1. GEORGIA MEDICAID BUDGET AND FUNDING OPTIONS Presented to: HomeTown Health November 12, 2009 By: Josh Belinfante RobbinsLaw LLC www.robbinslawllc.com RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

2. Overview  FY 2009  FY 2010  FY 2011 DCH Budget Politics of the 2011 Session Provider Fee CMO Premium Tax RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

3. Budgets: Overview  Terms  Breakdown RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

4. Budgets: Overview RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

5. Budgets: October 2009 RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

6. FY 2009  As passed in 2008:  Provider rate increases: $70,219,164 Hospitals: $29,419,916 (41% of new funds) Physicians: $17,243,389 Nursing Homes: $17,650,154 Ambulance: $1,986,043 Other Providers (waivers, home health, etc.): $3,919,662  Executive Withhold RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

7. FY 2009 Amended  Stimulus funds:  FMAP: 64.5% match to 73.4% match  January 2009 - January 2011  No provider rate increases RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

8. FY 2010  Lost Revenue ($208,088,881)  5% Budget Cut ($111,486,829)  Federal regulation on CMOs: ($96,602,052)  Required Cuts: ($130,467,938)  After all discretionary spending cuts: ($77,620,943) RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

9. FY 2010  Revenue:  Governor’s Provider Fee  Tobacco Tax  Cuts:  10% Medicaid Expense Cut for Hospitals. 15% rate cut totaling $85,307,375.  6% Expense Cut for Others. 10% rate cut totaling: $93,924,186. RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

10. FY 2010  Rates spared.  Fair Rental Value System for SNF’s Funded.  $23M for trauma (super speeder).  High reliance on Stimulus funds. RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

11. FY 2010 Amended  Off-Budget by approximately $912M  3% Medicaid Withhold  SHBP Redesign  3 Day Furlough  5% Agency Withholds RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

12. FY 2010 Amended: DCH Budget  Medicaid Revenue: $114.37M  Surplus funds: $52.7M  Medicaid enrollment adjustments: $15.8M  PeachCare enrollment adjustments: $21.5M  Miscellaneous: $24.3M RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

13. FY 2010 Amended: DCH Budget  Medicaid Expenditures: ($ 52.9M)  DSH Matching: ($8.6M)  3% Cut: ($44.3M)  Surplus to 2011: $61.4M RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

14. FY 2011: Overview  Compare:  Loss of Stimulus Medicaid Funds: ($347,977,910)  FY 2010: ($208,088,881) RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

15. FY 2011: DCH Budget  Medicaid Expenditures ($86.2M)  Projected Medicaid growth: $83.2M  New ICWP slots: $1.2M  ICWP waiting list: $1.8M RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

16. FY 2011: DCH Budget  Medicaid Revenue: $92.88M  Surplus from FY 2010: $61.4M  Lower PeachCare enrollment: $16.7M  Nursing home fees: $8.7M  Foster care children to CMOs: $2.9  Drug renegotiation: $0.64M  Capping CMO rates: $2.54M RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

17. FY 2011: DCH Budget  Medicaid Cuts: ($37.1M)  Reduce CMO reimbursement rates 1.86%: $15.7M  Reduce FFS reimbursement rates by 1.86%: $21.4M  Totals:  New Revenue: $92.88M  Reimbursement Cuts: $37.1M  New Expenses: ($86.2M)  3% Reduction: ($44.3M) RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

18. FY 2011: Problems with DCH Budget  Presumes only 3% cut ($44M).  Revenues continue to fall?  Competing priorities?  Surplus carryover. RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

19. FY 2011: Political Realities  Gubernatorial Race: 1 Senator, 2 Representatives  Congress: 1 Senator, 3 Representatives  Insurance Commissioner: 2 Senators, 1 Representative  Attorney General: 1 Representative  Labor Commissioner: 1 Representative  Court of Appeals: 2 Judgeships RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

20. FY 2011: Political Realities  Educators  Healthcare  Corrections  Judicial Branch RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

21. FY 2011: Provider Fee  New Revenue: $389,576,496 (Net: $372,840,569)  CMO and private insurance fee of 1.6%: $90,778,848 CMOs: $49,518,535 (Net: $32,782,608) Commercial: $57,333,746  Hospital fee of 1.6% of gross revenue: $259,724,215  Super Speeder: $23,000,000  Program cuts: none to services.  Additional Expenditures: $171,992,802  Trauma: $60,000,000  Provider Rate Increases: $98,279,417 Hospitals: $52,213,936 (53% of new funds) Physicians: $17,243,389 Nursing Homes: $15,000,000 Other Providers: $5,256,845 (home health, CCSP, MRWP and ICWP) Ambulance: $1,988,999  DSH Funds: $13,713,384 (solves private hospitals). RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

22. FY 2011: CMO Tax Exemption Repeal  CMO’s exempt from premium tax (2.25%)  Repeal: $43.2M RobbinsLaw LLC L ITIGATION & R EGULATORY L AW

23. Summary & Questions Josh Belinfante RobbinsLawLLC 999 Peachtree Street, NE Suite 1120 Atlanta, GA 30309 404-856-3262 josh.belinfante@robbinslawllc.com RobbinsLaw LLC L ITIGATION & R EGULATORY L AW