Slowing Ohio s Medicaid Per Capita Spending - Progress to Date

Transcription

1 Slwing Ohi s Medicaid Per Capita Spending - Prgress t Date January 2017 Since the creatin f the Jint Medicaid Oversight Cmmittee (JMOC) in May 2014, with its fcus n lwering health care csts and imprving health utcmes, year-ver-year grwth in per capita Medicaid spending has slwed. Additinally, spending at the mnthly per capita r per member (PMPM) level has been significantly lwer than was estimated at the intrductin f the last budget. Using actual enrllment t prvide an apples-t-apples cmparisn, these changes have prduced savings f $1.6 billin acrss all funds in fiscal years 2015 and 2016 cmpared t Executive Budget PMPM estimates. Medicaid PMPM Spending FY 2015 FY 2016 Grwth Rate FY 2017 Grwth Rate JMOC Limit (Oct 2014) $628 $ % $ % Executive Budget $628 $ % $ % Actual/Estimate* $606 $ % $620-$ %-2.6% *Actual/Estimate calculated by Optumas, December 2016 The table abve shws mnthly Medicaid PMPM spending fr fiscal years 2015 thrugh The table includes the PMPM limit set by JMOC in Octber 2014, the PMPM rate prpsed by the Gvernr in the Executive Budget, and actual spending as calculated by JMOC s actuary. Lwering the rate f grwth in PMPM spending in the Medicaid prgram wuld nt be pssible withut a cntinuing cmmitment frm bth the legislature and the administratin, as achieving substantial and meaningful savings in the Medicaid Prgram requires a lng term cmmitment t a cnsistent set f plicies. The fllwing sectins identify the plicies that helped t achieve the savings identified abve, thse that have increased spending, and additinal pprtunities t lwer spending while imprving health utcmes. Plicies That Have Lwered Medicaid Per Capita Spending Grwth Several plicies have had a significant impact n slwing the rate f grwth in Medicaid spending ver time. While these are nt new plicies, they represent a clear and cnsistent plicy directin that emphasizes value ver vlume, apprpriate cst-cntainment strategies, psitive health utcmes, and persn-centered care.

2 Increased Use f Managed Care The Ohi Department f Medicaid (ODM) began expanding its use f managed care in FY 2006 when enrllment became mandatry fr recipients in the Cvered Families and Children (CFC) categry as well as a subset f thse in the Aged, Blind, and Disabled (ABD) categry. In FY 2014, Ohi expanded the use f managed care t qualifying individuals enrlled in bth Medicaid and Medicare in six regins f the state with abut half f Ohi s dually eligible individuals enrlled. Managed care has reduced PMPM spending in the fllwing ways: Imprvement in care management and care crdinatin; Reductin in inapprpriate utilizatin f services; Increased use f value-based purchasing; Reductins in premium rates fr perfrmance and efficiency factrs; and Shared savings with Medicare fr care fr dually eligible members. Increased Use f Hme and Cmmunity Based Alternatives t Institutinal Care Ohi has wrked successfully t rebalance Medicaid spending tward less expensive hme and cmmunity based services rather than higher cst settings like nursing facilities. Mre than half f all Medicaid spending n lng term care services and supprts is fr care in hme and cmmunity based alternatives t institutinal care. The ultimate gal is t enable senirs and peple with disabilities t live with dignity in the settings they prefer, especially their wn hme. Imprved Prgram Administratin With annual spending f $27 billin in fiscal year 2017, Ohi s Medicaid Prgram is the largest prgram in state gvernment. While it is the largest single payer fr health care in the state, it is nly ne payer in a much larger health care system. Managing a prgram f this size and cmplexity requires a high level f sphisticatin. Ohi has made a number f changes that have imprved the management f the Medicaid Prgram, including the creatin f a standalne cabinet level agency t prvide the leadership and fcus needed t manage a prgram f this size and the replacement f utdated infrmatin systems fr claims prcessing and decisin supprt and eligibility that have substantially imprved the accuracy and efficiency f the prgram alng with prviding near-real time data fr better decisin making. Plicies That Have Increased Per Capita Spending Grwth While the legislature, thrugh JMOC, has created an verarching gal f reducing Medicaid spending, sme plicies have increased spending, thrugh higher rates, the additin f new cvered services, r restrictins n the management f the prgram. Nt all spending increases shuld be cnsidered bad plicy. Increases may be warranted t imprve health utcmes, access t care, r t address systemic issues. Listed belw are the mre significant plicy changes adpted in the last budget that have resulted in higher per capita spending this biennium. Rate Increases Rates have been increased fr the fllwing prviders and/r services: sme physician rates; ambulettes; hme health services, private duty nursing, and waiver nursing services; and dental services including a 5% increase fr prviders in rural areas. Additinally, nursing facility prices have Page 2

3 been rebased t reflect mre recent csts. While the experience f individual facilities may vary, rebasing resulted in increased spending. Additin f New Services Several services have been added t the Medicaid benefit package including: peridntal scaling and rt planing; metablic nutritin prducts; respite services fr children with certain mental health cnditins; care crdinatin fr inmates being released frm state prisns; specialized transprtatin thrugh the Medicaid in Schls Prgram; and enhanced maternal care services. Administrative Cnstraints While nt new in this biennium, regulatry prvisins cntinue t limit prgram flexibility including requirements t cntract with certain prviders r at specified rates, enhanced rates that favr ne prvider, and limitatins n the prir authrizatin f prescriptin drugs that raise the cst f care withut crrespnding imprvements in quality f care r health utcmes. It is imprtant t nte that state plicymakers have limited t ability t cntrl csts in sme f the fastest grwing areas in the Medicaid Prgram namely prescriptin drugs and Medicare csts paid by Medicaid. Spending in bth f these areas have increased substantially ver the past tw years and are expected t cntinue t grw quickly thrugh the next biennium. Additinal Opprtunities t Lwer Medicaid Per Capita Spending Ging int the next state budget, the fllwing plicy areas ffer a number f high value pprtunities t bth imprve care and utcmes fr Medicaid recipients while reducing verall spending. These areas are significant, either because they represent an area with a high level f per persn spending r wuld affect a large number f individuals. Behaviral Health Integratin Medicaid is the largest payer f behaviral health services, and behaviral health disrders ften tp the list f mst expensive health cnditins mainly as a result f mre care being delivered in inpatient and emergency rm settings. In Ohi, many individuals with serius and persistent mental illnesses and substance use disrders are nt receiving services thrugh the cmmunity behaviral health system. Additinally, many f these individuals als have serius physical health cnditins that are nt well managed. The result is higher utilizatin rates fr inpatient hspitalizatin and emergency rm care, higher csts, and prer health utcmes frm a lack f disease management and preventive care. It will take time t see savings as cnsumer and prvider practices change. Other states, particularly thse that have gd integratin f physical and behaviral health, have seen substantial savings as well as imprve utcmes fr patients. Imprving Value in Health Care Ohi received a State Innvatin Mdel (SIM) grant t test multipayer, value-based payment mdels. Thrugh this grant, Ohi is implementing tw initiatives Cmprehensive Primary Care and Episdic Payments. These initiatives include Medicaid, Medicare, and Ohi s majr cmmercial insurers and have an verarching gal f cvering 80% f Ohians thrugh a value-based payment mdel by Page 3

4 Thrugh the use f episdic payments, the state seeks t reduce variatins in cst and quality by ffering rewards and penalties t prviders accuntable fr an episde f care and t imprve quality fr the mst cmmn healthcare episdes. Ohi plans t rll ut five t seven new episdes per year. Currently, six episdes are in the perfrmance perid where prviders are able t earn bnuses r face penalties, while seven mre episdes are in the initial reprting-nly phase. Thrugh the Cmprehensive Primary Care Initiative (CPCI), the state seeks t re-center primary care in the health care system t imprve preventin and management f chrnic disease. CPCI was launched in January 2017 amng a small number f large primary care practices. Participating practices will receive a mnthly per capita payment fr all patients n its registry and each practice will be eligible fr a shared savings payment at the end f the year based n its perfrmance against a set f benchmarks. A brader expansin f this initiative is expected t begin in January Imprving Prgram Integrity Medicaid enrllment and spending has increased substantially, which has the ptential t increase the incidence f fraud, waste, and abuse. Plicymakers need t ensure versight is adequate t ensure prgram integrity. One area f cncern is hme health care. A fast grwing ppulatin and fast grwing industry cupled with a lw bar fr prvider entry and limited versight makes this area susceptible t fraud and makes the ppulatin that relies n these services susceptible t harm. Ohi is in the prcess f implementing an electrnic visit verificatin (EVV) system t help validate delivery f hme health services t eligible individuals. The EVV system will significantly reduce the risk f imprper claims being paid by Medicaid and reduce certain administrative burdens assciated with identifying fraud, waste, and abuse. Imprving Maternal and Infant Health In 2015, Ohi s Medicaid prgram paid fr 51.7% f all births. Prematurity, lw birth weight, and maternal addictin are amng the factrs that cntribute t pr infant health and infant mrtality. Imprving maternal health prir t pregnancy can significantly impact these factrs. In additin t imprving Ohi s infant mrtality rates, imprving maternal and infant health can reduce nenatal intensive care unit (NICU) stays; reduce the length f stay in NICUs, and reduce the incidence f develpmental delays all f which can als significantly reduce Medicaid csts. Cntinued Push t Imprve Quality thrugh Managed Care Ohi cntinues t trail mst ther states n many imprtant health utcme measures including preventive care and chrnic disease management, nt nly in the Medicaid Prgram, but acrss all ppulatins in the state. Medicaid managed care is an imprtant vehicle fr driving quality and imprving health utcmes in the Medicaid prgram, but much mre wrk needs t be dne. Ohi has recently implemented a new Medicaid quality strategy that is fcused n delivering better care, imprving health utcmes acrss ppulatins, and practicing best evidence medicine acrss the care cntinuum. T effectively increase health utcmes, the administratin and legislature needs t cntinue t encurage and reward new, innvative strategies while maintaining fcus and attentin n Page 4

5 what is wrking. JMOC shuld increase its attentin in this area by increasing its review f current initiatives, prgress made, and barriers that are impeding better results. Page 5