Provider Fee Program Presented by: Nancy Dolson 8/30/17 1 Our - - PowerPoint PPT Presentation

Federal Fiscal Year 2016-17 Provider Fee Program

Presented by: Nancy Dolson

8/30/17

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Our Mission

Improving health care access and

• utcomes for the people we serve

while demonstrating sound stewardship of financial resources

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• FFY 2016-17 hospital provider fee model discussion

➢ Hospital provider fee program overview ➢ Fee and payments methodologies ➢ Reconciliation process overview

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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 need to

shift uncompensated costs to other payers

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Overview

• $113 million net new funds for hospitals between

October 2016 through September 2017

➢ $1.2 Billion in total supplemental Medicaid and DSH

payments, including $90 million in quality incentive payments

• Reduced uncompensated care costs and the need

to shift uncompensated care costs to other payers

➢ From 2009 to 2015, Medicaid payment to hospitals

improved from 54% to 75% of cost

➢ Between 2013 and 2015, bad debt and charity care

decreased by more than 58%

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Overview

• Expanded health care coverage to more than

479,600 Coloradans as of September 30, 2016:

➢ 356,000 adults without dependent children ➢ 98,000 Medicaid parents ➢ 20,000 CHP+ children and pregnant women ➢ 5,600 working adults and children with disabilities

• No increase in General Fund expenditures

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

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Overview

• Net Patient Revenue (NPR) - limiting total provider

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)

• Provider Fee collection limited to 6% of 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
• UPL Room = Medicaid cost + provider fee cost –

MMIS payments – non-provider fee 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 = Inpatient & Outpatient Medicaid cost +

uninsured cost – total Medicaid payments

• DSH funds exceeding hospital-specific DSH limits

must be repaid

Provider Fee

• FFY 2016-17 Hospital Provider Fee Model

➢ $782 million provider fees

▪ Net Patient Revenue / 5.35%

➢ $1.16 billion in hospital supplemental payments

▪ Upper Payment Limit / 97.00%

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FFY 2016-17 Net Hospital Reimbursement1 Fees / Payments 2014-15 2015-16 2016-17

Total Supplemental Payments $1,186,200,000 $1,120,800,000 $1,166,000,000 CICP Prior to Provider Fees $(162,900,000) $(162,900,000) $(162,900,000) Total Provider Fees $688,400,000 $670,000,000 $782,300,000 Net Reimbursement to Hospitals $344,800,000 $288,400,000 $220,800,000

1 rounding may cause calculation discrepancies.

Provider Fee

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FFY 2016-17 Net Hospital Reimbursement1 Fees / Payments 2015-16 2016-17 Difference

Total Supplemental Payments $1,120,800,000 $1,166,000,000 $45,200,000 CICP Prior to Provider Fees $(162,900,000) $(162,900,000) $- Total Provider Fees $670,000,000 $782,300,000 $112,300,000 Net Reimbursement to Hospitals $288,400,000 $220,800,000 $(67,600,000)

1 rounding may cause calculation discrepancies.

Provider Fee

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1 rounding may cause calculation discrepancies.

FFY 2016-17 Fees and Payments1

Expenditures Fees Federal Funds Total Funds

IP Base Rate Supplemental Payment $217,500,000 $217,700,000 $435,200,000 OP Supplemental Payment $161,400,000 $161,500,000 $322,900,000 Uncompensated Care Supplemental Payment $57,700,000 $57,800,000 $115,500,000 DSH Supplemental Payment $101,400,000 $101,400,000 $202,800,000 HQIP Supplemental Payment $44,800,000 $44,900,000 $89,700,000 Total Supplemental Payment $582,800,000 $583,200,000 $1,166,000,000 Medicaid Parents to 100% $22,000,000 $239,800,000 $261,800,000 Adults without Dependent Children (AwDC) $69,900,000 $1,560,400,000 $1,630,300,000 Buy-In for Individuals with Disabilities $25,100,000 $30,600,000 $55,700,000 CHP+ 206% to 250% $8,000,000 $48,500,000 $56,500,000 Continuous Eligibility $30,300,000 $30,500,000 $60,800,000 Prior Period Adjustment - NNEs $3,000,000 $0 $3,000,000 Medicaid Expansion $158,300,000 $1,909,800,000 $2,068,100,000 Administration $22,500,000 $32,200,000 $54,700,000 Cash Fund Reserve $3,000,000 $0 $3,000,000 Transfer to General Fund -25.5-4-402.3 (4)(b)(VIII) $15,700,000 $0 $15,700,000 Total Other Expenditures $199,500,000 $1,942,000,000 $2,141,500,000 Grand Total $782,300,000 $2,525,200,000 $3,307,500,000

Provider Fee

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Provider Fee

• Inpatient fee assessed on managed care

& non-managed care days

➢ Inpatient fee

▪ Per non-managed care day: $385.35 ▪ Per managed care day: $86.22

• Outpatient fee assessed on percentage of

total Outpatient charges

➢ Outpatient fee

▪ Percentage of total charges: 1.8208%

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Provider 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 60.00%

➢ Outpatient fee

▪ High Volume Medicaid & CICP hospitals discounted 0.84%

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Provider 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

Provider Fee

21 OP NPR Limit IP NPR Limit

IP Fee $407 million OP Fee $376 million Days Charges Provider Fees $782 million

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

Provider Fee

• 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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Supplemental Payments

• Increase rates for inpatient hospital services

for Medicaid clients

• Total Payments: $435.1 million
• Inpatient Base Rate Payment = Medicaid rate

before add-ons * inpatient percentage adjustment factor * estimated Medicaid discharges * 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 Before 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

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Inpatient Base Rate Supplemental Payment

• Increase rates for outpatient hospital services

for Medicaid clients

• Total Payments: $322.9 million
• Outpatient Payment = estimated Medicaid
• utpatient cost * 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 Outpatient Supplemental Medicaid Payment $250,000 Row 1 * Row 2

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Outpatient Supplemental Payment

• Reimbursement to hospitals providing services to

uninsured

• Total Payments: $115.5 million

➢ $15 million distributed to qualified Essential Access hospitals, based on proportion of beds ➢ $100.5 million distributed to all other qualified Non Essential Access hospitals, based on proportion of uninsured cost

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Uncompensated Care 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 Uncompensated Care Supplemental Medicaid Payment $450,000 Row 4 * Row 5

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Uncompensated Care 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 $100,500,000 Row 6 Uncompensated Care Supplemental Medicaid Payment $300,000 Row 4 * Row 5

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Uncompensated Care Payment

• Reimbursement to hospitals providing services

to uninsured

• Total Payments: $202.8 million

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DSH Supplemental Payment

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DSH Supplemental Payment Calculation

Row Description Amount Calculation Row 1 Estimated DSH Limit $2,880,000 Row 2 Uninsured Cost $500,000 Row 3 Total Uninsured Cost for all Remaining Qualified Hospitals $50,000,000 Row 4 % of Uninsured Cost to Total Uninsured Cost for Remaining Qualified Hospitals 1.00% Row 2 / Row 3 Row 5 Available DSH Dollars $202,800,000 Row 6 Not-limited DSH Supplemental Payment $2,028,000 Row 4 * Row 5 Row 7 DSH Supplemental Payment $2,028,000 Lesser of Row 1 & Row 6

DSH Supplemental Payment

• Reimbursement to hospitals providing services that

improve health care outcomes

• Total Payments: $89.7 million
• Quality measures and payment methodology

approval concluded by Oversight and Advisory Board (OAB) on 8/23/16

• HQIP Payment = % of normalized eligible points *

Medicaid Adjusted Discharges* dollars per-adjusted discharge point

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HQIP Supplemental Payment

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Dollars Per-Adjusted Discharge Point

Quality Points Awarded Tier Rate

1 - 10 1 $ 5.95 11 - 20 2 $ 8.93 21 - 30 3 $ 11.90 31 - 40 4 $ 14.88 41 - 50 5 $ 17.85

HQIP Supplemental Payment

Hospital Quality Incentive 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 * by 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 HQIP Supplemental Medicaid Payment $3,600,000 Row 6 * Row 7

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HQIP Supplemental Payment

DSH Allotment OP UPL Limit IP UPL Limit HQIP IP Base Rate Supplemental payments Uncompensated care DSH Supplemental payment OP Base Rate Supplemental payments

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OP Supplemental Payments $323 million DSH Payments $203 million IP Supplemental Payments $640 million DSH Limit IP Base Rate Supplemental Payments $435 million Uncompensated Care Supplemental Payments $115 million HQIP Supplemental Payments $90 million OP Supplemental Payments $323 million DSH Supplemental Payments $203 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

Hospital Provider Fee Program supplemental payments $1,166 billion

Supplemental Payments

FFY 2016-17 HPF Overview

($ in Millions)1

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Hospital Provider Fee limited by Net Patient Revenue (NPR)

$782

HPF Dollars (HPF)

$2,525

Federal Matching Dollars (FF)

$3,307

Total Available Dollars (TF)

[$782 HPF / $2,525 FF] Supplemental Payments limited by Upper Payment Limit (UPL)

Medicaid Expansion $2,068 TF

[$158 HPF / $1,910 FF]

Supplemental Payments $1,166 TF

[$583 HPF / $583 FF] Net Hospital Reimbursement Supplemental Payments = $1,166 CICP Prior to HB 09-1293 = $163 Hospital Provider Fee = $782 Net Benefit to Hospitals = $221

Administration Expenses $55 TF

[$23 HPF / $32 FF]

Transfer to General Fund 25.5-4-402.3(4)(b)(VIII) $16 TF

[$16 HPF / $0 FF]

Transfer to Cash Reserve $3 TF

[$3 HPF / $0 FF]

1 rounding may cause calculation discrepancies.

• Net Reimbursement decrease due to:

➢ Reduction in expansion federal matching percent from 100% to 95% ➢ Increase in Medicaid Expansion population ➢ Reduction in standard federal matching percent from 50.72% to 50.02%

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Net Reimbursement

38 3 27 44 9 2 2

• 100

100 200 300 400 500 600 700 800 900 1000

<25% 25%-50% 50%-75% 75%-100% 100%-125% 125%-150% 150%-175% More

5 10 15 20 25 30 35 40 45 50 Frequency

Distribution of Payment to Cost Ratios for FFY 2016-17

• Provider fees and supplemental payments were at

interim levels from October 2016 to July 2017

• Fees and payments will be reconciled to the final

model in the months of August, and September 2017

• Final Amount - Interim Amount-to-Date =

Remaining Amount

• Remaining Amount / 2 months = Monthly Remaining

Amount

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Reconciliation Process

Upcoming interim process

• Considerations

➢ DSH allotment reductions ➢ Funds for expansions ➢ Consistent with State Plan and Regulations

• Interim letters

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Questions or Concerns?

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Contact Information

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

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Thank You!

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