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AAHAM Spring Meeting MHA UPDATE March 15, 2013 Anne Hubbard, Assistant Vice President, Financial Policy & Advocacy PowerPoint PPT Presentation


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AAHAM Spring Meeting MHA UPDATE March 15, 2013 Anne Hubbard, Assistant Vice President, Financial Policy & Advocacy. MHA Update Agenda. Wavier Modernization Update Medicaid Budget Update Proposed Federal FAP Rules. Waiver Cushion. 3. Current Test vs. New Test. Current Test New Test.

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AAHAM Spring Meeting MHA UPDATE March 15, 2013 Anne Hubbard, Assistant Vice President, Financial Policy & Advocacy

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Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

AAHAM Spring Meeting

MHA UPDATE

March 15, 2013

Anne Hubbard, Assistant Vice President, Financial Policy & Advocacy


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

MHA Update Agenda

  • Wavier Modernization Update

  • Medicaid Budget Update

  • Proposed Federal FAP Rules


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

Waiver Cushion

3


Current test vs new test

Current Test vs. New Test

Current TestNew Test

Medicare Inpatient Payment per Discharge

Medicare Inpatient and Outpatient Payment per Beneficiary

Cumulative Rate of Growth

(1981 to present)

Annual Rate of Growth

Base Year

1981

MD vs. National

Growth Target

MD vs. MD

4

4


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The Structure

Two three-year demonstrations – “3 + 3”

  • First three-year demonstration

    • 2013 – 2015

    • More clear

  • Second three-year demonstration

    • 2016 – 2018

    • Less clear


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The “Goal”

First three-year demonstration

  • The Goal –

    • By the end of the first three years;

    • Limit the rate of growth in;

    • Total per capita inpatient and outpatient regulated hospital revenue;

    • To 3.57% or less


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The “Goal”

  • Based on 10-year historical average annual growth in Gross State Product (GSP)

    • GSP averaged 3.6%

    • Hospital regulated revenue averaged 6.8%

  • But projected revenue growth (2013 – 2015) is 3.5%


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The “Test”

First three-year demonstration

  • The Test –

    • By the end of the first three years;

    • Limit the rate of growth in;

    • Medicare per beneficiary inpatient and outpatient regulated hospital revenue;

    • To 2.62% or less (takes into account that Medicare grows slower than GSP)


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The “Tools”

  • Total Patient Revenue (TPR) – new models

  • Admissions Readmissions (ARR)

  • Volume Adjustments

  • Primary Care Medical Home

  • More links between payment and quality

  • Accountable Care Organization options

  • New “bundled” payment approaches

  • Physician gain sharing


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

The “Transition”

  • Protection from current waiver test

  • Improved hospital annual updates

  • Process to articulate second three years

  • Insurance premium rate alignment

  • Review uncompensated care policy

  • Broaden HSCRC governance


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

MHA Objectives

  • Retain as much of the waiver subsidy as possible

  • Pursue innovation in care delivery

  • Our “critical few”

    • Get out from under the existing waiver and payback provisions

    • Implement real care delivery tools

    • Protection from Medicaid assessments

    • Improved update

    • Differential used as lever to achieve success under new waiver


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

Next Steps

  • State to submit proposal – April 1

  • Federal government review and reply

    • 2-6 month turn around

  • Hospitals must assess support

  • Failure will be painful; new waiver may be painful

  • Regardless, hospitals must prepare


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

FY 2014 State Medicaid Budget


Fy 2014 maryland budget

FY 2014 Maryland Budget

  • Governor’s Budget - $32B

    • Introduced to the General Assembly Jan. 6th

    • The Legislature can cut the budget but they cannot add to it without taking funds from other programs.

    • Budget must be finalized by April 1st


Medicaid budget

Medicaid Budget

  • Maryland Medical Assistance Program - $7.4 billion budget request

    • No deficit expected

  • FY 2013 will close out with a surplus.

    • FY 2013 Medicaid expenditures will be reduced by $94 million to reflect lower than anticipated expenditures due to lower enrollment, favorable case mix changes and utilization trends and a 2013 reduction in MCO rates.


Medicaid budget growth

Medicaid Budget Growth


Fy 2014 medicaid budget growth

FY 2014 Medicaid Budget Growth

  • The budget grows by $300 million or 4.4%, due to expansion of Medicaid to 138% FPL, as specified under ACA. Most of this increase is federal funding, as the expansion population will be entirely covered by the federal government through FY 2017.


Medicaid enrollment growth

Medicaid Enrollment Growth


Medicaid assessment

Medicaid Assessment


Medicaid assessment1

Medicaid Assessment

  • Medicaid Assessment set at $389M for FY 2014

  • Other cost containment actions:

    • Tiering of outpatient rates and ED services (study required to define savings)

    • Study required to define savings associated with this action. If $30M anticipated is not realized, HSCRC can take action to generate necessary savings.

      .


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

Federal Proposed FAP Rules


Federal proposed fap rules

Federal Proposed FAP Rules

  • ACA requires hospitals to have Financial Assistance Policies.

  • The Department of Treasury and the IRS issued proposed rules in June 2012. Comments were due September 2012.


Key differences between md and fap federal policies

Key differences Between MD and FAP Federal Policies

  • Notification – community based and on hospital websites

  • Application – FAP must apply to emergency and medically necessary care (MD policy doesn’t apply to medically necessary care)

  • Collection – Debts can’t be collected in the ED

  • Language – FAP must be issued in languages representing 10% or more of the PSA

  • Reasonable effort – 120 days – 3 billing statements + copy of FAP

  • Application Period – 240 day period


Federal limitation on charges policy

Federal Limitation on Charges Policy

Two Methods: Look Back & Prospective Medicare

  • The “look back” method would allow for the amount generally billed to be determined based on a blend of public and private payor payments; thus, the reduced-cost care would likely be between 94 and 98 percent of charges in Maryland.

  • The “prospective method” would set reduced cost rates at 94 percent of charges in Maryland, because the method is based on Medicare payments.


Aaham spring meeting mha update march 15 2013 anne hubbard assistant vice president financial policy advocacy

Questions?


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