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Page 1: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

ALTCIActuarial Study

June 22, 2005

Page 2: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 2

Actuarial Study Objectives

Determine key cost drivers

Identify financing options that promote the goals of ALTCI

Recommend a rate structure that will best match payment to the risk of the enrolled population

Page 3: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 3

Methodology

Review historical Medi-Cal and Medicare CY1998-2000 FFS data

Adjust data to include only populations and services expected to be covered under ALTCI

Project data forward to CY2007 by category of service

Adjust data for significant program changes including Medicare Part D

Page 4: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 4

ALTCI Eligibles (76,700)

DD5%

MSSP1%

IHSS/HC16%

NH9%

Well70%

CY2000 DataSan Diego County

Nursing Home Residents, MSSP, DD, IHSS, and Home Care (HC) account for 30 percent of the total ALTCI membership in San Diego, but 74 percent of the total San Diego Medi-Cal expenditures.

ALTCI Expenditures ($455M)

Well26%

NH44%

IHSS/HC24%

MSSP1%

DD4%

Well

MSSP

IHSS/HC

NH

DD

Page 5: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 5

San Diego CountyCY2000 Dually Eligible vs. Medi-Cal Only ABD Membership

Duals60%

Medi-Cal Only40%

Dually Eligibles

DD3%

MSSP1%

IHSS/HC20%

NH13%

Well63%

Page 6: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 6

San Diego CountyDually Eligible vs. Medi-Cal Only CY2000 PMPM ALTCI Medi-Cal Costs

Dually Eligible vs. Medi-Cal Only

$0 $50 $100 $150 $200 $250

Other

Inpatient

Outpatient

Inst LTC

Comm LTC

Physician

Pharmacy

PMPM

Dually Eligible

Medi-Cal Only

Page 7: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 7

San Diego CountyElderly vs. Disabled Membership

Elderly37%

Disabled63%

ElderlyDD0%

MSSP1%

IHSS/HC17%

NH14%

Well68%

Page 8: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 8

Alameda, Contra Costa, and San Diego CountiesCY1998–2000 Medi-Cal CostsHigh Cost Chronic Conditions

Rank Disease MMs Dollars PMPM

1 Ventilator Dependent 24,827 43,510,194$ 1,752.54$

2 Traumatic Brain Injury 28,126 48,908,704$ 1,738.91$

3 Alzheimer's/Dementia 260,537 398,485,707$ 1,529.48$

4 Mental Retardation 96,634 129,363,417$ 1,338.69$

5 Developmental Disability 30,613 32,904,568$ 1,074.86$

6 AIDS/HIV 81,127 82,925,845$ 1,022.17$

7 Parkinson's Disease 38,228 36,850,967$ 963.98$

8 Cerebrovascular Disease 363,170 342,848,676$ 944.04$

9 Medical Disability 76,807 62,304,149$ 811.18$

10 Neurological Disability 46,791 35,995,578$ 769.28$

11 Congestive Heart Failure 282,867 182,996,911$ 646.94$

12 Psychosis 106,756 53,671,050$ 502.75$

13 Alcohol/Substance Abuse 31,409 12,501,001$ 398.01$

14 OTHER 142,134 56,564,122$ 397.96$

15 Physical Disability 162,133 56,824,366$ 350.48$

16 Chronic Heart Disease 498,099 167,223,359$ 335.72$

17 Diabetes 383,384 126,338,157$ 329.53$

18 Schizophrenia 108,289 33,792,198$ 312.06$

19 COPD/Asthma/Emphysema 287,108 87,673,104$ 305.37$

20 Depression 341,197 99,417,646$ 291.38$

21 CMI Disability 29,551 8,340,346$ 282.24$

22 Arthritis 240,961 54,637,740$ 226.75$

23 Sensory Disability 109,206 16,868,404$ 154.46$

24 NONE 1,341,957 195,834,916$ 145.93$

Grand Total 5,111,911 2,366,781,125$ 462.99$

TOTAL

Page 9: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 9

San Diego CountyCY2000 Medi-Cal ALTCI PMPM Costs

Total $495

Total

NH $2,492

Community $303

Setting

NHC

$2,492

MSSP

$1,172

IHSS

$752

Well

$182

DD

$436

Frailty

Medi-Cal Only

$4,708

Dual

$2,153

Medi-Cal Only

$710

Dual

$1,174

Dual

$28

Dual

$557

Medi-Cal Only

$368

Medi-Cal Only

$1,337

Medi-Cal Only

$532

Dual

$277

Medicare Status

Aged

$2,291

Disabled

$1,855

Aged

$3,023

Disabled

$4,910

Aged

$537

Disabled

$577

Aged

$963

Disabled

$1,363

Aged

$36

Disabled

$18

Aged

$196

Disabled

$402

Category of Aid

Page 10: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 10

Preliminary ResultsKey Cost Drivers

Setting – Nursing Home vs. Community

Frailty – Nursing Home Certifiable/At Risk vs. Well

Medicare Status – Dually Eligible vs. Medi-Cal Only

Category of Assistance – Aged vs. Disabled

Chronic High Risk Conditions – TBD

Page 11: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 11

Preliminary Recommendations

Reimbursement needs to be sufficiently sophisticated to promote program goals

Incentives should be included to promote increased community based services

Savings achievable through more appropriate use of hospital, emergency room and nursing home services

Administrative costs should be reflected in rates with sufficient consideration of start up costs

Increased care management should be supported and funded

Page 12: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 12

Preliminary Recommendations (continued)

Implement early reinsurance or risk sharing

Capitated model should allow for flexibility of both Medi-Cal and Medicare funding sources

Page 13: ALTCI Actuarial Study June 22, 2005. Mercer Government Human Services Consulting 2 Actuarial Study Objectives Determine key cost drivers Identify financing

Mercer Government Human Services Consulting 13

Next Steps

Complete projections

Assess adequacy of Medicare reimbursement

Finalize recommended rating structure

Submit final report and recommendations


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