Medicaid Reform
Presentation to the
Board of County Commissioners
November 13, 2007
Medicaid Reform
July 30, 1965: The
Medicaid program,
authorized under Title
XIX of the Social Security
Act, was enacted to
provide health care
services to low-income
children deprived of
parental support, their
caretaker relatives, the
elderly, the blind, and
individuals with
disabilities.
President Johnson signing the Medicare
program into law, July 30, 1965. Shown
with the President (on the right in the
photo) are (left to right) Mrs. Johnson;
former President Harry Truman; VicePresident Hubert Humphrey; and Mrs.
Truman. Photo courtesy of LBJ
Presidential Library.
Medicaid Reform
At the bill-signing ceremony President Johnson enrolled President
Truman as the first Medicare beneficiary and presented him with the
first Medicare card. This is President Truman's application for the
optional Part B medical care coverage, which President Johnson
signed as a witness. SSA History Archives.
Medicaid Reform
Presentation Outline
 Medicaid Overview
 Reform Efforts
 Local Impacts
 Orange County (PCAN)
 Hospitals
 Health Department
 Summary
Medicaid Reform
Overview
History
 1967: The Early and Periodic Screening,
Diagnostic, and Treatment (EPSDT) –
established health services benefit for
all Medicaid children under age 21.
 1972: Federal Supplemental Security
income program (SSI) provided States
the opportunity to link to Medicaid
eligibility for elderly, blind, and disabled
residents.
Medicaid Reform
Overview
History
 1981: States were required to pay
hospitals treating a disproportionate
share of low-income patients additional
payments "DSH“ which led to IGT
 1996: The Aid to Families with
Dependent Children (AFDC) entitlement
program replaced by the Temporary
Assistance for Needy Families (TANF)
block grant.” Devolution”
Medicaid Reform
Overview
History
 1997: The Balanced Budget Act of 1997
(BBA), created the State Children's
Health Insurance Program.
 2005: Florida
reform efforts
Legislature
approved
Medicaid Reform
Overview
Enrollees
Orange
121,300
Florida
2,875,700
National
58,420,500
Overview
100 %
Medicaid Enrollees and Expenditures on Benefits
by Eligibility Category
Elderly 9%
Elderly 26%
Blind & Disabled 16%
75%
Adults 27%
Blind & Disabled 43%
50%
Adults 12%
25 %
Children 48%
Children 19%
0%
Enrollees
Expenditures
Total = 52.4 million
Total = 235 billion
Source: Kaiser Foundation from Congressional Budget Office: 2003
Florida Medicaid
 National/State/Orange co
PCAN Clinic Sites
Primary
Primary Care
Care Access
Access
Network
Network
Overview
Mandatory Services
Overview
Optional Services
Overview
Optional Services
Reform Efforts
Reform Efforts
Why Medicaid Reform?
 Medicaid is not as effective as it should be
in meeting the needs of enrollees
 Too expensive
 at current rate of growth Medicaid will be 59% of the
state budget by 2015
 Consumers have little choice
 A lack of access to specialists
 Does not focus on the health status of the
recipient: claims payment vs. health
improvement
Reform Efforts
2005 Authorization
 Reform authorized Pilot Programs
 Initially Broward & Duval
 Expand to Baker, Clay and Nassau within
one year of Duval implementation
 Only targeted Medicaid eligibility groups
Reform Efforts
What is new?
2005 Authorization
 More choices for beneficiaries
 HMOs and PSNs
 Customized benefit package




Choice counseling
Enhanced benefit accounts
Risk-adjusted rates
Low Income Pool (IGT)
Reform Efforts
Pilot Outcomes
 Staffing levels were inadequate
 Performance, quality and cost data
is not available to evaluate cost
effectiveness
 Lack of access to key documents
and information
 Drug coverage information is not
accessible
Reform Efforts
Pilot Outcomes
 Pre-reform problems still exist
 Fraud and abuse still a problem
 Expansion will potentially impact
the finances of County Health
Departments.
Reform Efforts
Recommendations
 Develop benchmarks for
resolution of issues encountered
to date prior to further expansion
 Further expansion of Medicaid
Reform should be delayed
Local Impact
The “Triple Whammy”
 Reform
 State budget
 County budget implications
Local Impact
“Triple Whammy”
 PCAN
 Hospitals
 Health Department
Local Impact
The Low Income Pool (LIP) ensures
continued government support for the
provision of health care services to
Medicaid, underinsured and uninsured
populations and is capped at $1
Billion dollars.
Local Impact
 These health care expenditures may be
incurred by




The State
Hospitals
Clinics
Other provider types for uncompensated
medical care
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Orange County
Budgeted
12.1 Million
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Agency for Health Care Administration
Federal Match in
FY 07 was
$.5876
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Agency for Health Care Administration
Federal Match
Drawdown
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Agency for Health Care Administration
Federal Match
Drawdown yields
$1,586,700
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Agency for Health Care Administration
Federal Match
Drawdown yields
$1,586,700
$1,200,000 To Orange
County
Local Impact
IGT Process
County Tax Dollars
$1,000,000
Agency for Health Care Administration
Federal Match
Drawdown yields
$1,586,700
$386,700 for statewide
Medicaid
$1,200,000 To Orange
County
Local Impact
IGT Process
$1,200,000 returned to
Orange County DSH
Hospitals
ORHS
$600,000
Florida
$600,000
14.4 million
returned
Local Impact
IGT Process
ORHS
$600,000
Florida
$600,000
Third Party
Administrator
Local Impact
IGT Process
ORHS
$600,000
Florida
$600,000
Third Party
Administrator
Clinics
Secondary
Care
Inpatient
Local Impact
Clinic Site Funding
 Funding mix consists of:
 County General Revenue
 IGT-Medicaid
 HRSA Grants
 Medicaid and Medicare
 Self pay (sliding scale)
 Other Third Party Payors
 Other grants (ie. Healthy Start)
Local Impact
Clinic Site Funding
$36 Million Dollars
$8.4 Million
Patient
Billings
$11 Million
$17 Million
$11 Million
IGT
$6 Million
Other
HRSA
Medicaid
Local Impact
Funding Pressures
 Medicaid Reform
 Loss of patients
 Loss of revenue
 Provider Service Networks
 Reform
 Non-reform
Local Impact
Funding Pressures
 State Budget reductions
 Loss of revenue
 IGT (LIP) Funding
 Reimbursement rates
Local Impact
Projected Reductions
Projected
Loss
Partner
Community Health Centers
$4 Million
Hospitals
$10 Million
Health Department
$2 Million
Local Impact
Funding Pressures
 County budget reductions
 Jeopardizes the IGT funding
 Ancillary services may be
curtailed
 Clinic sites might be closed
Funding Pressures
Who will be affected?
They Will
Infants, Children and Adults
Top 5 Diagnosis
Primary Care



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
Hypertension
Diabetes
Asthma
Heart Disease
Acute Care
Secondary Care





Oncology/Hematology
Diabetes
Cardiology
Orthopedics
Gastroenterology
Funding Pressures
What services may be
affected?
PCAN Services







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Primary care
Specialty care
Acute care
Behavioral health
Dental care
Pharmacology
Radiology
Laboratory






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Nutritional guidance
Disease prevention
Cancer screening
Immunizations
Annual examinations
Referral services
Health education
Medicaid Reform
Summary
 Change in Medicaid program inevitable
 Serious financial pressures exist at stae
and County level
 Viability of safety net providers at risk
 The uninsured are at the greatest risk
Medicaid Reform
Presentation to the
Board of County Commissioners
November 13, 2007
Provider Service
Network (PSN)
 A Provider Service Network (PSN) is
a network established or organized
and operated by a health care
provider or group of affiliated health
care providers
Provider Service
Network (PSN)
 A Provider Service Network (PSN) is
a network established or organized
and operated by a health care
provider or group of affiliated health
care providers
 PSNs provide a substantial portion of
the health care items and services
contracted directly through the
provider or affiliated group of
providers.
Provider Service
Network (PSN)
 A Provider Service Network (PSN) is
a network established or organized
and operated by a health care
provider or group of affiliated health
care providers
 PSNs provide a substantial portion of
the health care items and services
contracted directly through the
provider or affiliated group of
providers.
 The health care providers must have
a controlling interest in the
governing body of the PSN
PCAN as a PSN?
PRO:
 PCAN has the necessary infrastructure
and linkages necessary to be a PSN
within Orange County.
 Patients can remain in a medical home
despite coverage.
 PCAN provides excellent care
CON:
 Timetable
 PSN must be built around 5 countiesOrange, Osceola, Seminole, Lake and
Brevard
 Specialists