Affordability and Sustainability Enterprise Board February 27, 2018 - - PowerPoint PPT Presentation

Colorado Healthcare Affordability and Sustainability Enterprise Board

February 27, 2018

Agenda

• Welcome
• Approve Minutes from December 12, 2017 Meeting
• 2017-18 Fees and Payments

➢ Overview by Nancy Dolson ➢ Board discussion and vote

• Hospital Quality Incentive Payments (HQIP)

➢ Introduction and Overview by Chair Shepard Nevel ➢ Presentation by Michael Joseph, Matt Haynes and Nancy Kohler ➢ Board discussion and vote on 2019 framework

• Open Forum for Public Comments
• Adjourn

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2017-18 Fees and Payments

Nancy Dolson, Special Financing Division Director

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Overview

➢ CHASE Overview ➢ Fee and Payments Methodologies ➢ Net Reimbursement Overview ➢ Next Steps ➢ DSH Reduction Delay

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2017-18 CHASE

➢ $896.3 million CHASE fees ▪ Net Patient Revenue limiting fees at 5.75% of estimated NPR ➢ $1.3 billion in hospital supplemental payments including $97.6 million in quality incentive payments ▪ Upper Payment Limit at 96.9% ▪ Disproportionate Share Hospital (DSH) Limit ➢ $368.9 million in net reimbursement1

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1 See note 1 on slide 20

2017-18 CHASE Fees and Payments

Expenditures Fees Federal Funds Total Funds IP Base Rate Supplemental Payment $228,500,000 $228,500,000 $457,000,000 OP Supplemental Payment $213,800,000 $213,800,000 $427,600,000 Uncompensated Care Supplemental Payment $55,200,000 $55,200,000 $110,500,000 DSH Supplemental Payment $86,300,000 $86,300,000 $172,600,000 HQIP Supplemental Payment $48,800,000 $48,800,000 $97,600,000 Total Supplemental Payment $632,600,000 $632,600,000 $1,265,300,000 Medicaid Parents to 133% of FPL $29,800,000 $280,500,000 $310,300,000 Medicaid Adults without Dependent Children to 133% of FPL $101,800,000 $1,625,200,000 $1,727,000,000 Medicaid Buy-In for Working Adults and Children with Disabilities $33,100,000 $36,800,000 $69,800,000 CHP+ 206% to 250% of FPL $8,600,000 $55,300,000 $64,000,000 Twelve Months Continuous Eligibility for Medicaid Children $31,300,000 $31,300,000 $62,600,000 Non Newly Eligibles $8,600,000 $42,500,000 $51,000,000 Medicaid Expansion $213,200,000 $2,071,700,000 $2,284,900,000 Administration $26,800,000 $49,100,000 $75,900,000 Transfer to General Fund – 25.5-4-402.4 (5)(b)(VII) $15,700,000 *$0 $15,700,000 Total Other Expenditures $42,500,000 $49,100,000 $91,600,000 Cash Fund Reserve $8,000,000 $0 $8,000,000 Grand Total $896,300,000 $2,753,400,000 $3,649,800,000 *Federal funds drawn from the transfer to the General Fund are not shown

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Return on CHASE Fee

• $896.3 million generates $2.8 billion in federal funds, a

212% return on investment

• Administrative expenditures ($75.9 million) are 2.1% of total

CHASE expenditures ($3.6 billion)

• Administrative expenditures include the following

➢ Staff costs, legal services, accounting, etc. ➢ Contracted services, including utilization management and external quality review ➢ IT systems (i.e., eligibility and claims) and staffing for the customer contact center for more than 500,000 covered lives

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CHASE Fee

• Inpatient fee assessed on managed care & non-managed care

days ➢ Inpatient fee ▪ Per non-managed care day: $391.15 ▪ Per managed care day: $87.52

• Outpatient fee assessed on percentage of total Outpatient

charges ➢ Outpatient fee ▪ Percentage of total charges: 2.0208%

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Inpatient Base Rate Supplemental Payment

• Increase rates for inpatient hospital services for Medicaid

members

• Total Payments: $457.0 million
• Inpatient Base Rate Payment = Medicaid rate before add-ons

* inpatient percentage adjustment factor * estimated Medicaid discharges * case mix

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Outpatient Supplemental Payment

• Increase rates for outpatient hospital services for Medicaid

members

• Total Payments: $427.6 million
• Outpatient Payment = estimated Medicaid outpatient cost *
• utpatient percentage adjustment factor

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Uncompensated Care Supplemental Payment

• Reimbursement to hospitals providing services to the

uninsured

• Total Payments: $110.5 million

➢ $15.0 million distributed to qualified Essential Access hospitals, based on proportion of beds ➢ $95.5 million distributed to all other qualified Non Essential Access hospitals, based on proportion of uninsured cost

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DSH Supplemental Payment

• Reimbursement to hospitals providing services to the

uninsured

• Total Payments: $172.6 million
• Most hospitals capped at 96% of their estimated DSH limit

➢ A hospital with a CICP Write-Off cost greater than 900% of the average state-wide CICP Write-Off cost has a DSH Supplemental Payment equal to 85.5% of their estimated DSH limit ➢ A respiratory hospital’s DSH Supplemental Payment equals 45% of their estimated DSH limit

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HQIP Supplemental Payment

• Reimbursement to hospitals providing services that improve

health care outcomes

• Total Payments: $97.6 million
• Quality measures and payment methodology approval

concluded by the CHASE Board on August 22, 2017

• HQIP Payment = % of normalized eligible points * Medicaid

Adjusted Discharges * dollars per-adjusted discharge point

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Net Reimbursement

• Net Reimbursement1,2 decrease due to:

➢ Reduction in expansion federal matching percent from 95% to 94% in January 2018 ➢ Increase in Medicaid and CHP+ caseload ➢ Reduction in standard federal medical assistance percentage (FMAP) from 50.02% to 50.00% in October 2017

14 Item 2016-172 2017-18 Difference Fee (cash funds) $782,311,197 $896,346,622 $114,035,425 Supplemental Payments (total funds) $1,166,009,269 $1,265,286,602 $99,277,333 Net Reimbursement1 $383,698,072 $368,939,980 $(14,758,092)

1 See note 1 on slide 20 2 See note 2 on slide 20

Net Reimbursement

15 Row 1 Additional funds from increased fees $114,035,425 Variance in Fee Year over Year2 Row 2 Expansion expenditure increase due to FMAP reduction $41,490,131 Row 3 Expansion expenditure increase due to caseload $13,394,421 Row 4 Funds expended due to administration expenditure increase $4,278,879 Row 5 Cash funds reserved $5,000,125 Row 6 Funds expended due to standard FMAP reduction $233,203 Row 7 Total increase in funds $64,396,759 Sum Row 2 through Row 6 Row 8 Funds available for Supplemental Payments (cash fund) $49,638,666 Row 7 – Row 1 Row 9 Funds available for Supplemental Payments (total fund) $99,277,332 Row 8 * 2 Row 10 Net Reimbursement1 $(14,758,092) Row 9 – Row 1

1 See note 1 on slide 20 2 See note 2 on slide 20

Payment to Cost Ratio

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Next Steps

• CHASE fees and supplemental payments have been at interim

levels since October 2017

• Following CHASE Board approval, we will

➢ Seek federal approval from CMS ➢ Present rules to Medical Services Board ➢ Reconcile between the final model and the interim model in Summer 2018 ➢ Notify hospitals and host webinar

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Delay in DSH Reduction

• DSH Reductions have been delayed until 2020

➢ Colorado reduced FFY 2017-18 allotment: $172.6 million ➢ Unreduced: $208 million, difference of $35 million

• Bipartisan Budget Act of 2018 (H.R. 1892) signed into law

by the President on February 9, 2018 ➢ Section 53101 lays out the amendments for DSH reductions

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Delay in DSH Reduction

• Proposed process

➢ Two year timely filing ▪ Up to September 2020 to draw down full FFY 2017-18 DSH allotment ➢ Draw down additional DSH dollars in upcoming models ➢ Direct to hospitals with lower percentage of DSH limit

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Footnotes

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• 1Net reimbursement reflects direct supplemental payments

paid to hospitals minus total CHASE fees and does not include revenue received by hospitals via claims paid for expansion populations

• 22016-17 fee and payment data. Despite being separate fees

and separate programs, information for the October 1, 2016 to June 30, 2017 time period under CHCAA and the July 1, 2017 to September 30, 2017 time period under CHASE are reported in aggregate for the sake of meaningful comparison

Board discussion and vote

• 2017-18 CHASE fees and payments

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Hospital Quality Incentive Payments (HQIP)

Michael Joseph, Public Consulting Group Matt Haynes, Department of Health Care Policy and Financing

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Quality Measure Process to Date

• Conducted an environmental scan of measures used in other

hospital quality programs to identify best practices and review measure alignment

• Worked with internal staff to identify potential priority areas for the

Department and assess alignment with other programs

• Developed a proposed measure framework and presented

framework to subcommittee

• Working with the subcommittee to review measures that would fit

in the framework

• Monitoring the work of the MAP Rural Health Workgroup which is

in the process of developing a core set of rural relevant measures for consideration in future iterations of the measure set

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Key Considerations in Developing Framework and Selecting Measures

• Shift towards measures that align with other programs including

ACC Phase II

• Focus on groups of measures rather than individual measures
• Increase the proportion of outcome measures
• Incentivize adherence to guidelines and best practices
• Include areas not currently addressed by this program, e.g. social

determinates of health, opioids

• Consider the challenges rural hospitals may face in reporting

measures

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Proposed 2019 Framework

• Focus on the following six areas of measurement:

➢ Perinatal and Maternal Care ➢ Patient Safety ➢ HCAHPS ➢ Behavioral Health ➢ Substance Use ➢ Cost of Care

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Quality Measure Process Next Steps

• Seek CHASE Board approval of recommended framework
• Work with subcommittee to identify and refine measures that work

within the framework, achieve the goals of the program and are able to be operationalized

• Bring back to the CHASE board a completed framework and slate
• f measures that have been approved by the subcommittee
• Monitor and explore applicability of MAP Rural Health Workgroup

Recommendations

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Board discussion and vote

• HQIP framework 2019

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Thank You

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