Texas Medicaid Updates

Transcription

1 Texas Medicaid Updates John Berta Senior Director, Policy Analysis Texas Hospital Association Michelle Apodaca, VP, Advocacy, Public Policy & Legal Texas Hospital Association AAHAM 2012 State Institute April 26, 2012

2 THA Who We Are The Texas Hospital Association is a nonprofit trade association representing Texas hospitals and health systems. In addition to providing a unified voice for health care, THA serves its 500+ members with timely information, data analysis, education on essential operational requirements, networking and leadership opportunities. 2

3 THA What We Do Since its founding in 1930, THA has grown and evolved with the hospital industry itself. Today, THA is the leading advocacy organization for Texas hospitals. The Association s dedicated, professional staff is committed to helping hospitals navigate the complex, everchanging legislative and regulatory environment, while working toward common solutions for better health care policy at the state and federal levels. THA also serves as a resource for the State of Texas in the areas of disaster planning and response, data services and regulatory development. 3

4 Serving Texas Hospitals/Health Systems 4

5 Overview of Today Texas Budget & Politics Medicaid 1115 Waiver RHP Development Proposed Payment Rule Medicaid DSH Proposed Rule Problems with Funding Medicaid Managed Care Expansion HHSC Cost Containment Initiatives 5

6 State Budget Shortfall approximately $27B Projected $72B in available revenue to fund an estimated $99B in current services Current services impacted by Medicaid caseload growth, public school enrollment, etc. Historically dire budget situation 2003 shortfall was only $10B resulting in significant cuts House and Senate both filed initial versions of budget that assumed no new revenue 6

7 Factors Driving the Shortfall Structural deficit business margins tax Sales tax projections down over biennium Sales taxes are 56% of state revenue Teacher and state employee retirement and health care costs have skyrocketed Increased demand for services as state population grows, ages Loss of enhanced FMAP under federal stimulus act 7

8 Factors Driving the Medicaid Shortfall Missed projections for Medicaid caseload, service utilization in

9 No Political Will to Address Revenue Nov. 4, 2010 elections 101/150 Republicans in House Tea Party effect: No new revenue, no Rainy Day Fund was the mantra RDF only used for biennial shortfall Focus on temporary non-tax revenue Payment deferrals Unwillingness to modify margins tax Focus on administrative efficiency : Higher and public education Medicaid 9

10 How Did They Balance Art. II? Substantial $4.8B under-funding of Medicaid Expected to be made up through supplemental appropriation in 2013 (Rainy Day Fund) Spending reductions Cost-containment initiatives Medicaid managed care expansion statewide Gray area Cost-containment for federal flexibility 10

11 Budget Hospital Impact 8% rate cut for hospitals (added to 2% cut in ) Rural and children s hospitals paid at cost Statewide hospital SDA implementation for 9/1 ($30M savings - $20M mitigation) Expansion of Medicaid managed care ($386M GR in savings) Medicaid cost savings implemented (nonemergent care, OB, NICU) 11

12 Statewide SDA THHSC directed in H.B. 1 Rider 67 to implement a statewide SDA by 9/1/11 Incorporates 8% cut in hospital rates Adjustments for trauma, teaching and reclassified wage index Trauma federal match to fund trauma add-on: $63M all funds into SDA; $31M in trauma fund at TDSHS remaining Establishes a ceiling of $4,684 Funds a hold harmless at 87% of 9/1/11 rate 12

13 Why A Waiver? Upper Payment Limit Program - $2.7 billion/year Eliminated due to statewide expansion of managed care Need to save supplemental funding to hospitals 13

14 Why This Waiver? California received a waiver as a pathway to health reform HHSC negotiated a waiver that both saves UPL payments and incentivizes change and improvement to healthcare delivery system 14

15 What Does This Waiver Do? Brings the opportunity for more money ($29 billion over 5 years vs. $14 billion under UPL) Budget neutral to the federal government Creates two funding pools Uncompensated Care Pool Delivery System Reform Incentive Payment Pool 15

16 Overview Waiver Pool Uncompensated Care Pool Pays hospitals for cost of care not compensated by Medicaid directly or through DSH Inpatient Outpatient Pharmacy Hospitals eligible for funding must commit to investing in system transformation Hospitals must participate in a regional healthcare partnership to receive funds from either pool Delivery System Reform Incentive Pool Pays hospitals for achieving metrics that move toward the triple aim Category 1 Infrastructure Development Category 2 Program Innovation & Redesign Clinic Physician Category 3 Quality Improvements Category 4 Population Focused Improvements 16

17 Regional Partnerships 19 regions proposed based on UPL affiliations and feedback Each region will have Anchor Funding public entities Participating hospitals 17

18 RHP Participants Duties Anchors Administrative functions Interface between RHP and HHSC Do not dictate how transferring entities spend their money Transferring entities Fund waiver payments Help select DSRIP projects 18

19 Participating Hospitals Be an RHP member Work on incentive projects Provide expense alleviation for public entity to create IGT capacity 19

20 Uncompensated Care Pool Uncompensated Care Supplements hospitals for Medicaid underpayment and uninsured Additional categories of costs can be claimed Physicians Clinics Pharmacies 20

21 DSRIP Pool Project categories Infrastructure Development Enhance access to care Program Innovation & Redesign Medical homes Quality Improvements Preventable readmissions Population-Focused Improvement Diabetes, preventive care 21

22 Waiver Funding - $29 Billion 22

23 RHP Plans Draft template released by HHSC RHP Organization Executive Overview Community Needs Assessment Stakeholder Engagement Incentive Projects Allocation of Funds Affiliation Agreements Public input into plan 23

24 State Fiscal Year 2012 transition payments based on prior UPL payments March 2012 HHSC submitted UC Tool to CMS April HHSC has distributed DSRIP draft project menu May 1 RHPs to submit RHP areas and participants to HHSC August 31 HHSC to submit RHP areas and participants and DSRIP project menu to CMS Sept. 1 - RHPs to submit plans to HHSC October 31 HHSC to submit final RHP Plans to CMS 24

25 Challenges Aggressive timeline Many vital pieces still under development IGT capacity - sufficient local dollars to access available federal funds Politics Balance between structure and flexibility 25

26 Resources HHSC website: THA website: Harris County Hospital District s waiver website: 26

27 Medicaid DSH DSH needs to be reviewed in light of the waiver Waiver provides options for public hospitals to opt-out of DSH HHSC will not approve RHP if DSH is not funded Public Hospitals can use UC Tool instead of DSH 27

28 Medicaid DSH Multiple Options Available Public Hospital Petition (Proposed Rule) TAVH Proposal Other HHSC Wants Public Discussion of Rules HHSC/Industry Workgroup 28

29 Medicaid DSH Proposed Rule to be Published on Friday Key Features DSH May not be Fully-Funded in FY2012 Rule effective 7/1/2012 Allocation based 100% on Low-Income Days Separate Pools for Rural and Children s Hospitals Eliminates Weights for Public Hospitals Establishes Imputed IGT New Rule will be REDISTRIBUTIVE 29

30 HHSC / THA DSH Effort Searching for New Funding $500M available in FY2012 DSRIP Payment of DSRIP to Public Hospitals will help them Financially; make DSH funding viable Otherwise Develop Options to Mitigate Losses Rule to be Heard at 5/3/2012 HPAC 30

31 Medicaid Managed Care Expansion Expand existing service delivery areas to contiguous counties (9/11) Expand STAR+PLUS to Lubbock and El Paso (3/12) Expand STAR and STAR+PLUS to South Texas (3/12) Convert PCCM areas to the STAR program model (3/12) Include in-patient hospital services in STAR+PLUS (no carve-out) (3/12) 31

32 Maximus Enrollment Broker Eligibility Support Services and Enrollment Contractor for Medicaid, food stamps, TANF programs and for Children s Health Insurance Program (CHIP); Assists in educating clients who are enrolling in Medicaid managed care (STAR) and CHIP about health plan and PCP choices; Enrolls clients in STAR and CHIP , Monday through Friday, 8 a.m. to 8 p.m. Central Time. 32

33 Claims STAR and STAR+PLUS Claims are paid by the MCO. Providers must file claims within 95 days of Date of Service (DOS). MCOs required to adjudicate within 30 days. Page 33

34 Provider Complaints Initial point of contact is MCO May submit written complaint to HHSC at us HHSC will deal with issues when MCO is not complying with HHSC contract Page 34

35 HHSC Monitors MCOs HHSC monitors the HMO performance quarterly for these key indicators: Network Adequacy Claims Processing time Hotline Performance Complaint processing Additional contract requirements and performance is also monitored on ongoing basis. Page 35

36 HHSC Uniform contract with Plans 28

37 Managed Care Contract Provisions Between HHSC and MCOs HHSC Uniform Managed Care Contract dicaid/uniformmanagedcarec ontract.pdf 37

38 Sanctions 34

39 Medicaid Managed Care Enrollment 39

40 Managed Care Resources HHSC Managed Care Proposals Website: HHSC STAR Website: HHSC STAR+PLUS Website: TMHP Website: Page 40

41 Reimbursement Check your contracts with health plans Medicaid Manual and bulletins ( 41

42 Rural Hospitals Rider Payments to Hospital Providers. Until HHSC implements a new inpatient reimbursement system for Fee-for-Service (FFS) and Primary Care Case Management (PCCM) or managed care, including but not limited to health maintenance organizations (HMO) inpatient services, hospitals that meet one of the following criteria: 1) located in a county with 50,000 or fewer persons according to the U.S. Census, or 2) is a Medicare-designated Rural Referral Center (RRC) or Sole Community Hospital (SCH), that is not located in a metropolitan statistical area (MSA) as defined by the U.S. Office of Management and Budget, or 3) is a Medicaredesignated Critical Access Hospital (CAH), shall be reimbursed based on the costreimbursement methodology authorized by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) using the most recent data. Hospitals that meet the above criteria, based on the 2000 decennial census, will be eligible for TEFRA reimbursement without the imposition of the TEFRA cap for patients enrolled in FFS and PCCM. For patients enrolled in managed care other than PCCM, including but not limited to health maintenance organizations (HMO), inpatient services provided at hospitals meeting the above criteria will be reimbursed at the Medicaid reimbursement calculated using each hospital's most recent FFS rebased full cost Standard Dollar Amount for the biennium. 42

43 Out of Network - Reimbursement General Rules Out-of-network, in area service provider = 95% the Medicaid Fee-For- Service (FFS) rate in effect on the date of service. Out-of-network, out-of-area service provider = 100 % percent of the Medicaid Fee-For-Service rate in effect on the date of service, unless the parties agree to a different reimbursement amount. Special Rule All post stabilization services provided to a member by an out-of-network provider must be reimbursed by the MCO at 100 percent of the Medicaid Fee-For-Service rate in effect on the date of service until the MCO arranges for the timely transfer of the member, as determined by the member's attending physician, to a provider in the MCO's network. 43

44 Out of Network - Usage Standards & Reporting No more than 15 % of an MCO's total hospital admissions may occur in out-of-network facilities; No more than 20 % of an MCO's total emergency room visits, by service delivery area, may occur in out-of-network facilities; and No more than 20 percent of total dollars billed to an MCO for "other outpatient services" may be billed by out-of-network providers. MCOs report to HHSC on a quarterly basis. 44

45 Cost Containment Riders in Budget Rider 59 requires THHSC to save $700M GR funds by pursuing a waiver from CMS to allow Medicaid flexibility including: Greater flexibility in standards and levels of eligibility Better designed benefit packages to meet demographic needs of Texas Use of co-pays Consolidation of funding streams for transparency and accountability Assumed responsibility by the feds of 100% of the health care costs of unauthorized immigrants 45

46 Cost Containment Riders in Budget Rider 61 requires THHSC to achieve $450M GR funds through: (of 30 items) Payment reform and quality based payments Increasing neonatal intensive care management More appropriate ER rates for non-emergent care Resulting in 40% cut in reimbursement (see next slide) Maximizing copays in Medicaid Improving birth outcomes by reducing birth trauma and elective inductions Resulting in OB modifier requirement for all Medicaid births (see next slide) Increasing fraud, waste and abuse detection 46

47 OB Modifier on Medicaid Deliveries THHSC requires a modifier on each physician delivery claim in Medicaid, effective 10/1/2011 Denial on physician and hospital claim for mother. OB Delivery Code Modifier Indication Claim Status U1 Medically necessary delivery prior to 39 weeks of gestation Covered Service U2 Delivery at 39 weeks of gestation or later Covered Service Claim Denied, payment subject to U3 Modifier Not Present Non-medically necessary delivery prior to 39 weeks of gestation recoupment Claim Denied, payment subject to recoupment 47

48 Non-Emergent Patients in the ED THHSC is implementing a rule to lower reimbursement of non-emergent emergency room visits by 40% Effective 9/1/2011 THHSC will lower the reimbursement on claims with the lowest three levels of acuity based on E&M codes 48

49 Cost Containment Riders in Budget Article II Special Provisions Sec. 17 THHSC Medicare equalization THHSC implementing rule that limits payments of deductibles and coinsurance for Medicare-Medicaid dually eligible clients Capped amount will be what Medicaid would have paid Can capture as part of bad debt? Alternative was further rate reductions 49

50 Medicaid APR-DRGs All Patient Refined DRGs Acute Care Hospitals - 9/1/2012 Children s Hospitals 9/1/2013 HHSC views APR-DRG Methodology superior Increased DRG assignments for Mothers and Newborns 3M Proprietary Product 50

51 Medicaid Key Implementation Dates Day Year Initiative Sep 1 Sep 30 Managed Care Contiguous County Expansion Statewide SDA Implementation Outpatient and ER Reduction Waiver Period Begins 2011 Medicaid Waiver Formal Approval Granted Emergency Rules Published Repealing UPL New OB Requirements in Effect Oct 1 Transition UPL payments in effect Dec Waiver Terms and Conditions Finalized Jan 1 Outpatient Part B Payments Expired Mar 1 Major MCO Expansion June APR-DRG rules published 2012 APR-DRG implemented Acute Inpatient Sep 1 Hospitals Oct 1 Transition Payments End UC Pool Payments 51

52 Questions? John Berta Phone: 512/ Michelle Apodaca, J.D. 512/