AHLA. R. Current Issues in Medicaid Supplemental Payments and Financing. Barbara D. A. Eyman Eyman Associates PC Washington, DC

Transcription

1 AHLA R. Current Issues in Medicaid Supplemental Payments and Financing Barbara D. A. Eyman Eyman Associates PC Washington, DC Charles A. Luband Dentons US LLP New York, NY Institute on Medicare and Medicaid Payment Issues March 25-27, 2015

2 Presented by Charles A. Luband, Dentons US LLP Barbara Eyman, Eyman Associates PC March 25, What is this Session About? Supplemental Payments Payments in addition to those made under the regular Medicaid program Significant portion of the Medicaid program Payments Include: Medicaid Disproportionate Share Hospital (DSH) Program Supplemental payments for fee for service Medicaid Managed care and waiver payments 2 1

3 What is this Session About? Financing and the Non Federal Share States generally finance the non federal share of fee for service (FFS) Medicaid program Supplemental payments are often financed more creatively 3 Medicaid DSH Payments Basics Granddaddy of Supplemental Payments Requirement goes back to 1981 Only Medicaid Payment Explicitly Permitted to Reimburse for Cost of Care to Uninsured 4 2

4 Medicaid DSH Payments Basics State by State Allotments Hospitals Deemed Eligible 25% low income utilization rate Medicaid utilization rate greater than one std dev above mean Minimum Eligibility Req'ts 1% Medicaid utilization percentage requirement Requirement that two physicians are willing to provide non emergent obstetrical services to Medicaid recipients. 5 Medicaid DSH Payments Basics Payment Methodologies Hospital Specific Limit (HSL) Unreimbursed costs for providing hospital services to Medicaid and uninsured patients Reporting and Auditing Largely focused on HSL 6 3

5 Medicaid DSH Current Issues HSL and Audits HSL and Dual Eligibles HSL and Provider Taxes Looming DSH Allotment Reductions 7 Medicaid DSH HSL Medicaid Includes inpatient and outpatient services Includes MCO services Includes all payments Uninsured (for service provided) Excludes underinsured (copays, deductibles) Includes state and local indigent programs 8 4

6 Medicaid DSH HSL Audits Imposed in late 2008 Reporting generally 3 years after fact 2011 year (mostly due in 2014) is first where findings result in overpayments 9 Medicaid DSH HSL and Dual Eligibles Controversy over inclusion of costs and payments for dual eligibles Texas Children's Hospital brought action with respect to Private Medicaid duals Texas proceedings Federal proceedings (with Seattle Children's) District Court (D.C.) issues injunction in late Dec

7 Medicaid DSH HSL and Provider Taxes Increase in provider tax use in Medicaid Modified Medicare policies with respect to inclusion of costs related to provider taxes Medicaid policy appears to be different 11 Medicaid DSH Allotment Reductions ACA required Medicaid DSH Allotments Reductions Now scheduled to begin in 2017 (ACA said 2014) Reach of cuts extended DSH Health Reform Methodology (DHRM) must: Impose largest percentage reductions on states that: Have the lowest percentages of uninsured (during the most recent year for which data are available) or Do not target DSH payments on hospitals with high Medicaid or uncompensated care Impose smaller percentage reductions on low DSH states and take into account states that use DSH for coverage expansion through a waiver CMS issued reg in 2013 (only applied to ) 12 6

8 Other Supplemental Payments Base rates well below costs DSH funding limited Rising uncompensated care impeding access Many forms and policy objectives: GME, IME, trauma, safety net, pediatric, rural, etc. 13 Supplemental Payments Basics Section (a)(30)(a): Efficiency, Economy, Quality, Access Upper payment limit (UPL) regulations Institutional services Medicare equivalent in the aggregate Aggregate calculation by class (state, non state government, private) CMS policy based limits Professional services Average commercial rate Primary Care Payment Bump Fee for Service only Upper Payment Limit Supplemental Payments Base Payment Medicaid Payments 14 7

9 Cheat Sheet DSH vs. UPL Medicaid DSH Includes services to Medicaid and uninsured Only for hospital services Limit CMS prescriptive definition of costs FFS and MC beneficiaries Non DSH UPL Payments For Medicaid services only Can create programs for hospital services as well as professionals, etc. Limit what Medicare and/or average commercial payer would have paid FFS beneficiaries 15 Supplemental Payments Current Issues Impact of Managed Care CMS Accountability Guidance Equal Access Rule Rate Challenges 16 8

10 What about Managed Care? 75% of beneficiaries in managed care Regulations prohibit direct supplemental payments States developing workarounds CMS finding new flexibility Changes ahead? Medicaid Managed Care Penetration Kaiser Family Foundation State Health Facts 17 CMS Accountability Initiative CMS reviewing UPL demonstrations annually Starting 2013 for institutional services Starting 2014 for professional and clinic services First detailed guidance on calculating UPLs, average commercial rate 18 9

11 Equal Access Section (a)(30)(a) access requirements The forgotten stepchild MACPAC report March 2011 Proposed Equal Access Rule April 2011 Requires access reviews 3 part framework 19 Rate Challenges Boren Amendment Sec Supremacy Clause challenges: Douglas v. Independent Living Center (Feb. 2012) Armstrong v. Exceptional Child (argued Jan. 2015) 20 10

12 Waiver Based Payments Basics Section 1115 Demonstration Projects Waiver authority Expenditure authority Special Terms and Conditions Budget neutrality Discretionary approval authority Public process requirements 21 Uncompensated Care Pools Payments for UC incurred by any provider type Payments limited to cost Generally follows DSH cost calculation approaches Detailed claiming and funding protocols Excludes costs for undocumented immigrants Examples: Safety Net Care Pool: California, Massachusetts, Arizona Low Income Pool: Florida UC Pool: Texas, Kansas, New Mexico CMS willingness to approve/extend? 22 11

13 Delivery System Reform Incentive Payments 23 DSRIP Basics Medicaid incentive payments to providers that undertake intensive delivery system reform State makes payments based on achievements of milestones Not considered payment for services 12

14 What Kind of Delivery System Reform is Expected? Pre approved projects designed to move towards the Triple Aim, for example: 25 What Kind of Delivery System Reform is Expected? Performance measurements based on: Meeting project milestones Reporting clinical and population health data Improved outcomes 26 13

15 Active and Pending DSRIPs NY MA RI CA KS IL NJ NM AL Active Pending TX FL 27 Fee for Service Managed Care Waivers State pays providers directly State pays plan; plan pays providers State pays providers (or nonproviders?) Payments tied to Medicaid services Payments tied to Medicaid services Payments may or may not be tied to services Regulatory/policy limits on provider payments (ACR, Medicare) Regulatory limit on plan payments (actuarial soundness); no limits on plan payments to providers Service based payments typically limited to cost Governed by SPA Governed by MCO contract Governed by waiver Special Terms & Conditions (STCs) Limited CMS discretion Limited CMS discretion Broad CMS discretion Shrinking base Direct pay prohibition (except GME) 3 5year approval 14

16 Financing the Non Federal Share State General Funds Intergovernmental Transfers (IGTs) Certified Public Expenditures (CPEs) Provider Taxes Provider Donations 29 What are IGTs? Transfer of funds among or between different levels of government Local governments transfer money to the state through IGT State claims federal matching funds for expenditures 30 15

17 What are CPEs? Governmental entities confirm expenditures count as expenditures under the Medicaid state plan Related to Designated State Health Programs under Waivers Local governmental entities confirm that they have made payment to providers State claims federal matching funds for expenditures 31 Provider Tax For class of services, must be: Broad based Uniform No Hold Harmless No positive correlation between tax and Medicaid or non Medicaid payment No indirect hold harmless Generally, less than 6 percent net patient revenues If rules not followed, reduction in federal match 32 16

18 Donations Donation is a transaction between a private entity and a public entity Provision of cash or in kind services, direct or indirect, to government entity Generally highly disfavored by CMS Some bona fide donations, but rare If rules not followed, reduction in federal match 33 Other Medicaid Financing Concepts Retention Providers must be permitted to receive and retain full amount of payments Redirection of Medicaid payments Nebulous concept referring to the use of Medicaid payments Mentioned in 2007 Public Provider Cost Limit Rule and in DAB decisions 34 17

19 Financing Issues Accountability SMDL Concern regarding public private partnerships where private entities provide funds in exchange for funding for supplemental payments Issues raised in a number of states 35 Financing Issues False Claims Act Settlement with Community Health Systems regarding alleged impermissible donations to counties in New Mexico CHS agreed to pay $75 million 36 18