Slowing Cost Growth In Medicaid


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Slowing Cost Growth In Medicaid

  1. 1. Wisconsin’s Experience in Slowing Cost Growth In Medicaid Medicaid Managed Care Conference Curtis Cunningham, Deputy Director Bureau of Fiscal Management Wisconsin Department of Health Services September 28, 2010
  2. 2. Agenda Impetus for Rate Reform Rate Reform Approach Rate Reform Process Highlights from Rate Reform Version 1.0 Rate Reform Version 2.0 and Beyond Lessons Learned Wisconsin Department of Health Services 2
  3. 3. Rate Reform Overview The Medicaid program was required to find $625 million (all funds) in savings (2009 Act 28) as a result of the 2009-11 State Budget Deficit. Rather than achieving these savings by doing across-the-board cuts, DHS decided to take the opportunity to find real reform opportunities in the Medicaid program. DHS’s Rate Reform approach includes: A comprehensive examination of how MA purchases specific health care services Identification of areas where true reform can be achieved in Medicaid and the program can achieve savings Goal – to utilize the creativity of stakeholders to help identify ways to make Medicaid more efficient without harming the program. We invited all the provider and advocate groups to participate. Everyone had a seat at the table. Wisconsin’s Rate Reform Project is Now Our Process for Continuous Quality Improvement and Program Reform. 3Wisconsin Department of Health Services
  4. 4. What Wisconsin could do to meet the legislative mandate to reduce Medicaid spending by $600 million AF Across-the-board rate cuts of approximately 5.5% over the biennium; 19% if applied only to non-institutional services Sweeping reductions in benefits and services. Samples of submitted ideas included: Eliminating oral health coverage for BC+ Benchmark plan Expanding use of provider assessments Ending the expansion of Family Care Eliminating SeniorCare Dramatically increasing co-payments for expansion populations 4Wisconsin Department of Health Services
  5. 5. ARRA Restrictions Mandatory covered service requirements Governor’s Priorities Guiding Principles Context of Rate Reform: 5Wisconsin Department of Health Services
  6. 6. The American Reinvestment & Recovery Act (ARRA) prohibits the imposition of stricter eligibility standards. Wisconsin risks losing $1.2 billion in federal funding. ARRA funding is up for a 6-month continuation; however, this funding comes with no guarantees and eventually will end. ARRA Restrictions 6Wisconsin Department of Health Services
  7. 7. The Federal Government requires that states cover: Inpatient hospital services (other than IMD services) Outpatient care and ambulatory services of RHCs and FQHCs Laboratory and X-ray services Nursing facility services (other than an IMD) for individuals 21 or older Early and periodic screening, diagnosis and treatment (EPSDT) for individuals who are eligible under the plan and are under age 21 Family planning services and supplies Physicians' services and the medical services of dentists Pregnancy-related services, including treatment of conditions which may complicate the pregnancy or threaten the safe delivery of the fetus, until 60 days after delivery Nurse midwife and nurse practitioner services in states where they are licensed Medicare cost-sharing for dual-eligible beneficiaries Mandatory Services 7Wisconsin Department of Health Services
  8. 8. Wisconsin should continue to be a national leader in access to basic, affordable health care coverage We need to build on our achievements in providing healthcare coverage Budget savings will not be accomplished through stricter eligibility standards or reductions in benefits The state will have to trim back reimbursement rates for services such as medical care Governor’s Priorities 8Wisconsin Department of Health Services
  9. 9. Identify savings to reach targeted reduction levels Look for both short-term solutions and long-term systemic changes Ensure that no one provider group is singled out for rate reductions Ensure access to care for MA patients Align payments with value rather than volume Build on previous MA quality improvement efforts including managed care P4P initiative Implement care management/coordination strategies Focus on high-intensity services Cost containment now about “continuous improvement” Guiding Principals 9Wisconsin Department of Health Services
  10. 10. Very public process. 200 stakeholders participating in multiple meetings. On-line survey tool. Process generated over 500 ideas. Rate Reform Version 1.0 was completed June 2009. State is now implementing the plan. Process was well received. Key was everyone was at the table and understood that something had to be done. Status quo was not an option. So well in fact that we hope to continue into the future. This is the way we should do business! Framework for Project 10Wisconsin Department of Health Services
  11. 11. All-Provider Kick-Off Call (3/23/09) Round 1 Advisory Group Meetings (4/2/09-4/17/09) Over 200 advisory group participants Web survey to 30,000 portal users Generated over 500 ideas Highest volume of ideas for Pharmacy, LTC & PA-related changes Package Development (4/20/09-7/1/10) Balanced approach across all providers State Budget Impact Need: SFY10-11 savings; target has grown Round 2 Advisory Group Meetings (7/15/10-7/22/10) Implement Recommendations (begin 8/1/10) Rate Reform Project Overview 11Wisconsin Department of Health Services
  12. 12. Ideas analyzed and prioritized based on: Short & long term impact Current spend & potential savings Benefit considerations Policy impacts Regulatory parameters Contract changes Reviewed and triaged each idea internally Developed list of short- term savings ideas for 2009-11 biennium Template completed for each idea Idea Analysis and Development 12Wisconsin Department of Health Services
  13. 13. Original Target (March 2009): Governor’s SFY 10-11 Budget $140 million GPR $415 million AF ------------------------------------------------------------------------------- Revised Target (May 2009): Joint Finance Committee $191 million GPR $581 million AF ------------------------------------------------------------------------------ Final Target (June 2009): Conference Committee $205 million GPR $625 million AF ------------------------------------------------------------------------------- Separate Savings Items: Hospital assessment $300 million GPR (over three fiscal years) Increase in hospital assessment $93 million GPR (over three fiscal years) New ambulatory surgical center assessment $21 million GPR (2009-11 biennium) Increase in nursing home assessment $23 million GPR (2009-11 biennium) Savings Target 13Wisconsin Department of Health Services
  14. 14. SE Wisconsin Managed Care RFP – New focus on quality. Reimburse Physicians based on cost effectiveness. Create an incentive for nursing homes to avoid preventable adverse health conditions (e.g. pressure ulcers) or other alternative. 100 Day Supply requirement for specified maintenance drugs/early refill limits. Reimburse C-Sections at Same Rate As Vaginal Deliveries, Unless C-Section is Medically Necessary. Care Management contract for high cost Fee-For-Service members. More aggressive approach to MAC pricing/Balanced with additional payments for enhanced pharmaceutical care. Reform the way Critical Access Hospitals are paid. Adopt APC approach for outpatient payments. Highlights of Specific Proposals 14Wisconsin Department of Health Services
  15. 15. On track to save $633 million (all funds) as required by the 2009-11 state budget. Initially explored 72 items, though some have been eliminated or consolidated. 32 of the remaining 56 ideas have been implemented to date. These 32 ideas are projected to save $277.8 million (all funds) over the biennium. Rate Reform Version 1.0 has been a success! 15Wisconsin Department of Health Services
  16. 16. However, Medicaid program grows during difficult economic times. Demand for Medicaid services exceeds current funding. Continually looking for more efficiencies and enhancements to the program. Result = Wisconsin Medicaid Rate Reform 2.0. Continuous Quality Improvement & Rate Reform 16Wisconsin Department of Health Services
  18. 18. Rate Reform 2.0 Package Summary Rate Reform 2.0 is much smaller than version 1.0 We did not hit our target of $100M GPR Total Preliminary Savings Estimate: $39,779,668 (AF) Focus is on: Program Improvement Medicare Alignment Focus is not on: Items needing legislation changes Total Number of Recommended Ideas: 36 18Wisconsin Department of Health Services
  19. 19. Jan . Ongoing Jul.Jun . MayApr . Mar.Feb. 1/26 Kick-Off Meeting 2/19 – 3/9 Meetings with 4 Stakeholder Groups Brief the Secretary’s Office Implementations Begin* 7/1 Final Package Modify Package Brief the Legislature DRAFT Final Package to Stakeholders at Meeting Brief the Governor’s Office *Note: Some initiatives require State Plan language changes. Implementation start dates will be impacted by these changes. Rate Reform 2.0 Timeline 19Wisconsin Department of Health Services
  20. 20. Description Projected Biennial Savings* Recoup double payments for Medicare cross-overs $858,000 Reduce paper mailings $55,000 Allow WIC Agencies to become Medicaid certified to do blood lead testing $0 Reform policy for enteral nutrition $200,000 Expand never events beyond Medicare requirements to all , Children's hospitals, and Critical Access Hospitals $0 Rev Max: review income maintenance and child care programs in Milwaukee county $4,825,000 Avoid Medicaid payment for rental equipment in nursing homes that is eligible for Medicare reimbursement $497,407 APCs for Hospitals (Start collecting 7/10, start paying based on APCs 1/11 or 7/11) $0 *All Funds Rate Reform 2.0 DRAFT Package 20Wisconsin Department of Health Services
  21. 21. Description Projected Biennial Savings* PA for atypical antipsychotics prescribed by PCPs for children TBD PA for growth hormone prescribed for children $200,000 Medicare/Medicaid analysis for radiology $4,200,000 Implement 3rd Party Identification and recovery processes to maximize the recovery of funds from liable parties, including casualty and subrogation cases. $1,450,000 Use HMS's national eligibility database to ID commercial insurance coverage upon application TBD Use Pharmacy and Rx Claim Audits to systematically audit client retail pharmacy providers. $5,000,000 Contain Costs through Clinical Editing (Bloodhound) TBD Enhanced Medicare Reimbursement at State Mental Health Institutes TBD Educate pharmacists and doctors on OTC coverage policy TBD Rate Reform 2.0 DRAFT Package 21 *All Funds Wisconsin Department of Health Services
  22. 22. Description Projected Biennial Savings* Improve data-sharing for children in foster care $370,000 Develop a Health Care Fraud Prevention and Enforcement Action Team (HEAT) for Home Health Services TBD Paper Claims Payment Reduction $700,000 Enroll Part B entitled into Medicare $12,000,000 Examine whether state should do HMO subrogation or adjust HMO rates (no COB or TPL) TBD Establish uniform residential rate-setting methodology in Family Care TBD Maximize capture of Medicare, third party reimbursement and casualty claims in Family Care TBD Review time studies that impact claiming to various DHS programs, including FoodShare TBD Contract with UW for specialty pharmacy TBD Rate Reform 2.0 DRAFT Package 22 *All Funds Wisconsin Department of Health Services
  23. 23. Description Projected Biennial Savings* Lab Fee settlements for HMOs TBD Enhance DHCAA's current data exchanges with DWD and DOR for state wage data and unemployment compensation data. TBD Modify Enrollment and Benefit booklets sent to Nursing Home residents to use less paper TBD Investigate utilizing certain recycled/used DME (e.g., wheelchairs) TBD Implement improved drug utilization controls $5,000,000 Increase dispensing fee to pharmacists for increasing generic fill rates $1,000,000 Use a group number to distinguish benefit plans $0 Claim portion of case management cost in Partnership program for Medicare reimbursement (note: long term goal) $2,000,000 Raise criteria for eligibility for bedhold payment $1,424,261 Rate Reform 2.0 DRAFT Package 23 *All Funds Wisconsin Department of Health Services
  24. 24. Description Projected Biennial Savings* Contract with Medicare Advantage Organizations for services to dual eligible enrollees (SNPs) TBD National Health Care Reform: Require physicians to see patients in person in order to receive Home Care services TBD National Health Care Reform: Allow children in hospice to continue to receive treatment TBD National Health Care Reform: FFS members to have Primary Care Provider under a Medical Home $8,959,064 Rate Reform 2.0 DRAFT Package 24 *All Funds Wisconsin Department of Health Services
  25. 25. Thanks to BadgerCare Plus, Wisconsin leads the nation in health care access. Budgets are about values and priorities. Governor Jim Doyle has made health care access a priority during good and challenging budget times. Managing the budget effectively must include engaging stakeholders and thinking creatively. Legislative changes are difficult to accomplish Fewer focus groups are easier to manage Be aware of systems and staff limitations In open process - be prepared for anything Lessons Learned 25Wisconsin Department of Health Services
  26. 26. QUESTIONS? (608) 250-5833 26Wisconsin Department of Health Services