Medicaid Trends and MassHealth System Transformation HFMA March 10, - - PDF document

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HEALTH MANAGEMENT ASSOCIATES

Medicaid Trends and MassHealth System Transformation

HFMA March 10, 2017

Agenda

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The National MCO and Reform Context The Changing MassHealth Delivery System Looming State and Federal Issues Discussion

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4.7% 6.8% 8.7% 10.4% 12.7% 8.5% 7.7% 6.4% 1.3% 3.8% 5.8% 7.6% 6.6% 9.7% ‐4.0% 3.2% 6.8% 10.5% 5.9% 4.5% ‐1.9% 0.4% 3.2% 7.5% 9.3% 5.6% 4.3% 3.2% 0.2% ‐0.5% 3.1% 7.8%7.2% 4.8% 2.3% 1.5% 5.3% 13.2% 3.9% 3.3%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Proj.

Total Medicaid Spending Medicaid Enrollment Annual Percentage Changes, FY 1998 – FY

NOTE: For FY 1998‐2013, enrollment percentage changes are from June to June of each year. FY 2014‐2016 reflects growth in average monthly

• enrollment. Spending growth percentages refer to state fiscal year. FY 2017 data are projections based on enacted budgets.

SOURCE: Kaiser Family Foundation, Medicaid Enrollment & Spending Growth: FY 2016 & FY 2017; October 2016, available at: http://kff.org/health‐reform/press‐release/50‐state‐survey‐finds‐slower‐growth‐in‐total‐medicaid‐spending‐nationally‐in‐fy‐2016‐and‐ projected‐for‐fy‐2017‐as‐earlier‐increases‐from‐the‐affordable‐care‐acts‐coverage‐expansions‐taper‐off/

Medicaid Spending and Enrollment Growth Over Time

3 NOTES: *AR, IA, IN, MI, MT, and NH have approved Section 1115 waivers. WI covers adults up to 100% FPL in Medicaid, but did not adopt the ACA expansion. SOURCE: KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2016.

Medicaid Expansion Decisions by Year of Implementation

WI* WV WA VA VT TX TN SC RI PA OR OK OH ND NC NY NM NJ NH* NV MT* MO MS MN MI* MA MD ME LA KY KS IA* IN* IL HI GA FL DC DE CT CO CA AR* AZ AK AL WY ID UT SD NE Implemented in FY 2016 (2 States) Implemented in FY 2017 (1 State) Not Implementing At This Time (19 States) Implemented in FY 2015 (3 States) Implemented in FY 2014 (26 States including DC) 4

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NOTE: Percentages reflect the median percent change for each group of states for each year. FY 2017 growth reflects projections in enacted budgets. In FY 2016, Alaska and Montana moved and in FY 2017, Louisiana moved to the expansion state group. SOURCE: Enrollment growth for FY 2015‐2016 is based on KCMU analysis of CMS, Medicaid & CHIP Monthly Applications, Eligibility Determinations, and Enrollment Reports, accessed October 2016. The spending growth rate for FY 2015 is derived from KCMU Analysis of CMS Form 64 Data. All other growth rates are from the KCMU survey of Medicaid officials in 50 states and DC conducted by Health Management Associates, October 2016.

National Medicaid Enrollment and Spending Growth

19.3% 4.8% 2.6% 10.3% 7.1% 4.2% 3.9% 1.1% 1.2% 2.2% 3.8% 3.5% 2015 2016 2017 Proj 2015 2016 2017 Proj Expansion States Non‐Expansion States Median Rates of Growth

Medicaid Enrollment Total Medicaid Spending

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2 2 4

9 9 3 3 8 28 34 25 32 13

All Beneficiary Groups 39 states Children 39 states ACA Expansion Adults 27 states All Other Adults 39 states Elderly and Disabled 39 states

Excluded <25% 25‐49% 50‐74% 75+%

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NOTES: Limited to 39 states with MCOs in place on July 1, 2016. Of the 32 states that had implemented the ACA Medicaid expansion as of July 1, 2016, 27 had MCOs in operation. SOURCE: Kaiser Commission on Medicaid and the Uninsured Survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2016.

In 2016, at least 75% of all Medicaid beneficiaries are in an MCO in 28 states (up from 21 states in 2015)

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• 39 states today have MCO

contracts

• 25 of 27 Medicaid expansion

states are using managed care to cover the expansion population

• Increasingly states are

extending managed care to Long Term Services and Supports

Managed Care is Medicaid’s Predominate Delivery System

As states expect MCOs to develop alternative payment models, what will result?

• More mergers/integration with provider

systems?

• Poorly integrated demands on providers?
• Collaboration or competition with ACOs?

When this involves Medicare, will MCOs be expected to follow Medicare’s MACRA imperatives?

MCOs will need to transition from payers to implementers of state‐led delivery system reforms. Providers will need to deal with multiple demands for APMs

Agenda

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The National MCO and Reform Context The Changing MassHealth Delivery System Looming State and Federal Issues Discussion

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MassHealth Delivery System Reform

The push for innovation in MassHealth’s delivery system is on. CMS and EOHHS are (or perhaps were) aligned.

• MassHealth wants fundamental delivery system reforms
• CMS wants measurable system‐wide transformation
• Fee‐for‐service payment models encourage volume and fragmentation
• MassHealth costs too much and is growing too fast
• ACOs will re‐organize the care delivery system
• MCOs play a role alongside the new entities, on an as‐needed basis
• The PCC Plan in its current form is being eliminated
• ACOs will forge partnerships with community‐based resources
• The ACO model requires that PCPs can join only one ACO

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Meanwhile, the state will be accountable to CMS for hitting target statewide trends for cost, utilization and quality. ACOs

• 3 distinct models to

accommodate risk readiness and provider circumstances

• Plan to move LTSS

services into ACOs in Year 3

• Big emphasis on social

determinants

• Social risk adjustment
• Flexible services funds
• Community partners

Integrated Care Models with Medicare

• Existing programs for

Medicaid‐Medicare “duals” are favored and likely to expand

• SCO (over 65)
• OneCare (under 65)
• PACE

Program Integrity for LTSS

• New third party

administrator to focus

• n LTSS services not in

managed care

• Emphasis is on program

integrity and admin resources, but program will likely evolve to support programmatic goals

The Broader MassHealth Picture

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Constant budget challenges are the backdrop for ALL of this transformation work.

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MassHealth’s Current Delivery System

67% of MassHealth members are in non‐dual managed care:

• MCO
• PCC Plan
• CarePlus MCO

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MCO 31% CarePlus MCO 13% PCC Plan 23% One Care <1% SCO <2% PACE <1% [CELLREF], [PERCENTA GE]

SOURCE: MMPI, MassHealth: The Basics, Facts and Trends; Enrollment Update as of September 2016

ACOs could be an option for 2/3 of MH members

20% have other insurance (Medicare or employer)

• Duals not in managed care
• Individuals with commercial

coverage

• Individuals enrolled in HCBS

waivers 13% are in SCO, OneCare or MassHealth Limited

IN OUT

• ACOs are financially accountable for physical and behavioral health

services and covered prescription drugs

• Essentially what MCOs cover today
• Significant interest in dealing with MassHealth state plan LTSS costs, but

a recognition that ACOs are not prepared to deal with this immediately

• Financial accountability means a range of potential payment

mechanisms and risk arrangements – and all must have some accountability for quality performance

• Shared Savings
• Shared Savings and Risk
• Capitation ‐ PMPM
• Other ACO expectations will include creating value‐based purchasing

arrangements at the provider level.

Accountable for what?

How the MCOs fit into this picture is a very big TBD.

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How providers fit in is easy: more risk at the provider level.

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A Bunch of Connected Procurement Processes

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Extension request July 22, 2016 ACO RFR Released September 2016 ACO Pilot Launch December 2016 CP Certification Process March 2017 ACO/ MCO/CP Launch Oct 2017 MCO RFR Released Late 2016 DSRIP Funding Starts July 2017

• Implementing the plans means conducting a series of procurements
• Pilot ACOs began providing services in December 2016
• Full ACO application process is underway – state is evaluating responses
• MassHealth also planning a regional procurement of Certified Community Partners (CPs)
• MCO contracts will be awarded consistent with the ACO plan

Services begin January 2018

We are here

Agenda

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The National MCO and Reform Context The Changing MassHealth Delivery System Looming State and Federal Issues Discussion

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BLOCK GRANTS

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Medicaid Block Grants or Per Capita Caps: a Fundamental Change in Medicaid Financing

• Medicaid block grant: a fixed amount of federal funds to

each state, regardless of actual Medicaid costs in that state

• The fixed amount would be based on baseline historical

federal spending for each state

• The fixed block grant amount would be adjusted annually by

an index

• Per capita cap: a variation of a block grant, but the fixed

amount is per enrollee

• Usually, proposals set the fixed amount by eligibility category

(e.g., children, adults, aged or disabled)

• The per capita cap allows federal funds to increase or

decrease with changes in enrollment

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The basic equation: (PER‐PERSON SPENDING) X (PEOPLE) = FEDERAL GRANT

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Block Grants and Per Capita Caps Change the Basic Medicaid Entitlements

Lost

• Beneficiaries would likely

lose the entitlement to eligibility and to medically needed covered benefits.

• States would lose the

entitlement to federal Medicaid matching funds for all “qualifying expenditures.” Gained

• Federal government saves

money and has more budget certainty

• States gain flexibility in
• Benefits
• Rates
• Eligibility
• Program design

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Providers and Plans should expect less Medicaid revenue.

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“The primary driver of our national debt is our healthcare programs. There's no one magic bullet — like pass this and it's fixed — but, save the healthcare system and you're saving the country from its debt crisis.” ‐‐ House Speaker Paul Ryan

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And now for something completely different… HIGH RISK POOLS REDUX AND PERSONAL RESPONSIBILITY IN MEDICAID

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High Risk Pools: Reemergence as a Policy Option

• Long History in State/Federal Coverage Infrastructure
• Operated in states (generally smaller scale) for decades – cycled in and
• ut of fashion and with ACA repeal are back
• Common provisions include guaranteed coverage; state‐subsidized

support for the cost of premiums; life‐time limits on costs; different definitions of eligibility

• Considerations
• May address issues from ACA/Exchange repeal – but unclear how

Congress maintaining ACA consumer protections will change high risk pools (traditionally meant to solve the same problems)

• Generally thought of as a way to protect the individual market

unwelcome risks – or individuals from unaffordable pricing

• History of risk pools shows that enrollment policies (how and when you

can get in) and price are crucial to making these secondary insurance pools work

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Medicaid and Health Savings Accounts

• Very common in private market – over 20

million people use HSAs today

• Extension of this concept to Medicaid is

extremely likely, but may look very different in

• peration
• HSAs raise some big issues at lower incomes:
• What are maximum “personal responsibility” limits

for a low‐income population?

• HSA‐style programs may also include more binding

premium payment requirements for Medicaid

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Work Requirements and Medicaid

• Work requirements support state “Personal

Responsibility” themes encouraging self‐ sufficiency for able‐bodied enrollees

• States have proposed (but CMS did not

approve) work requirements on the Medicaid Expansion population

• CMS very likely to provide greater flexibility

for states to set work requirement policies

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Agenda

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The National MCO and Reform Context The Changing MassHealth Delivery System Looming State and Federal Issues Discussion