a.m. to 7:00 p.m.
Early Voting
October 24th-November 4th, 2016
November Election – Key Dates
Item Date
Last Day to Register to VoteTuesday, October 11, 2016*
*First business day after Columbus Day
First Day of Early Voting Monday, October 24, 2016
Last Day to Apply for Ballot by Mail (Received, not Postmarked)
Friday, October 28, 2016
(* NEW LAW: 11th day before election day; ABBM and FPCA.)
Last Day of Early Voting Friday, November 4, 2016
Last Day to Receive Ballot by MailTuesday, November 8, 2016
(election day) at 7:00 p.m. (unless overseas deadline applies)
Texas Election – Key Races
U.S. President - 4 yr. term
All 36 United States Representatives 2 yr. term
16 State Senators - 4 yr. term
All 150 State Representatives 2 yr. term
National Election - Debates
Sept. 26 — Presidential debate at Wright State University in
Dayton, Ohio
Oct. 4 — Vice presidential debate at Longwood University in
Farmville, Virginia
Oct. 9 — Presidential debate at Washington University in St. Louis
Oct. 19 — Presidential debate at University of Nevada-Las Vegas
Nov. 8 — Election Day
Texas Voting - Resources
http://www.sos.state.tx.us/
http://www.votetexas.gov/
Today’s Discussion
November 8th Election
85th Texas Legislature & the State
Budget
Trauma funding
Medicaid waiver
Other Items
Major Issues for Texas Leaders
10
State Budget – FY 2016-2017 Highlights
$373 million GR - Savings and Cost Containment Rider
(highlights of activities that may impact providers)
Therapy Rates
Fully implement Dual Eligible Medicare/Medicaid integrated care model.
Implement FFS payment changes and MMC premium adjustments that
incentivize the most appropriate and effective use of services.
Improve birth outcomes, including access to information and payment reform.
Continue strengthening prior authorization and UR.
Develop MCO premium development process for ongoing methodology for
reducing inappropriate utilization, improving outcomes, reducing unnecessary
spending and increasing efficiency.
Increase third party recoupments.
Assess options to reduce costs for retroactive Medicaid claims.
11
State Budget – FY 2018-2019
Oil and gas downturn hurts Texas sales tax revenue
12
Major Driver – Sales Tax
Texas Sales Tax Collections
Oil Prices
Speaker Letter to House
Appropriations Committee 4/19
Speaker Straus laid out a host of tough issues lawmakers must
consider as they begin discussing the next budget:
• Plunging oil prices slowing revenues and the economy,
• a foster system in crisis that courts may require Texas to fix,
• a potentially costly ruling in long-winding school finance suit and
• the need for a long-term solution to fund health care for retiring
teachers.
15
Medicaid Caseload Growth
State Budget – FY 2018-2019 – Drop in
Federal Rate
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
$65.00
$70.00
FY2013 FY2014 FY2015 FY2016 FY2017
Cost to Provide $100.00 in Texas Medicaid Payments
Texas Feds
17
Year Texas Feds
FY2013 $40.70 $59.30
FY2014 $41.31 $58.69
FY2015 $41.95 $58.05
FY2016 $42.87 $57.13
FY2017 $43.82 $56.18
85th Texas Legislature
LEGISLATIVE PRIORITIES
Coverage Expansion the Texas Way
Possible Components
Personal Responsibility
Co-pays
Employment
Marketplace Coverage
NEXT STEPS
Continue promoting the need to
expand coverage and reduce
uninsured.
Today’s Discussion
November 8th Election
85th Texas Legislature & the State Budget
Trauma funding
Medicaid waiver
Other Items
Trauma Account 5111
Collections - $100M
Expenditures - $175M
Expenditures exceed Collections
Trauma Sources of Revenue
Sources of 5111 Funding
23
73%
27%
Account 5111 - FY2015 Revenue
Drivers License Surcharge Court Fines
DRP Surcharge (3 years)
24
DRP Program FY2015 Revenue
25
$152$97
$30
2015 DRP Revenue in Millions
Collected
Waived
Not Collected
DRP Program Revenue by Type
26
$1,397
$1,675
$779
$36
DRP Lifetime Revenue in Millions
DWINo InsuranceNo DL, DWLIPoints
Uses of DRP Net Revenues
27
50%50%
Drivers License Surcharge Revenue
Account 5111 State GR
Uses of Court Fine Revenues
28
33%
67%
Court Fines
Account 5111 State GR
Total Contribution to Account 5111
29
43%57%
Court Fines & DRP Surcharges
Account 5111 State GR
Trauma Account 5111
Collections - $100M
Expenditures - $175M
Inpatient Funding Increases from 84th
Session - I
Safety Net Add-on for Children’s and Urban Hospitals
Special Provision 59; FY 2016 = $135,340,736 AF; FY 2017
= $133,777,545 AF.
Must have qualified for DSH in most recently completed DSH
program year.
Rates determined by allocating appropriated funds by the
number of Medicaid days for each qualified hospital. The
allocated amount was then divided by the hospital’s total
relative weights, which yields the add-on amount.
Funds started flowing for services provided on or after
September 1, 2015.
Inpatient Funding Increases from 84th
Session - II
Increased Trauma Add-on
Special Provision 32; FY 2016 = $178,780,092 AF; FY 2017 =
$176,715,177 AF.
Funds started flowing for services provided on or after September 1,
2015.
Inpatient Funding Increases from 84th
Session - III
Quality Add-on for Safety Net Hospitals
Special Provision 59; FY 2016 = $15,037,860 AF; FY 2017 =
$14,864,172 AF.
Must be a Safety Net Hospital.
Based on performance on PPRs and PPCs.
Goals is to pay FY 2016 funds in lump sums to qualifying hospitals
prior to end of FY 2016.
Inpatient Funding Increases from 84th
Session - IV
Special Provision 58 directed HHSC to expend certain funds to
provide increases in, or add-ons to, Medicaid outpatient provider
rates for rural hospitals to ensure access to critical services.
FY 2016 = $28,043,936 AF; FY 2017 = $30,030,030 AF
Increased general outpatient reimbursement such that final
payments do not exceed 100% of cost.
Increased reimbursement for outpatient emergency
department services that do not qualify as emergency visits
such that final payments do not exceed 65% of cost.
Created rural hospital add-ons to the outpatient hospital
imaging services fee schedule.
State Budget – FY 2016-2017 Highlights
(cont’d) – Hospital Specific
• $129 million in state funding for a Medicaid rate add-on for
safety net hospitals
• $67 million for trauma add-on over 2016-2017 biennium in
addition to the $44 million already appropriated add-on
payment for trauma care
• $25 million for rural outpatient services at 100% of costs
• All but $5 million comes from unspent trauma funds
35
Texas Trauma Centers
36
175
195
215
235
255
275
295
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015
Total Trauma Centers
Level FY2000 FY2015 Variance
Level I 10 17 7
Level II 11 15 4
Level III 33 55 22
Level IV 127 197 70
Total 181 284 103
Texas Level-I Trauma Centers
37
Population
Level I –
13.9 Million
Contiguous
6.5 Million
All Other
6.9 Million
Today’s Discussion
November 8th Election
85th Texas Legislature & the State Budget
Trauma funding
Medicaid waiver
Other Items
1115 Medicaid Transformation Waiver Extension
What’s at Stake?
UC Funding
$17.6 billion between 2011 and 2016
Offset some of the costs of providing care to uninsured and Medicaid patients
DSRIP Projects and Funding
1,491 active projects
Increasing access to primary care, behavioral health services, specialty care
Improving chronic disease management
Reducing unnecessary use of hospital ER
Promoting better health outcomes
Integrating behavioral health and physical health care
$11.4 billion in earned payments between 2011 and 2016
Statewide Medicaid Managed Care - $8.65 B in savings
Medicaid Waiver – Overview
Managed care expansion – FY2017 = 92% MCO
Allows statewide Medicaid managed care services (STAR, STAR+PLUS,
and Children’s Medicaid Dental Services) while preserving historical UPL
funding.
Waiver goals:
Expand Medicaid managed care statewide
Develop and maintain a coordinated care delivery system
Improve health outcomes while containing costs
Protect and leverage federal match dollars to improve the healthcare
infrastructure
Transition to quality-based payment systems across managed care and
hospitals
Medicaid Waiver - Overview
Section 1115 of the Social Security Act gives the
Secretary of Health and Human Services authority to
approve experimental, pilot, or demonstration projects
that promote the objectives of the Medicaid and CHIP
programs
Expire/Begin Approval Date
Texas 10/1/2011 CMS – 12/12/2011
California 1/1/2016 CMS – 12/30/2015
Tennessee 6/30/2016 6/30/2016 – 2 Month
Texas 12/31/2017 TBD
1115 Medicaid Transformation Waiver Extension
Extension Timeline
Current five-year waiver expires Sept. 30, 2016
Gov. Greg Abbott submitted an extension application to
CMS in September, 2015
Request was for another 5-year term
No major changes to managed care, DSRIP or UC terms
and conditions
CMS Granted 15-month extension!
Waiver Timeline
Waiver Renewal – Agreements
As part of the 15 month extension, CMS required Texas to agree that:
CMS and Texas will work over the next 15 months on an agreement to
reform the state’s UC pool and DSRIP.
If, at the end of calendar year (CY) 2017, CMS and the state have not come
to an
agreement that is consistent with CMS’ UC pool principles and a DSRIP that
supports Texas’ commitment to managed care:
DSRIP will not be renewed except as a phasedown starting at the end of CY
2017. The phase down would begin at 25 percent in 2018, and phase down by
an additional 25 percentage points each year afterwards.
UC will not be renewed except at a reduced level consistent with CMS’
principles for uncompensated care.
Waiver Components
Uncompensated Care (UC) Pool:
Replaces UPL
Covers Medicaid shortfall and costs of care provided to individuals who have
no third party insurance coverage.
Creates 20 Regional Healthcare Partnerships (RHPs)
Delivery system Reform Incentive Payment (DSRIP) Pool
New incentive program to support coordinated care and quality
improvements through the RHPs.
Goals: transform delivery systems to improve care for individuals (including
access, quality and health outcomes), improve health for the population and
lower costs through efficiencies and improvements.
Targets Medicaid recipients and low income uninsured individuals
Waiver Extension UC and DSRIP
GAO Report June, 2013
GAO Recommendations
1. Update the agency’s written budget neutrality policy to reflect actual criteria and processes used to develop and approve demonstration spending limits, and ensure the policy is readily available to state Medicaid directors and others; and
2. Reconsider adjustments and costs used in setting the spending limits for the Arizona and Texas demonstrations, and make appropriate adjustments to spending limits for the remaining years of each demonstration.
Waiver Spending
FY2012 FY2013 FY2014 FY2015 FY2016
Medicaid Capitation Waiver Spending
WOW WW
Sample Per Member Per Month Amounts
Waiver Spending
FY2012 FY2013 FY2014 FY2015 FY2016
Medicaid Capitation Waiver Spending
WOW WW
Savings
UC
DSRIP
NAIP
CMS Initiatives
Response: address all portions of
the graph:
- Top line, tighten inflation;
disallow older costs
- Bottom line, tighten
Medicaid managed care rules
- Gap – tighten rules around
measurement and allowance
supplemental payments
Waiver Spending
Control Spending – Lower WOW
1.Lower inflation (CA) 6.2% down to <4.0%
2.Cost Sharing
1.Phase out savings
2.Projects > 5 Years – savings phased down
1.YR 6= -10%
2.YR 7= -20%
3.YR 13= -75%
Waiver Spending
FY2012 FY2013 FY2014 FY2015 FY2016
Medicaid Capitation Waiver Spending
WOW WW
Savings
UC
DSRIP
New WOW
Managed Care Rules
-Actuarial Soundness Requirements -Rate Development Standards and Rate Certification Requirements -Medical Loss Ratio -Delivery System Reform
In-Lieu-of-Services Capitation Payments for Enrollees with a Short-Term Stay in an Institution for Mental Disease Incentive Arrangements Withhold Arrangements Delivery System Reform and Provider Payment Initiatives
Sample Per Member Per Month Amounts
Actuarial Soundness
1903(m) of the Social Security Act requires that capitation rates paid to managed care organization be actuarially sound in order for a State to receive FFP on the capitation payment
438.4(b)(5): Payments from any rate cell must
not cross-subsidize or be cross-subsidized by
payments for any other rate cell
Waiver Spending
FY2012 FY2013 FY2014 FY2015 FY2016
Medicaid Capitation Waiver Spending
WOW WW
Savings
UC
DSRIP
New WOW
Supplemental Funding @ Risk
CMS interpretations of federal regulations pertaining to the use of certain
types of public/private arrangements such as Low-Income and Needy Care
Collaboration Agreements, Collaborative Endeavor Agreements and Public-
Private Partnerships.
New federal managed care regulations limiting the use of IGT Responsibility
Agreements.
Statutory reductions in future DSH allocations under the Affordable Care Act
CMS UC pool principles
CMS’ position regarding “pay-to-play” arrangements
Method of Finance
CMS Deferral – 18 months ago
Public/Private Affiliation Agreements Reviewed
THHSC met with CMS over the summer
CMS notifies Texas current arrangements are good thru
August 2017
THHSC to continue to “draw out” CMS on August 2017
position
60
DSRIP
1,451 active DSRIP projects
• 298 providers – hospitals (public and private), physician groups, community
mental health centers and local health departments
• Major project focuses:
Over 25% - behavioral healthcare
20% - access to primary care
18% - chronic care management and helping patients with complex needs
navigate the healthcare system
9% - access to specialty care
8% - health promotion and disease prevention.
• Over $7.1 billion earned through January 2016
HHSC Future DSRIP Principles
• Further incentivize transformation
• Maintain program flexibility
• Integrate with Texas Medicaid managed care quality
strategies
• Streamline and lesson administrative burden
• Improve project-level evaluation
• Support the healthcare safety net for Medicaid and low
income uninsured Texans
62
Supplemental Funding – DSH
UC Pool Evaluation 8/30/2016
CMS is requiring Texas to submit an Evaluation of Uncompensated Care Costs for the
Uninsured report by August 31, 2016
Report must be completed by an independent entity (HHSC is using Health
Management Associates and Deloitte Consulting)
Should review the role of UC and DSRIP payments in the overall Medicaid
system for paying hospitals.
Consider adequacy of base Medicaid payment levels and their relation to
Medicaid shortfalls and indicate degree to which UC pool and DSRIP payments
compensate for insufficient base payment levels.
Identify percentage of UC pool payments not specifically related to Medicaid
shortfalls.
Estimate what Texas’ UC burden would be in FFY 2017 if Texas Medicaid rates
fully funded the Medicaid shortfall and if Texas opted to expand Medicaid as
allowed under the ACA.
UC Pool Evaluation
Estimate what Texas’ UC burden would be in FFY 2017
• If Texas Medicaid rates fully funded the Medicaid shortfall
• If Texas opted to expand Medicaid as allowed under the ACA.
• Shortfall = ~$2.4B
• Expansion = 1/3 of Uninsured
Florida – LIP
• Florida has a Low Income Pool (LIP) that serves a similar purpose to Texas’ UC
pool.
• CMS granted Florida a one year extension of its pool when it initially expired but
required Florida to commission a UC study similar to the study now required of
Texas and indicated that it would apply the same principles to Florida’s UC pool
renewal as detailed on the previous slide.
• In June 2015, CMS and Florida agreed to extend the LIP for two years with pool size
limited to projected costs of care for those uninsured individuals who would not be
eligible for Medicaid coverage if Florida had expanded Medicaid, whether or not
Florida actual expands Medicaid.
• Final LIP pool size is $1 billion for July 2015 – June 2016 and $608 million for July
2016 – June 2017.
Texas’ UC pool and Florida’s LIP pool
waivers,
Texas UC - Florida LIP
• Florida LIP 2014 = $2.16 billion
• For 2015-2016, the federal government will send
approximately $1 billion to the low-income pool.
• In 2016-2017, that amount will drop to about $600 million.
68
Texas UC - Florida LIP
• CMS Three Principles
• Use Medicaid Rates to Address Medicaid Rate Problem
• Use Medicaid Expansion to Address Uninsured Issues
• Other Uninsured Cost LIP funds are available
69
QIPP/MPAP
MPAP has existed since NFs were carved in to managed care on March 1,
2015.
-279 publically owned NFs will receive $601 million in MPAP for FY2016
-Since the implementation of the precursor program NF UPL in October, 2013,
the number of publically owned NFs has grown from about 20 to 279.
-Most MPAP NFs are owned by small public hospital districts but Dallas County
Hospital District and Bexar County Hospital District also participate.
-In an April 2016, letter to HHSC, CMS indicated that it would not approve the
continuation of the MPAP beyond August 31, 2016 because:
-HHSC requires MPAP NFs to enter into an agreement to provide an
IGT to fund the non-federal share of the MPAP.
-MPAP payments are only made to NFs that have entered into such
an agreement, making the funding contingent upon the IGTs.
Quality Incentive Payment Program –
Delayed until 9/1/2017
• The Texas Legislature directed HHSC to base paymentsthrough the QIPP upon improvements in quality andinnovation in the provision of nursing facility services:
▫ Culture change
▫ Small house models
▫ Staffing enhancements
▫ Improved quality of care and life for nursing facilityresident
71
Network Access Improvement Program
“NAIP”
• Public Hospitals and health-related institutions
• Existing Medicaid managed care structure
• Costs incorporated into MCO capitation rate
• MCOs develop and implement provider incentive
programs with hospitals and HRIs
• Project examples: bonus fund incentives for access to
PCPs; expansion of hours/services; targeted specialty
recruitment; telehealth/telemedicine; chronic condition-
specific focus; pregnancy and childbirth; behavioral
health integration; medication management; integrated
service delivery for primary and acute care services.
72
1115 Medicaid Transformation Waiver Renewal
Major Obstacles
Medicaid Expansion in Texas?
Current UC Pool Includes Medicaid Shortfall
CMS: Tight Method to calculate UC
Method of Finance
Deferral of federal UC payments
CMS agreed to give state until end of August 2017
to resolve any issues with private hospital funding
methodology
Medicaid Waiver - Options
Unwind – return to FY2011 rules?
No waiver – state plan amendment?
Work with CMS to address the
problems.
Today’s Discussion
November 8th Election
85th Texas Legislature & the State Budget
Trauma funding
Medicaid waiver
Other Items
Section 1332 State Innovation Waivers
Gives states the option to apply for a waiver to waive some, but not all,
requirements of the ACA related to marketplace (exchange) coverage and
to implement innovative ways to increase access to quality health care.
The waivable provisions are limited to:
1. those dealing with the health insurance marketplace, including
provisions related to benefits;
2. the subsidies available through the marketplace;
3. the requirement for individuals to have coverage or pay a penalty
(individual mandate); and
4. the “shared responsibility” requirement for employers with 50 or more
full-time-equivalent workers (employer mandate).
Local Provider Participation Fund
• Local Provider Option - New
• Bowie
• McLennan
• Bell
• Beaumont
• Gregg
• Hays
• Rusk
• Brazos
77
STAR Kids I
STAR Kids is a new Texas Medicaid managed care program that will
provide Medicaid benefits, beginning November 1, 2016, to children
and adults 20 and younger who have disabilities.Participation in the
STAR Kids program is required for those who are 20 or younger,
covered by Medicaid, and meet at least one of the following:
Get Supplemental Security Income (SSI).
Get SSI and Medicare.
78
STAR Kids II
• Comprehensive needs assessment
• Client-centered planning and service design
• Service coordination
• Health home
• Behavioral health integration
• Early and thorough adult transition planning
• Rural services program design
• Quality monitoring and improvement
• Ongoing MCO collaboration
79
STAR Kids III
80
85th Legislature 2016-2017
Important Dates
9/30/2016 – Current Waiver Expires
11/8/2016 – November Election
1/10/2017 – 85th Texas Legislature Begins
5/29/2017 – 85th Texas Legislature Ends Regular Session
Thru 8/31/2017 – No Deferral of Private Hospital Payments
12/31/2017 15-Month Extension Expires
81
Medicaid Re-enrollment 9/24/2016
Texas Medicaid must revalidate the enrollment of all
providers in state Medicaid programs. For Texas Medicaid,
this means all providers, including ordering and referring
providers, who have not met all PPACA revalidation
requirements must do so through re-enrollment by Sep.
24, 2016
To avoid disenrollment on Sep. 25, 2016, and possible
disruption in claims payment, providers should submit a
re-enrollment application to the state or TMHP today.
http://www.tmhp.com/Pages/Topics/Reenrollment.aspx