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Medicaid DSH. John Berta Senior Director, Policy Analysis Texas Hospital Association June 19, 2014. THA – Who We Are.

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Medicaid DSH

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Medicaid dsh

Medicaid DSH

John Berta

Senior Director, Policy Analysis

Texas Hospital Association

June 19, 2014


Tha who we are

THA – Who We Are

  • The Texas Hospital Association is a nonprofit trade association representing Texas hospitals and health systems. In addition to providing a unified voice for health care, THA serves its 500+ members with timely information, data analysis, education on essential operational requirements, networking and leadership opportunities.


Serving texas hospitals health systems

Serving Texas Hospitals/Health Systems


Medicaid dsh outline

Medicaid DSH - Outline

  • FY2011

  • FY2012-13 – Waiver DY1 & DY2

  • FY2014-15 – DY3 & DY4

  • FY2016 and Beyond


Fy2011 dsh and before

FY2011 DSH (and Before)

  • DSH & UPL – Pre-Waiver

  • Programs Related to each other

  • Public Hospitals have incentive to Fund DSH

  • Fully Funded for Every Year


Dsh funding incentive

DSH Funding Incentive

  • UPL at Maximum – No Other Funds Available

    • IGT ~$0.40

    • Paid $1.00

  • DSH

    • IGT ~$0.40

    • Paid~$0.55


  • Medicaid dsh outline1

    Medicaid DSH - Outline

    • FY2011

    • FY2012-13 – Waiver DY1 & DY2

    • FY2014-15 – DY3 & DY4

    • FY2016 and Beyond


    Fy2012 financing transformation

    FY2012 Financing Transformation

    • Transformation Waiver

      • Shifting Landscape

      • DSH & UC - Closer Connection

      • Additional PCP Costs Allowed for UC

      • Result = Alternate Funding Opportunities for Public Hospitals

    • DSH Audit

      • Dollars Recouped beginning in Program Year 2011


    Fy2012 shifting landscape

    FY2012 - Shifting Landscape

    • FY2011 UPL $2.8B

    • FY2012 UC & DSRIP $4.2B

    • DSH & UC Closely Aligned

    • Medicaid Shortfall Growing Larger


    Medicaid disproportionate share fy2012

    Medicaid Disproportionate Share FY2012

    • Public Hospitals Agree to Fund $502M of $569 Potential

    • DSH Dollars Unspent

    • THA Forms Task Force on DSH


    Tha task force concepts 2012 2013

    THA Task Force Concepts 2012-2013

    • Medicaid Disproportionate Share Hospital Task Force – 6/1/2012

      • the money follows the work

      • shared responsibility for funding the Medicaid DSH program

      • protection for the most vulnerable classes of hospitals


    Uc and dsrip funding 29b

    UC and DSRIP Funding= $29B

    UC/UPL Transition- $466M


    Medicaid dsh fy2013 issues

    Medicaid DSH FY2013 - Issues

    • FY 2013 Payments – 100% Amounts - $138M GR $323M IGT

    • New DSH Rule

      • Lubbock and Odessa drop out of 8 hospital coalition leaving big 6

      • DSH is Regionalized

      • Pass 3 Rural Funding Mechanism Developed

      • GR and IGT are separated

      • Texas Children’s Lawsuit

        • Max TPL payment = Cost

    • DSH paid @ 90% (10% Expected)


    Medicaid dsh outline2

    Medicaid DSH - Outline

    • FY2011

    • FY2012-13 – Waiver DY1 & DY2

    • FY2014-15 – DY3 & DY4

    • FY2016 and Beyond


    Medicaid disproportionate share fy2014

    Medicaid Disproportionate Share FY2014

    • New Rider 86 covers DSH & UC

    • $300M GR authorized for FY2014 & FY2015

      • 2014 = $160M

      • 2015 = $140M

  • No General Revenue Funds appropriated after FY2015

  • Other Budget Riders not written in this manner


  • Medicaid dsh rider 86

    Medicaid DSH Rider 86

    • Proportional allocation of supplemental hospital payments among large public, small public, and non-public providers

    • Mechanisms though which Medicaid payments are made through managed care organizations

    • Recommended statutory changes and any other legislative direction needed to fully implement the plan


    Medicaid dsh rider 86 cont d

    Medicaid DSH Rider 86 (cont’d)

    • Assess the extent to which supplemental payments are needed to cover Medicaid and uninsured/uncompensated care costs

    • Transition plan from supplemental payments to rates that recognize improvements in quality of patient care, the most appropriate use of care, and patient outcomes

    • No General Revenue Funds appropriated after FY2015


    Medicaid dsh rider 86 cont d1

    Medicaid DSH Rider 86 (cont’d)

    • FY 2014 request must show a measurable progress in developing the plan

    • FY 2015 request should include the final plan

    • No GR funds may be expended for FY 15 until plan is finalized


    Medicaid dsh fy2014

    Medicaid DSH FY2014

    2011-Before Transformation Waiver

    • Non-State Hospital DSH Pool = $1.2B

    • UPL Payments = $2.8B

    • Total = $4.0B

      2014-After Transformation Waiver

    • FY2014 UC & DSRIP = $6.2B

    • FY2014 DSH Non State = $1.3B

    • Total = $7.5B


    2014 dsh attributes 1

    2014 DSH – Attributes - 1

    • State-owned hospitals – No change

    • 2013 – Regional Approach (RHP)

    • 2014 – Hospitals in statewide pools

    • 2013 – Funds for Low Income and Medicaid

    • 2014 – Days added together


    2014 dsh attributes 2

    2014 DSH – Attributes - 2

    • 2013 - GR funded non RHP areas

    • 2014 – Hospitals share in GR and related FF

    • 2014 – 3 Pools = all GR and FF in Pools 1&2 shared by all (e.g. net DSH proceeds)

    • 2014 - Pool 3 = IGT back to IGT hospitals

    • 2013 – Pass 3 Methodology in place

    • 2014 – No change

    • 2013 – 6 Large public hospitals transfer for their region

    • 2014 – Fed Funds on IGT by 6 shared by all


    2014 dsh attributes 3

    2014 DSH – Attributes - 3

    • 2013 – no provision

    • 2014 – Most other public hospitals IGT ½ of their DSH (Lubbock & Ector IGT for themselves)

    • 2014 – Non-8 public hospitals have their days weighted such that net DSH is equal

    • 2014 – Big 6 = $377 total = $396


    2014 uc attributes 1

    2014 UC Attributes - 1

    • UC funds are divided into seven pools

      • state-owned hospitals

      • COTH members (6 large public)

      • other public hospitals

      • private hospitals

      • physician group practices

      • governmental ambulance

      • publicly owned dental providers


    2014 uc attributes 2

    2014 UC Attributes - 2

    • Pool amounts are Allocated pro-rata

    • Allocation basis:

      • Hospitals - Post DSH Payment unpaid HSL

      • Other groups – UC Cost


    2014 uc attributes 3

    2014 UC Attributes - 3

    • 6 Large transferring hospitals receive “bump” on allocation basis (pre-allocation basis)

    • UC pre-allocation “bump” equals amount of DSH IGT made for other hospitals


    284m added to 6 uc pool

    $284M added to 6 UC Pool

    • Net DSH proceeds = $1.344B - $395M IGT = $949M

    • Big 6 = 23% of $949M net proceeds

    • Total IGT = $395M * 23% = $93M

    • $377M – $93M = $284M

    • $284M = UC bump for big 6


    2014 uc attributes 4

    2014 UC Attributes - 4

    • Special Provision for smaller (Rider 38) hospitals:

      • The reduction in future years is limited to decreases in UC Pool

      • E.g. $3.9 billion to 3.1 billion

      • Reduction is still significant but no greater than this amount

      • Applies to county < 60k, RRC,SCH,CAH


    2014 17 key dates

    2014-17 Key Dates

    • Fall 2014 - FY 2014 DSH paid (1/2 paid)

    • Jan 2015 – 84th TX Leg in session

    • Spring 2015 – last half of 2014 DSH Paid

    • June 2015 TX Leg leaves

    • FY2015 DSH – needs final plan

    • FY2016 – last year of 5 year waiver

    • 2017 DSH cuts begin


    Medicaid dsh outline3

    Medicaid DSH - Outline

    • FY2011

    • FY2012-13 – Waiver DY1 & DY2

    • FY2014-15 – DY3 & DY4

    • FY2016 and Beyond


    Medicaid dsh future years

    Medicaid DSH – Future Years

    • Composition of 84th Legislature

    • Federal DSH Allotment

    • DSH Audit Outcomes

    • Waiver Extension/Renewal/Replacement

      • Available UC Funds

      • CMS Negotiation / Federal Outlook

  • Medicaid Shortfall ~$3B


  • Medicaid federal dsh reductions

    Medicaid Federal DSH Reductions


    Questions

    Questions?

    John Berta

    Texas Hospital Association

    512/465-1556

    [email protected]


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