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State of Montana Department Public Health & Human Services Developmental Disabilities Program. January 2005. Reimbursement Rate Reform Joint Appropriations Subcommittee on Health and Human Services. Davis Deshaies, LLC. BOTTOM LINE. GOOD PEOPLE Talented Pool of Department staff

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Presentation Transcript
January 2005 l.jpg

State of Montana

Department Public Health

& Human Services

Developmental Disabilities Program

January 2005

Reimbursement Rate ReformJoint Appropriations Subcommittee on Health and Human Services

Davis Deshaies, LLC


Bottom line l.jpg
BOTTOM LINE

GOOD PEOPLE

  • Talented Pool of Department staff

  • Committed Case Management staff

    GOOD PROVIDERS

  • Well-Managed

  • Good Quality

    CHANGING FEDERAL & LEGAL EXPECTATIONS

  • Medicaid is limiting funding & increasing accountability

    NEED PREDICTABLE & STABLE FUNDING

  • Balance quality, utilization, cost, and access



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Project Purpose

FAIRNESS & EQUITY

  • Refine Individual Needs Assessment process

  • Refine Provider Reimbursement rates

    REDESIGN PRINCIPLES

  • Person - Centered Planning

  • Self - Directed Choice

    PREDICTABLE AND STABLE FUNDING

  • Balance quality, utilization, cost, and access


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Summary of Approach

  • Conduct Market Analysis

  • CollectCost Data and Service & Utilization Data

  • Define Cost Drivers

  • DesignIndividual Needs AssessmentTool

  • Define Standardized Reimbursement Rates

  • IntegrateSelf-Directed ServicesTools

  • Model & Forecast Future Program & Financial Impact



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Medicaid Pressures

  • Profitability versus Growth

  • Shifts in Utilization Management

  • Retreat from Risk

  • Consumer Directed Supports

  • Increased Drug and Staff costs



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Summary

STATES ARE GOING BROKE

STATES ARE GETTING OUT OF THE BUSINESS

  • Cost Shifting to local government & consumers

  • Outsourcing the Uncomfortable stuff

  • Merging with Medicaid / Long Term Care; Insurers rather than Providers

  • Rationing: Self-directed Service by any other name

    MORE PEOPLE WANT MORE SERVICE FOR MORE TIME


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Estimated State Deficits for FY 2004 (Center for Budget & Policy Benefits)


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Estimated State Deficits for FY 2004 (Center for Budget & Policy Benefits)


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Estimated State Deficits for FY 2004 (Center for Budget & Policy Benefits)


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Estimated State Deficits for FY 2004 (Center for Budget & Policy Benefits)


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National Expenditures SFY 2004Annual Per Capita Cost for HCBS

STATEPer Capita Cost

Montana $ 30,000 / person

Florida $ 24,000 / person

California $ 19,100 / person

Texas $ 42,900 / person

Pennsylvania $ 56,000 / person

BEWARE OF STRANGE COMPARISONS!!!



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Market Analysis

  • Expenditure & Caseload Growth

  • Provider Financial Viability

  • Geographical & Economical Factors

  • Comparisons with Benchmark States

  • Performance Outcome Best Practices


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DD Enrollment Trends

New People Enrolling

3%

15%

2%

10%

70%

Children

Birth

to

6 years

Children

7 yrs.

to

18 yrs

Adults

19 yrs.

to

21 yrs.

Adults

22 yrs.

to

44yrs.

Adults

45 yrs.

to

Death

1 out of 4

drop out

1 out of 10

drop out

1 out of 12

drop out

1 out of 7

drop out

1 out of 5

drop out

People Leaving


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Montana Total DD Expenditure by State Fiscal Year


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Total Expenditure by Age Group State Fiscal Year 2003




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Distribution of Individual Costs(Example – Not Montana)



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Assumptions

  • People use similar amounts of services in very different ways

  • Determining how much paid staff support is needed is more importantthan why it is needed.

  • People and families are the best predictors of the amount of service needed.

  • Historical costs don’t always predict need.


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Individual Cost Guideline Factors

  • Age and Family Living Situation

  • Geography of Residence

  • Personal Cost Factors

    • Community Inclusion

    • Behavior Supports

    • Health and Wellness Supports

    • Current Abilities


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Step 1

Determine

Individual

Cost Guidelines

Step 3

Test for

Fairness

$

All of the Parts

Step 4

Apply Standard Rates

Step 5

Utilization Review if Needed

Step 2

Plan,

Cost Out

&

Budget

Step 6

Select Provider & Implement Plan

Appropriate services

and supports

at a

fair rate

Step 7

Measure personal outcomes


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DEMONSTRATION:MONA & Individual Cost Plan


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Rates: Pricing, Purchasing, & Performance


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Individual Needs-basedRate Model

Individual

Needs

Assessment

Standard

Rate

Market

Analysis

Cost Per Unit of Service

Individual

Budget

&

Flexible

Services

Number of Units of Service

Cost

Drivers

X

X

=


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Rate Components

  • Direct Care Staff Salaries

  • Employee - Related Expenses / Benefits

  • Program - Related / Clinical Supervision

  • General & Administrative


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Pricing Trends

  • Wage Parity across all services and employer type.

  • Employee-Related Expenses are reflecting actual Workers’ Compensation, FICA experience, and geographical differences.

  • Program-Related Costs have the highest variability.

  • General and Administrative Costs will be fixed.


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MONTANA BENCHMARK:Direct Care Salaries


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MONTANA BENCHMARK: Employee-Related Expenses




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Rates with Geographical Factors

Rates expressed as Direct Care Staff Hours


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INITIAL RATES v. CURRENT SFY 2004 Contracts

5%+ decrease

0%-5% decrease

0%-5% increase

5%+ increase

DECREASE

INCREASE

13

Providers

4

Providers

9

Providers

10

Providers



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Liquidity Ratios

  • Current Assets to Current Liabilities

  • Debt to Net Assets

  • Net Cash from Operations to Operating Expenses

  • Cash to Operating Expenses



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Next Steps(Start Dates)

  • Design Development – October 2003 to August 2004

  • Shadowing – Sept. 2004 to November 2004

  • Initial Pilot – January 2005 to March 2005

  • Expanded Pilot – March 2005 to December 2005

  • Phased Implementation – Begin January 2006



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SHADOWING: Initial ResultsCompensation: Direct Care Hourly Salary


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SHADOWING: INITIAL RESULTSService Hours: Hours Per Person Per Day


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SHADOWING: COMPARISON WITH MONA SERVICE UTILIZATION STANDARDS

Service Standards: Range of Hours Per Person Per Day

Davis Deshaies, LLC


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SHADOWING: Comparison of Salary Benchmark to Initial Results STANDARDS

Compensation: Direct Care Hourly Salary


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Shadowing: Comparison of STANDARD RATES to Sept. / October Shadowing

Compensation: Direct Care Hourly Salary


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PILOTS Shadowing


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Pilots Shadowing

People in the Pilot:

  • Receive Individual Allocations

  • Using Person-Centered Planning, build an Individual Cost Plan and Key Personal Outcomes

  • Receive technical assistance as needed from Pilot Team (to be selected by DDP)

  • Select service and Case Manager initiates contract

  • Participate in Outcome Study


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Pilots Shadowing

Providers in the Pilot:

  • Receive Business Development Assistance

    • Market Analysis

    • Cash Flow Management

    • Human Resource Management

    • Strategic Planning

  • Receive Technical Assistance on Implementing Self-Directed Supports

    • Choice & Empowerment


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A Good Time Ahead… ShadowingBe on Your Guard


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