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September 14, 2005. ALTCI Actuarial Study — Final Results. Actuarial Study Objectives. Determine key cost drivers Identify financing options that promote the goals of ALTCI Recommend a Medi-Cal rate structure that will best match payment to the risk of the enrolled population

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actuarial study objectives
Actuarial Study Objectives
  • Determine key cost drivers
  • Identify financing options that promote the goals of ALTCI
  • Recommend a Medi-Cal rate structure that will best match payment to the risk of the enrolled population
  • Assess adequacy of Medicare reimbursement for ALTCI population
key considerations
Key Considerations
  • Individual health plan risk is driven by a number of factors, including
    • Program design
      • Who will be eligible (population subgroups)?
      • What services will be covered?
      • Integration with Medicare?
    • Contracting approach
      • Mandatory vs. optional enrollment
      • Number of health plans competing
    • Operational Issues
      • Enrollment and screening/assessment process
      • Case management and care coordination requirements
      • Administrative responsibilities
assumptions
Assumptions
  • For our analysis, we assumed
    • Mandatory enrollment (for completeness purposes only - i.e., so that the entire population would be subject to analysis, allowing creation of a reimbursement model that would work for a voluntary program)
    • All adult SPD eligibles (21 and older)
    • All services, except specialty mental health, dental, and DD waiver services
    • ALTCI participating health plans would also have to participate in Medicare
what s new from the previous presentation
What’s New from the Previous Presentation?
  • Change in population definitions
    • Medicare Part B only population included in Medi-Cal only population group
    • Blended IHSS, MSSP, and Home Care together to create a rating category of Community At Risk
  • Chronic condition analysis for Medi-Cal community population
  • Medicare sufficiency analysis
methodology
Methodology
  • Review historical Medi-Cal and Medicare CY1998 – 2000 FFS data
  • Adjust data to include only populations and services expected to be covered under ALTCI
  • Project data forward to CY2007 by category of service
  • Adjust data for significant program changes including Medicare Part D
cy2000 medi cal data san diego county
CY2000 Medi-Cal DataSan Diego County
  • Nursing Home Residents, DD, and At Risk account for 28 percent of the total ALTCI membership in San Diego, but 74 percent of the total San Diego Medi-Cal expenditures
san diego county cy2000 dually eligible vs medi cal only abd membership
San Diego CountyCY2000 Dually Eligible vs. Medi-Cal Only*ABD Membership

* Includes recipients with Part B only coverage.

san diego county cy2000 dually eligible vs medi cal only abd medi cal expenditures
San Diego CountyCY2000 Dually Eligible vs. Medi-Cal Only*ABD Medi-Cal Expenditures

* Includes recipients with Part B only coverage.

chronic condition analysis
Chronic Condition Analysis
  • Reviewed 23 chronic disease categories
  • Analyzed 3 years of data from CY1998 – CY2000 for 3 counties (Alameda, Contra Costa, and San Diego) to enhance credibility
  • Separate analysis for Community At Risk and Not At Risk
  • Reviewed cases with annual Medi-Cal costs in excess of $100,000
  • Findings show highest cost condition overall for Medi-Cal is ventilator dependents
  • Of the cases in excess of $100,000 annually, 20% were ventilator dependent
  • Recommendation is to consider a separate risk adjustor for ventilator dependents in the community
san diego county cy2000 medi cal altci pmpm costs

Total $443

Total

Setting

NH $2,487

Community $261

NHC

$2,487

At Risk

$731

Not At Risk

$157

DD

$367

Frailty

Medicare Status

Medi-Cal Only*

$4,230

Dual

$26

Medi-Cal Only*

$253

Medi-Cal Only*

$438

Dual

$2,099

Dual

$542

Medi-Cal Only*

$1,003

Dual

$238

Disabled

$238

Aged

$2,240

Disabled

$1,789

Aged

$215

Aged

$23

Disabled

$28

Aged

$513

Disabled

$564

Category of Aid

Aged

$119

Disabled

$304

Aged

$3,188

Disabled

$4,589

Aged

$694

Disabled

$1,135

Aged

$1,998

Disabled

$438

San Diego CountyCY2000 Medi-Cal ALTCI PMPM Costs

*Includes Part B only recipients.

san diego county dually eligible vs medi cal only cy2000 pmpm altci medi cal and medicare costs

Pharmacy

Physician

Comm LTC

Inst LTC

Outpatient

Inpatient

Other

Medi-Cal Only

Dual Medicare

Dual Medi-Cal

San Diego CountyDually Eligible vs. Medi-Cal OnlyCY2000PMPM ALTCI Medi-Cal and Medicare Costs
medicare sufficiency analysis
Medicare Sufficiency Analysis
  • Used base data (1999 and 2000) to calculate estimated Medicare reimbursement for 2000
  • Utilized 2005 Medicare Reimbursement Rules
  • Compared estimated Medicare reimbursement to actual Medicare FFS costs for 2000
  • Reviewed by population subgroup
medicare sufficiency findings
Medicare Sufficiency Findings
  • In 2000, Medicare reimbursement would have been sufficient for the ALTCI population in total (across all population subgroups)
  • Sufficiency of Medicare reimbursement is highly variable by population subgroup
  • See details on the next slide
san diego county cy2000 altci medicare sufficiency

All ALTCI Dual Eligibles

2000 Costs $725

Rate $730

Sufficiency 0.67%

Total

NH

$1,366 $986

-28%

Community

$634

$694

9%

Setting

At Risk

$1,115

$914

-18%

Not At Risk

$513

$641

25%

DD

$282

$495

76%

NHC

$1,366

$986

-28%

Frailty

Medicare Status

Dual*

$1,366

$986

-28%

Dual*

$1,115

$914

-18%

Dual*

$513

$641

25%

Dual*

$282

$495

76%

Category of Aid

Aged

$1,120

$780

-30%

Aged

$1,100

$980

-11%

Aged

$438

$679

55%

Disabled

$580

$606

5%

Disabled

$1,463

$834

-43%

Disabled

$1,128

$857

-24%

Disabled

$280

$494

77%

Aged

$1,304

$1,082

-17%

San Diego CountyCY2000 ALTCI Medicare Sufficiency

*Includes only recipients with both Part A and B coverage.

medicare sufficiency other points
Medicare SufficiencyOther Points
  • Need to update the analysis
  • Because Medicare beneficiaries would not be forced to select an ALTCI Plan, the mix of the population that chooses is important
  • Medicare still working on a frailty adjuster for non-PACE plans. This will not be implemented before 2007
results key medi cal cost drivers
ResultsKey Medi-Cal Cost Drivers
  • Identified 10 key rating categories
  • Setting — Nursing Home vs. Community
  • Frailty — Nursing Home Certifiable/At Risk vs. Not At Risk and DD
  • Medicare Status — Dually Eligible vs. Medi-Cal Only
  • Category of Assistance — Aged vs. Disabled
  • Chronic High Risk Conditions — Ventilator Dependents
recommendations
Recommendations
  • Reimbursement needs to be sufficiently sophisticated to promote program goals
    • Utilize multiple capitation risk groupings
    • Include some risk adjustment mechanism
  • Incentives should be included to promote increased community based services
  • Savings achievable through more appropriate use of hospital, emergency room and nursing home services
recommendations continued
Recommendations (continued)
  • Administrative costs should be reflected in rates with sufficient consideration of start up costs
  • Increased care management should be supported and funded
  • Implement early reinsurance or risk sharing
  • Capitated model should allow for flexibility of both Medi-Cal and Medicare funding sources
  • Reimbursement mechanisms should continue to be refined as the program matures