Alabama Medicaid Agency

1. Alabama Medicaid Agency

2. Medicaid “Rules” • Medicaid was established in 1965 by federal law to provide medical assistance to low income and resource individuals. • States may choose to have a Medicaid program, but must comply with all federal Medicaid requirements once a program has been implemented. • Funded through a federal and state partnership (generally 70/30 in Alabama)

3. “Rules” • Federal law sets minimum eligibility and benefit levels. • With few exceptions, Alabama’s program is at the federal minimum level for eligibility. • Alabama has one of the most conservative benefit packages in the country. • Medicaid cannot make any more program cuts and still be in compliance with federal regulations.

4. Don’t be confused… • Medicaid is a federal and state program and provides medical assistance to low income and resource individuals. • Medicare is a federal program to provide medical insurance generally to individuals aged 65 and older.

5. Challenges • The benefits available to children enrolled in the Medicaid program are more comprehensive than almost any available private insurance. • Restrictive federal regulations and resource limitations present challenges to program management • Provider participation • Scope of services for adults

6. Challenges • Enrollment as Entitlement • Multiple standards • Adult eligibility extremely limited which discourages family units to have effective medical care • Trusts and annuities circumvent requirements • Match Rate • State can receive no less than 50% federal match • Poor states pay disproportionately • Part D MMA

7. Challenges • Patient Education • Changing addresses • Minimal motivation to change behavior to more appropriate use • Cannot incent recipients based on behavior • Medical Inflation • New technologies • Life style drugs • Pharmacy ingredient cost driven by manufacturer

8. Challenges • Provider Participation • Reimbursement Rates • Access to care • Unfunded Mandates • Premiums and co-pays for Medicare recipients • The State is the final payer behind the Federal government for those eligible for Medicare • EPSDT • MMA

9. History of Unfunded Mandates • Medicare Modernization Act, 2003 • Health Insurance Portability and Accountability Act (Currently implementing NPI) • Pryor Amendment, 1990 (Mandated open drug formulary) • OBRA 1989 (Mandated the EPSDT program) • CCA 1988 (Mandated coverage of QMB)

10. The Face of Medicaid

11. Demographics FY 2003 • Medicaid covers: • 19.9% of Alabama’s total population (includes all eligibility categories) • 46% of all deliveries in Alabama • 37.1% of Alabama’s children (under 19) • 21.2% of Alabama’s elderly (65 and above) • 74% of nursing home residents in facilities with certified beds (65% of all beds in Alabama)

12. Eligibility For Medicaid • SOBRA Children • Federal minimum • 133% Poverty through age 5 • 100% Poverty age 6 through age 18 • Medicaid for Low Income Families (MLIF) • Adult with child in the home • Less than 15% Poverty • $194 per month income for family of four • Covers 15% of poverty families

13. Eligibility For Medicaid • SSI related • Income level determined annually by federal government • Disabled, aged, blind determined by federal agency • $564 per month income for individual, $846 for couple in FY 2004 • Nursing Facilities/ Institutionalized • 300% SSI • $1692 income per month in FY 2004 • All but $30 per month applied to facility payment

14. State Children on Medicaidunder age 21

15. Growth in Eligibles • 5.69% increase from 2002 to 2003 • 7.54% increase from 2001 to 2002 • 5.79% increase from 2000 to 2001 • Prior to 2000, historical growth was between 2 and 4% • Increase has been seen primarily in children and QMB

16. Medicaid Eligibility by Age

17. High Medicaid Counties • These 13 counties have the highest concentration • of Medicaid eligibles across the general population • (30% or greater). • Bullock 33% Lowndes 34% • Butler 32% Macon 30% • Conecuh 30% Marengo 30% • Dallas 41% Perry 44% • Greene 40% Pickens 30% • Hale 33% Sumter 40% • Wilcox 48%

18. High Medicaid Counties These 14 counties have the highest concentration of Medicaid eligibles across the children’s population (50% or greater). Barbour 50% Greene 64% Bullock 66% Hale 52% Butler 56% Lowndes 56% Conecuh 57% Perry 68 % Crenshaw 51% Pike 52% Dallas 66% Sumter 65% Escambia 50% Wilcox 71%

19. Economic Impact • In FY 2005, Medicaid will pay approximately $3.9 billion to providers for various health care services rendered; $2.8 billion represents federal funds brought into the State. • Medicaid expenditures supported more than 84,323 jobs in various industries within the state. 1Economic Impact of the Alabama Medicaid Agency on the Economy of the State of Alabama and its Counties, Amy K. Yarbrough, MSHA, MBA, Administrative Fellow, University of Alabama at Birmingham

20. Financial Impact by County • 5 counties receive Medicaid payments in excess of $100 million. Jefferson $474 million Mobile $275 million Tuscaloosa $137 million Madison $118 million Montgomery $302 million • 9 counties receive Medicaid payments in excess of $60 million. • 16 counties receive Medicaid payments in excess of $40 million. • 31 counties receive Medicaid payments in excess of $20 million.

21. Financial Impact by Hospital • Without Medicaid revenue, critical components of Alabama’s healthcare infrastructure could not continue to exist. • 52% of the patient days at Children’s Hospital are paid for by Medicaid • 77% of the patient days at USA Children’s and Women’s Center are paid for by Medicaid Source: Information obtained from Medicare Cost Reports as filed.

22. Program Funding

23. Where It Comes From, Where It Goes Administrative Costs 3.48% State Funds 27.93 % Federal Funds 72.07% Benefit Payments 96.52%

24. Pharmacy Factor • Despite Alabama having one of the lowest annual growth rates in the country, Medicaid’s Pharmacy Program is the fastest growing area. • Without question, the driving force behind the unsustainable growth is the cost of medications.

25. Budget Outlook • Medicaid faced a $60 million state,$220 million total fund shortfall in FY 2004. • Medicaid faced a $182 million state, $623.9 million total fund shortfall in FY 2005. • Through the strong support of Governor Riley and the Alabama Legislature, Medicaid has been made whole for FY 2004 and 2005.

26. What percent of General Fund does Medicaid receive?

27. FY 2006 Need additional $65 million State funds • Loss of IGT for UPL payments $24.4 million • Inflation $36.4 million • Change in FMAP (69.41% from 70.83%) $52.4 million • 53rd week provider payroll $9.3 million • Medicare premium increase $ 6.6 million Total $129.1 million Assumptions: 3% inflation for all programs except Nursing Homes at 4% and Pharmacy at 15% $50 million generated from Intergovernmental Transfers, $15 million from savings in Pharmacy program

28. Medicaid: The Industry Medicaid is a business that: • Places almost $4 billion into Alabama’s economy • Contributes $2.7 billion new federal dollars into Alabama; almost $9 billion after the rollover effect • Supports over 84,000 jobs • Provides the cornerstone of Alabama’s healthcare infrastructure

29. Medicaid: The Industry Medicaid is a business that: • Is efficient compared to private health coverage • Between 2000-2003, Medicaid per capita growth in the cost of acute care was 6.9%. • For employer-sponsored health insurance, the growth is 12.6% and for all private insurance coverage is 9%. • Nationally, Medicaid administrative costs are in the range of 4 to 6% while commercial insurers administrative costs are often well above 10%.

30. Medicaid: The Industry Medicaid is a business that: • Administers the second largest insurance program in Alabama • Operates with one of the lowest administrative rates of any organization in the country at 2.6%. Over 97% of Medicaid’s total budget is spent on health care benefits and services for recipients

31. Patient 1st • Medical Home for eligible patients • Constant source of primary care • Less reliance on Emergency Room care • Coordination of referrals • Case management by physician • Specialized case management available when needed • Program accountability • Historically 1,500 PMPs and 425,000 enrollees

32. Program Enhancements Disease Intervention • Telemetry concept – in-home monitors communicate with centralized database. • Database alerts appropriate staff when intervention needed • Partnership with USA Hospital and the Alabama Dept. of Public Health • Target chronic diseases – initially Diabetes Mellitus • Monitor high risk patients for primary disease andco-morbidities and care is directed by primary physician

33. Program Enhancements • InfoSolutions • PDA tool for physicians • Download patient prescription information each morning • Patient specific Preferred Drug information • Alternative treatment options • ePocrates

34. InfoSolutions A Medical Information Network e-Prescribing from Blue Cross and Blue Shield of Alabama

35. Preferred Drug Program • Preferred Drug Lists (PDL) offer an effective way to provide safe and effective therapy options in a cost efficient manner. 27 state Medicaid programs use a PDL and more are adding this component. • Most employment-related insurance today use a preferred drug list. • The new Medicare drug benefit is predicated on a system of formularies and preferred drug lists. • Medicaid uses a Pharmacy and Therapeutics (P&T) Committee to conduct in-depth clinical reviews to insure safe and effective drugs are placed on the PDL.

36. Impact on Other Programs • The PDL has been designed to foster safe and cost-effective drug therapy. • Medicaid monitors the impact of the PDL and prior authorization. • Based on Medicaid studies there has been no increase in other Medicaid costs as a result of pharmacy initiatives. • Studies will continue to insure program costs in other areas are not adversely affected (ER, Hospital, Physicians).

37. Premise Good oral health prevents pain, suffering, missed days of school or work and unnecessary costs due to dental treatment.

38. Why Is Good Oral Health Important? • Dental related illness causes poor children to “miss” 12 times more school days than children from higher income families • Poor oral health has been associated with other medical problems including heart disease and premature births

39. Is There An Oral Health Problem In Alabama? • Two out of five Alabama schoolchildren are estimated to have untreated tooth decay • Almost 70% of low-income children in Alabama did not visit a dentist last year

40. Is There An Oral Health Problem In Alabama? • Alabama has 30% fewer dentists per capita than the nation and our dentists are not distributed evenly (38 dentists in Alabama versus 54 per 100,000 population nationally) • One-third of all Alabamians over age 65 have no teeth, the 9th highest percentage in the country

41. Dental ProgramVision Statement To ensure every child in Alabama enjoys optimal health by providing equal and timely access to quality, comprehensive oral health care, where prevention is emphasized promoting the total well-being of the child.

42. Alabama Medicaid Dental Program • Approximately 450,000 Medicaid eligible children with limited access to dental services • 8 counties with no Medicaid dentists or one Medicaid dentist • Limited participation in other counties with most not accepting new Medicaid patients

43. Currently….. • Increased dental rates to100% of BCBS 2001 rates • More procedure codes covered • Increased provider assistance • Made case management services available • Increased enrolled dentists to 700

44. Where to begin? • Where do I find ______?

45. Alabama Medicaid Provider Manual • Updates Quarterly • Provides All Information on Policy and Billing • Now Available on CD Rom

46. Chapters you need…. Chapter 1 IntroductionChapter 2 EnrollmentChapter 3 Eligibility Chapter 4 Prior Authorization Chapter 5 Filing Claims Chapter 6 Receiving ReimbursementChapter 7 Rights and ResponsibilitiesChapter 13 Dental

47. Appendix • Appendix B Electronic Media Claims (EMC) Guidelines • Appendix E Medicaid Forms • Appendix G Non-Emergency Transportation (NET) • Appendix I Outpatient Hospital and ASC Procedures • Appendix J Explanation of Benefit Codes • Appendix K Third Party Carrier CodesAppendix L AVRS Quick Reference Guide • Appendix N Medicaid Contact Information

48. Come On Board!!! • How do I become a provider? • For an enrollment application Contact • EDS provider enrollment unit 1-888-223-3630 • Medicaid’s dental program 1-334-242-5997 • EDS issues a 9 digit provider number (effective the first day of the month the application is received) • You must receive a provider number for each physical location where you perform services

49. Provider’sRights • Keep records for 3 years plus current • Provide same services to Medicaid patients as all other patients • Can bill recipients when services are non-covered or patient exceeded limits • Can limit number of patients seen, days seen or ages

50. Chapter Three--EligibilityWho is eligible? Three important questions to ask… • Are they eligible? • Are they under the age of 21? • Do they have full Medicaid benefits?