1

Medicaid Advisory GroupMeeting

October 20, 2010Department of Health Services

Division of Health Care Access and Accountability

1

2

Agenda1. FY 2011 Deficit & DSH Claiming

2. 2011-2013 Budget Overview

3. 2011-2013 Hospital Budget

4. Rate Reform 3.0

5. FY 2011 State Plan Amendments and RAIs

6. 2010 Pay-For-Performance

7. Hospital Assessment Update

8. Critical Access Hospital Assessment

9. CAH Cost Settlements

10. Data Requests

11. Transitioning MAG to Public Meetings2

3

2011 Deficit

LFB Projection: $148 Million

less $ 20 Million Senior Care

less $ 44 Million Cap Timing Adjustment

----------------------------

$ 84 Million

3

4

2009 DSH Claiming Opportunity

With the support of the hospital community, DHS has the ability to make retroactive supplemental DSH payments through an increase in the provider assessment.

DHS has CMS approval to make additional FFY 2009 supplemental payments to private acute care hospitals, subject to the availability of state funding.

DSH payments would be distributed based upon a hospital’s uncompensated care costs in relation to total uncompensated care costs for all private acute care hospitals.

For FFY 2009, WI had a DSH Allotment of $156 million with remaining available DSH funding of $88 million.

In order to draw down the additional DSH funding, DHS would require to increase the assessment by $54 million.

This would result in a Net Benefit of $34 million to hospitals. $19 million would go towards solving the FY 11 deficit.

4

5

2011-2013 Budget Overview

A substantial deficit is projected in the state budget for the 11-13 biennium. This deficit will place significant pressure on all state programs to obtain savings and cost containment.

$2.5-$3.2 billion over the biennium

5

6

2011-2013 Hospital Budget

6

Approximate Budget Factor Changes 2011 to 2012 2012 to 20123

Inpatient FFS Intensity Increase 2.00% 2.00%

Outpatient FFS Intensity Increase 2.00% 2.00%

Inpatient FFS Caseload Change -2.00% -1.00%

Outpatient FFS Caseload Change -3.50% -2.50%

Budget FY 2012 FY 2013AF Total FFS Hospital Budget Including FFS Assessments 747,000,000$ 744,250,000$

77

Rate Reform 3.0Rate reform 3.0 was included as part of the

Department’s FY11-13 budget request :

● Assumes $300 million GPR savings over the biennium ● The Department will pursue the same process as in rate

reform 1.0 and 2.0.● First stakeholder meeting on October 20, 2010● Specific direction was given to explore an all provider

assessment ● In addition, will work to develop statutory language for next

Governor’s budget submission

8

Context for Rate Reform

Affordable Care Act Maintenance of Eligibility Requirements

Mandatory covered service requirements

Governor’s priorities: Promote Access and Improve Quality

Guiding principles

9

Guiding Principles

Identify savings to reach targeted reduction levels Look for both short-term solutions and long-term systemic changes Ensure that no one provider group is singled out for rate reductions Ensure access to care for MA patients Align payments with value rather than volume Build on previous MA quality improvement efforts including

managed care P4P initiative Implement care management/coordination strategies Focus on high-intensity services Cost containment now about “continuous improvement”

10

2011 State Plan Amendments

● Inpatient and Outpatient State Plan Amendments (SPAs) were submitted on September 30, 2010 and are currently under review by CMS.

10

11

Changes Made to SPAs

1. Appeals Policy Limit 5 Year Look Back For Cost Report –Use of Unaudited Cost Reports When Certain Criteria Met.

2. Terminate Critical Access Hospital Settlements3. Align Rehab Rates to Psych Per Diem Calculations4. Move EACH Payments under the UPL5. Reform DSH Methodology to Pay DSH As a Lump Sum Payment6. Revise Rural Hospital Payment Adjustment to Eliminate Reference

to Wisconsin Historical Wage Index Calculation.7. Wage Index Policy – Recommend In State and Out of State Index8. Changed UPL Methodology to Medicare Cost Based Methodology.

11

12

Proposed 2011 Pay-For-Performance Measures

● Keep Five Checkpoint Measures used in 2010

● Move from Pay-For-Reporting to Pay-For-Performance for:1. Surgical Care Improvement and Clot

Prevention Medication Given2. Perinatal Measures

● Remove Readmission Report Requirement and use $500,000 to pay for performance on perinatal measures.

12

13

Request for Additional Information (RAI) on SPAs

CMS sent RAIs on SPAs related to 2010 Pay-for-Performance Measures and 10% Critical Access Rate Cut (implemented from Jan-June 2010)

DHS responded to request on Sept. 17th

CMS has until Dec. 17th to approve or deny changes.

13

14

FY 2010 Pay-For-Performance Update

DHS is currently working with WHA to finalize 2010 CheckPoint Information for FY 2010 Pay-For-Performance Measures.

Payments will be made by December.

15

FY 2010 Hospital Assessment Update

(1) – Actual payments reflect claims paid as of October 15, 2010 with Dates of Service between July 1, 2009 – June 30, 2010. HMO payments through April 2010.

(2) – Inpatient Projections include only Acute Care Hospitals

(3) – Outpatient Projections include Acute Care, Psychiatric and LTC Hospitals

(4) –This is a preliminary projection of payments. Final results may vary.

*This amount reflects payments that still need to be made to the Hospitals during the reconciliation for FY 10

Classification Actual

Payments to Date (1)

Total Projected Payments

PaymentVariance

VarianceAs a %

Inpatient FFS (2) $126,913,820 $132,558,856 ($5,645,036) -4.26%

Outpatient FFS (3) $68,379,484 $82,007,587 ($13,628,103) -16.62%

Managed Care $356,139,537 $383,999,997 ($27,860,460) -7.26%

Total Access Payments $551,432,840 $598,566,440 ($47,133,600)* -7.87%

16

FY 2011 Critical Access Hospital Assessment Update

The first quarter of assessment was collected by September 30, 2010.

HMO have paid out payments for July-September.

October HMO payments should be received by November 1st.

FFS Access Payments started in September. A retro-active claims adjustment is being

completed for claims from July 1st-September.

17

Critical Access Hospital Cost Settlements

DHS completed 2005 CAH Cost Settlements in September.

2001-2004 CAH Settlements were sent to hospitals in late September.

2006-2007 will be settled by the end of SFY 11. Contact: Randy McElhose

Randy.McElhose@wisconsin.gov

(608) 267-7127

17

18

Data Requests DHS has modified the format of the paid claims information

provided to Hospitals. Information provided will be raw data. An FAQ will accompany the extract to help facilities use the

extract to address needs. Two week turn-around should be expected. DSH Funding:

Paid Claim Extract will provide Yes/No/Perhaps indicator as to whether member is eligible for T-19.

If Members with “Perhaps” result are critical to meet DSH required percentage, DHS will conduct further research to definitively determine Yes or No.

DHS is in process of upgrading our data repository hardware to import FPL info and give a definitive Yes or No for T-19 eligible.

Expect functionality to be available February 2011.

19

Medicaid Advisory Group Newly Enforced CMS Guideline requires that public process must

include one of the following:

Hold one or more public hearings, at which the proposed rates, methodologies, and justifications are described and made available to the public, and time is provided during which comments can be received. Hold one or more additional public hearings, at which the final rates, methodologies, and justifications are described and made available to the public.

Use a commission or similar process, where meetings are open to members of the public, in the development of proposed and final rates, methodologies, and justifications.

Include notice of the intent to submit a state plan amendment in newspapers of general circulation, and provide a mechanism for members of the public to receive a copy of the proposed and final rates, methodologies, and justifications underlying the amendment, and an opportunity, which shall not be less than 30 days prior to the proposed effective date, to comment on the proposed rates, methodologies, and justifications.

Include any other similar process for public input that would afford an interested party a reasonable opportunity to learn about the proposed changes.

1919

20

Medicaid Advisory Group (cont.)

To comply with this requirement the department will transition the MAG to a Department Advisory Group and hold public meetings.

Meetings will still be held at WHA.

20

21

Future Considerations

Start Discussing 2012 Rate Setting Process

Next Meeting: February at WHA

22

COMMENTS AND/OR

QUESTIONS??

22