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Arkansas Healthcare Financial Management Association Spring Meeting

� Arkansas Medicaid is a key component of the total medical services market in the state.

� The Private Option, soon to be Arkansas Works, has helped to fill the gaps resulting from the Medicare related aspects of the ACA.

� Medicaid is on track to spend $1.45 billion in expansion related funding in SFY2015.

� The following slides paint the numeric picture of the current financial impact of Traditional Medicaid and ACA expansion.

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State Fiscal Year 2015 SpendState Fiscal Year 2015 SpendState Fiscal Year 2015 SpendState Fiscal Year 2015 Spend

Hospital ServicesHospital ServicesHospital ServicesHospital Services $ 1,663,824,998 $ 1,663,824,998 $ 1,663,824,998 $ 1,663,824,998

Long Term CareLong Term CareLong Term CareLong Term Care $ 995,220,922 $ 995,220,922 $ 995,220,922 $ 995,220,922

DDDDDDDD $ 540,895,368 $ 540,895,368 $ 540,895,368 $ 540,895,368

Mental HealthMental HealthMental HealthMental Health $ 559,219,281 $ 559,219,281 $ 559,219,281 $ 559,219,281

Physician ServicesPhysician ServicesPhysician ServicesPhysician Services $ 342,817,669 $ 342,817,669 $ 342,817,669 $ 342,817,669

Prescription DrugPrescription DrugPrescription DrugPrescription Drug $ 441,731,137 $ 441,731,137 $ 441,731,137 $ 441,731,137

Other MedicalOther MedicalOther MedicalOther Medical $ 231,862,936 $ 231,862,936 $ 231,862,936 $ 231,862,936

Other PractitionersOther PractitionersOther PractitionersOther Practitioners $ 162,008,669 $ 162,008,669 $ 162,008,669 $ 162,008,669

TransportationTransportationTransportationTransportation $ 92,147,423 $ 92,147,423 $ 92,147,423 $ 92,147,423

Family PlanningFamily PlanningFamily PlanningFamily Planning $ 6,592,512 $ 6,592,512 $ 6,592,512 $ 6,592,512

ClinicsClinicsClinicsClinics $ 42,250,892 $ 42,250,892 $ 42,250,892 $ 42,250,892

Case ManagementCase ManagementCase ManagementCase Management $ 4,443,485 $ 4,443,485 $ 4,443,485 $ 4,443,485

Medicare RelatedMedicare RelatedMedicare RelatedMedicare Related $ 25,335,377 $ 25,335,377 $ 25,335,377 $ 25,335,377

Private OptionPrivate OptionPrivate OptionPrivate Option $ 1,083,475,075 $ 1,083,475,075 $ 1,083,475,075 $ 1,083,475,075

Total Medicaid SpendTotal Medicaid SpendTotal Medicaid SpendTotal Medicaid Spend $ 6,191,825,744 $ 6,191,825,744 $ 6,191,825,744 $ 6,191,825,744

27%27%27%27%

16%16%16%16%

9%9%9%9%9%9%9%9%

6%6%6%6%

7%7%7%7%

4%4%4%4%

3%3%3%3%

1%1%1%1%

0%0%0%0% 1%1%1%1%

0%0%0%0%

0%0%0%0% 17%17%17%17%

Hospital Services

Long Term Care

DD

Mental Health

Physician Services

Prescription Drug

Other Medical

Other Practitioners

Transportation

Family Planning

Clinics

Case Management

Medicare Related

Private Option

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Newly Eligible Spend SFY2015Newly Eligible Spend SFY2015Newly Eligible Spend SFY2015Newly Eligible Spend SFY2015

Hospital ServicesHospital ServicesHospital ServicesHospital Services $87,181,463 $87,181,463 $87,181,463 $87,181,463

Long Term CareLong Term CareLong Term CareLong Term Care $5,412,132 $5,412,132 $5,412,132 $5,412,132

DDDDDDDD $118,505 $118,505 $118,505 $118,505

Mental HealthMental HealthMental HealthMental Health $9,816,088 $9,816,088 $9,816,088 $9,816,088

Physician ServicesPhysician ServicesPhysician ServicesPhysician Services $51,216,990 $51,216,990 $51,216,990 $51,216,990

Prescription DrugPrescription DrugPrescription DrugPrescription Drug $44,711,760 $44,711,760 $44,711,760 $44,711,760

Other MedicalOther MedicalOther MedicalOther Medical $16,252,607 $16,252,607 $16,252,607 $16,252,607

Other PractitionersOther PractitionersOther PractitionersOther Practitioners $10,079,330 $10,079,330 $10,079,330 $10,079,330

TransportationTransportationTransportationTransportation $19,950,776 $19,950,776 $19,950,776 $19,950,776

Family PlanningFamily PlanningFamily PlanningFamily Planning $867,284 $867,284 $867,284 $867,284

ClinicsClinicsClinicsClinics $5,781,162 $5,781,162 $5,781,162 $5,781,162

Case ManagementCase ManagementCase ManagementCase Management $4,740 $4,740 $4,740 $4,740

Medicare RelatedMedicare RelatedMedicare RelatedMedicare Related $259,476 $259,476 $259,476 $259,476

Private OptionPrivate OptionPrivate OptionPrivate Option $1,083,475,075 $1,083,475,075 $1,083,475,075 $1,083,475,075

Total Newly Eligible SpendTotal Newly Eligible SpendTotal Newly Eligible SpendTotal Newly Eligible Spend $1,247,945,925 $1,247,945,925 $1,247,945,925 $1,247,945,925

7%7%7%7%

0%0%0%0% 0%0%0%0%

1%1%1%1%

4%4%4%4%

3%3%3%3%

1%1%1%1%

1%1%1%1%2%2%2%2%

0%0%0%0%0%0%0%0%

0%0%0%0%

0%0%0%0%

81%81%81%81%

Hospital ServicesHospital ServicesHospital ServicesHospital Services

Long Term CareLong Term CareLong Term CareLong Term Care

DDDDDDDD

Mental HealthMental HealthMental HealthMental Health

Physician ServicesPhysician ServicesPhysician ServicesPhysician Services

Prescription DrugPrescription DrugPrescription DrugPrescription Drug

Other MedicalOther MedicalOther MedicalOther Medical

Other PractitionersOther PractitionersOther PractitionersOther Practitioners

TransportationTransportationTransportationTransportation

Family PlanningFamily PlanningFamily PlanningFamily Planning

ClinicsClinicsClinicsClinics

Case ManagementCase ManagementCase ManagementCase Management

Medicare RelatedMedicare RelatedMedicare RelatedMedicare Related

Private OptionPrivate OptionPrivate OptionPrivate Option

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$251,652,313Hospital ServicesHospital ServicesHospital ServicesHospital Services $87,181,463 $87,181,463 $87,181,463 $87,181,463

Long Term CareLong Term CareLong Term CareLong Term Care $5,412,132 $5,412,132 $5,412,132 $5,412,132

DDDDDDDD $118,505 $118,505 $118,505 $118,505

Mental HealthMental HealthMental HealthMental Health $9,816,088 $9,816,088 $9,816,088 $9,816,088

Physician ServicesPhysician ServicesPhysician ServicesPhysician Services $51,216,990 $51,216,990 $51,216,990 $51,216,990

Prescription DrugPrescription DrugPrescription DrugPrescription Drug $44,711,760 $44,711,760 $44,711,760 $44,711,760

Other MedicalOther MedicalOther MedicalOther Medical $16,252,607 $16,252,607 $16,252,607 $16,252,607

Other PractitionersOther PractitionersOther PractitionersOther Practitioners $10,079,330 $10,079,330 $10,079,330 $10,079,330

TransportationTransportationTransportationTransportation $19,950,776 $19,950,776 $19,950,776 $19,950,776

Family PlanningFamily PlanningFamily PlanningFamily Planning $867,284 $867,284 $867,284 $867,284

ClinicsClinicsClinicsClinics $5,781,162 $5,781,162 $5,781,162 $5,781,162

Case ManagementCase ManagementCase ManagementCase Management $4,740 $4,740 $4,740 $4,740

Medicare RelatedMedicare RelatedMedicare RelatedMedicare Related $259,476 $259,476 $259,476 $259,476

35%35%35%35%

2%2%2%2%

0%0%0%0%

4%4%4%4%

20%20%20%20%

18%18%18%18%

7%7%7%7%

4%4%4%4% 8%8%8%8%

0%0%0%0%

2%2%2%2%

0%0%0%0% 0%0%0%0%Hospital Services

Long Term Care

DD

Mental Health

Physician Services

Prescription Drug

Other Medical

Other Practitioners

Transportation

Family Planning

Clinics

Case Management

Medicare Related

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� Expected to go live in May of 2017

� Beneficial to the Medicaid Program

� Also contains elements designed to directly impact our healthcare partners.

In SFY 2014, the Medicaid Management Information System (MMIS):In SFY 2014, the Medicaid Management Information System (MMIS):In SFY 2014, the Medicaid Management Information System (MMIS):In SFY 2014, the Medicaid Management Information System (MMIS):

Processed more than forty-one (41) million provider-submitted claims

Conducted 2,803 provider visits

Conducted 41 workshops around the state

Responded to 89,324 voice calls

Responded to 134,581 automated calls

Responded to 46,983 written inquiries

Processed claims submitted by 11,785 providers

Claims submitted on behalf of more than 902,378 Arkansans

Ninety-nine (99%) of claims processing within 30 days

Average receipt-to-adjudication time of approximately 3.4 days

On average, provider received their payments within a week of claim submission

Paid $4.7 billion in benefit reimbursements (includes premium payments)

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� The MMIS Replacement Project, chartered by the Division of Medical Services (DMS), is to implement a new:

• Core Medicaid Management Information System (MMIS)

• Pharmacy point of sale (POS)

• Decision Support System (DSS)

� The Goal of the project is to:

• Modernize existing system functions

• Significantly enhance the goals of Arkansas Medicaid

◦ Ensure that eligible individuals receive the health care benefits that are medically necessary

◦ Reimburse providers promptly and efficiently

AME MMIS Project ScheduleAME MMIS Project ScheduleAME MMIS Project ScheduleAME MMIS Project Schedule

AME MMIS Systems

Implementation

Timeline 2013

2014 2015 2016 2017

Implementation

TimelineJ F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

1. Decision Support

System

2. Pharmacy System

3. Core MMIS

Supporting Contracts

4. IV&V

5. PMO

6. DSS & Pharmacy Ops

7. Core MMIS M&O

We are We are We are We are herehereherehere

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� Manpower Efficiencies

� Provider Efficiencies

� Enhanced Member Experience

� Policy Changes are implemented quickly

� System closely aligned with Federal Guidelines

� Proven, low risk technology

� Claims are processed in real time

� Administrative Benefits achieved

� Long Term Cost Savings for DHS

� Positioned for the future

• Portal: ◦ Provider: The provider portal empowers providers through a self-service

model that supports them in completing tasks including claim submission and inquiry, member eligibility inquiry, provider enrollment submission and inquiry, and service authorization submission and inquiry.

◦ Member: The secure member portal provides members access to their coverage, claims, prior authorization, and general information.

• Mobile Application: ◦ The MMIS solution includes a mobile application that will be available

through both the Apple and Android stores. This application will allow provider search, look up personal history of services/claims, look up what members are eligible for, and look up what “other insurance” is on record.

• Security: ◦ The system provides a single point of access for authorized system users,

with centralized user authentication and authorization (single sign-on), security role management, and the ability to de-provision a terminated user.

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� Extensive Research Capabilities

� Industry Leading Analytic Tools

� Flexible and Expandable

� Contains National Standard Evidence-based Measures and Benchmarks for Provider Measurement

� Data-driven Management Framework

� Interoperates with other Health Information Technology Components

� Comprehensive Program Integrity Services

� Supports Federal Funding Requirements

� Trend and formulary management

� Legislative support and analysis

� Health Informatics to identify, measure, and demonstrate value

� Configurable for ease in adapting to program changes

� Aligned with federal system requirements

� Pharmacy Network Management

� Solutions for enhancing mental health management

� Flexible clinical management tools

� On-line claims administration

� Access to customer forums

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� DMS worked extensively with the Arkansas Hospital Association to address policies on both sides which needed adjustment.

� We ended up with a win for both sides and improved policy at the same time.

� The current practice related to hospital reimbursement for the dual eligible population was not in line with the State Plan as approved by the Centers for Medicare and Medicaid Services (CMS).

� Those policies had eliminated “Crossover” payments for dual eligible individuals but the payment methodology was never adjusted.

� This put Arkansas Medicaid at significant risk to CMS for punitive action.

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� The Arkansas Medicaid policy on reimbursement included a flat 24 day limit for hospitals days paid for by Medicaid.

� The unlucky hospital that got stuck with days 25 and beyond got no revenue for services provided.

� Arkansas Medicaid recognized that this was inefficient and unreasonable and we were looking to remove this limitation.

� Unfortunately there are always fiscal impacts to policy changes

� The reality here was Arkansas Medicaid did not have the available funding to match the 48,000 estimated unpaid days of care.

� We realized that if we combined the two issues we could craft a new policy that was beneficial to Arkansas Hospitals as well as the Medicaid Program

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� Elimination of all “crossover” payments – Both Inpatient and Outpatient

� Elimination of either Inpatient or Outpatient “crossover” payments

� Elimination of any arbitrary maximum number of Medicaid days of care in hospitals

� Raising the maximum of Medicaid days of care in hospitals to a higher limit.

� Arkansas Medicaid had to maintain budget neutrality in this process.

� As noted before there was no new funding available to increase the match paid by Arkansas Medicaid

� CMS had to by into Arkansas’ new methodology, in particular the requirement that any proposed changes would improve rather than limit access to care

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� Data evaluated◦ Cost reports for all UPL hospitals with an emphasis on the unpaid days currently unreimbursed (BKD was very helpful in these discussions)

◦ Internal data related to in patient and outpatient dual eligible reimbursements

Concerns on Fiscal Impacts

◦ Impacts on individual hospitals

◦ Impacts on Critical Access Hospitals

◦ Impacts on state budget

� We built an interactive data model which allowed us to change key assumptions on the fly and evaluate the impacts of the mix of possible changes in real time.

� The model included the following elements:◦ Hospitals and providers impactedHospitals and providers impactedHospitals and providers impactedHospitals and providers impacted◦ Net UPL access fees for inpatient and outpatientNet UPL access fees for inpatient and outpatientNet UPL access fees for inpatient and outpatientNet UPL access fees for inpatient and outpatient◦ UPL payments for Inpatient and OutpatientUPL payments for Inpatient and OutpatientUPL payments for Inpatient and OutpatientUPL payments for Inpatient and Outpatient◦ Inpatient crossoversInpatient crossoversInpatient crossoversInpatient crossovers◦ Outpatient CrossoversOutpatient CrossoversOutpatient CrossoversOutpatient Crossovers

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� We quickly abandoned the elimination of Outpatient Crossover payments as the impact, particularly on critical access hospitals, would have been difficult for providers.

� Elimination of Inpatient Crossover payments had a more uniform and reasonable impact across the entire hospital spectrum

� The 24 day limit on hospital days was removed. Arkansas hospitals will now be reimbursed for approximately 48,000 additional days

� Outpatient crossover payments remained undisturbed.

� Inpatient Crossover payments were eliminated

� Small UPL pool formerly matched by UAMS was merged with the larger UPL pool

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�Net Benefit to DMS $ 3,000,000

� Net Benefit to UAMS $ 7,500,000

◦ Net Benefit to State Agencies $10,500,000

�Net Benefit of Policy

Changes to Hospitals $49,000,000

�Available Bad Debt Write Offs

On Medicare Cost Reports $17,500,000

�Complete Financial Benefit $66,500,000

� Arkansas Medicaid and the hospitals in Arkansas have a long history of partnership and engagement on both easy and complex issues.

� In the UPL situation both entities achieved their goals and the citizen’s of Arkansas will benefit from a stronger Medicaid Program and a hospital infrastructure ready to meet the challenges of today’s market.

� None of this can be achieved without trust and a willingness to engage.

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� As a note of information, I will likely be adding additional content to this prior to the actual presentation.

� This will likely include a discussion of the recent legislatively mandates changes to the Ambulatory Service Rates and possible some other issues.