Presentation on theme: "DHCF Budget Presentation For FY2015 Presentation for: Medical Care Advisory Committee Department of Health Care Finance April 2014 Washington DC."— Presentation transcript:
DHCF Budget Presentation For FY2015 Presentation for: Medical Care Advisory Committee Department of Health Care Finance April 2014 Washington DC
Presentation Outline 2 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
Continuing Fiscal Responsibility A structurally sound budget and financial plan that does not use locally mandated reserves Preservation of 12% debt cap and funding of dedicated Pay-As-You-Go Capital fund To continue upward trajectory of District bond ratings No tax or fee increases to balance the budget 3
-$518 million Control Period Revitalization Act $1.75 Billion Fund Balance Continues To Grow 4
Local Fund Budget Summary FY 2014 approved budget - $6.35B Total baseline expenses - $6.64B –CSFL for Local funds- $6.48B –Technical adjustments to CSFL - $157.7M –4.5% increase over FY 2014 approved budget FY 2015 proposed budget - $6.79B –Total new policy decisions - $139M –2.3% of total FY 2015 proposed budget –By comparison, the District’s population grew by 2.1% 5
FY 2015 At A Glance Human Support Services: $4.34B % Public Education: $2.19B % Public Safety: $1.19B % Government Operations: $0.78B - 7.2% Economic Development: $0.47B - 4.4% Financing and Other: $1.09B % 6 Total Gross Funds Budget : $10.7B
Over 70% Of The District’s Revenue is Generated Locally 7 Locally Generated Local Funds $6.79B % Special Purpose Revenue $0.59B - 5.5% Dedicated Taxes $0.27B - 2.5% Federally Generated Medicaid $2.07B % Federal Grants $0.96B - 8.9% Federal Payments $0.08B - 0.8% ally
Presentation Outline 8 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
Medicaid Is A Key Factor In Growth Of The District’s Current Services Funding Level CSFL budget is created annually by the Office of the Chief Financial Officer –Calculates the local cost of providing the same services in the next fiscal year –Adjusts agency budgets for inflation and other growth factors –Serves as the baseline budget for the Mayor to make his decisions. The FY 2015 CSFL budget grew 4.5% or $157.7 million over the FY 2014 approved budget, excluding one-time costs. DHCF CSFL growth was 4.3% or $31 million Growth outside provider payments based on city-wide growth rates Provider payment growth based on preliminary forecast Actual enrollment through March 2013 Actual spending through June 2013 Trended per beneficiary per month costs No new initiatives or savings At the time the CSFL was produced in November 2013, the gap between the FY2015 CFSL and projected revenue was $2.7 million 9
10 (in millions) FY2014 Approved FY2015 Proposed % Change Local Funds$714.3$ % Dedicated Taxes $86.3$ % Special Purpose Revenue $3.6 0% Total General Funds $804.2$ % Federal Grant Funds $28.4$ % Federal Medicaid Funds $1,891.9$2, % Total Federal Funds $1,920.3$2, % Intra District Funds $22.4$ % Gross Funds$2,746.9$2,912.96% CSFL increase plus $33M of policy decisions minus MCO rate updates, PCA utilization declines, and DD Waiver transfer. Growth in Healthy DC, Nursing Home Quality of Care, and Stevie Sellows offset by the expiration of the Hospital Bed Tax and Hospital Provider Fee. No change Match to Local, Dedicated Tax, Special Purpose, and I-D funds. DD Waiver budget did not shift and 4 qtrs of 100% FMAP for childless adults in FY Shifting $51M DD Waiver local budget to DDS requires DDS to send funds DHCF via intra-district for match to DD Waiver spending. Expiration of the grant to Establish the Health Benefits Exchange and build DCAS. Next phase at HBX. FY 2014 Approved versus FY2015 Proposed Explanation by Fund
FY15 Local Budget Development 11 (dollars in thousands)
Personal Services and Support Services for DHCF Operations 12 FY14 Approved Budget FY15 Proposed Budget % Change Personal Services$19,513.6$22, % Fixed Cost$935.5$ % Other Non- Personal Services (excludes provider payments) $1,689.4$1, % Contractual Services $65,481.8$60, % The federal grants budget is not included in the above comparison 24.4 additional FTEs and step increases. Central agency projections. Net effect of normal contract increases and reductions from FY 2014 budget for HIT and LTC. (dollars in thousands)
Medicaid Mandatory Service FY13 Expenditures FY14 Budgeted Amount FY15 Budget Request Inpatient Hospital $278.8$338.8$348.7 Nursing Facilities $227.8$274.3$261.9 Physician Services $42.0$47.6$61.1 Outpatient Hospital, Supplemental & Emergency $26.9$70.6$59.2 Durable Medical Equip (including prosthetics, orthotics, and supplies) $27.9$40.6$37.2 Non-Emergency Transportation $25.1$17.2$24.1 Federally Qualified Health Centers $37.8$32.6$42.9 Lab & X-Ray $14.9$17.4$25.5 Budget Request For Select Medicaid Mandatory Services 14 Budget and spending information is based on SOAR which includes all adjustments. Data presented in subsequent slides is based exclusively on MMIS claims and may not include adjustments occurring at the provider level (FTs) or adjustments in SOAR.
Medicaid Optional Services FY13 Expenditures FY14 Budgeted Amount FY15 Budget Request Managed Care Services $789.9$849.2$934.1 DD Waiver (FY 2015 includes intra-district funds from DDS) $158.1$180.3$170.9 Personal Care Aide $260.8$182.3$259.8 EPD Waiver $35.1$51.8$39.2 Pharmacy (net of rebates) $33.2$71.9$78.1 Mental Health (includes DMH intra-district for MHRS) $83.3$74.9$80.6 Day Treatment / Adult Day Health $19.6$27.4$11.4 Home Health $11.1$10.9$16.4 Budget Request For Select Medicaid Optional Services 15
Presentation Outline 16 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
Key Initiatives Under Way In FY2014 InitiativeDescriptionGoal of ProjectStatus Reform MCO Program Improve Patient Outcomes Build a program using health plans with innovative solutions to improve health outcomes for program beneficiaries, while mitigating the impact of those factors which have created growing cost pressures in the program Establish a managed care program that focuses on greater care coordination, improved services to children, and documented improvements in patient outcomes Three health plans selected and providing services under a new contract with specific performance criteria. Also, DHCF will employ a risk- adjusted rate methodology for the first time in the program’s history, effective May 1, 2014 Implement Care Coordination Program for Fee-For-Service Population Improve Patient Outcomes Within the agency’s existing FY2014 and proposed FY2015 budget, develop a pilot program to test the efficacy of care coordination for the fee-for- service population Establish a care coordination model to improve patient outcomes and reduce health care spending for the fee-for- service population. The chosen approach will be evaluated as a prelude to a possible larger scale program in FY2016 An existing vendor has submitted a proposal for care coordination. DHCF will evaluate the proposal, assess the budget impact, and possibly implement the strategy before the end of FY2014 Reform Medicaid Long-Term Care System Enhance Program Integrity Develop an improved system of long term care with a single “front door” for program entry, conflict-free, comprehensive, and automated assessments of patient need, alignment of eligibility criteria with assessments, and improved program monitoring and oversight Eliminate fragmentation in the long-term care system, reduce inappropriate growth, and strengthen program oversight DHCF implemented a new conflict-free, comprehensive assessment tool for PCA services. Plans are underway to expand the use of this comprehensive tool for the remainder of the long term care program services. 17
Key Initiatives Under Way In FY2014 InitiativeDescriptionGoal of ProjectStatus Redesign Hospital Payment Systems Enhance Program Integrity Develop a plan to shift hospitals to the ICD-10-CM system used to classify and code all diagnoses, update the grouper used to calculate in-patient payment rates, and modernize the hospital outpatient payment methodology Modernize the hospital payment methodologies to improve the fairness of payments, reduce the administrative burden of the process, and ensure the sustainability of payment methods New rate methodology is under development and on track for an October 1, 2014 implementation Develop New Medicaid Eligibility System for Health Care Reform Implement Health Care Reform Work with an IT vendor to develop and implement a new eligibility, enrollment, integrated case management system, that is aligned with HBX for the District of Columbia Provide seamless access to District health insurance options and other services to meet the requirements of the Affordable Care Act The new integrated eligibility system known as the District of Columbia Access System (DCAS) went live on October 1, DHCF continues to work with our partners at DHS and DCHBX to improve system functionality and enhance capabilities Strengthen the reimbursement design and financial analysis capabilities Enhance Program Integrity DHCF has a budget of more than $2.7 billion and distributes 95 percent of this amount through provider reimbursements. There is a constant need to develop, redesign, modify, and otherwise update the various reimbursement methodologies that are used to distribute payments Increase the capacity within DHCF to develop reimbursement systems that are properly designed to encourage the provision of quality care in the most cost- effective manner Established the Office of Rates, Reimbursement, and Financial Analysis (ORRFA) 18
DHCF New Initiatives in FY15 Amounts reflect local portion only 19
Initiatives in FY15 Continue Plans For A New Hospital To Replace United Medical Center 20 Capital Funding Plan For New Hospital Fiscal YearAmount 2015$41.6 million 2016$92.9 million 2017$90 million $120 million Total$344.6 million
Additional DHCF Requests Assigned To Revenue Priority List 1.$1.8M Coverage of Ineligible for Health Benefits Exchange Insurance 2.$1.5M Federally Qualified Health Center (FQHC) Rate Methodology 3.$1.0M Elderly and Persons with Disability Wavier 21
Presentation Outline 22 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
The Enrollment Spikes That Followed Medicaid Expansion In The District Have Begun To Significantly Moderate 23 Expansion Enrollment Growth Moderating 2.6% Growth 20.6% Growth Annualized Growth In Medicaid Enrollment Rates 2.0% Growth Medicaid Expansion Sources and Notes: Excludes ineligible individuals (individuals who failed to recertify due to lack of follow-up, moving out of the District, excess income, or passed away), the Alliance, and immigrant children. The large jump in is due to the implementation of childless adult eligibility expansion. Data for data was extracted by ACS from tape back-ups in January, Data from 2010-present are from enrollment reports
…..And So Have The Associated Costs % Growth 16.7% Growth Medicaid Cost Moderating 2.4% Growth Source: FY08-FY11 totals extracted from Cognos by fiscal year (October, 1 through September, 30), using variable Clm Hdr Tot Pd Amt (total provider reimbursement for claim). Includes fee-for-service paid claims only, including adjustments to claims, and excludes claims with Alliance Line of Business or Immigrant Children's group program code. Only includes claims adjudicated through MMIS; excludes expenditures paid outside of MMIS (e.g. pharmacy rebates, Medicare Premiums).
Presentation Outline 25 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
Managed Care And Fee-For Service Hospital Spending Are The Major Cost Drivers For Medicaid Acute Care Services 26 Managed Care 57% (747.9) Inpatient Care 22% ($284.6) Physician 3% ($44.6) DSH 4% ($55.9) Outpatient 2% ($26.4) Clinic Care 4% ($51.5) Dental 2% ($29.7) Other 1% ($14.9) Primary & Acute Care 57% ($1,304,078,261) Long-Term Care 34% ($774,516,677) Other 5% ($101,444,160) Total Medicaid Program Expenditures, FY2013 $2,273,416,654 RX 4% ($48.1) Source: Data extracted from MMIS, reflecting claims paid during FY2013
Payment Policies For Managed Care Require Adequate Rates Medicaid managed care rate setting is governed by federal regulations Rates must be actuarially sound, developed by a credentialed actuary -- we use Mercer Consulting -- and certified by CMS Rates must be appropriate for covered populations and recipient benefit package Each year the actuary provides a range from which the managed care rates must be selected For The First Time In The Program’s History DHCF Will Risk Adjust The Health Plans Medicaid Rates 27
While DHCF Is Negotiating With The Health Plans For Rates That Will Take Effect May 1, 2014, As In Past Years, The Actuarial Sound Rate Range Will Guide Agency Decision Making YearLow RateHigh Rate Rate Paid Separate Rate Cell For Waiver Population Low High Rate Rate Rate Paid $237.43$257.23$ $268.86$303.21$ $289.26$319.27$ $305.26$334.38$316.53$609.05$657.13$ $311.13$344.61$ $ $ $561.94$614.34$ $ $ Children (1-19) Adults $ $ Note: For the period from May1, 2015 through September 30, 2015, DHCF has assumed a 5.6 percent increase in managed care rates. For , the health plans were allowed to select their own rates as a part of the competitive bidding process. Thus the rates paid for this contract year are not uniform 28
The Enrollment Growth In The Managed Care Program -- Now At 73 Percent Of The Total Medicaid Population -- Combined With Federal Requirements For Rate Adequacy Drive The Cost Of This Program 36% 37% 64% 33% 67%63% 29 32% 68% 32% Medicaid Managed Care Enrollment Trends 73% 27% Source: DHCF staff analysis of data extracted from the agency’s MMIS.
The Annual Growth In Managed Care Expenses For Medical Services Dropped Slightly To Six Percent 30 Managed Care Medical Expenses Grew By 7 Percent Total Managed Care Expenses Grew By 6 Percent Administrative Expenses Experienced 3 Percent Growth Annualized Growth Rates For Per-Member Per-Month Managed Care Expenses, $ $ $ $ $37.40$43.32 Source: Mercer analysis of MMIS Encounter data and the financial reports of the managed care plans
31 More Than Half Of All Managed Care Expenses Incurred By The District’s Three Health Plans Are Hospital-Based Hospital Services Dental Total FY2013 Managed Care Medicaid Expenses 55% 6% 14% Physician Services 9%RX Services 7% Administration 9% Other $544,223,802 $168,854,548 Inpatient (55%) $56,521,298 Outpatient (19%) $77,420,679 Emergency (26%) With RX carve outs, the health plans now spend as much on administrative costs as they do on pharmacy. Source: Data collected from Mercer data books and MMIS Encounter files
Hospital Admissions For Managed Care And Fee-For Service Have Moderated In The Last Two Years Comparison Of Trends In Hospital Admissions For Medicaid Managed Care and Fee-For-Service, FY2009-FY2013 Managed Care Fee-For-Service Source: DHCF staff analysis of data extracted from MMIS
Nonetheless, Hospital Readmissions And Potentially Avoidable Admissions For The Managed Care Population Remain A Concern Total Hospital Admissions For Managed Care Patients FY FY ,752 Managed Care Readmissions within 30 Days 5,247 Cost of Readmissions $72,791,062 Potentially Preventable Admissions 3,051 Cost of Potentially Preventable Admissions $34,450,796 Source: DHCF staff analysis of data extracted from MMIS
Fee-For-Service (FFS) Hospital Spending Is The Second Largest Expenditure Item In The Medicaid Budget 34 Non-Hospital Spending 86% ($1,962,236,109) Hospital Spending 14% ($311,180,545) $2,273,416,654 FFS Medicaid Hospital Spending As A Percent Of Total Medicaid C ost Inpatient $284,685,378 (91%) Outpatient $18,839,513 (6%) Emergency Room $7,655,654 (3%) Source: Data extracted from MMIS December, 2013 and reflect final claims, including adjustments, paid during FY13. Distribution of hospital expenditures within managed care is based on plan year 13 (May 12 to April 13) distributions applied to FY 13 spending.
Fee-For-Service Hospital Readmissions And Potentially Avoidable Admissions Are Costly Problems For The Medicaid Program Total Hospital Admissions For Fee-For Service Patients FY FY ,597 ($1,075,328,748) Fee-For-Service Readmissions within 30 Days 12,893 Cost of Readmissions $183,672,230 Potentially Preventable Admissions 8,390 Cost of Potentially Preventable Admissions $112,215,340 Source: DHCF staff analysis of data extracted from MMIS
36 In FY2014, Funding For Hospital Inpatient And Outpatient Care Was Supported By Provider Taxes That Will Not Be Available In FY2015 $35M FY2014 $338.8M Impact Of Provider Tax On Funding For Hospital Inpatient And Outpatient Care Hospital Inpatient Budget $70.6M $29.6M Hospital Outpatient Budget FY2014 $288.8 Net Revenue Generated By Provider Tax $15M Amount of Provider Tax $28.3 $12.7M Net Revenue Generated By Provider Tax Amount of Provider Tax Source: Budget and spending information is based on SOAR which includes all adjustments. Data presented based exclusively on MMIS claims and may not include adjustments occurring at the provider level (FTs) or adjustments in SOAR. Hospital Tax Revenue Lost For FY2015 $27.7M
Long-Term Care Spending Accounts For More Than Three Of Every 10 Dollars Spent In Medicaid 37 Primary & Acute Care 57% ($1,304,078,261) Long-Term Care 34% ($774,516,677) Other 5% ($101,444,160) Total Medicaid Program Expenditures, FY2013 $2,273,416,654 Nursing Homes 29% ($227.4) DD Waiver 20% ($158.1) PCA Benefit 34% ($262.4) EPD Waiver 5% ($34.8) ICF/MR 11% ($85.1) Other 1% ($6,6) Source: Data extracted from MMIS, reflecting claims paid during FY2013
The FY 2013 Cost of The Waiver Programs And State Plan Personal Care Services Are Especially High But Less Than Institutional Care Program Service Total Number of RecipientsTotal Cost for Services Average Cost Per Recipient DD Waiver* 1,593 $158,111,464 $99,254 EPD Waiver 3,270 $34,860,545 $10,661 ICF/DD 368 $84,197,479 $228,797 State Plan Personal Care 10,038 $261,851,850 $26,086 Nursing Facilities 4093 $227,401,814 $55, Overall And Per Recipient Cost For Waiver, Personal Care And Institutional LTC Programs, FY2013 *DD Waiver costs do not include DDS local funds for the waiver.
The Number Of Medicaid Recipients Using Personal Care Benefits In The State Plan Program Continues To Rapidly Increase 39 State Plan PCA 10,038 3,756 1,372 1,498 EPD Waiver 0 DD Waiver State Plan PCA Has 28% Annual Growth Rate Source: Data reflects final claims, including adjustments, paid during FY13. Claims are identified via procedure code and categorized by program according to modifiers. Unique benefit counts indicate total number of individuals with non-zero claims paid during FY13.
Nine Out Of Every 10 Dollars Spent On Personal Care Is Through The State Plan Program Government of the District of ColumbiaDepartment of Health Care Finance $116,179,495 $133,907,704 $179,297,871 $202,098,295$243,250,145 Personal Care Spending In Waiver And State Plan PCA, FY2013 $291,115,106 Source: Data reflects final claims from MMIS, including adjustments, paid during FY13
A Significant Number Of Home Health Care Agencies Were Placed Under Payment Suspension Sanctions In February And March 2014, Potentially Impacting Many Beneficiaries 41 No Payment Suspension 49% Payment Suspension 51% Payment Sanction Rate For Medicaid Home Health Agencies Payment Sanction Rate For Home Health Care Agencies Is Beneficiaries’ Agency Under Payment Suspension? 81% Yes No 19% 7,782 Number of PCA Beneficiaries Served By Agencies Facing Sanctions Total Beneficiaries Home Care Agencies 37 Source: Investigative reports from DHCF’s Division of Program Integrity and reports from the Office of the Inspector General..
Summary Of Challenges In Medicaid Program DHCF must continue to pursue policies that address a range of challenges faced in the Medicaid program. For acute care services: Pursue balance between inpatient and outpatient hospital reimbursement policies that encourage efficiency in care delivery Ensure rate adequacy for managed care plans to avoid problems encountered in recent years which placed some health plans in difficult financial positions Reduce unnecessary hospitalization for both managed care and fee-for-service beneficiaries through improved care coordination strategies Implement an aggressive managed care oversight program to improve the performance of the District’s health plans For long-term care: Address the over reliance on nursing home care, especially for persons who do not meet minimum level of care requirements Arrest the growth of the State Plan personal care benefit through aggressive monitoring and improved control over access to this benefit using an independent contractor Ensure the proper transfer of beneficiaries from home care agencies under the suspicion of fraud to agencies that have not been reported for credible allegations of fraud 42
Presentation Outline 43 Overview Of District’s Budget For FY2015 Budget Development For DHCF Medicaid Cost Drivers, Policy Issues, And Challenges DHCF Budget Initiatives For FY2015 Alliance Spending Trends and Enrollment Issues Medicaid Enrollment Trends And Spending Patterns
Face-to-Face Recertification Policies, Established In 2012, Have Further Dampened Alliance Enrollment Levels 44 Alliance Enrollees Immigrant Children Alliance Members Move To Medicaid Alliance Enrollment Procedures Changed Enrollment Trends For Alliance And Immigrant Children, Sources: Excludes ineligible individuals – persons who failed to recertify due to lack of follow-up, moving out of the District, or had excess income, or passed away. Data for data was extracted by ACS from tape back-ups in January, Data from 2010-present are from enrollment reports.
Consistently At Least Half And Up To 67 Percent Of Alliance Recertifications Are Terminated Prior To Completion 45 Case Terminated Did Not Complete Process Case Recertified Outcome Of Alliance Recertification Process, January 2013 to December %38% 44% 47% 49% 39% 36% 35% 32% 36% 33% 63% 60% 55% 52% 50% 60% 62% 64% 67% 62% 65% Source: DHS ESA Service Center Intake Log and Queue Management Center
46 Wait Times For Alliance Face-To-Face Recertifications Are Almost Twice The Length Of Wait Times For Medicaid 101 Alliance Wait Time Source: DHS ESA Service Center Intake Log and Queue Management Center Comparison Of Average Alliance And Medicaid Wait Times (in minutes) For Recertifications, September 2013 to February Alliance Medicaid Average 77.5 Medicaid Wait Time
Partially As A Result, Alliance Program Spending Continues To Decline 47 Alliance Spending Spending On Immigrant Children Alliance Enrollment Procedures Changed Expenditure Trends For Alliance And Immigrant Children, Source: FY08-FY11 totals extracted from Cognos by fiscal year (October, 1 through September, 30), using variable Clm Hdr Tot Pd Amt (total provider reimbursement for claim). Includes fee-for-service paid claims only, including adjustments to claims, and excludes claims with Alliance Line of Business or Immigrant Children's group program code. Only includes claims adjudicated through MMIS; excludes expenditures paid outside of MMIS (e.g. pharmacy rebates, Medicare Premiums).
Although Overall Alliance Costs Are Declining, The Per- Member Per-Month Cost Associated With The Care For Beneficiaries Who Now Access The Program Has Grown 48 Source: DHCF Alliance capitation rates calculated by Mercer Consulting
Conclusions And Key Questions Regarding The Alliance Program The Alliance recertification process, which requires face-to-face interviews, has twice the average wait time as Medicaid recertifications and appears to have dampened Alliance enrollment growth A high rate of Alliance recertifications terminate without the applicant completing the process At the same time, it appears that persons with higher care needs are disproportionately enrolling in Alliance Does this mean that eligible persons who are not sick are self-selecting out of the program rather than endure a lengthy recertification? Or, is the recertification process serving as a deterrent to those who are not District residents? 49