AHCCCS Hospital Provider Meeting

“Reaching across Arizona to provide comprehensive quality health care for those in need”

AHCCCS Hospital Provider Meeting

February 22, 2012


Our first care is your health care arizona health care cost containment system

AHCCCS Update


AHCCCS Budget Status Implemented $2.5 billion in budget changes – 21% reduction

in FY 2012 Medicaid in FY 2012 is currently balanced Funds need to be moved between agencies Risks include ongoing lawsuits – one resolved Awaiting final approval on 25 day limit FY 2013 AHCCCS GF Request –historically low Growth returns in FY 2014 & 15 with ACA expansion Short term savings (rates–services-benefits) maxed


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1,300,000

1,320,000

1,340,000

1,360,000

1,380,000

1,400,000

1,420,000

1,440,000

Mar May July Sept Nov Jan

Total AHCCCS Population



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Combined Proposition 204 Member Month Forecast

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

Actual AHCCCS Forecast



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0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

FY09 FY10 FY11 FY12 FY13

AHCCCS Budget Request Increases



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AHCCCS Spending

0

2

4

6

8

10

12

Billio

ns

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15



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Future Challenges

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Health Care Reform PPACA expands Medicaid to 133% of the federal poverty

limit on January 1, 2014. Nationally Medicaid is estimated to grow by 16 million

lives Create Health Exchange

provide tax credit subsidy for individuals from 133% to 400%

Nationally Exchanges are expected to cover 24 million lives by 2019

State needs to determine who will operate Exchange Made a number of commercial insurance reforms Established Individual Mandate


Federal Health Care Reform

11 Our first care is your health care arizona health care cost containment system



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Health Care Reform Est.Eligible Participants

Exchange 621,000 479,000

AHCCCS 431,000 247,000

SHOP Exchange 1,822,000 510,000


10-1-13 Triple Crown of Contracting - Integration Efforts (5 year contracts) Behavioral Health –

RBHA plus establish Single plan in Maricopa County responsible for all care for individuals with Serious Mental Illness

Children’s Rehabilitative Services - Establish single plan for all services for children

designated eligible for this program Acute -

Unprecedented competition – Exchange-Medicaid continuum



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Dual Members Arizona has been leader with model to build on Unique historical opportunity to change structure Changes being made at federal level with new Office

for the Duals Demonstration program available to states Establishes contract between Feds – State – Plans AHCCCS evaluating demo as opportunity to

improve alignment



Other News Medicaid E.H.R Incentive Payments

Thru Jan 2012 – 37 facilities paid - $43.7m Stakeholder Discussion

Open door to address Issues Efficiencies established to date Payment reform opportunities


Questions???



Proposition 202 into SNCP


Prop 202 into SNCP Doesn’t need statute or rule exemption

Will be a separate attachment to the Waiver Standard Terms and Conditions, similar to DSH

AHCCCS brought this idea to CMS in late 2011 and continues to work on specifics with CMS

Will be in effect for FFY 2012 and 2013 only


Principles for Rule

Notwithstanding the guideline under R-9-22-2101 through R9-22-2103, for federal fiscal years 2012 and 2013, the Administration shall pay the Trauma and Emergency Services Fund Payments under the arrangements pertaining to the Safety Net Care Pool.

The calculation for the allocation of Trauma funds will be determined by the number and acuity of trauma cases. The proportion of each hospital’s share of the fund for trauma readiness will be allocated based upon the proportion each hospital’s acuity-adjusted volume to the total for trauma hospitals.

The calculation for the allocation of Emergency funds will be determined by each hospital’s Emergency Services cost data as reported on the hospital’s Medicare Cost Report, Worksheet B, column 0, line 61. The percentage of each hospital’s share of the fund for uncovered emergency services will be allocated based upon the proportion of each hospital’s emergency services cost to the total emergency services costs for all hospitals in Arizona that have an Emergency Room.

In line with Medicare cost principles, no hospital’s payment will exceed that hospital’s FFY OBRA limit and these payments will be reconciled in the federal fiscal year that is two years subsequent to the payment. Payments that exceed a hospital’s OBRA limit will be re-allocated.


Trauma Calculation Existing calculation uses acuity-adjusted volume

(using injury severity score) and the lesser of direct readiness and total trauma unrecovered costs reported by hospitals on application.

SNCP calculation would use acuity-adjusted volume as basis for distribution

Allocations very closely mirror current distribution percentages


ED Calculation Current calculation uses charity care and bad debt

from UAR

SNCP calculation will use Emergency Department Expense recorded on MCR Worksheet B, Part I, column 0, line 61


Trauma Fund Splits

AHCCCS posted several options on the web

Other options can be considered


Questions???Comments???



Supplemental Payment Timeline CAH – 1st Payment Feb. 24, 2012; 2nd Payment August 2012 SNCP and Prop 202 funds mid-summer 2012 DSH 2010 Pool 5 – All partnership arrangements approved by CMS as

of April 15, 2012. Final distribution of 2010 funds in June DSH 2011 Pool 5 – All partnership arrangements approved by CMS as

of April 15, 2013. Final distribution of 2011 in 2013 DSH 2012 – Applications due Feb. 29, 2012 GME – Data due by April 1, 2012. RHIF – Distributed in June via MCOs EHR – Payments made within 45 days of a clean application


Potentially Preventable Readmissions


AHCCCS Readmissions Like CMS and other Medicaid states, AHCCCS is

reviewing hospital readmission rates and associated costs

AHCCCS engaged national consultants, Sellers Dorsey, to examine 2 years of claims/encounter data

Draft Report was distributed to all hospitals and provides the definitions, methodology and exclusions (Final Report will be posted to web)

Analysis shows that 5% of hospital inpatient readmissions were potentially preventable


National Efforts to Reduce Readmissions CMS – 12th Scope of Work – Health Services

Advisory Group No Place Like Home campaign Statewide effort to engage hospitals, SNFs,

hospice, clinician practices, pharmacies, health plans and other health care providers in an effort to reduce avoidable hospital readmissions that occur within 30 days of hospital discharge

CMS Payment Adjustments


AHCCCS Efforts to Reduce Readmissions Contractor Performance Improvement Projects

(PIPs) Decrease the rate of inpatient readmissions within 15 and

30 days of a previous admission in order to improve quality of life, promote patient-centered care, and reduce unnecessary health care utilization and costs

AHCCCS will develop contractually-mandated Contractor performance measurements


AHCCCS Efforts to Reduce Readmissions AHCCCS and Contractors will have

increased focus on discharge planning AHCCCS and Contractors participating in

HSAG campaign AHCCCS will consider future reimbursement

strategy to assist with reducing readmissions


Inpatient Hospital Reimbursement Methodology


AHCCCS Activity AHCCCS exploring options for budget-neutral,

revised inpatient hospital reimbursement methodology

HB 2534 introduced in 2012 Session would: eliminate the requirement to use a tiered per diem

methodology for inpatient hospital reimbursement effective 9/30/13

allow AHCCCS to utilize a reimbursement methodology consistent with Title XIX of the Social Security Act, effective October 1, 2013

Hired national consulting group, Navigant


AHCCCS Tiered Per Diem Methodology Tiered Per Diem rates were last rebased in

1998 using 1996 data Rates are stale and in need of update Per diem rates focus on quantity rather than

quality Outliers were eliminated by Legislature in

2011 Session thus AHCCCS must take some action


AHCCCS Options – Inpatient Payment Methodologies Rebase Tiered Per Diem rates

+ Easily understood in Arizona+ Little system change required+ Operational procedures/payment policies already

established— Doesn’t change focus from quantity!!— Costly— Lengthy


AHCCCS Options – Inpatient Payment Methodologies

DRG-based rates + Align incentives towards quality of care and improved

efficiency+ Not a unique methodology - hospitals and commercial

plans already use+ Improved ability to implement quality and efficiency

measures (e.g. HCAC, readmissions)+ Eliminates need for limits on inpatient days— System changes required — Operational procedures/payment policies to be established — Lengthy


AHCCCS Options –DRG-Based Rates If HB 2534 signed into law, Navigant recommends

APR-DRG payment model Approximately 6 state’s Medicaid programs using

APR-DRG rates Approximately 6 more states moving to APR-DRG

rates APR-DRG rates intended for all patients – unrelated

to Medicare (elderly and disabled) 1258 DRGs as opposed to 746 DRGs in CMS’ MS-

DRGs for Medicare


AHCCCS Options –DRG-Based Rates APR-DRG has the greatest number of newborn DRGs of all

options Preferred by childrens’ hospitals Decisions would need to be made:

Regarding which services, if not all, to be paid under this methodology

Regarding which providers, if not all, to be paid under this methodology

Regarding outlier and transfer adjustments And a myriad of other payment policy issues…


Next Steps AHCCCS will monitor progress of HB 2534 If signed into law, AHCCCS will:

Form two workgroups: One for hospitals

AzHHA and non-AzHHA representatives Cross-section of urban and rural facilities

One for health plans Work toward 10/1/13 implementation date to

coincide with effective date of new AHCCCS Acute Care contracts


Please watch the AHCCCS website www.azahcccs.gov for up-to-date information when available

Questions???


AHCCCS Hospital Provider Meeting

Documents

Transcript of AHCCCS Hospital Provider Meeting