Medicaid DSH

Report
Medicaid DSH
John Berta
Senior Director, Policy Analysis
Texas Hospital Association
June 19, 2014
THA – Who We Are
 The Texas Hospital Association is a nonprofit trade
association representing Texas hospitals and health
systems. In addition to providing a unified voice for
health care, THA serves its 500+ members with timely
information, data analysis, education on essential
operational requirements, networking and leadership
opportunities.
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Serving Texas Hospitals/Health Systems
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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FY2011 DSH (and Before)
 DSH & UPL – Pre-Waiver
 Programs Related to each other
 Public Hospitals have incentive to Fund DSH
 Fully Funded for Every Year
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DSH Funding Incentive
 UPL at Maximum – No Other Funds Available
 IGT
~$0.40
 Paid $1.00
 DSH
 IGT
~$0.40
 Paid ~$0.55
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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FY2012 Financing Transformation
 Transformation Waiver
– Shifting Landscape
– DSH & UC - Closer Connection
– Additional PCP Costs Allowed for UC
– Result = Alternate Funding Opportunities for
Public Hospitals
 DSH Audit
– Dollars Recouped beginning in Program Year
2011
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FY2012 - Shifting Landscape
 FY2011 UPL $2.8B
 FY2012 UC & DSRIP $4.2B
 DSH & UC Closely Aligned
 Medicaid Shortfall Growing Larger
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Medicaid Disproportionate Share FY2012
 Public Hospitals Agree to Fund $502M of
$569 Potential
 DSH Dollars Unspent
 THA Forms Task Force on DSH
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THA Task Force Concepts 2012-2013
 Medicaid Disproportionate Share
Hospital Task Force – 6/1/2012
–the money follows the work
–shared responsibility for funding the
Medicaid DSH program
–protection for the most vulnerable
classes of hospitals
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UC and DSRIP Funding= $29B
UC/UPL Transition- $466M
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Medicaid DSH FY2013 - Issues
 FY 2013 Payments – 100% Amounts - $138M
GR $323M IGT
 New DSH Rule
– Lubbock and Odessa drop out of 8 hospital coalition leaving big 6
– DSH is Regionalized
– Pass 3 Rural Funding Mechanism Developed
– GR and IGT are separated
– Texas Children’s Lawsuit
 Max TPL payment = Cost
 DSH paid @ 90% (10% Expected)
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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Medicaid Disproportionate Share FY2014
 New Rider 86 covers DSH & UC
 $300M GR authorized for FY2014 & FY2015
– 2014 = $160M
– 2015 = $140M
 No General Revenue Funds appropriated
after FY2015
 Other Budget Riders not written in this
manner
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Medicaid DSH Rider 86
 Proportional allocation of supplemental hospital
payments among large public, small public, and
non-public providers
 Mechanisms though which Medicaid payments
are made through managed care organizations
 Recommended statutory changes and any other
legislative direction needed to fully implement
the plan
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Medicaid DSH Rider 86 (cont’d)
 Assess the extent to which supplemental
payments are needed to cover Medicaid and
uninsured/uncompensated care costs
 Transition plan from supplemental payments
to rates that recognize improvements in
quality of patient care, the most appropriate
use of care, and patient outcomes
 No General Revenue Funds appropriated
after FY2015
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Medicaid DSH Rider 86 (cont’d)
 FY 2014 request must show a measurable
progress in developing the plan
 FY 2015 request should include the final plan
 No GR funds may be expended for FY 15
until plan is finalized
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Medicaid DSH FY2014
2011-Before Transformation Waiver
 Non-State Hospital DSH Pool = $1.2B
 UPL Payments = $2.8B
 Total = $4.0B
2014-After Transformation Waiver
 FY2014 UC & DSRIP = $6.2B
 FY2014 DSH Non State = $1.3B
 Total = $7.5B
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2014 DSH – Attributes - 1
 State-owned hospitals – No change
 2013 – Regional Approach (RHP)
 2014 – Hospitals in statewide pools
 2013 – Funds for Low Income and Medicaid
 2014 – Days added together
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2014 DSH – Attributes - 2
 2013 - GR funded non RHP areas
 2014 – Hospitals share in GR and related FF
 2014 – 3 Pools = all GR and FF in Pools 1&2 shared
by all (e.g. net DSH proceeds)
 2014 - Pool 3 = IGT back to IGT hospitals
 2013 – Pass 3 Methodology in place
 2014 – No change
 2013 – 6 Large public hospitals transfer for their region
 2014 – Fed Funds on IGT by 6 shared by all
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2014 DSH – Attributes - 3
 2013 – no provision
 2014 – Most other public hospitals IGT ½ of their
DSH (Lubbock & Ector IGT for themselves)
 2014 – Non-8 public hospitals have their days
weighted such that net DSH is equal
 2014 – Big 6 = $377 total = $396
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2014 UC Attributes - 1
 UC funds are divided into seven pools
– state-owned hospitals
– COTH members (6 large public)
– other public hospitals
– private hospitals
– physician group practices
– governmental ambulance
– publicly owned dental providers
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2014 UC Attributes - 2
 Pool amounts are Allocated pro-rata
 Allocation basis:
– Hospitals - Post DSH Payment unpaid HSL
– Other groups – UC Cost
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2014 UC Attributes - 3
 6 Large transferring hospitals receive “bump”
on allocation basis (pre-allocation basis)
 UC pre-allocation “bump” equals amount of
DSH IGT made for other hospitals
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$284M added to 6 UC Pool
 Net DSH proceeds = $1.344B - $395M IGT =
$949M
 Big 6 = 23% of $949M net proceeds
 Total IGT = $395M * 23% = $93M
 $377M – $93M = $284M
 $284M = UC bump for big 6
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2014 UC Attributes - 4
 Special Provision for smaller (Rider 38)
hospitals:
– The reduction in future years is limited to
decreases in UC Pool
– E.g. $3.9 billion to 3.1 billion
– Reduction is still significant but no greater than
this amount
– Applies to county < 60k, RRC,SCH,CAH
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2014-17 Key Dates
 Fall 2014 - FY 2014 DSH paid (1/2 paid)
 Jan 2015 – 84th TX Leg in session
 Spring 2015 – last half of 2014 DSH Paid
 June 2015 TX Leg leaves
 FY2015 DSH – needs final plan
 FY2016 – last year of 5 year waiver
 2017 DSH cuts begin
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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Medicaid DSH – Future Years
 Composition of 84th Legislature
 Federal DSH Allotment
 DSH Audit Outcomes
 Waiver
Extension/Renewal/Replacement
–Available UC Funds
–CMS Negotiation / Federal Outlook
 Medicaid Shortfall ~$3B
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Medicaid Federal DSH Reductions
Revised Schedule Allotments - April 3, 2014
Total
Year
Reduction
Note – if Texas maintains existing policy then
100% of the reduced allotment will be absorbed
by non-state hospitals
2017
TX~20%
1,800,000,000
2018
TX~50%
4,700,000,000
2019
4,700,000,000
2020
4,700,000,000
2021
4,800,000,000
2022
5,000,000,000
2023
5,000,000,000
2024
4,400,000,000
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Questions?
John Berta
Texas Hospital Association
512/465-1556
[email protected]
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