Medi-Cal Hospital Fee Program Amber Ott Vice President, Finance
Agenda What is a hospital fee program? History of California s program Approval Process 2014-16 California Model Implementation Future 2
What is a Hospital Fee Program? Federal Medical Assistance Percentage (FMAP) is 50% in California Varies based on state s poverty level and unemployment rate General fund dollars draw down federal match CA is in the bottom 10% of spending per capita for Medicaid = $6 Billion Shortfall 3
What is a Hospital Fee Program? Upper Payment Limit (UPL) 49 states and DC have a Hospital Fee Program Federal Requirements Broad based Uniform Doesn t violate hold harmless provisions Winners and Losers 4
What is a Hospital Fee Program? Private Hospitals agree to be taxed by the state to raise non-federal share State collects taxes and draws down federal match State issues supplemental Medi-Cal fee-for-service payment to hospitals State issues supplemental Medi-Cal managed care payments to health plans Health plans issue supplemental Medi-Cal managed care payments to hospitals 5
History of California s Program First program implemented in 2010, and spanned period going back to April 2009 Required over 100 meetings to gain consensus CHA Hospital Fee Workgroup designed model CHA worked with CA Department of Health Care Services (DHCS) to gain CMS approval 6
History of California s Program Phase 1 (4/1/09 12/31/10): Complete Supplemental Medi-Cal Fee-For-Service Payments Supplemental Medi-Cal Managed Care Payments $560 million to state to fund children s coverage $310 million in grants to Designated Public Hospitals $2.6 Billion Net Benefit to Hospitals 7
History of California s Program Phase 2 (1/1/11 6/30/11): Complete $161 million to state to fund children s coverage $50 million in grants to Designated Public Hospitals $952 million Net Benefit to Hospitals 8
History of California s Program Phase 3 (7/1/11 12/31/13): Nearly Complete Completed 10 cycles of fee-for-service and 3 cycles of managed care $1.2 billion to state to fund children s coverage $139.5 million in grants to Public Hospitals $4.6 Billion Net Benefit to Hospitals 9
History of California s Program Phase 4 (1/1/14 12/31/16): Current Signed into law by Governor in October 2013 SB 239 - Hernandez Tax and fee-for-service components approved by CMS in December 2014 2014-16 Medi-Cal Expansion = 100% FMAP Childless adult population 10
History of California s Program Phase 4 (1/1/14 12/31/16): Current $13.3 billion in fees collected $2.3 billion to state to fund children s coverage $187 million in grants to Public Hospitals Estimated $10.2 Billion Net Benefit to Hospitals 11
Approval Process CHA calculates UPL and managed care room CHA Hospital Fee Workgroup designs the fee program model and submits to DHCS after CHA Board approval DHCS reviews UPL and fee model DHCS submits UPL and fee model to CMS 12
Approval Process CMS approves UPL and fee model DHCS submits annual managed care rates to CMS CMS approves annual managed care rates 13
2014-16 California Model Quality Assurance Fee Public, rural, specialty and long term care hospitals exempt All inpatient days (acute, psych, rehab) are assessed a fee including commercial, Medicare, Medi-Cal and self pay. Long-Term Care and Nursery days excluded 2010 data from OSHPD, most current available when modeling was developed 14
2014-16 California Model Quality Assurance Fee SFY 13/14 fees per day: Medi-Cal (FFS and Managed Care) = $536 Fee-For-Service = $494 Managed Care» Health Plan Owned Hospital = $81» All Other Hospitals = $145 Highest rate charged to Medi-Cal to put most burden on those who receive most benefit 15
2014-16 California Model Supplemental Medi-Cal Fee-For-Service Payments (Estimated) SFY 13/14 Private Hospital Payments: General Acute Care = $1,370 Psychiatric = $965 ICU/CCU/NICU = $2,500 Trauma (level I and II) = $2,500 Transplant = $2,500 Subacute = 50% of 2010 payment Outpatient = 150% of 2010 payments 16
2014-16 California Model Supplemental Medi-Cal Fee-For-Service Payments Trauma, Transplant, and ICU/CCU/PICU/NICU payments Non-DSH hospitals only In addition to general acute payment rates 17
2014-16 California Model Supplemental Medi-Cal Managed Care Payments (Estimated) SFY 13/14 Private Hospital Payments Inpatient = $1,783 per day Outpatient = $153 per visit Payments based on 2010 Medi-Cal managed care days in Medicaid Utilization Reports Calculated by dividing managed care pool by total Medi-Cal managed care utilization 18
2014-16 California Model Other Payments $187 million grants to public hospitals $274 million Medi-Cal Managed Care payments to designated public hospitals $209 million rate range room funding 19
2014-16 Model Implementation Governor signed into law in October 2013 CMS approved December 2014 Fee-for-service implementation started this month Bi-Weekly Cycles until program is current, approximately June 2015 Quarterly Cycles through January 2017 20
2014-16 Model Implementation Hospitals must pay fee to DHCS in full and on time Delinquent payments result in lower payments to all hospitals Need fee money to draw down federal match Delinquent hospitals put on withhold 21
2014-16 Model Implementation Managed care approval for first 6 months expected this summer Expansion population (100% FMAP) approved after previously eligible population approved Annual managed care approvals based on state fiscal year Approval expected 6 9 months after state fiscal year end 22
2014-16 Model Implementation DHCS makes supplemental capitation payments to Medi-Cal managed care plans Based on current enrollment CHA gives payment schedules by hospital to Medi-Cal managed care plans Based on model Plans make supplemental payments to hospitals 23
2014-16 Model Implementation Model is subject to change Delinquent Hospitals New Hospitals Closed Hospitals Converted Hospitals Egregious Errors Managed Care Approvals 24
Future 2016 Ballot Initiative to lift sunset date State share locked at 24% net benefit Rebased every 2-3 years Congress may lower taxable rate below 6% or eliminate the program Not politically viable with nearly all states relying on this funding mechanism 25
Thank You Amber Ott Vice President Finance aott@calhospital.org 916 552 7669