january 2005
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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

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
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
project purpose
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
summary of approach
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
medicaid pressures
Medicaid Pressures
  • Profitability versus Growth
  • Shifts in Utilization Management
  • Retreat from Risk
  • Consumer Directed Supports
  • Increased Drug and Staff costs
summary
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

national expenditures sfy 2004 annual per capita cost for hcbs
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!!!

market analysis16
Market Analysis
  • Expenditure & Caseload Growth
  • Provider Financial Viability
  • Geographical & Economical Factors
  • Comparisons with Benchmark States
  • Performance Outcome Best Practices
slide17

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

assumptions
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.
individual cost guideline factors
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
all of the parts

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

individual needs based rate model
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

=

rate components
Rate Components
  • Direct Care Staff Salaries
  • Employee - Related Expenses / Benefits
  • Program - Related / Clinical Supervision
  • General & Administrative
pricing trends
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.
rates with geographical factors
Rates with Geographical Factors

Rates expressed as Direct Care Staff Hours

initial rates v current sfy 2004 contracts
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

liquidity ratios
Liquidity Ratios
  • Current Assets to Current Liabilities
  • Debt to Net Assets
  • Net Cash from Operations to Operating Expenses
  • Cash to Operating Expenses
next steps start dates
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
shadowing comparison with mona service utilization standards
SHADOWING: COMPARISON WITH MONA SERVICE UTILIZATION STANDARDS

Service Standards: Range of Hours Per Person Per Day

Davis Deshaies, LLC

shadowing comparison of standard rates to sept october shadowing
Shadowing: Comparison of STANDARD RATES to Sept. / October Shadowing

Compensation: Direct Care Hourly Salary

pilots49
Pilots

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
pilots50
Pilots

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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