Medi-Cal Reimbursement for Prisons and Jails

California/Nevada Chapter of the American Correctional Health Services Association: Multidisciplinary Correctional Conference

November 3, 2011Brenda G. Klütz

Senior ConsultantHealth Management Associates

Learning Objectives

1. Understand current Medi-Cal & reimbursement opportunities for inmate inpatient stays

2. Understand the how the key elements of healthcare reform effect payment for inmate, parolee and probationers health now & in 2014

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Health Management Associates• Public health policy and management

consulting firm, 12 offices• Focus on Medicaid, uninsured, public health

care programs and systems, health care reform, access and quality

• Clients: – County health systems and jails, prison systems– Medicaid agencies, managed care, county

governments, professional associations, hospitals and health systems, insurers, foundations

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Today’s Medicaid

The Basics

Medicaid Eligibility

• Eligibility is based largely on:– Income– Assets– Age (under 21 and over 64)– Families with children– Disability

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Medicaid Eligibility

• Low-income, childless adults between the ages of 21 through 64 are generally not eligible for Medicaid, unless they have a disability.

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Advantages of Medicaid Funding• State Medicaid expenditures

are matched by Federal funds: amount of match is the Federal Medical Assistance Percentage (FMAP)

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Advantages of Medicaid Funding• The FMAP formula is a state’s per

capita income relative to U.S. per capita income: higher match to states with lower incomes (with a maximum of 83%) lower match to states with higher incomes (minimum of 50%).

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Advantage of Medicaid Funding

• California’s FMAP is 50%

• Nevada’s FMAP is 51.63% (2011)

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Medicaid and Inmate Health Care

What will Medicaid Pay for?

Medicaid and Inmates: The Facts• Medicaid does not provide matching

funds for services provided to incarcerated persons

• However, an inmate who spends 24 hours or more in a medical institution is not considered to be incarcerated during that time, even though still in custody

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Medicaid and Inmates: The Facts

• “Medical institution” = hospital or skilled nursing facility not operated by the corrections organization, serves the general public

• (See Appendix A & B of Handout)

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Medicaid and Inmates: The Facts• CMS will provide matching

funds for inpatient services provided in a hospital that has a locked correctional unit, as long as the overall hospital serves the general public. (See Appendix C)

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Medicaid and Inmates: The Facts• Federal Medicaid rules allow payment for

certain inpatient services provided to inmates who are eligible & enrolled in Medicaid.

• CMS has made clear, that federal law does not require states to dis-enroll inmates from Medicaid, but the state may only claim federal matching funds for certain services. (See Appendix B)

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Medicaid and Inmates: The Facts• Many states dis-enroll Medicaid

beneficiaries upon incarceration.

• States may not have a process to enroll inmates in Medicaid if they become eligible while in prison or jail

• State laws, regulations or policies may prohibit continued enrollment

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• If state laws permit, prisons and jails can claim federal matching funds for some health care services provided to eligible inmates that are now paid for by 100% state general fund

• Ensuring eligibility prior to release can ensure more seamless health care

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Advantages of Medicaid Eligibility and Enrollment

What Other States are Doing• At least nine other states have been

claiming federal matching funds for the cost of inpatient stays for eligible inmates

• Some started in the late 1990’s

• At least 5 other states have new laws or are proposing laws to permit

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Health Care Reform

How might it affect inmates?

Key Provisions of the Patient Protection and Affordable Care Act

• Insurance Market Reforms in All States• Delivery System Redesign• Payment models• Primary care workforce initiatives• Coverage Expansions• Health Insurance Exchanges• Medicaid Expansions

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Health Care Reform

• Effective 1/1/2014:– Asset, age and disability criteria for

Medicaid eligibility will be eliminated

– Individuals with incomes of up to 133% FPL will be eligible for Medi-Cal

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Health Care Reform

• Individuals with income from 134% up to 200% FPL will be eligible for coverage through CA Health Benefit Exchange

• Low income (up to 133% FPL), childless adults between the ages of 21 through 64 will be eligible for some Medicaid coverage. (majority of prison and jail population)

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Health Care Reform

• In 2014, federal match for new enrollees will be 100%

• Year Two the match will be 90% federal funds

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Planning for 2014

California’s Approach

California’s Bridge to Reform

• By 1/1/2014, approximately 851,000 currently-uninsured Californians will be eligible for Medi-Cal.

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California’s Bridge to Reform• Created a Medicaid waiver option

for counties to participate in a Medicaid expansion program: Low Income Health Program (LIHP)

• Covers childless adults age 21 through 64, with income levels of up to 133% FPL and 200% FPL

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California’s Bridge to Reform• Starts to provide Medi-Cal-like

coverage for low-income childless adults prior to health care reform’s full implementation

• Builds the provider network capacity to prepare for 1/1/2014

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California Law Change in 2010

• California regulations previously required counties to dis-enroll Medi-Cal beneficiaries upon incarceration

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California Law Change in 2010• California law now mandates

counties to enroll state prison inmates in LIHP

• Gives counties the option to enroll inmates county jails to enroll in the LIHP or in the Medi-Cal program

• Law is silent about city jails.(See Appendix D of Handout)

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Which Inmates TODAY are eligible (CA)?

1. State Medicaid income & asset guidelines AND

2. Categorical Eligibility– Pregnant women– Inmates< age 21– Inmates age 65>– Disabled for at least 12 months

• Most relevant to prisons, but jails often have isolated very costly cases

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Will it Last?

• According the Centers for Medicare and Medicaid, Medicaid Disabled and Elderly Programs:

– There is no plan to rescind FFP for inmate inpatient care

– Medicaid eligibility for inmates offers important opportunities for continuity of care for chronic conditions, mental illness

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Challenges and Opportunities

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Medicaid as Payment in Full

• Federal rule prohibit providers participating in Medicaid to balance-bill patients or providers

• For some prisons and jails, provider payment levels are in statute and exceed Medicaid rates

• Some prisons and jails have negotiated contract rates with providers that exceed Medicaid rates

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Medicaid as Payer of Last Resort• Hospitals may challenge Medicaid

payment because they perceive prison, jail, or vendor as insurance coverage.

• Key distinction between insurance and a correctional organization’s constitutional obligation as custodian to avoid deliberate indifference and cruel or unusual treatment.

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Alternatives

• Hospital bills Medicaid for admission, accepts payment; prison/jail makes periodic “patch payment” to provider

• Prison/jail consolidates admissions to specific hospitals to gain volume and cooperation

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Implementation Issues: Hospitals• Is Medicaid payment

acceptable?

• Enrollment/eligibility process – who does it? (In California, it is the counties)

• Does hospital bill Medicaid?

• Is payment significantly delayed?

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Implementation Issues: Inmates

• Freedom of Choice issue• Inmate doesn’t want to

enroll/sign Medicaid application• Documents not available

– Birth certificate– Tax statements– Bank statements

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Implementation Issues: Jails

• Difficult to change state law individually

• May require additional resources, or administrative systems changes

• In California, county jails should be working with the county health or social services department

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Prisons

• May require new resources

• May require tracking system for claims, high-cost inmates, eligibility status, redetermination dates

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Implementation Issues: Medicaid• Suspended eligibility

• Requires new resources (but 50% federal match)

• How is federal match tracked and traded?

• Many other competing priorities related to health care reform

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Implementation

• Extremely complex and varies enormously by state Medicaid program

• May begin with workgroup that includes Medicaid and the agency that decides eligibility

• May work on jails and prisons simultaneously

• Most programs start by manually processing a few high-cost cases

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Other Opportunities

• Create information for inmates under age 26 about coverage on parent’s insurance plan

• Assist eligible inmates with serious health needs to enroll prior to release

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Get Moving Toward 2014

•Work with community stakeholders to develop

–Streamlined discharge planning–Common prescription drug formulary–Continuity of care–Targeted Case Management Programs

•Develop inmate education materials

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Discussion

FOR MORE INFORMATION CONTACT

Brenda Klutz, Senior ConsultantHealth Management Associates

916.446.4601, ext. 424bklutz@healthmanagement.com

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