• Like
View Entire Presentation from the Medicaid Reform Symposium
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

View Entire Presentation from the Medicaid Reform Symposium

  • 1,374 views
Published

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
1,374
On SlideShare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
12
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide
  • MediPass numbers include PSN & pilots (MPN, Pediatric ER Diversion)
  • Benefits Mandatory / Mandatory Mandatory / Optional Optional / Mandatory Optional / Optional Care Management Disease Management Nurse Case Managers Fraud & Abuse SB 1064 – Medicaid’s Fraud & Abuse Bill – Authorized the Agency to require second opinions in order to ensure that no Medicaid recipient profits from an incorrect diagnosis by reselling or diverting expensive pharmaceuticals paid for by the Medicaid program. Allowing the Agency to be proactive in its efforts to prevent suspected fraudulent activities by authorizing the Medicaid program to withhold payment to a provider upon initial receipt of evidence of fraud. Service Delivery Systems Managed Care (Capitation) Primary Care Case Management Consumer Directed Care Financial Methodologies Investigate ways to receive federal match and gain increased flexibility Incentivize providers to offer preventative care Incentivize beneficiaries to access preventative care Financial Participation Enrollment Optional Eligibility Groups: Meds A/D – “Medicaid Designated by SOBRA for the Aged and Disabled”. The income is 88% of the FPL. ($683 income limit with $5,000 asset limit) Breast & Cervical Cancer Treatment Pregnant Women above 150% Infants above 185% Age 19-20
  • One of the first places where the deficits have started to create political pressure is in the “entitlement” (or “mandatory”) programs. These are programs that are not controlled by annual appropriations. They include individual entitlements to a certain benefit – such as in Social Security, Medicare, Medicaid, food stamps, and the Earned Income Tax Credit. They also include “entitlements to states” – such as the TANF block grant, child care, and foster care. Chart 9 lists three different kinds of attacks we have seen, and can expect in the future, on these programs. Caps: Legislation voted on in the House this year would have capped total spending for entitlements other than Social Security, and called for automatic across-the-board cuts if Congress didn’t pass legislation cutting programs deeply enough to fit under the cap. This is a major right wing priority, and will surely come up again in 2005. Reconciliation: The House has been trying to use this fast-track budget-cutting process for several years, and so far Senate has stopped them. But next year, it seems almost inevitable, unless there is a major shift in power, and possibly even then, since both parties worry about deficits. Block grants: The President has proposed a whole slew of block grants, which so far have not gotten traction on Capitol Hill. But they can be a clever, back-door way to cut programs over the long haul.
  • The FMAP formula is designed to give an edge to those states with average per capita incomes below the national average an edge.

Transcript

  • 1. Medicaid Reform Symposium What is the Right Prescription for Floridians? Sponsored By: Suncoast Region Healthy Start Coalitions The Children’s Board of Hillsborough County Tampa Bay Health Care Collaborative American Heart Association
  • 2. Opening Remarks Luanne Panacek, Ph.D. Executive Director The Children’s Board of Hillsborough County
  • 3. Welcome Sandra L. Murman Florida State Representative
  • 4. Florida Medicaid: A Case for Modernization Thomas W. Arnold Deputy Secretary for Medicaid November 23, 2004
  • 5. Medicaid Structure
    • Federal Medicaid laws mandate certain benefits for certain populations
    • Medicaid programs vary considerably from state to state, and within states over time
    • State Medicaid programs vary because of differences in:
      • optional service coverages
      • limits on mandatory and optional services
      • optional eligibility groups
      • income and asset limits on eligibility
      • provider reimbursement levels
    • Medicaid does not cover all low income individuals
    • Individuals not covered are often working adults without children – in fact, the number of uninsured children nationally is at the lowest level since measuring began
    • Medicaid serves the most vulnerable; in Florida:
      • 27% of children
      • 44% of pregnant women
      • 66% of nursing home days
      • 885,000 adults - parents, aged and disabled
      • 52% of people with AIDS
  • 6. Medicaid Eligibility - A Complex System of Coverages *Coverage for infants up to 185% FPL is required in order for states to receive Title XXI funding. 2
  • 7. Growth in Medicaid Average Monthly Caseload Source: Medicaid Services Eligibility Subsystem Reports. * October 8, 2004, Medicaid Caseload Estimating Conference.
  • 8. Mandatory Medicaid Services
    • Advanced Registered Nurse Practitioner Services
    • Early & Periodic Screening, Diagnosis and Treatment of Children (EPSDT)/Child Health Check-Up
    • Family Planning
    • Home Health Care
    • Hospital Inpatient
    • Hospital Outpatient
    • Independent Lab
    • Nursing Facility
    • Physician Services
    • Portable X-ray Services
    • Rural Health
    • Transportation
    Mandatory 40.67% of $12.7 Billion
  • 9. Florida Medicaid Optional Services*
    • Adult Health Screening
    • Ambulatory Surgical Centers
    • Assistive Care
    • Birth Center Services
    • Children’s Dental Services
    • Children’s Hearing Services
    • Children’s Vision Services
    • Chiropractic Services
    • Community Mental Health
    • County Health Department Clinic Services
    • Dialysis Facility Services
    • Durable Medical Equipment
    • Early Intervention Services
    • Emergency Dental for Adults
    • Healthy Start Services
    • Home and Community-Based Services
    • Hospice Care
    • Intermediate Care Facilities/ Developmentally Disabled
    • Intermediate Nursing Home Care
    • Occupational Therapy
    • Optometric Services
    • Orthodontia for Children
    • Personal Care Services
    • Physical Therapy
    • Physician Assistant Services
    • Podiatry Services
    • Prescribed Drugs
    • Primary Care Case Management (MediPass)
    • Private Duty Nursing
    • Registered Nurse First Assistant Services
    • Respiratory Therapy
    • School-Based Services
    • Speech Therapy
    • State Mental Hospital Services
    • Subacute Inpatient Psychiatric Program for Children
    • Targeted Case Management
    *States are required to provide any medically necessary care required by child eligibles. Optional 59.33% of $12.7 Billion
  • 10. Medicaid Budget - How it is Spent FY 2003-04 * Adults and children refers to non-disabled adults and children. Adults* Children* Blind & Disabled Elderly 65+
  • 11. Projected FY 2004-05 Medicaid Expenditures by Appropriation Category Source: FY 2004-2005 GAA
    • Other:
    • Special Payments to Hospitals
    • Supplemental Medical Insurance
    • Hospital Outpatient Services
    • Disproportionate Share Hospital Payments
    • Hospice Services
    • Intermediate Care Facility/DD
    • Home Health Services
    • Therapeutic Services for Children
  • 12. Top 6 Categories for Over 65 FY 2003-04
  • 13. Estimated Medicaid Spending FY 2004-05 Source: FY 2004-2005 GAA $14,709,277,810 $ 2,144,318,352 $ 159,329,606 $ 162,861,286 $ 194,819,297 $ 219,702,401 $ 310,917,998 $ 533,443,612 $ 539,444,228 $ 577,333,410 $ 754,478,058 $ 769,697,270 $ 1,622,434,059 $ 1,762,289,358 $ 2,314,153,880 $ 2,644,054,895 Estimated Annual Spending 100.00% Total 14.58% Other 1.08% Therapeutic Services for Children 1.11% Home Health Services 1.32% Intermediate Care Facility/DD 1.49% Hospice Services 2.11% Disproportionate Share Hospital Payments 3.63% Hospital Outpatient Services 3.67% Supplemental Medical Insurance 3.92% Special Payments to Hospitals 5.13% Physician Services 5.23% Home & Community Based Services 11.03% Prepaid Health Plans/HMO 11.98% Hospital Inpatient Services 15.73% Nursing Home Care 17.98% Prescribed Medicine/Drugs Percent of Total Spending Service
  • 14. General Revenue History by Service
  • 15. Growth in Medicaid as Percent of State Budget GR and With Match Source: Medicaid Services' Budget Forecasting System Reports * Surplus/Deficit Report, Medicaid Budget Forecasting System, October 2003. ** FY 2004-05 General Appropriations Act adjusted for vetoes.
  • 16. Florida Medicaid – Recent Efforts to Control Growth in Costs
    • Prescription Drug Cost Controls
    • Service Authorization
    • Utilization Review
    • Institutional Rate Reductions
    • Increased Use of Capitation
    • Nursing Home Diversion/Transition
  • 17. A Summary of Florida Medicaid Anti-Fraud and Abuse Measures – Medicaid Program Integrity The Nation’s Model 1996-2004
    • New Provider Application
    • New Provider Agreement
    • Periodic Provider Re-Enrollment
    • Financial/Criminal Background Screening
    • Fingerprinting Providers
    • Provider Credentialing
    • New Provider Licensure Requirements
    • Surety Bonds
    • Provider Site Visits
    • Additional FMMIS Edits
    • New Sanction Tools
    • New Prior Authorization Requirements
    • New Utilization Review Programs
    • Provider Audits
    • Provider/Beneficiary Utilization Trends
    • Payment Suspensions
    • Beneficiary Lock In
    • PRO/Peer Review Programs
    • Counterfeit-Proof Prescription Pads
    • Decision Support Systems/Data Warehouses
    • Fraud and Abuse Detection Contractor
    • Expanded Managed Care Contracting/Risk Contracting
    • Nursing Home Payment Edits – Eligibility/Level of Care
    • Additional Service Limits
    • Intraagency Medicaid Fraud and Abuse Committee (FACT)
    • Additional Investigators/Attorneys/Monitors
    • Performance Measurement System
    • Overpayment Recoupment Tracking System
    • Claims Payment Accuracy Rate Study
    • Eligibility Error Rate Study
  • 18. Prescribed Drug Cost Control Program – 1999-2004
    • Monthly Four Brand Prescription Drug Limit
    • Preferred Drug List
    • Supplemental Drug Manufacturer Rebates
    • and Value-Added Agreements
    • P&T Committee
    • Drug Prior Authorization
    • Therapeutic Consultation Program
    • Intensified Benefit Management Program
    • Therapeutic Academic Intervention Program (Detailing)
    • Drug Therapy Limits
    • Ingredient Cost Adjustments
    • 34-Day Supply Limit
    • Early Refill Limits
    • HMO Capitation Rate Adjustments
    • FDA Drug Use Guidelines
    • Counterfeit-Proof Prescription Pads
    • State MACs
    • Diabetic Supply Contract – Competitive Bidding
    • Diabetic Product/Mail Order Pharmacy – Competitive Bidding
    • Beneficiary Pharmacy Lock-In
    • Diverted Pharmaceutical Pilot Project (STAMP)
    • HIV/AIDS and Mental Health Patient Drug Management Project (2002-03)
    • Drug Data Management/Analysis Contractor – Data Warehouse (2002-03)
    • Hemophilia Revenue Enhancement Program (2002-03)
    • Wireless Handheld Clinical Pharmacology Drug Information Database (2002-03)
    • Home Delivery Pharmaceutical Services Pilot Project (2002-03)
    • J-Code Rebates
    • Ingredient Cost Reductions to Pharmacies
    • Prescription Drug Coinsurance (2004)
  • 19. The Florida Medicaid Managed Care System 1970 - 1983 Fee-for-Service 1984 - 1997 Managed Acute Care HMOs – Since 1984 MediPass (PCCM) – Since 1991 1997 -2003 Provider Service Network - Since 2000 Disease Management Long Term Care Management Other Alternative Plans - Since 2001 The Evolution of Reform Within Florida’s Medicaid System 2004 - Present Disease Prevention/Self-Management Integrated Care Management/Care Coordination Provider Network Limits New Risk Sharing Arrangements Outcomes Management/Improved Clinical Decision Making Quality Assurance Market Forces/Purchasing Strategies/ Performance-Based Contracting
  • 20. Managed Care Enrollment Florida Medicaid MediPass HMO Source: Agency for Health Care Administration - October 2003 In some respects, this illustrates some of the problem managing the current program. Dual burden of managing a FFS system while also monitoring an HMO system
  • 21. State Reform Initiatives
    • Most states experienced pressure in FY 2004 and found their Medicaid budget was growing faster than state revenue in part due to:
      • Rising caseloads (5.2% nationally)
      • Rising medical costs.
    • States are moving to waivers which include features such as:
      • enrollment caps;
      • reduced benefits;
      • increased premiums or cost sharing.
    Source: Kaiser Commission on Medicaid and the Uninsured, Report dated October 2004
  • 22. State Reform Initiatives (continued)
    • For 2005, states generally proposed the following remedies:
    Source: Kaiser Commission on Medicaid and the Uninsured, Report dated October 2004 Increase premiums for optional groups 3 Increase co-payments 9 Reduce or restrict benefits 9 Expand managed care 14 Focus on long-term care 17 Expand or implement disease management programs 28 Implement changes to restrict eligibility 14 Increase pharmacy cost controls 43 Freeze or reduce provider payments 47 Response # of States
  • 23. Principles of Medicaid Reform
    • Principles:
      • Predictability in Growth
      • Accountability
      • Appropriately serving the population for which the program was created
    • Evaluation Criteria:
      • Will it result in savings, while stabilizing expenditure increases at a rate in keeping with revenue growth?
      • Does it give consumers incentives to reduce utilization/ change behavior/purchase services wisely?
      • Does it give providers incentives to reduce costs/ reduce utilization and provide effective care?
      • Does it promote innovation in service delivery systems?
  • 24. Medicaid Reform Potential Strategies
    • Benefits
    • Care Management
    • Fraud & Abuse
    • Service Delivery Systems
    • Financial Methodologies
    • Enrollment
  • 25. Medicaid Modernization Effort The Process
    • The Agency has established reform teams in eight topical areas, centering the discussion on the following areas of Medicaid:
      • Long Term Care
      • Children’s Health Services
      • Developmental Disabilities
      • Pharmacy Services
      • Disease Management
      • Financiering Methodologies
      • Eligibility Services
      • Behavioral Health
  • 26. Medicaid Modernization Effort The Process (continued)
    • The Agency established a series of Medicaid Stakeholder Meetings, seeking input for reform of the program from providers, beneficiaries, and advocates
      • April 23, 2004 – Tallahassee: Introduction to Reform
      • June 11, 2004 – Tallahassee: Children’s Health and Long Term Care
      • July 1, 2004 – Miami: Pharmacy and Disease Management
      • August 5, 2004 – Orlando: Developmental Disabilities
    • The Agency has also received input from major stakeholders, industry experts and experts on the Medicaid program
  • 27. Broad Input from Numerous Sources
    • Agency reform teams
    • Stakeholder meetings
    • Experts in the field 
    • The Agency has researched what other states are doing to reform state Medicaid programs, including:
      • Oregon
      • Tennessee
      • Mississippi
    The Agency continues to review and discuss the merits of the concepts put forth to date.
  • 28. Focusing the Modernization Efforts
    • The Agency held a series of day-long workshops
      • Format:
        • A moderator with knowledge of the Medicaid program facilitated meaningful discussion.
        • Panelists were charged with evaluating potential options available to the state, identifying barriers to implementation, and proposing solutions.
        • There was an opportunity for the public to comment or submit written comments in response to information that was posted on the internet prior to the meetings.
      • Pharmacy Workshop - October 5, 2004
      • Managed Care Workshop - November 4, 2004
  • 29. Pharmacy Workshop – Options Under Consideration
    • Population Options
      • Vary Pharmacy Benefit Levels Among Different Population Groups
      • Preserving Prescription Drug Services for the Medically Needy
      • Include/Exclude Supplemental Benefits for Dual Eligible Population
    • Service Options
      • Formulary Revisions
      • Establishment of Caps
      • Development of Comprehensive Pharmacy Management Program
    • Financing Options
      • Opt Out of Federal Rebate Program
      • Change in Ingredient Cost Reimbursement Methodology
      • Change in Recipient Cost Sharing Structure
  • 30. Managed Care Workshop – Options Under Consideration
    • Delivery Options
      • Fully Capitated Programs (Full Risk)
      • Alternative Programs (Limited Risk)
      • Buy-in Programs
    • Coverage / Benefit Options
      • Tailor Benefits to Meet Needs of Different Populations
      • Inclusion of Comprehensive Services Under Full Capitation
      • Consumer Directed Model
    • Financing Options
      • Rate Setting in Fully Capitated Programs
      • Cost Sharing Models
      • Consumer Accounts
  • 31. Where We Go From Here
    • Solving the puzzle – Putting all input together in a cohesive package that best serves Florida Medicaid beneficiaries and providers.
      • Policy and Rule Changes
      • State Statutory Changes
      • Federal Waiver/SPA
      • Proposed Federal Statutory/Rule Changes
    • http://www.fdhc.state.fl.us/Medicaid/medicaid_reform/index.shtml
  • 32. Medicaid Reform Symposium What is the Right Prescription for Floridians? Sponsored By: Suncoast Region Healthy Start Coalitions The Children’s Board of Hillsborough County Tampa Bay Health Care Collaborative American Heart Association
  • 33. Medicaid Reform: What Could it Mean for Florida’s Health Care System? Joan Alker Senior Researcher Georgetown Health Policy Institute [email_address] Medicaid Reform Symposium Tampa, FL November 23, 2004
  • 34. What role does Medicaid play in Florida?
    • Important safety net especially in times of recession
      • Covers 2.2 million Floridians
      • US: 51 million people
    • Major source of prenatal care
      • Covers 43% of all births
      • US: One-third of all births
    • Provides long term care services to seniors and persons with disabilities
      • Pays for 66% of all nursing home days
    • Pays Medicare cost-sharing for low-income seniors
  • 35. Percentage of Low-income Children in the US Without Health Insurance Has Fallen About One-Third Due to SCHIP and Medicaid Source: Analysis of CDC’s National Health Interview Survey, Mar 2004 Children below 200% of poverty Children above 200% of poverty 23% 15% 6% 5%
  • 36. Source of Health Care Coverage for Low-Income Children, 2002-2003 Low-income equates to family income below 200% of the federal poverty line. In 2003, the poverty line was $15,260 for a family of three. Other includes private non-group and other public insurance (mostly Medicare and military-related). Medicaid includes SCHIP. Source: Urban Institute analysis of March 2003 and 2004 CPS data for the Kaiser Commission on Medicaid and the Uninsured Health Insurance Coverage in America: 2003 Data Update , forthcoming.
  • 37. Source of Health Care Coverage for Low-Income Nonelderly Adults, 2002-2003 Low-income equates to family income below 200% of the federal poverty line. In 2003, the poverty line was $15,260 for a family of three. Other includes private non-group and other public insurance (mostly Medicare and military-related). Medicaid includes SCHIP. Source: Urban Institute analysis of March 2003 and 2004 CPS data for the Kaiser Commission on Medicaid and the Uninsured Health Insurance Coverage in America: 2003 Data Update , forthcoming.
  • 38. Note: Caseload data may vary from official federal caseload data due to federal reporting protocols, and does not does not include SSI beneficiaries who have eligibility for Medicaid determined by the Social Security Administration. Source: Florida Dept. of Children and Families Economic Self Sufficiency Caseload Data. http://www.dcf.state.fl.us/ess/reports/ Medicaid Enrollment in Hillsborough County Over the Past Year (excluding SSI beneficiaries)
  • 39. Medicaid Enrollment in Hillsborough County Has Increased at a Faster Rate than Florida Over the Past Year Note: Caseload data may vary from official federal caseload data due to federal reporting protocols, and does not does not include SSI beneficiaries who have eligibility for Medicaid determined by the Social Security Administration. Source: Florida Dept. of Children and Families Economic Self Sufficiency Caseload Data. http://www.dcf.state.fl.us/ess/reports/ Growth is from October 2003 to October 2004
  • 40. “ Mandatory" Groups “ Optional” Groups
    • Children under age 6 ≤ 133% FPL
    • Children age 6 and older ≤ 100% FPL
    • Children in foster care
    • Pregnant women ≤ 133% FPL
    • Parents with incomes below state-established minimums (median = 60% FPL)
    • Children, elderly and disabled SSI beneficiaries (incomes ≤ 74% FPL)
    • Low-income Medicare beneficiaries
    • Children and parents above minimum requirements
    • Pregnant women  133% FPL
    • Disabled and elderly people  74% FPL, including those in nursing homes
    • Disabled and elderly people served under Home and Community Based waivers
    • Women with breast and cervical cancer
    • Certain disabled people who are employed and buy into coverage
    • Persons with high medical costs “Medically Needy ”
    How does Medicaid Eligibility Work?
  • 41. Florida’s Optional Medicaid Beneficiaries
    • Infants 185-200% FPL
    • Pregnant Women 151-185% FPL
    • Medically Needy or “Spend Down” <24% FPL
    • Seniors and People with Disabilities 74-88% FPL
    • Silver Saver Program <200% FPL
    • Breast and Cervical Cancer Treatment <200% FPL
    • Family Planning Waiver Services
  • 42. Mandatory Services Optional Services
    • Physician, nurse practitioner and nurse midwife services
    • Laboratory and x-ray services
    • Inpatient and outpatient hospital services
    • Screening and treatment services for children (EPSDT )
    • Family planning services
    • Federally-qualified health center (FQHC) and rural health clinic (RHC) services
    • Prescribed drugs
    • Medical care or remedial care furnished by licensed practitioners under state law
    • Diagnostic, screening, preventive, and rehabilitative services
    • Clinic services
    • Dental services, dentures
    • Physical therapy and related services
    • Prosthetic devices
    • Eyeglasses
    • TB-related services
    • Primary care case management services
    • Other specified medical and remedial care
    Source: Kaiser Commission on Medicaid and the Uninsured, “The Medicaid Resource Book”, July 2002 What Does Medicaid Cover? Acute Care Long-term Care
    • Nursing facility services for people 21 years of age or older
    • Home health care services (for people entitled to nursing facility care)
    • Intermediate care facility for people with mental retardation (ICF/MR) services
    • Inpatient and nursing facility services for people 65 or over in an institution for mental diseases (IMD)
    • Inpatient psychiatric hospital services for children
    • Home health care services
    • Case Management services
    • Respiratory care services for ventilator-dependent individuals
    • Personal care services
    • Private duty nursing services
    • Hospice care
    • Services furnished under a “PACE” program
    • Home and community-based (HCBS) services (under budget neutrality waiver)
  • 43. Elderly and People with Disabilities Account for More Than Two-Thirds of Florida’s Medicaid Expenditures Source: Georgetown Health Policy Institute analysis based on CMS MSIS 2001 data for 48 states plus the District of Columbia. Excludes Hawaii and Washington, which have not submitted data to CMS. Excludes spending on Medicaid Family Planning waivers.
  • 44. Medicaid Fills Medicare’s Gaps Over Two-Fifths of Medicaid Benefit Spending is for Services for Medicare Beneficiaries This Grows Over Time with the Baby Boomers’ Retirement Source: Kaiser Commission on Medicaid and the Uninsured. “Dual Eligibles”: Medicaid’s Role in Filling Medicare’s Gaps” March 2004 Spending on Medicare Beneficiaries 42% Spending on All Other Beneficiaries 58%
  • 45. Medicaid is a major component of a state’s health care system
    • Accounts for 16% of the nation’s health care expenditures
    • Single largest source of federal financing to states
      • FL estimates it will receive $8.1 billion in federal Medicaid funds in FY 2005
    • Provides key financial support to safety net health centers, hospitals and other providers
    • Economic engine in many communities – for every dollar the state spends, it draws down $1.44 in federal funds
  • 46. Key Features of Medicaid Financing
    • Jointly financed by states and federal government
    • Federal funds paid to states as a “match” on state spending
      • FL’s regular Medicaid match rate is 59%
    • Federal funding for Medicaid available on an open-ended, as-needed basis
      • Federal funds for SCHIP (Healthy Kids/KidCare) are capped although state receives higher matching rate
        • FL’s SCHIP match rate is 71%
  • 47. Federal and State Share of Florida’s Medicaid Expenditures * Note: For FY 2003-2004, Florida, like all states, received a temporary FMAP increase of 2.95% as part of the “Jobs and Growth Tax Relief Reconciliation Act of 2003.” This enhanced matching rate expired on July 1, 2004. Source: Medicaid expenditure data received from AHCA Bureau of Program Analysis, June 2004. Total Expenditures (in billions) $14.0 $8.9 $10.2 $11.4 $13.0 (42.3%) (57.7%) (41.0%) (59.0%) (62.3%) (37.7%) (59.5%) (40.5%) (42.3%) (57.8%)
  • 48. Medicaid costs are growing, but the growth rate has slowed down
    • Medicaid spending rose nationally by 8% in 2004; projected to fall to 4% in 2005
      • FL Medicaid expenditures rose on average 13.8% over last four years (FY99-00 to FY03-04) but state projects growth will decline to 7.3% from FY03-04 to FY04-05
    • Growth in spending is attributable to increase in health care costs and rise in enrollment partially due to the recession
    • States have been facing severe budget pressures. Medicaid costs were growing while revenues were shrinking. Revenues are starting to come back.
  • 49. Underlying Cost Pressures in Medicaid
    • Long Term
      • Rising costs of “dual eligibles,” elderly and disabled enrolled in Medicare and Medicaid. Medicare effectively shifted costs to Medicaid
      • Rising medical costs that affect all health sectors, particularly rising prescription drug costs. (But there are signs that the health cost cycle may have peaked for now.)
    • Short Term
      • Weak economy and falling private insurance leads to enrollment increases, particularly children and parents
  • 50. Private Insurance Premium Increases vs. Florida’s Medicaid Expenditures Note: Florida data represents Medicaid expenditures for July 1-June 30 th of that fiscal year. 2004-05 data is based on General Appropriations. Source: Georgetown Health Policy Institute analysis based on Kaiser HRET 2004 Annual Survey, Florida Social Services Estimating Conference Medicaid Caseload data, 2/6/04; Medicaid expenditure data from AHCA Bureau of Program Analysis, June 2004.
  • 51. Source: Georgetown Health Policy Institute analysis based on Florida Social Services Estimating Conference Medicaid Caseload data, 2/6/04; Medicaid expenditure data from AHCA Bureau of Program Analysis, June 2004. Sources of Florida’s Medicaid Expenditure Growth
  • 52. Part 2 Federal Medicaid Reform: What Could it Mean for Florida?
  • 53. What has been happening at the federal level?
    • Federal FY04 Bush budget contained proposal to cap Medicaid funding in exchange for lots of flexibility to cut benefits, raise cost-sharing, restrict enrollment etc.
    • Proposal was not endorsed by majority of NGA Task Force and Members of Congress had reservations
      • Gov Bush served on this Task Force and supported the proposal
    • It appeared that the policy was being pursued through the waiver process – CT, NH, FL??, CA??
  • 54. Are other states considering global caps?
    • CT – (Ex) Governor had proposed/Legislature passed 12-month prohibition
    • NH – Governor was negotiating cap with Sec. Thompson. Legislature passed the following statutory language:
      • “ The department of health and human services shall not amend nor seek to amend, nor gain nor seek to gain approval of waivers to, the state Medicaid plan in any way that results at any time in the consolidation of federal grants or allotments, caps on the federal portion of Medicaid spending, reductions in the federal share of Medicaid spending, or increases in the state share of Medicaid spending, without the prior approval of the fiscal committee of the general court .”
      • NH Governor lost election; future of waiver uncertain
    • CA – Governor was developing a mega-waiver ; state announced 8/2 that waiver would be delayed until January budget in response to concerns
    • FL - ???
  • 55. TennCare Reform/Waiver Includes Some Troubling Concepts
    • State is requesting “pre-approval” from the federal government to make any necessary changes to comply with budget pressures
    • State budget cap of 26% of state general revenues
    • Very restrictive definition of medical necessity
      • “ Least costly alternative … that is adequate for the medical condition of the enrollee… an alternative course may be no treatment at all..”
  • 56. What does the recent election mean for Medicaid?
    • In light of the election results it appears the emphasis on significant change to Medicaid’s financing system will shift from the waiver process to a debate in Congress about capping the program
    • A proposal to cap federal Medicaid funding is likely to appear in the President’s FY06 budget or arise during the Congressional budget process
  • 57. Why do we think so?
    • In an interview with Congress Daily prior to the election, CMS administrator Mark McClellan said the administration wants to reauthorize the SCHIP program next year rather than when it expires in 2007 as part of an overall examination of Medicaid .
    • The Administration’s FY04 budget proposal talked about making Medicaid more like SCHIP.
    • SCHIP funding is capped.
  • 58. What role will Florida play?
    • “ Buoyed by his brother’s performance in Florida on Election Day, Gov Jeb Bush is vowing to .. produce two politically potent years in the lame-duck phase of his final term His agenda includes … with President Bush’s assistance, restructuring Medicaid in a way he hopes will become a model for the nation.”
    • Source: Tallahassee Democrat Monday, November 8, 2004
  • 59. What is the President’s vision of Medicaid reform?
  • 60. Key Features of the President’s Proposal
      • Capped federal payments to states on at least “optional” federal funding
        • Payments front loaded to provide fiscal relief, but reductions in later years to make proposal “budget neutral” over 10 years
        • This time around unlikely to have any additional funds but will achieve budget savings
      • No required state matching payments; “maintenance of effort” system instead
      • Broad new flexibility over program rules
  • 61. Potential Changes to the Medicaid Program Through the Federal Budget Process
    • Entitlement caps leading to automatic, deep cuts in virtually every program except Social Security.
      • Voted on by House earlier this year, expected to be revisited next year in both the House and Senate. Sounds benign – part of “reforming the budget process” – but actually very harmful.
      • House version would have reduced funding for entitlement programs by $1.8 trillion over 10 years; federal Medicaid funding would have been cut almost $400 billion
    • “ Reconciliation” process , in which Congress sets a multi-year deficit target and moves legislation on a fast track to make cuts in entitlement programs to meet that target
    • Tax policy changes More tax cuts mean fewer resources available to fund health programs. Additional tax policy changes being made related to health care (health savings accounts)
  • 62. Capped Federal Payments
      • Based on 2002 spending, adjusted forward using
      • 10-year growth projections
      • Funding no longer based on actual changes in enrollment
      • Funding no longer based on actual changes in health care costs, utilization, new technology
  • 63. President’s plan would allow significant flexibility for “optional” beneficiaries and services
    • What could this mean?:
    • Optional services could be provided for some people but not others
    • Some services could be covered in some parts of the state but not others
    • Closed formularies for drugs: high cost drugs could be excluded even if needed
    • Higher cost sharing for beneficiaries; no limits for some groups
    • Services, like inpatient hospital care, could be dropped
    • Potential loss of federal nursing home quality standards, managed care protections, etc.
  • 64. How would Congress determine how much money a state gets?
    • The mother of all formula fights!!
    • SCHIP funding formula has not worked well
    • Formula would likely include two components
      • Base amount
      • Inflator/Trend factor
        • Differences of a few percentage points can have dramatic impacts
    • A Section 1115 waiver for Florida with a global cap would likely have a similar formula
  • 65. What would the President’s proposal or a global cap waiver mean for Florida?
  • 66. Risk #1 The Majority (and Possibly All) of Florida’s Spending Would Fall Under the Cap
  • 67. Most Spending in Medicaid is “Optional” (US, 1998) Mandatory Expenditures For Mandatory Groups 35% Optional Services for Mandatory Groups 21% Optional Expenditures 65% Source: Urban Institute estimate prepared for the Kaiser Commission on Medicaid and the Uninsured, based on data from federal fiscal year 1998 HCFA2082 and HCFA-64 reports, 2001. Note: Expenditures do not include disproportionate share hospital (DSH) payments, administrative costs, or accounting adjustments. All Services for Optional Groups 44%
  • 68. Florida Medicaid Services for All Eligibles, FY 2003-3004 Optional Expenditures 62.8% Source: Medicaid expenditure data from AHCA Bureau of Program Analysis, June 2004.
  • 69.
    • Risk #2
    • It is very hard to predict the rate of growth in health care spending
  • 70. Congressional Budget Office (CBO) Federal Medicaid Spending Projections for Fiscal Year 2003 Variance in actual 2003 expenditures vs. projections is $19.7 billion or 12.3% of all 2003 federal payments. Source: Congressional Budget Office Medicaid Baselines, 1998-2004. (billions of dollars)
  • 71. Risk #3 The block grant would change the fiscal incentives that encourage Florida to maintain investments in coverage or make other improvements such as increasing provider reimbursement
  • 72. Current Law Federal dollars lost if FL reduces Medicaid spending by $125 million, at Medicaid and SCHIP match rates Federal Dollars Lost (millions) $199 Match Rate State Funds Withdrawn (millions) 59% $125 Proposal Federal Dollars Lost (millions) $0 State Funds Withdrawn (millions) $125 Federal dollars lost if FL reduces Medicaid spending by $125 million (assuming state meets “MOE”) Matching System Creates Incentives to Maintain State Investment $214 71% $125
  • 73. Potential Loss of State Spending Note: Lower estimate shows the difference between MOE and state spending projections under current law assuming program expenditures grow at 8.15% (CBO 2004 Medicaid baseline growth for the years 2004-2013). Higher estimate shows the difference between MOE and state spending projections under current law assuming program expenditures grow at 10.81% (FL’s Medicaid expenditure growth rate from 1998-2002). MOE growth is based on 2003-04 state expenditures as reported by AHCA, adjusted by the Medical CPI projected by HHS. 2006 2013 10-year loss (2004-2013) 2006 2013 10-year loss (2004-2013) (millions of dollars)
  • 74. Risk #4 Florida’s historically low spending will be locked into its base
  • 75. Florida’s Medicaid Expenditures Per Beneficiary, By Category, 2001 (36) (45) (37) (39) (44) Note: National Rank in parenthesis Source: Georgetown Health Policy Institute analysis based on CMS MSIS 2001 data for 48 states plus the District of Columbia. Excludes Hawaii and Washington, which have not submitted data to CMS. Excludes spending on Medicaid Family Planning waivers.
  • 76. Risk #5 Will the growth rate under a block grant or a waiver be able to accommodate Florida’s needs?
  • 77. Note: Low-Income refers to income less than 200% of the federal poverty level ($30,040/year for a family of three in 2002). Source: Georgetown University Health Policy Institute analysis based on March 1993-2003 Current Population Surveys. Florida’s Growth in Low-Income Elderly Exceeds that of the US (1992-2002)
  • 78. Source: Georgetown University Health Policy Institute analysis based on Social Security Administration Annual Reports, 1996-2003. Florida’s Growth in Blind and Disabled SSI Beneficiaries Exceeds that of the US (1996-2003)
  • 79. Who will pay if federal funding is capped?
    • Health care needs will still exist
    • Costs get shifted to
      • Hospitals and other providers
      • Low-income families themselves
        • Additional premiums/cost-sharing leads to declines in enrollment/loss of access to needed services
      • Purchasers of private insurance
      • Other areas of state’s budget
  • 80. Additional pressures on Florida’s health care system
    • High rate of uninsured persons already – no new federal funding would be available to address this
    • Large number of immigrants who are ineligible for federal Medicaid funding
    • Florida is currently one of two states in the country with closed enrollment for its Healthy Kids/KidCare program
  • 81. Uninsurance Rate for Nonelderly Persons, 2002-2003 Florida ranks #6 in the country in Uninsurance Rate for the Non-elderly Source: Urban Institute analysis of March 2003 and 2004 CPS data for the Kaiser Commission on Medicaid and the Uninsured Health Insurance Coverage in America: 2003 Data Update , forthcoming.
  • 82. Concluding thoughts on Medicaid reform
  • 83. Some questions to consider
    • Federalizing costs for dual-eligibles – reform outside of Medicaid
      • What will the impact of the Medicare prescription drug benefit be?
        • Will Florida see budget relief?
        • What kind of prescription drug coverage will be available?
        • Does the law need amending?
    • Who should pay for long term care?
    • What can we do about rising health care costs and the growing number of uninsured in our health care system generally?
  • 84. Some questions to consider, cont.
    • Are there ways we can save money and improve efficiency in Medicaid without undermining the guarantee of coverage?
      • Increase prescription drug rebate
      • Improve coordination and disease management programs
  • 85. Impact on Local Communities Kathy Castor County Commissioner Hillsborough County, Florida
  • 86. Penny Wise, Pound Foolish Why Cuts to Medicaid hurt Florida’s economy Priya Sampath Policy Associate HUMAN SERVICES COALITION Medicaid Reform Symposium, Tampa 11/23/04
  • 87. Medicaid – the Economic Engine
    • Financing
    • Federal dollars in Florida’s budget
    • The Economic Impact of “Federal” Medicaid Spending
    • Research results
  • 88. Financing Medicaid
    • Open-ended Federal-state partnership
    • Federal Financial Participation (FFP) for SERVICES
    • FMAP = F (P, I), US vs State
    • Highest: 83% (MS – 77%), Lowest: 50% (CA, CO, CT)
    • Florida : ~ 60%; State $1.00, Feds $ 1.60
    • Admin cap 50%
  • 89. Federal $$ into Florida
    • 25 - 30% of Fl state budget represents Federal money.
    • Medicaid - Largest source of federal funds
    • Medicaid Budget - $ 13 billion, =>
        • ~ $8 billion is Federal $$
        • Its money from outside the state
        • Has a MULTIPLIER EFFECT
  • 90. Methodology
    • IMPLAN Software
    • Input-output analysis
    • Transactions between different sectors determines “multiplier effect”
    • Used AHCA data
    • County-level analysis, 13 counties
  • 91. MULTIPLIER EFFECT
    • Direct Impact
    • Indirect Impact
    • Induced Impact
    • Jobs & income in medical sector (nurse’s salary)
    • Spending by businesses (medical equipment)
    • Jobs & income supported by employee spending (car dealerships)
  • 92. Medicaid – The Economic Engine
    • 2002
    • Medicaid budget – $8.8 Billion
    • Of which, Federal $$ - (56%) $4.8 Billion
    • Jobs Created: 120,950
    • Incomes supported: $4.3 Billion
    • Business activity generated: $8.7 Billion
    • Every federal dollar - $2.7 generated
    • Effects were consistent across counties
  • 93. Cuts – Penny wise, Pound Foolish
    • Cuts cost jobs, income and activity
    • 2003 - cuts to the Medicaid program
    • Affected $ 50 million in state $$, $72 million in Federal $$
    • 1,732 jobs
    • $155 million in economic activity
    • $92 million in wages
  • 94. Conclusion
    • The health sector is among the fastest growing, Medicaid significant player
    • Effects not limited to the medical sector, not limited to beneficiaries
    • It is a cost – but has significant economic benefits that Fl cannot ignore.
  • 95. Sponsored By: Suncoast Region Healthy Start Coalitions The Children’s Board of Hillsborough County Tampa Bay Health Care Collaborative American Heart Association