Interim Committee on Medicaid
Transformation and Reform
Medicaid 101
Jul y 8, 2013
Presented by Senate Staff:
Adriane Crouse
Marga Hoelscher
Adam Koenigsfeld
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Presentation Highlights
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Background and Overview
Missouri Medicaid
Services and Service Delivery Systems
Provider Reimbursement Levels
Financing and Budget
Hospital Reimbursement
Provider Tax
ACA and Federal Health Reform
Transformation Considerations
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Background and
Overview
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What is Medicaid?
 Nation’s largest public health program for low-income
Americans
 Medicaid is NOT Medicare
 Two separate programs with different federal rules and
regulations
 Different eligibility focus
 Children
 Pregnant Women
 Majority of Spending goes to Elderly and Disabled
 Long-Term Services and Supports
 Nursing Homes
 Home and Community -based Services
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What is Medicaid?
• Medicaid is Considered an Entitlement
• Anyone meeting income and eligibility requirements can enroll
• Jointly Financed by State and Federal governments
• Federal law requires states offer a basic set of benefits
• Federal law requires certain groups of people to be covered
• Medicaid programs differ greatly from state to state
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Federal and State Agreements
• Medicaid State Plan
• Agreement between federal government and each state
• Documents specifics regarding each state’s program
• Covers specifics like: services, eligibility, provider reimbursement and
cost sharing
• Waivers
• Necessary to innovate
• Very difficult process
• Medicaid Partnership Plan
• Specific to Missouri
• Documents Provider Tax Requirements
• Requires Missouri to submit Additional Documentation
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Missouri Medicaid
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Missouri Caseload
as of May, 2013
 532,100
Children
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27,240
Pregnant Women

77,289
Low Income Parents
 161,491
Persons with Disabilities
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Low Income Elderly
75,346
Total
873,466
*Additional 59,512 women receive limited services under Breast and Cervical program.
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In Missouri:
• DSS is Single State Agency
• Designation required in federal law
• Agency responsible for administering Medicaid State Plan
• MO HealthNet is state’s Medicaid agency
• Medicaid services also administered by
• Department of Mental Health
• Department of Health and Senior Services
• Department of Elementary and Secondary Education
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TOTAL MEDICAID ALL AGENCIES
FY 2014 Proposed
GR
Elementary and Secondary Education
FED
OTHER
TOTAL
$0
$1,000,000
$7,000,000
$8,000,000
Mental Health
$356,799,977
$726,941,916
$32,385,406
$1,116,127,299
Health and Senior Services
$234,605,038
$450,951,832
$485,831
$686,042,701
$1,194,009,324
$3,563,640,541
$2,407,772,614
$7,165,422,479
$1,785,414,339
$4,742,534,289
$2,447,643,851
$8,975,592,479
Social Services
Total
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State Agencies & Medicaid
DSS/MHD
•Services Other than DMH, DHSS, and DESE
•Federal Cash Management
•Maintains MMIS and Clinical tools
•Maintains State Plan
•Reviews and Submits All Waivers
•Develops care strategies
DHSS
DMH
•Home and Community Based Services for Seniors
•Home Delivered Meals
•Mental Health Services (CPS)
•Services for Disabled (DD)
•Alcohol and Drug Services (ADA)
•Operates Waivers
•Care strategies for populations they serve
DESE
•State Operated schools
•First Steps
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Quick Facts
Medicaid Management Information System - state
mechanized claims processing and information retrieval
systems
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99.8 million claims processed in FY 12
Payments in excess of $8 billion
Average claim processing time is less than a day
Over 99% of claims submitted electronically
Over 41,000 providers of 68 different types
System applies 1000s of edits
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Quick Facts
Pharmacy is an Optional Service available to all participants
• 315,000 average monthly pharmacy users
• 13.2 million claims
• $1.16 billion budgeted for FY 14
• Is carved out of managed care contracts
Nursing Facilities is a Mandatory service for Medicaid programs
• 23,387 average monthly users in FY 12
• 8.3 million days provided
• Average per diem rate in FY 12 was $138.37
• Over 60% of occupied beds are paid by Medicaid
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Provider Rates
• 208.152 RSMo requires an annual parity study
• Overall rate for SFY 2013 is 57% of Medicare
Program
2013 Rate as %
of Medicare
Ambulance
40%
Audiology
45%
Dental
37% (UCR)
Durable Medicaid Equipment
86%
Optical
40%
Physician
59%
Rehabilitation Center Therapy
20%
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Clinical Management Examples
• Inpatient Pre-certification
• Pharmacy
o Clinical Edits
o Early Refill,
o Dose Optimization
• Optical
• DME Prior Authorizations
• Psychology Prior Authorizations
• Imaging Prior Authorizations
• HCBS Assessments and Prior Authorizations
• Psychology Prior Authorizations
• Imaging Prior Authorizations
• HCBS Assessments and Prior Authorizations
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Eligibility
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Source: Department of Social Services
2013 ANNUAL INCOME RATES
Percent of Federal Poverty Level
Family
Size
18%
Annual
Amount
85%
Annual
Amount
100%
Annual
Amount
138%
Annual
Amount *
185%
Annual
Amount
300%
Annual
Amount
1
$2,068
$9,767
$11,490
$14,856
$21,257
$34,470
2
$2,792
$13,184
$15,510
$20,123
$28,694
$46,530
3
$3,515
$16,601
$19,530
$25,390
$36,131
$58,590
4
$4,239
$20,018
$23,550
$30,657
$43,568
$70,650
5
$4,963
$23,435
$27,570
$35,923
$51,005
$82,710
6
$5,686
$26,852
$31,590
$43,594
$58,442
$94,770
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MO HealthNet Enrollees and Expenditures
In SFY-2012, seniors
and persons with
disabilities comprised
more than 27% of
enrollees, however,
they accounted for
nearly 66% of MO
HealthNet
expenditures.
MO HealthNet
SFY-2012
100%
18.7% - Persons
With Disabilities
75%
8.7% - Seniors
48.5% - Persons
With Disabilities
($3,398.0 M)
12.1% - Pregnant Women &
Custodial Parents
50%
17.4% - Seniors
($1,218.6 M)
Number of People SFY-2012
(Average Monthly)
Persons With Disabilities
Seniors
Pregnant Women &
Custodial Parents
Children
Total
167,367
77,460
108,325
60.5% - Children
25%
8.9 % - Pregnant Women &
Custodial Parents ($626.1 M)
25.2% - Children
($1,762.1 M)
540,824
893,976
0%
Percent of Enrollees
(893,976* Average
Monthly Enrollees)
Percent of Expenditures
($7,004.8 M)
*Data reflects Department of Social Services, Table 23, Medical Statistics excluding Women’s Health Services
Persons with Disabilities include Permanently and Totally Disabled; Aid to the Blind; Blind Pension; Specified Low-Income Medicare Beneficiary; and, Ticket to Work Health Assurance Program (TWHAP)
Seniors include Old Age Assistance; Qualified Medicare Beneficiary (QMB) and, Specified Low-Income Medicare Beneficiaries (SLMB)
Pregnant Women & Custodial Parents include MO HealthNet for Families-Adult; Refugee; Women with Breast or Cervical Cancer; Independent Foster Care Children Ages 18-21; MO HealthNet for Pregnant Women (Poverty and Income); and,
Presumptive Eligibility (Pregnant Women)
Children includes MO HealthNet for Children; SCHIP (including no cost and premium enrollees); MO HealthNet for Families-Child; Foster Care; Child Welfare Services; Title XIX-Homeless, Dependent, Neglected (HDN); DYS-General Revenue;
Children in a Vendor Institution; Missouri Children with Developmental Disabilities (MOCDD); Presumptive Eligibility for Children; and, Voluntary Placements
Services and Service
Delivery
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Services
Mandatory
Optional
• Physician, Nurse Practitioner,
and Nurse Midwife Services
• Hospital Services–Inpatient
and Outpatient
• Laboratory and Radiology
Services
• Family Planning Services and
Supplies
• Nonemergency Medical
Transportation (NEMT)
• Federally-qualified Health
Centers and Rural Health
Clinics
• Comprehensive Access to
Services for Children (EPSDT)
• Prescription Drugs
• Eyeglasses, Prosthetic Devices
• Case Management Services for
Specific Conditions
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Service Delivery
Fee for Service
• Seniors
• Persons with Disabilities
• Children and Parents
outside Managed Care
Counties
State at Risk for
Service Costs
Managed Care
• Children and Parents
inside Managed Care
Counties
• $1.18 Billion budgeted
for FY 12
Managed Care
Plans are at Risk
for Costs of
Services
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Costs and Financing
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Jointly Financed
• FMAP—Federal Medical Assistance Percentage
• Regular FMAP: Generally based on per capita income
• Statutory floor of 50%
• Missouri’s regular match rate is 62%
• Enhanced FMAPs
• CHIP is 73%
• Promotion of Other Federal Priorities
• 100% FMAP for Electronic Health Records (EHR)
• 90% MMIS/Technology
• 75% Program Integrity
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• Administrative Match generally 50%
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Provider Taxes
• Defined in federal statute
• Must be broad-based and uniform
• Providers cannot be “held harmless” from the tax
• Safe harbor rate of 6% of net patient revenue
• Nearly all states have at least one provider tax
• Most popular:
• Nursing home
• Hospital
• ICF-ID
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Provider Taxes Key in Missouri
• Missouri has long standing history of provider taxes
• Missouri relies heavily on provider taxes to fund the
Medicaid program
• Provider taxes fund state match for billions in payments
• Transformation recommendations must consider
impact on provider taxes
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Hospital
Reimbursement
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Hospital Reimbursement
Complicated Methodology
 Per Diem
• Based on 1995 Costs Trended to 2001
 Medicaid Add-On Payments
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Makes up Difference Between old Costs and Today’s Cost
Paid for both Fee for Service and Managed Care Days
Upper Payment Level (UPL)
Disproportionate Share Hospital (DSH)
 Outpatient
Provider Tax funds about ½ of State Share of Payments
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FY 12 Inpatient and Outpatient Units of Service
by Large Eligibility Groups
Inpatient
Units
Total Custodial Parents
Outpatient
% of Total
Units
Total
% of Total
Units
% of Total
21,482
3.21%
1,313,844
9.57%
1,335,326
9.27%
Total Children
174,208
26.04%
1,656,130
12.06%
1,830,338
12.71%
Total Disabled
413,795
61.87%
8,370,648
60.96%
8,784,443
61.01%
Total Elderly
22,787
3.41%
1,730,777
12.61%
1,753,564
12.18%
Total Pregnant Women
36,609
5.47%
658,509
4.80%
695,118
4.83%
668,881
100.00%
13,729,908
100.00%
14,398,789
100.00%
Grand Total
Source: Table 23 Medical Statistics for FY 12
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Disproportionate Share Payments (DSH)
• DSH Payments are for Uncompensated Care
 Subject to Federal Allotment Cap; and
 Subject to Hospital Specific Costs
• Federal Allotment Reduction under ACA
 5% for first three years
 15% for next year
 50% thereafter
• Missouri’s FY 2013 DSH payments:
 $511 million hospitals
 $207 million DMH hospitals
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Disproportionate Share Payments (DSH)
 DSH Reductions written in the Federal Bill
• Secretary Determines Cut Formula based on:
- Percentage of uninsured,
- State’s use of DSH funds, and
- State’s current DSH level
 Federal Rule with Formula Issued in May
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Why Increasing Medicaid Eligibility is Important to
Missouri Hospitals?
• DSH Reductions Will Happen
 Both Medicare and Medicaid
• Many hospitals at Hospital Specific DSH Caps
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Unrelated to ACA
• Medicare DSH cuts Comparable to Medicaid
• Other Medicare Payments Impacted
• Trend
• Sequestration
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ACA and Federal
Health Reform
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Allows Increase of Eligibility
• Under 65 with incomes up to 138% of the FPL
• Significant Eligibility Change for Missouri
• Now: Parents up to 19% of the Federal Poverty Level (FPL)
• No non-custodial adults unless seniors or disabled
• Allows Medically Frail
• 100% federally funded for first three fiscal years (FY14-FY16).
• State share phases up to 10%:
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January 2017 – 5% (half year for FY 2017);
January 2018 – 6%;
January 2019 – 7%; and
January 2020 – 10%
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MEDICAID PROJECTIONS
NUMBER OF PEOPLE
300,000
250,000
259,499
19,782
200,000
268,039
292,061
276,579
307,542
19,782
19,782
19,782
19,782
149,653
158,193
124,032
132,572
141,112
115,685
115,685
115,685
122,626
129,567
FY2014
FY2015
FY2016
FY2017
FY2018
Parents
Childless Adults
150,000
100,000
50,000
0
Medically Frail
Source: Budget & Planning
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Transformation
Considerations
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Transformation Considerations
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Access
Quality
Sustainable Financing
Service Delivery
Personal Responsibility
Provider Reimbursement Levels
Eligibility Levels
• Appropriateness of Current Levels
• Organization Structure to Support Transformation
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