MassHealth Restructuring Matt Klitus CFO & Chief Strategy - - PDF document

MassHealth Restructuring

January 19, 2019

Matt Klitus CFO & Chief Strategy Officer

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Residents Covered MassHealth covers ~28% of MA population and accounts for ~40% of the state budget 1.9M Annual Spend $16B

• ~28% of MA population:
• Disabled individuals
• Seniors <100% FPL
• Children < 300% FPL
• Non-Disabled Adults

< 133% FPL

• Special populations (e.g.

HIV, breast/cervical cancer)

• ~40% of Massachusetts

state budget

• $9.5B Medical/Behavioral*
• $5.5B Long-term Services

& Supports

• ~55% average federal

match on state spend

* Including Medicare premiums and hospital supplemental payments

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MassHealth Program Spending $ billions CAGR 5.1% 16.9% 8.5% 3.1% 2.7% 0.0% 12.5% 9.2% FY10

• FY13

FY16 FY17 FY13

• FY15

Note: 1) Commonwealth lost >$1B in federal revenue with sunset of enhanced revenues under the American Recovery and Reinvestment Act (ARRA) 2) Excludes ELD Choices spending for all years.

We have reduced MassHealth spending from double-digit annual growth to single-digits, but reforms required for sustainable growth

4.4% 0.7% FY18 FC 15.7 15.0 14.6 13.5 11.8 10.7 10.3 10.1 9.2 6.1 6.1 6.1 5.9 5.4 5.0 4.7 3.5 3.1 FY18 FC FY17 FY16 FY15 FY14 FY13 FY12* FY11 FY10 Net State Cost Gross Program Spend

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Affordability, rising health care costs, and other factors have resulted in more residents covered by MassHealth, fewer by Commercial insurance

65% 63% 59% 58% 15% 15% 15% 16%

4% 3% 3%

14%

3%

2015

3%

21% 6.8 6.7 2013 6.7

3% 3% 2%

15% 21% 2011 6.8 Commercial 2016 MassHealth Connector Medicare MA population by primary health coverage type* Millions of residents Change 2011-2016 + 491k (523k) Uninsured

* MassHealth enrollment including members with primary Medicare or commercial coverage represents 28% of population in 2017. Source: CHIA

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Shift in volume toward public coverage puts significant pressure on fiscal health of health care organizations

40% 38% 36% 37% 38% 40% 14% 16% 17% 8% 7% 7% Commercial Medicare MassHealth Other FY16 FY14 FY12 MA hospital payor mix % of Gross Patient Service Revenue (GPSR) CHIA data Relative unit price by payor (approximate) % of Medicare fee schedule*

* Approximate. Commercial % of Medicare estimated by comparing 2015 payment-to-cost ratios as reported on 2015 hospital cost reports; MassHealth % of Medicare does not include supplemental payments to hospitals.

51% 54% 57% Medicare + Medicaid Share

Change (1%) +3% +3% (4%)

0.85 1.00 1.25

• 32%

Commercial MassHealth Medicare

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MassHealth restructuring roadmap

• 2. Program integrity
• 3. ACO restructuring and DSRIP investments
• 4. Behavioral health care + Opioids
• 1. Eligibility integrity
• 5. MassHealth reform package

6

MassHealth restructuring roadmap

• 2. Program integrity:
• 3. ACO restructuring and DSRIP investments:
• 4. Behavioral health care + Opioids:
• 1. Eligibility integrity: right-sizing caseload
• 5. MassHealth reform package

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Eligibility: historically-low enrollment growth due to fixing eligibility system defects and enhancing eligibility controls

1,300,000 1,400,000 1,500,000 1,600,000 1,700,000 1,800,000 1,900,000 2,000,000 2,100,000 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Total MassHealth Enrollment FY14-FY18 YTD Average Member Months Dec 2014 = 2.0M Oct 2017 = 1.8M

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MassHealth restructuring roadmap

• 2. Program integrity: $350M+ in recurring annual savings
• 3. ACO restructuring and DSRIP investments:
• 4. Behavioral health care + Opioids:
• 1. Eligibility integrity: right-sizing caseload
• 5. MassHealth reform package

9

MassHealth restructuring roadmap

• 2. Program integrity
• 3. ACO restructuring and DSRIP investments: 17 ACOs, $1.8

billion in new funding starting March 2018

• 4. Behavioral health care + Opioids:
• 1. Eligibility integrity
• 5. MassHealth reform package

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ACO Reforms: Overview

▪ 17 ACOs will start March 2018 – Cover ~900,000 MassHealth members – Accountable for quality and cost of population – Majority of ACOs (13 of 17) chose fully capitated model – Almost all areas of the Commonwealth have 1 or more ACOs ▪ ACOs will receive portion of $1.8B in new DSRIP funding

(through MassHealth waiver) over 5 years

▪ Uses of $1.8B in DSRIP – Enhancing care coordination/ member engagement, clinical

and non-clinical

– Both staff and non-staff (e.g., IT) investments – Clinical workforce development (loan repayment programs for

community-based PCPs, BH clinicians, etc.; new residency slots at safety net providers)

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Provider MCO Options MCO Options

ACO Reforms: 3 types of ACO models

Model A: Integrated ACO/MCO model Model B: Direct to ACO model MassHealth ACO Model C: MCO-administered ACO model MCO Options Provider Provider Provider Provider Provider Provider Model A Partnership Plan Model C MCO-Admin ACO Model B Primary Care ACO Model C MCO-Admin ACO Provider Provider Provider Provider

• Fully integrated: an

ACO joins with an MCO to provide full range of services

• Risk-adjusted,

prospective capitation rate

• ACO/MCO entity

takes on full insurance risk

• ACO provider contracts

directly with MassHealth for overall cost/ quality

• Based on MassHealth/

MBHP provider network

• ACO may have provider

partnerships for referrals and care coordination

• Advanced model with two-

sided performance (not insurance) risk

• ACOs contract and work with

MCOs

• MCOs play larger role to support

population health management

• Various levels of risk; all include

two-sided performance (not insurance) risk Increasing levels of sophistication, care coordination, and DSRIP $ PCC plan Member enrollment

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ACO Reforms: Pricing Model

▪ Single risk pool across ACO, MCO, FFS – 1.2 million

members

▪ 5 regions x 6 rating categories ▪ State-wide base rates ▪ Quarterly risk adjustment (including social determinants) ▪ Blend of uniform rate with historical performance ▪ Quality measures ▪ Risk corridors

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ACO Reforms: Selected Partners

• Atrius Health with Tufts Health Plan
• Baystate Health Care Alliance with Health New England
• Beth Israel Deaconess Care Organization with Tufts Health Plan
• Boston Accountable Care Organization with Boston Medical Center HealthNet Plan
• Cambridge Health Alliance with Tufts Health Plan
• Children’s Hospital Integrated Care Organization with Tufts Health Plan
• Community Care Cooperative (13 federally qualified health centers)
• Health Collaborative of the Berkshires with Fallon Community Health Plan
• Lahey Health
• Mercy Health Accountable Care Organization with Boston Medical Center HealthNet Plan
• Merrimack Valley ACO with Neighborhood Health Plan
• Partners HealthCare ACO
• Reliant Medical Group with Fallon Community Health Plan
• Signature Healthcare Corporation with Boston Medical Center HealthNet Plan
• Southcoast Health Network with Boston Medical Center HealthNet Plan
• Steward Medicaid Care Network
• Wellforce with Fallon Community Health Plan

ACOs will cover 900,000 MassHealth members and manage $6B in annual spending

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MassHealth restructuring roadmap

• 2. Program integrity
• 3. ACO restructuring and DSRIP investments:
• 4. Behavioral health care + Opioids: integration of care,

expanding services

• 1. Eligibility integrity
• 5. MassHealth reform package

15

MassHealth restructuring roadmap

• 2. Program integrity
• 3. ACO restructuring and DSRIP investments:
• 4. Behavioral health care + Opioids:
• 1. Eligibility integrity
• 5. MassHealth reform package

16

Questions?