Budget Presentation (or, how we reversed the downward spiral…)

1. Budget Presentation(or, how we reversed the downward spiral…) Nevada County Behavioral Health CMHDA Small Counties Annual Meeting May 8, 2008

2. Contents • Productivity Measurement & Benefits • Review Services • Monitor Insurance • Cost Report Optimization • Staffing and Funding • Contract Structure • Other Topics

3. Financial Turnaround • Nevada County had multiple years of large deficits; exhausting realignment fund balance • Staffing and budget cuts • Received 10% Realignment shift and some County General Fund

4. Financial Turnaround • For 08-09, minimal County General Fund • Increase staff and contracts • No Realignment shift • Minimal realignment draw

5. Productivity Expectation • More revenue with minimal increase in costs (low hanging fruit). • Individualized performance agreement, baseline 80% billable service expectation • Re-defined “billable” as productive • Train clinical and admin staff on billable services and correct use of codes • Set clear deadlines for daily documentation

6. Productivity Monitoring • Cross reference of billing & time card coding • Daily documentation should include all hours worked, productive and non • Weekly reports on late billing documentation • Monthly report & feedback from managers and clinicians • Included in performance evaluations

7. Productivity • Bill for all assessment services; open the episode early • Focus on billable services • Limit pre-admission services

8. Capture all Covered Services • Travel time associated with service provision • Documentation of service • Phone calls • Crisis

9. Review Services Don’t Pay for Services Covered by Other Agencies, Sources & Funds • Ambulance costs from Emergency Room to Hospital for 5150 • Jail medical services • FQHC mental health services • PCP • Crime Victims • Veterans

10. Review Services Monitor High Cost Treatment & Provide Options • Acute inpatient • State Hospital • PHF • IMD • Board & Care • Day Treatment

11. Review Services Monitor High Cost Treatment & Provide Options • Develop budget and strategy for placement; consider ACT/wrap team impact • Open all Hospital, PHF, and other residential treatment services to billing system • Monthly report showing actual services and costs

12. Increase Medi-Cal Enrollment • Assure that eligible beneficiaries are enrolled • SSI, CMSP, HF • Closely review cases for medical necessity if not Medi-Cal

13. Increase Medi-Cal Enrollment • Decrease services and numbers of private insurance & Medicare • Medi-Cal is priority and mandate • Don’t subsidize for-profit insurance companies with your realignment dollars

14. Indigent, Private Insurance & Medicare • Prioritize patients that will cost money for IMD, Jail, SNF, Board & Care, etc • Review open cases; close & refer if appropriate • Refer to pcp, church, insurance company, legislators, self help

15. Insurance Monitoring • Monthly report with insurance status and type for all active clients • Put report in central location for updates • Assign roles and responsibility—case managers primary responsibility; admin staff support • Video eligibility and application technology

16. Insurance Monitoring • Log actions--“close episode” or “met with client and referred to eligibility worker” • Collaborate with HHSA departments—social services/eligibility workers and Behavioral Health • Crisis Workers—get insurance information and fill out ISAWS 1 at hospital

17. Cost Report – Maximize $$ • Published charge vs. actual costs vs. SMA • Settle at lower of Costs or Charges (LCC); cap is SMA • Nominal Fee Provider worksheet in Cost report--filling in the boxes resulted in +$175,000 in settlement.

18. Cost Report • Nevada County’s Published Charge was 15% below SMA • Our Actual Cost per unit was 5% above SMA • Change Published Charges to maximize cash flow and revenue • Nevada County increased Pub Chg to 5% above SMA • Medi-Cal will pay the SMA rates; private insurance and others billed at published chg • Increased Cash flow & reduced amount owed to county at Settlement

19. Cost Report • Some Counties’ actual costs are less than SMA but they bill Medi-Cal at SMA • High cash flow--keep extra cash in a “savings account”, earn interest and pay back at settlement time • Or, increase Published Charge to be close to Actual to minimize settlement variance

20. Cost Report – Admin Costs • Optimize Administrative Cost treatment • Maximum Medi-Cal reimbursement is 15% • Nevada County went from 7% admin cost reimbursement in 05-06 to 15% in 06-07.

21. Cost Report – Admin Costs • Admin Costs should be treated consistently Year-to-Year • But there’s flexibility to optimize methodology; 15% to Medi-Cal is optimal • Can allocate administrative staff other than Director salary • Flexibility with A-87: building costs, computer costs, can be direct program expenses

22. Cost Report – Manage Costs Try to get actual costs at or just below the SMA: • Increase units, keeping costs constant • OR reduce costs, keeping units constant

23. Cost Report – Other Thoughts • Charge 15% Admin to Contractors • QA claiming on Cost Report • Track QA work with clinical documentation or time-tracking for non-clinical staff • CMHDA Financial Services Committee; attend and ask questions • Hire consultants; Gary Ernst, Caryl Willard • Average Cost vs. Cost Center reporting

24. Optimize Staffing and Funding • For small departments, generally adding clinical staff = more units = lower cost per unit • County has high fixed costs per unit of service • Economies of scale – optimize staff levels to lower fixed costs per unit of service, but don’t get too big

25. Optimize Staffing and Funding • If fully funded by grant money, county staff are a better deal than contractors • County keeps all Medi-Cal, 15% admin, and associated grant funds • Cover all variable costs (salaries, office supplies, computer, etc…) plus portion of fixed costs • Contractor--all Medi-Cal goes to contractor, and county may be limited in getting admin $$

26. Optimize Staffing and Funding • Incrementally add new staff, slowly • Keep staff fully productive and on their toes, but not overworked and burned out

27. Optimize Staffing - Do Not Reduce Children’s Staff • EPSDT 95% • SB90+IDEA+3632 allocation • No realignment savings • If you cut staff, you may lose some economies of scale and result in net loss

28. Contracts – Optimize Structure • For mix-funded contracts (Grant and Medi-Cal), don’t specify amount of each funding source • More Medi-Cal revenue generated = more MHSA, MIOCR, etc…for discretionary dept expenses • Non-Medi-Cal costs are fully funded; saves realignment • Bill Medi-Cal, even for grant funded services and programs

29. Contracts – Optimize Structure • Include target billable service levels • 90% Medi-Cal eligibility target • Pay 1/12th of the contract if target billable services levels are met • Get monthly reports • Re-negotiate contracts mid year, based on performance

30. Program Planning & Implementation • With every new grant or program, include all associated costs; direct and indirect, variable and fixed

31. Program Planning & Implementation • Use existing staff so that minimal “new” costs are generated • Use Time-tracking for all staff involved in project. • Train staff to be aware of importance of coding to funding source/project • Non-clinical admin staff track time in project, using the electronic time-keeping system.

32. Re-Read MHSA Supplantation Letter • DMH Letter 05-04 • DMH Letter 05-08 • Must be used for: MHSA programs Not replace state or county funds 04-05 New or expanded programs

33. Re-Read MHSA Supplantation Letter • If possible, cover & allocate MHSA funds to your admin, support, data entry, managers, etc • Use MHSA to pay for as much related travel, training, and supplies as allowed

34. Other Funding Opportunities Implement SB163 • Wrap services to keep kids out of group homes • May not save dollars • But, services will generate Medi-Cal, and may free up MHSA and/or realignment

35. Other Funding Opportunities Become the Provider for Medi-Cal kids from Probation & Child Welfare • Court wards & dependents • All Medi-Cal EPSDT • If cash from Probation/Child Welfare is being used to pay outside providers, transfer a portion to BH instead

36. Housing • Transitional housing and ACT type services may decrease costly IMD utilization

37. Public Safety Argument for Small, Rural, Conservative Counties • Suicides; we have more suicide than homicide • DUI; much death and injury • Homicide; unique to Nevada County?

38. Public Safety Argument for Small, Rural, Conservative Counties • Compete with Police & Fire – use their tactics to advocate for county general fund • Lifespan of SMI folks– decreases by 25 years