Federal Fiscal Year 2017-18 CHASE Fee Program June 21, 2018 - - PowerPoint PPT Presentation

Federal Fiscal Year 2017-18 CHASE Fee Program

June 21, 2018

Overview

➢ CHASE Overview ➢ Fee and Payments Methodologies ➢ Net Reimbursement Overview ➢ Payment to Cost Ratio ➢ Reconciliation Process Overview

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Overview

Program Goals

• Increase hospital reimbursement for Medicaid and uninsured

patients

• Fund hospital quality incentive payments
• Expand health care coverage in Medicaid and Child Health

Plan Plus (CHP+) programs

• Reduce uncompensated care costs and the need to shift

uncompensated costs to other payers

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Overview

• $370 million in net reimbursement1 for hospitals between

October 2017 through September 2018 ➢ Net reimbursement reflects direct supplemental payments minus total CHASE fees and does not include revenue received by hospitals from coverage expansion

• $1.27 billion in total supplemental Medicaid & DSH payments,

including $97.6 million in quality incentive payments

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Overview

• Provides health care coverage to more than 501,500

Coloradans as of September 30, 2017: ➢ 376,000 adults without dependent children ➢ 93,000 Medicaid parents ➢ 25,000 CHP+ children and pregnant women ➢ 7,500 working adults and children with disabilities

• No General Fund expenditures

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CHASE Fee from Hospitals Increased Payment to Hospitals Expanded Coverage to Colorado Citizens Federal Match from CMS Cash Fund (CHASE Fee + Federal Match)

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Overview

• Net Patient Revenue (NPR) – limiting total CHASE fees that

can be collected

• Upper Payment Limit (UPL) – limiting total supplemental

payments that can be paid

• Disproportionate Share Hospital (DSH) Limit – limiting

hospital specific DSH payments that can be paid

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Overview

Net Patient Revenue (NPR)

• CHASE Fee collection limited to 6% of actual NPR
• Estimated using historical data inflated forward
• Inpatient NPR = (Inpatient Revenue / Total Hospital Revenue)

* Total Hospital NPR * Inflation

• Outpatient NPR = (Total Hospital NPR – Inpatient NPR) *

Inflation

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Overview

Upper Payment Limit (UPL)

• Supplemental payment limited to UPL
• Maximum Medicaid is allowed to reimburse to hospitals
• Aggregate, not hospital-specific limit
• Completed for both Inpatient and Outpatient services
• UPL Room = Medicaid cost – Medicaid fee for service

payments – non-CHASE supplemental payments

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Overview

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Overview

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Overview

Disproportionate Share Hospital (DSH) Limit

• DSH supplemental payment limited to DSH limit
• DSH limit = Medicaid plus uninsured cost minus Medicaid plus

uninsured payments

• DSH funds exceeding hospital-specific DSH limits must be

repaid

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CHASE Fee

• FFY 2017-18 CHASE Model

➢ $896 million CHASE fees ▪ Net Patient Revenue at 5.75% of estimated NPR ➢ $1.27 billion in hospital supplemental payments ▪ Upper Payment Limit at 96.9%

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rounding may cause calculation discrepancies

CHASE Fee

• Net reimbursement reflects direct supplemental payments

minus total CHASE fees and does not include revenue received by hospitals due to expansion ➢ For comparison’s sake, data include fees and payments prior to July 1, 2017 under the Colorado Health Care Affordability Act (CHCAA)

FFY 2017-18 Hospital Net Reimbursement1 Fees / Payments 2014-15 2015-16 2016-17 2017-18 Total Supplemental Payments $1,186,200,000 $1,120,800,000 $1,166,000,000 $1,266,400,000 Total Fees $688,400,000 $670,000,000 $782,300,000 $896,300,000 Net Reimbursement to Hospitals $497,800,000 $450,800,000 $383,700,000 $370,100,000

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CHASE Fee

rounding may cause calculation discrepancies

• Net reimbursement reflects direct supplemental payments

minus total CHASE fees and does not include revenue received by hospitals due to expansion

• For comparison’s sake, the 2016-17 data reflects 12 months of

fees and payments, including fees and payments under the CHCAA from October 1, 2016 through June 30, 2017 and under CHASE from July 1, 2017 through September 30, 2017

FFY 2017-18 Net Hospital Reimbursement1 Fees / Payments 2016-172 2017-18 Difference Total Supplemental Payments $1,166,000,000 $1,266,400,000 $100,400,000 Total Provider Fees $782,300,000 $896,300,000 $114,000,000 Net Reimbursement to Hospitals $383,700,000 $370,100,000 $(13,600,000) 16

CHASE Fee

FFY 2017-18 Fees and Payments Expenditures Fees Federal Funds Total Funds IP Base Rate Supplemental Payment $228,900,000 $228,900,000 $457,700,000 OP Supplemental Payment $214,000,000 $214,000,000 $428,000,000 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 $633,200,000 $633,200,000 $1,266,400,000 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 $8,600,000 $0 $8,600,000 Grand Total $896,300,000 $2,754,400,000 $3,650,900,000 rounding may cause calculation discrepancies *Federal funds drawn from the transfer to the General Fund are not shown

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Return on Investment

• $896 million generates $2.75 billion in federal funds, a

207% return on investment

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

CHASE expenditures ($3.65 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 and 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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CHASE Fee

• Psychiatric, long term care, and rehabilitation hospitals are fee

exempt

• Certain hospitals receive a discounted fee

➢ Inpatient fee ▪ High Volume Medicaid & CICP hospitals discounted 47.79% ▪ Essential Access hospitals discounted 60% ➢ Outpatient fee ▪ High Volume Medicaid & CICP hospitals discounted 0.84%

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CHASE Fee

CHASE Fee Calculation Row Description Amount Calculation Row 1 Managed Care Days 5,000 Row 2 Fee Per Managed Care Day $100.00 Row 3 Managed Care Day Fee $500,000 Row 1 * Row 2 Row 4 Non-Managed Care Days 10,000 Row 5 Fee Per Non-Managed Care Day $350.00 Row 6 Non-Managed Care Day Fee $3,500,000 Row 4 * Row 5 Row 7 Total Inpatient Fee $4,000,000 Row 3 + Row 6 Row 8 Total Outpatient Charges $50,000,000 Row 9 Fee Percentage 1.5000% Row 10 Total Outpatient Fee $750,000 Row 8 * Row 9 Row 11 Total Fee $4,750,000 Row 7 + Row 10

Your hospital’s calculation can be found on Page 7 (Table 4 & Table 5) of the June 14, 2018 letter

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CHASE Fee

OP NPR Limit IP NPR Limit

IP Fee $424 million OP Fee $473 million Days Charges CHASE Fees $896 million

Payers include: ✓ General Acute ✓ Critical Access ✓ Pediatric Fee exempt: ✓ Rehabilitation ✓ Long Term Care ✓ Psychiatric

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Supplemental Payments

• Inpatient Base Rate Medicaid Supplemental Payment
• Outpatient Medicaid Supplemental Payment
• Uncompensated Care Medicaid Supplemental Payment
• Disproportionate Share Hospital (DSH) Supplemental Payment
• Hospital Quality Incentive Payment (HQIP) Medicaid

Supplemental Payment

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Inpatient Base Rate Supplemental Payment

• Increase rates for inpatient hospital services for Medicaid

members

• Total Payments: $457.7 million
• Inpatient Base Rate Payment = Medicaid rate before add-ons

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

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Inpatient Base Rate Supplemental Payment

Inpatient Base Rate Supplemental Medicaid Payment Calculation Row Description Amount Calculation Row 1 Medicaid Rate Before Add-ons $6,000 Row 2 Percentage Adjustment Factor 50% Row 3 Incremental Medicaid Rate Bf Add-ons $3,000 Row 1 * Row 2 Row 4 Estimated Medicaid Discharges 1,000 Row 5 Case Mix 1.05 Row 6 Total Payment $3,150,000 Row 3 * Row 4 * Row 5

Your hospital’s calculation can be found on Page 8 (Table 6) of the June 14, 2018 letter

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Outpatient Supplemental Payment

• Increase rates for outpatient hospital services for Medicaid

members

• Total Payments: $428 million
• Outpatient Payment = estimated Medicaid outpatient cost

times outpatient percentage adjustment factor

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Outpatient Supplemental Payment

Outpatient Supplemental Medicaid Payment Calculation Row Description Amount Calculation Row 1 Estimated Medicaid Outpatient Cost $1,000,000 Row 2 Percentage Adjustment Factor 25.00% Row 3 Total Payment $250,000 Row 1 * Row 2

Your hospital’s calculation can be found on Page 9 (Table 7) of the June 14, 2018 letter

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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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Uncompensated Care Supplemental Payment

Uncompensated Care Supplemental Medicaid Payment Calculation (Essential Access Hospitals) Row Description Amount Calculation Row 1 Essential Access Hospital TRUE Row 2 Hospital Bed Count 21 Row 3 Total Bed Count for Qualified Hospitals with Fewer than 25 Beds 700 Row 4 % of Beds to Total Beds for Qualified Hospitals with 25 or Fewer Beds 3.00% Row 2 / Row 3 Row 5 Total Available Funds $15,000,000 Row 6 Total Payment $450,000 Row 4 * Row 5

Your hospital’s calculation can be found on Page 10 (Table 8) of the June 14, 2018 letter

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Uncompensated Care Supplemental Payment

Uncompensated Care Supplemental Medicaid Payment Calculation (Non Essential Access Hospitals) Row Description Amount Calculation Row 1 Essential Access Hospital FALSE Row 2 Uninsured Costs $5,000,000 Row 3 Total Uninsured Cost for Qualified Non Essential Hospitals $500,000,000 Row 4 % of Uninsured Cost to Total Uninsured Cost for Qualified Non Essential Hospitals 1.00% Row 2 / Row 3 Row 5 Total Available Funds $95,500,000 Row 6 Total Payment $955,000 Row 4 * Row 5

Your hospital’s calculation can be found on Page 10 (Table 8) of the June 14, 2018 letter

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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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DSH Supplemental Payment

DSH Supplemental Medicaid Payment Calculation Where DSH Supplemental Payment is Less Than Estimated DSH Limit Row Description Amount Calculation Row 1 Medicaid IP Cost $6,000,000 Row 2 Medicaid OP Cost $3,000,000 Row 3 Uninsured Cost $500,000 Row 4 Provider Fee Cost $500,000 Row 5 Medicaid & Uninsured Cost $10,000,000 Sum Row 1 through Row 4 Row 6 Medicaid IP Payment $1,000,000 Row 7 Medicaid OP Payment $750,000 Row 8 Uninsured Payment $250,000 Row 9 CHASE Supplemental Medicaid Payment $5,000,000 Row 10 Non-CHASE Supplemental Medicaid Payment $0 Row 11 Medicaid & Uninsured Payment $7,000,000 Sum Row 6 through Row 10 Row 12 Estimated DSH Limit $3,000,000 Row 5 – Row 11 Row 13 Uninsured Cost $500,000 Row 14 Total Uninsured Cost for All Qualified Hospitals $50,000,000 Row 15 Percent of Uninsured Cost to Total Uninsured Cost for All Qualified Hospitals 1.00% Row 13 / Row 14 Row 16 DSH Allotment in Total $172,500,000 Row 17 Not-Limited DSH Payment $1,725,000 Row 15 * Row 16 Row 18 Total Payment $1,725,000 Lesser of Row 12 & Row 17 Your hospital’s calculation can be found on Page 11 (Table 9) of the June 14, 2018 letter

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DSH Supplemental Payment

DSH Supplemental Medicaid Payment Calculation Where DSH Supplemental Payment is Greater Than Estimated DSH Limit Row Description Amount Calculation Row 1 Medicaid IP Cost $5,000,000 Row 2 Medicaid OP Cost $2,000,000 Row 3 Uninsured Cost $500,000 Row 4 Provider Fee Cost $500,000 Row 5 Medicaid & Uninsured Cost $8,000,000 Sum Row 1 through Row 4 Row 6 Medicaid IP Payment $1,000,000 Row 7 Medicaid OP Payment $750,000 Row 8 Uninsured Payment $250,000 Row 9 CHASE Supplemental Medicaid Payment $5,000,000 Row 10 Non-CHASE Supplemental Medicaid Payment $0 Row 11 Medicaid & Uninsured Payment $7,000,000 Sum Row 6 through Row 10 Row 12 Estimated DSH Limit $1,000,000 Row 5 – Row 11 Row 13 Uninsured Cost $500,000 Row 14 Total Uninsured Cost for All Qualified Hospitals $50,000,000 Row 15 Percent of Uninsured Cost to Total Uninsured Cost for All Qualified Hospitals 1.00% Row 13 / Row 14 Row 16 DSH Allotment in Total $172,500,000 Row 17 Not-Limited DSH Payment $1,725,000 Row 15 * Row 16 Row 18 Total Payment $1,000,000 Lesser of Row 12 & Row 17 Your hospital’s calculation can be found on Page 11 (Table 9) of the June 14, 2018 letter

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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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HQIP Supplemental Payment

Dollars Per-Adjusted Discharge Point Quality Points Awarded Tier Rate 1 - 10 1 $5.69 11 - 20 2 $8.54 21 - 30 3 $11.38 31 - 40 4 $14.23 41 - 50 5 $17.07

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HQIP Supplemental Payment

Hospital Quality Incentive Supplemental Medicaid Payment Calculation Row Description Amount Calculation Row 1 Earned Points 30 Row 2 Eligible Points 50 Row 3 % of Eligible Points Earned 60% Row 1 / Row 2 Row 4 % of Eligible Points Earned Normalized to 50 30 Row 3 * 50 Row 5 Medicaid Adjusted Discharges 10,000 Row 6 Adjusted Discharge Points 300,000 Row 4 * Row 5 Row 7 Dollars Per-Adjusted Discharge Point $12.00 Row 8 Total Payment $3,600,000 Row 6 * Row 7

Your hospital’s calculation can be found on Page 13 (Table 10) of the June 14, 2018 letter

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Supplemental Payment Overview

DSH Allotment OP UPL Limit IP UPL Limit HQIP IP Base Rate Supplemental payments Uncompensated care DSH Supplemental payment OP Base Rate Supplemental payments OP Supplemental Payments $428 million DSH Payments $173 million IP Supplemental Payments $665 million DSH Limit IP Base Rate Supplemental Payments $457 million Uncompensated Care Supplemental Payments $110 million HQIP Supplemental Payments $98 million OP Supplemental Payments $428 million DSH Supplemental Payments $173 million

Purpose

Increase base IP Medicaid rates Compensate for uninsured costs Value based payment Increase base OP Medicaid rates Compensate for uninsured costs

Data used

Utilization of Medicaid clients Uninsured utilization Quality scores Utilization of Medicaid clients Uninsured utilization

Qualifications

IP services for Medicaid clients Hospital services for Medicaid clients Hospital services for Medicaid clients OP services for Medicaid clients CICP hospitals

CHASE Supplemental Payments $1,266 billion

rounding may cause calculation discrepancies

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FFY 2017-18 CHASE Overview

($ in millions)

$896

Fees

$2,754

Federal Matching Dollars (FF)

CHASE limited by Net Patient Revenue (NPR)

$3,650

Total Available Dollars (TF)

[$896 Fee / $2,754 FF]

Medicaid Expansion $2,285 TF

[$213 Fee / $2,072 FF]

Supplemental Payments $1,266 TF

[$633 Fee / $633 FF] Supplemental Payments limited by Upper Payment Limit (UPL)

Administration Expenses $76 TF

[$27 Fee / $49 FF]

Transfer to General Fund 25.5-4-402.4(5)(b)(VII) $16 TF

[$16 Fee / $0 FF*]

Hospital Net Reimbursement1 Supplemental Payments = $1,266 CHASE Fee = $896 Net Reimbursement = $370

Cash Reserve $8 Fee

rounding may cause calculation discrepancies FF – Federal Funds TF – Total Funds *Federal funds drawn from the transfer to the General Fund are not shown

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Net Reimbursement

• Net Reimbursement1 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 matching percent from 50.02% to 50.00% in October 2017

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Difference in Program Net Reimbursement1 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 $1,266,409,095 $103,558,533 Net Reimbursement1 $383,698,072 $370,062,473 $(13,635,599)

Net Reimbursement

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How Additional Funding is Expended and the Impact on Net Reimbursement1 Row Item Cash Fund Calculation Row 1 Additional funds from increased fees $114,035,425 Variance in Fee YoY 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 $4,999,713 Row 6 Funds expended due to standard FMAP reduction $233,202 Row 7 Total increase in funds $64,396,346 Sum Row 2 through Row 6 Row 8 Funds available for Supplemental Payments (cash fund) $49,639,079 Row 7 – Row 1 Row 9 Funds available for Supplemental Payments (total fund) $99,278,157 Row 8 * 2 Row 10 Net Reimbursement1 $(14,757,268) Row 9 – Row 1

Net Reimbursement

CHASE Fee $114,035,425 Expansion FMAP $41,490,131 Expansion Caseload $13,394,421

Fund Reserve $4,999,713 Admininistration $4,278,879

Supplemental Payments $49,639,079

ADDITIONAL CASH FUNDING/REVENUE EXPENDITURE OF ADDITIONAL CASH FUNDING/REVENUE

HOW ADDITIONAL FUNDING IS EXPENDED & THE IMPACT ON NET REIMBURSEMENT

The impact from the Standard FMAP is $233,203 and is not visually significant for this graph

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Payment to Cost Ratio

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Next Steps

• Provider fees and supplemental payments were at interim

levels from October 2017 to June 2018

• Fees and payments will be reconciled to the final model in the

months of July, August, and September 2018

• Final Amount - Interim Amount-to-Date = Remaining Amount
• Remaining Amount / 3 months = Monthly Remaining Amount

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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

• 2Despite 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

Questions or Concerns?

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Thank You

Nancy Dolson Special Financing Division Director Nancy.Dolson@state.co.us Jeff Wittreich Provider Fee Financing Unit Supervisor Jeff.Wittreich@state.co.us