Healthcare Financial Management Association… · 7/25/2016 2 3 Comparison of FRA Components for...
24
7/25/2016 1 Healthcare Financial Management Association July 28, 2016 SFY 2017 Payments, FRA Assessment and MSC Pooling Arrangement 2
Transcript of Healthcare Financial Management Association… · 7/25/2016 2 3 Comparison of FRA Components for...
7/25/2016
1
Healthcare Financial Management Association
July 28, 2016
SFY 2017 Payments, FRA Assessment and MSC Pooling Arrangement
2
7/25/2016
2
3
Comparison of FRA Components for All MSC Pool ParticipantsSFY 2016 - SFY 2017
TotalUninsured Medicaid ContributorsPayments Add-On Net Payment Pool
95% / 100% Payments Assessment Prior to Pool RecipientsSFY 2017Inpatient Total $ 194,521,316 $ 578,580,313 $ 484,165,752 $ 321,244,406 $ 22,484,302
Outpatient Total 234,614,037 514,326,997 544,543,548 262,951,032 52,018,756
Grand Total for SFY 2017 $ 429,135,353 $ 1,092,907,310 $ 1,028,709,300 $ 584,195,438 $ 74,503,058
SFY 2016 - As of June 2016Inpatient Total $ 193,133,854 $ 577,021,786 $ 481,910,867 $ 319,716,686 $ 26,106,771
Outpatient Total 216,266,087 495,391,707 519,223,182 248,236,389 56,709,655
Grand Total for SFY 2016 $ 409,399,941 $ 1,072,413,493 $ 1,001,134,049 $ 567,953,075 $ 82,816,426
DIFFERENCE*Inpatient Total $ 1,387,462 $ 1,558,527 $ 2,254,885 $ 1,527,720 $ (3,622,469)
Outpatient Total 18,347,950 18,935,290 25,320,366 14,714,643 (4,690,899)
Grand Total $ 19,735,412 $ 20,493,817 $ 27,575,251 $ 16,242,363 $ (8,313,368)
* Some of the differences between SFYs 2016 and 2017 result from the following changes in SFY 2017:
- full transition of uninsured add-on payment from IGT to FRA for all hospitals
- implementation of a new interim DSH payment methodology
MSC Pooling Arrangement
In SFY 2017, a qualified not-for-profit pool contributor will participate in what was previously called the for-profit pooling arrangement which has been renamed the “Hybrid Pool.” To qualify, the hospital must
have a net payment prior to pool sufficient to cover pooling liabilities minimize the B1/B2 adjustment
4
7/25/2016
3
MSC Pooling Arrangement
The identification and willingness of a not-for-profit hospital to participate in the “Hybrid Pool” will be reevaluated on an annual basis.This new arrangement was developed to resolve concerns that the pooling contributions have been insufficient to offset losses in the pooling arrangement for the for-profit hospitals.
5
MSC Pooling Arrangement
The policy change was reviewed by the FRA Policy Committee on June 7, 2016, and ratified by the MSC Board of Directors on June 14, 2016.
6
7/25/2016
4
Interim Disproportionate Share Hospital Payments
7
New Methodology for Interim DSH Payments
The state regulation governing Disproportionate Share Hospital Payments is 13 CSR 70-15.220 which is available for review at the Missouri Secretary of State’s website: http://www.sos.mo.gov/In order to address concerns from the industry that completing both a state DSH survey and the independent DSH survey each year was burdensome, created duplicative work, and led to confusion, the state changed the interim DSH payment methodology beginning with SFY 2017.
8
7/25/2016
5
New Methodology for Interim DSH Payments
The state regulation was changed to base interim DSH payments on the most recent DSH survey collected during the independent DSH audit of the fourth prior year.The Medicaid net cost and uninsured uncompensated care cost from the survey are trended a fixed 1.5 percent, and are applied from the year subsequent to the state DSH survey to the current state fiscal year.The amended state regulation has a provision allowing hospitals that experienced an extraordinary circumstance to complete the DSH survey using the actual untrended cost and payment data from the most recent 12-month cost report on file with MHD.
9
New Methodology for Interim DSH Payments
Extraordinary circumstances are defined as unavoidable circumstances beyond the control of the facility and include:
Act of nature (i.e. tornado, hurricane, flooding, earthquake, lightening, natural wildfire, etc.)WarCivil disturbanceChange of ownership if the required data is not available to complete the survey.
10
7/25/2016
6
New Methodology for Interim DSH Payments
The regulation also contains an exception process to allow for an alternate state DSH survey (based on the most recent 12-month cost report on file) to be used if the hospital can demonstrate that the untrended total estimated net cost from the alternate DSH survey is at least 20 percent higher than the trended total estimated net cost from the required survey. This exception process will be considered before the beginning of the state fiscal year.
11
New Methodology for Interim DSH Payments
The regulation also contains a provision for interim DSH payment adjustments after the beginning of the state fiscal year if a hospital can demonstrate that the untrended total estimated net cost from the alternate DSH survey is at least 35 percent higher than the trended total estimated net cost from the required survey.
12
7/25/2016
7
New Methodology for Interim DSH Payments
The surveys are now being used for both DSH audit purposes and interim DSH payment purposes. Because of the financial implications, it is critical that hospitals complete the surveys as accurately and completely as possible.Hospitals may want to continue to use the original state DSH survey template as a tool to estimate DSH liabilities/shortfalls in advance of the actual independent DSH audit.
13
New Methodology for Interim DSH Payments
14
Uninsured Add-On Payment Using New Methodology
2017 Survey
Estimated Medicaid Net Cost from 2017 State DSH Survey $ 3,036,474 x Total Cumulative Trend 105.35%= Trended Estimated Medicaid Net Cost 3,198,925
Other Medicaid Payments for SFY 2017:Direct Medicaid Add-on Payment (Including Out-of-State Medicaid Payment) $ 3,954,032 Estimated Quarterly GME (Annual Amount) -Estimated Enhanced GME -Estimated UPL -Estimated Children's Outliers -Total Other Medicaid Payments $ 3,954,032
Estimated Medicaid Uncompensated Care Cost (UCC) $ (755,107)
7/25/2016
8
New Methodology for Interim DSH Payments
15
Uninsured Add-On Payment Using New Methodology Continued
Estimated Medicaid Uncompensated Care Cost (UCC) $ (755,107)
Estimated Uninsured Uncompensated Care Cost from 2017 State DSH Survey $ 6,850,938 x Total Cumulative Trend 105.35%= Trended Estimated Uninsured Uncompensated Care Cost 7,217,463
Estimated Hospital Specific DSH Limit 6,462,356
Out-of-State DSH Payment -
Estimated Uncompensated Care Cost Net of OOS DSH Payment 6,462,356
Potential DSH Payment for Eligible Hospitals 6,462,356 (No payment if negative UCC or if don't meet federal DSH requirements)
Times Percent of Payment to Receive, Limited by DSH Allotment 80.2053%
Uninsured at 100% of Available DSH Allotment to be Distributed $ 5,183,149
Total Interim DSH Add-on Payment at 100%(If facility does not contribute to Poison Control, payment is at 99%) $ 5,183,149
Medicaid DSH Allotment Reductions
Federal law imposes significant Medicaid disproportionate share hospital payment cuts beginning in federal fiscal year 2018. This will reduce hospital payments but free up FRA for other uses.Without a replacement hospital payment stream, the accumulating FRA proceeds will be a target for state budget diversion.
16
7/25/2016
9
Medicaid DSH Allotment Reductions
17
18
7/25/2016
10
Medicaid Hospital Outpatient Reimbursement
19
Redesign of Medicaid Outpatient Reimbursement
MHA continues to work with the MO HealthNetDivision to explore options for redesigning the outpatient payment methodology to reduce its complexity and promote administrative simplification. This project has been more challenging than first anticipated due to the numerous data issues that have been encountered.This redesign will likely cause a major shift in outpatient reimbursement for many hospitals.
20
7/25/2016
11
Outpatient Reimbursement
In accordance with 13 CSR 70-15.160, Prospective Outpatient Reimbursement Methodology, prospective outpatient payment percentage rates shall not be less than 20 percent. MHD staff have discussed the possibility of lowering this floor. However, it would require change in state regulation which would be published in the Missouri Register and open for a 30-day comment period.
21
22
Example of Regulatory Timeline for A Proposed Amendment
MHD Files Proposed Amendment With Secretary of State's Office 9/5/2016Proposed Amendment is Published in the Missouri Register and Is Open for Public Comment 10/17/2016The 30‐Day Comment Period Ends 11/16/2016
MHD Reviews Any Comments It Received and Prepares an Order of RulemakingMHD Files Order of Rulemaking with Joint Committee on Administrative Rules (Within 60 Days) 11/30/2016
(Order of Rulemaking Must Sit at JCAR for 30 Days Before it is Filed With SOS)MHD Files Order of Rulemaking with SOS (30 Days After JCAR) 12/30/2016
Order of Rulemaking is Published in the Missouri Register (not open for comment) 2/1/2017Amended Regulation is Published in the Code of State Regulations 2/28/2017The Amended Regulation is Effective 30 Days After Publication in the CSR 3/30/2017
Average Number of Days for a Proposed Amendment to Become Effective 206
Notes:1. In addition to the state's regulatory filing requirements, MHD must also file an amendment to it's Missouri Medicaid State Plan which is reviewed and approved by the Centers for Medicare & Medicaid Services.
2. While the regulation is in the process of being amended, it is not available for further changes.
7/25/2016
12
23
Missouri Medicaid’s Plan to Expand Managed Care Statewide
in May 2017
24
7/25/2016
13
Statewide Managed Care
The State of Missouri issued a Request for Proposal this spring to begin the process of expanding Managed Care statewide for children and low-income parents.Missourians who are aged, blind or disabled, including those Missourians with developmental disabilities served through the Missouri Department of Mental Health, will not be included in the managed care system and will continue to receive services through the traditional MOHealthNet Program.
25
Statewide Managed Care Timeline
April 29, 2016 – The RFP and Data Book prepared by the MO HealthNet Division were made available by the OA Division of Purchasing for competitive solicitation.July 31, 2016 – Bid/proposal period closes. Materials due to the Office of Administration, Division of Purchasing.August – September 2016 – Bids will be scored by an evaluation committee made up of representatives from applicable state agencies.
26
7/25/2016
14
Statewide Managed Care Timeline
October 1, 2016 – Contracts will be awarded by the Office of Administration.October 2016 – April 2017 – The companies awarded the managed care contracts will develop their provider networks and begin pre-enrolling Medicaid participants.May 1, 2017 – Medicaid services through the statewide managed care system are expected to begin.
27
Managed Care Add-On
28
7/25/2016
15
Transition of Add-On Payments to Managed Care
A recent federal Medicaid managed care regulation requires that all add-on payments paid to hospitals must be incorporated into the capitated rates paid by the state to the managed care plans. The state plans to transition these payments at the same time statewide managed care is implemented.
29
Transition of Add-On Payments to Managed Care
30
Direct Payments State Fiscal Year 2017
July 1, 2016 - June 30, 2017
Provider AProvider Number: 000000000
Direct Medicaid Payment
SFY 2017 Cost Per Day (Base Cost Trended) $ 1,420.13 Medicaid Inpatient Share of Assessment 78.69
Estimated Cost Per Day $ 1,498.82
Less Per Diem SFY 2017 (776.69)
Difference Between Estimated Cost Per Day and Per Diem $ 722.13 Projected SFY 2017 XIX Days 5,007 Managed CareTotal Direct Inpatient Payments - Annual $ 3,615,705 Estimated
Percent MC Add-On
Inpatient Direct Medicaid Payment Subtotal $ 3,615,705 X 23.36% $ 844,629
Plus Outpatient Medicaid Share of Assessment $ 275,357 X 45.42% $ 125,066
Total Direct Medicaid Payments $ 3,891,062 $ 969,695
Note: This example is for a hospital that is currently in a managed care region. When managed care expansion occurs, MHD will determine the amount that would move from fee-for-service to managed care.
7/25/2016
16
Transition of Add-On Payments to Managed Care
31
SFY 2017 ‐ Calculation of Days
Provider AProvider number: 000000000
Description Acute Psych Total
Jan 2015 ‐ Dec 2015 Total Actual Paid Days 1,160 2,481 3,641
2017 Regression AnalysisJan 2015 ‐ Dec 2015 Actual Paid Days times Inflationary Factor (1) 1,212 2,626 3,838 Divided by Non‐Managed Care Percentage* 76.64%Estimated MC+ Days 369 800
SFY 2017 Estimated Days per Regression Analysis (Used for Per Diem Days) 1,581 3,426 5,007
SFY 2017 Projected XIX Days (Used for Add‐on Days) 1,581 3,426 5,007
JANUARY 2015 ‐ DECEMBER 2015 Acute Psych(1)Inflationary Factor from Projected Days as Determined by MHD 1.044493 1.058520
* The Managed Care Percent of 23.36 Percent Can be Derived by Taking 100 Percent Minus the Non-Managed Care Percentage Above.
Disproportionate Share Hospital Audits – SFY 2011
32
7/25/2016
17
Disproportionate Share Hospital Audits
Although there has been no resolution to the SFY 2011 and 2012 DSH audits, the state’s independent DSH auditor, Myers and Stauffer, currently is conducting the State Fiscal Year 2013 DSH audits. This is the third year that the DSH audits will have actual financial consequences. The delay in the resolution of SFY 2011 results from pending litigation over the DSH audits.
33
DSH Audit LitigationThe underlying issue in the litigation is whether the Centers for Medicare and Medicaid Services attempted to implement a change in how uncompensated care is calculated without going through the proper rulemaking process. Specifically, CMS required through Frequently Asked Question #33, that the days, costs and revenues associated with patients who are eligible for Medicaid and also have private insurance be included in the hospital-specific DSH limit.
34
7/25/2016
18
DSH Audit Litigation
In December 2014, a US District Judge granted a preliminary injunction in Texas Children’s Hospital & Seattle Children’s Hospital v. Burwell to prevent the federal government from implementing FAQ #33. The court enjoined CMS from enforcing FAQ #33 on the grounds that the CMS policy did not go through proper rulemaking.Motions in this case were heard on June 29. A decision is anticipated in late August.
35
DSH Audit Litigation
In August 2015, the Missouri Department of Social Services filed a suit in the same court seeking relief through a declaratory judgement that the case applies to Missouri as well as the litigants, and for summary judgement in Missouri’s favor. The court has yet to issue an opinion on either the initial case, or Missouri’s action.
36
7/25/2016
19
37
Disproportionate Share Hospital Audits – SFY 2012
38
7/25/2016
20
Update on Final State Fiscal Year SFY 2012 DSH Audit Results
The MO HealthNet Division submitted the final SFY 2012 DSH audit results to CMS on December 31.The SFY 2012 DSH audit also is subject to change based on the outcome of the pending DSH audit litigation.
39
Update on Final State Fiscal Year SFY 2012 DSH Audit Results
The results of the SFY 2012 DSH audit submitted to CMS show Missouri hospitals have longfalls (DSH payments that exceed the CMS-defined allowable DSH costs) totaling $131.6 million, shortfalls (DSH payments that are less than the CMS-defined allowable DSH costs) of $99.7 million, with net longfalls totaling $31.9 million.The federal share of the net longfall, $20.2 million, will be returned to CMS. The state share of the net recoupment will be retained and is available to fund other hospital payment streams.
40
7/25/2016
21
DSH Longfalls and Shortfalls SFY 2010 through SFY 2012*
41
* The SFY 2010 through SFY 2011 data is based on the results of the independent DSH audits filed with the Centers for Medicare and Medicaid Services. Due to pending litigation, the amounts are subject to change.
Note: State Institutions of Mental Disease (IMDs) have been excluded from the above figures.
Update on Final State Fiscal Year SFY 2012 DSH Audit Results
The SFY 2012 Pool Policy Directives to be used in determining the final SFY 2012 pool adjustments (based on the independent DSH audit results) have been ratified by the MSC Board of Directors.Estimates, including the MSC pooling transactions related to the SFY 2012 DSH transactions, will be posted on the MSC website by the end of July.Revised estimates for SFY 2011 will be posted as well. The revised estimates will be based on the SFY 2011 independent DSH audit filed with CMS. The previous estimates were based on individual hospital estimates.
42
7/25/2016
22
43
FRA Tutorial
44
7/25/2016
23
45
Access to the FRA Tutorial
An FRA Tutorial is available on the MHA website. To access the tutorial, follow these steps:
Visit www.mhanet.comHover Over Advocacy in the Navigation MenuIn the Dropdown Box, Click on FRAClick on the Second Tab, Entitled “FRA Tutorial”Click on “Start the FRA Tutorial”
46
7/25/2016
24
Contact Information
47
Amy VolkartMHA Management Services CorporationDirector of Medicaid and FRAPhone: (573) 893-3700, ext. 1371E-mail: [email protected]
Kathy HasenbeckMHA Management Services CorporationMedicaid and FRA SpecialistPhone: (573) 893-3700, ext. 1344E-mail: [email protected]
Kim DugganMHA Management Services CorporationVice President of Medicaid and FRAPhone: (573) 893-3700, ext. 1345E-mail: [email protected]
