Medical Services Administration Fiscal Year 2015

Presentation to House Appropriations Subcommittee

on Community Health February 26, 2014

James K. Haveman, MDCH Director

Steve Fitton, Senior Deputy, MSA Director Tim Becker, Senior Deputy, Operations

Our Guiding Principles

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Mission The Michigan Department of Community Health will protect, preserve, and promote the health and safety of the people of Michigan with particular attention to providing for the needs of vulnerable and under-served populations.

Vision Improving the experience of care, improving the health of populations, and reducing costs of health care.

Leadership, Excellence, Teamwork

Strategic Priorities

• Promote and Protect Health, Wellness, and Safety • Improve Outcomes for Children • Transform the Healthcare System • Strengthen Workforce and Economic Development

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Topics • Michigan Medical Services

• Caseload, Cost Effectiveness, and Safety-Net Services • Long Term Care Supports and Services • Managed Care

• FY14 Initiatives • FY15 Executive Budget Recommendation

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FY13 Service Statistics • 1,854,879 total average eligibles • 1,132,864 children served • 347,395 disabled adults served • 13 Managed Care Plans • 786,629 school-based direct service procedures • 83,200,000 transactions processed last year • 1,039,000 calls handled annually by Michigan Enrolls • 3,788 women using Maternal Outpatient Medical Services

program each month • 28,977 nursing home residents • 494,380 children currently enrolled in Healthy Kids Dental • 37,453 currently enrolled in MI Child

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Effective Partnerships

• Hospitals, Physicians, Pharmacies, Long Term Care Community Providers, Nursing Homes, Dentists, Many Other Professional Practitioners, Durable Medical Equipment and Suppliers

• Health Maintenance Organizations – for-profit and non-profit • Federally Qualified Health Centers, Rural Health Clinics and

Look-a-Likes • Community Mental Health Agencies • Local Health Departments • University Medical Schools • Various Community and Advocacy Organizations • Private sector contractors – Maximus, CNSI, Optum

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Audits

• Numerous Audit Agencies • Office of the Inspector General - federal agency • Office of the Auditor General - state agency • Office of Internal Audit Services - state agency • Centers for Medicaid/Medicare Services - federal agency • Government Accountability Office - federal agency

• One dozen simultaneous audits on average • Community Health Automated Medicaid Processing

System (CHAMPS) Paying Dividends in Performance Audits

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8

Michigan Medicaid Caseload Th

ousa

nds

*January 2014

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

*1,829,185

Medicaid Insures Children

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29% 32%

35% 37%

39% 41%

42% 44% 47% 49% 50% 50% 50%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Medicaid serves 50% of all children in Michigan

Medicaid Costs FY 2012

Aged and/or

Disabled67%

Medicaid Consumers FY 2012

Aged and/or

Disabled25%

Other Consumers

75%

10

Medicaid Consumers & Costs

Other Consumers

33%

General Fund Support for Medicaid Remains Flat (in millions)

11

Historical Costs of Health Care 2000-2012

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Average Annual Commercial Health Insurance Premiums have more than Doubled in a Decade

* Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

13

Health Insurance Coverage Shifts

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78%

10% 9%

64%

19% 13%

Employer Medicaid Uninsured

2000 2012

Medicaid Delivery System - FY 13

15

Spend Down 1%

Long Term Care 2%

*FFS NonDual Eligible

Recipients 9%

*FFS NonDual Recipients

Migrating to Managed Care

6%

*FFS Dual Eligible

Recipients 9%

Managed Care 73%

*FFS = Fee for Service

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Michigan Population Change from 2000-2012

-3%

15%

42%

-10%

0%

10%

20%

30%

40%

50%

0-64 65-84 85+Ages Ages Ages

Long Term Care

• Comprised mainly of skilled nursing facility services and home and community based services (the fastest growing segment of long term care) • “Aging in place” • “Person Centered Planning” • “Self Direction”

• Adult Home Help serves approximately 60,000 individuals • Most cost effective long term care program • Business process review underway to strengthen program to

assure sustainability 17

Long Term Care Supports & Services • Medicaid and the Office of Services to the Aging serve as a

natural complement to each other. • Office of Services to the Aging allocates and monitors state

and federal funds for all Older Americans Act services, including:

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• Nutrition services • Community services • A legal hot line • Emergency prescriptions • Heating assistance • Senior education • Care management • Home delivered meals

• These Office of Services to the Aging services are often enough to prevent an individual from requiring the more extensive supports to live in the community provided by Medicaid.

Long Term Care Cost Per Member Per Month

$1,406

$3,037 $3,047

$5,702

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Home Help MI Choice PACE Nursing HomeFY13

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Monthly Average Members Served FY 13

20

57,540

9,223

788

27,072

0

10,000

20,000

30,000

40,000

50,000

60,000

Home Help MI Choice PACE Nursing Home

Adult Home Help Consumers by County FY13 County # County # County # County #

Alcona 53 Dickinson 136 Lake 187 Ogemaw 389 Alger 37 Eaton 443 Lapeer 228 Ontonagon 38 Allegan 398 Emmet 106 Leelanau 6 Osceola 6 Alpena 118 Genesee 2,763 Lenawee 332 Oscoda 70 Antrim 117 Gladwin 243 Livingston 271 Otsego 267 Arenac 207 Gogebic 69 Luce 39 Ottawa 367 Baraga 55 Grand Traverse 305 Mackinac 38 Presque Isle 53 Barry 198 Gratiot 174 Macomb 5,322 Roscommon 139 Bay 880 Hillsdale 234 Manistee 241 Saginaw 1,992 Benzie 83 Houghton 162 Marquette 245 St Clair 820 Berrien 1,089 Huron 160 Mason 168 St Joseph 322 Branch 124 Ingham 1,966 Mecosta 469 Sanilac 245 Calhoun 796 Ionia 274 Menominee 146 Schoolcraft 70 Cass 262 Iosco 206 Midland 526 Shiawassee 382 Charlevoix 137 Iron 88 Monroe 510 Tuscola 266 Cheboygan 206 Isabella 286 Montcalm 280 Van Buren 528 Chippewa 163 Jackson 915 Montmorency 66 Washtenaw 1,343 Clare 259 Kalamazoo 1,467 Muskegon 1,089 Wayne 25,805 Clinton 226 Kalkaska 100 Newaygo 305 Wexford 333 Crawford 108 Kent 2,664 Oakland 6,510 Delta 204 Keweenaw 12 Oceana 223

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Managed Care Plans

• Accountable • Transparent • Highly Ranked in National Measurement • Provides Access and Quality • Foundation for Healthy Behaviors and Fully

Integrated Care

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Managed Care Plans

• 13 accredited plans covering medically necessary services • Blue Cross Complete of Michigan • CoventryCares of Michigan, Inc. • HealthPlus Partners • McLaren Health Plan • Meridian Health Plan of Michigan • Midwest Health Plan • Molina Healthcare of Michigan • Physicians Health Plan – Family Care • Priority Health Choice • Harbor Health Plan • Total Health Care • UnitedHealth care Community Plan • Upper Peninsula Health Plan 23

Managed Care Plans Access/Quality

Michigan Medicaid has adopted the highest standard of accountability and transparency. Managed Care Plan performance requirements include: • Accreditation by an external entity • An annual audited Healthcare Effectiveness Data and

Information Set (HEDIS) report • All required HEDIS measures must be deemed reportable (free

of material bias) • An annual adult Consumer Assessment of Healthcare

Providers and Systems (CAHPS) survey report (measures experience of health care)

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Managed Care Plans Access/Quality

Performance requirements continued: • Public reporting required by Appropriation Section

1662 • Consumer guide to assist beneficiaries in their in plan

selection • Managed Care Plan Contractor performance bonus

based on plan scores relative to national Medicaid benchmarks

• Auto assignment preference based on performance

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Managed Care Plans Excel

• National Committee for Quality Assurance (NCQA) ranks 6 of Michigan’s Managed Care Plans in the top 20 nationwide. (2013) • Blue Cross Complete, Priority Health, Midwest

Health, UnitedHealthcare Community, HealthPlus Partners, and Upper Peninsula Health

• Demonstrates commitment to provide high quality health care to our most vulnerable citizens

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Managed Care Plans Blood Lead Testing - 3 year olds

76.3% 76.5%78.0% 78.1%

82.4%

50%

55%

60%

65%

70%

75%

80%

85%

2009 2010 2011 2012 2013

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44.1%

36.7%

31.1% 30.6%

25.6%

20.0% 18.5%

17.2%

14.2% 13.0%

9.8% 8.5%

6.3% 5.0% 4.6% 3.9%

9.7%

7.2% 5.4% 5.5%

4.4% 3.2% 2.5% 2.4% 1.6% 1.4% 1.1% 0.9% 0.8% 0.6% 0.53% 0.45%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Elevated Blood Lead Levels (EBLL) in Michigan 1998 - 2013 Children less than Six Years of Age

Percent of Children with EBLL ≥ 5µg/dL

Childhood Lead Poisoning Prevention Program

Healthy People 2020 Target: No children with lead levels ≥10µg/dL by 2020. Counties with highest proportions of children with lead levels >5µg/dL in 2013: Bay, Branch, Crawford, Huron, Jackson, Kent, Keweenaw, Lenawee, Mackinac, Manistee, Mason, Wayne

US Level For ≥10µg/dL: 0.62%

February 14, 2014 Source: MDCH Data Warehouse

CDC ‘reference’ level = No child in MI should have lead level > 5µg/dL

66.6%69.5%

72.3%75.3%

77.8%

50%

55%

60%

65%

70%

75%

80%

2009 2010 2011 2012 2013

MI W

eigh

ted

Aver

age

(%)

29

*HEDIS - 6 or more visits

Managed Care Plans Well Child Visits - First 15 Months

73.6%75.9%

78.0% 78.6% 78.0%

50%

55%

60%

65%

70%

75%

80%

2009 2010 2011 2012 2013

MI W

eigh

ted

Aver

age

(%)

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HEDIS

Managed Care Plans Well Child Visits - 3 – 6 years

Managed Care Plans Prenatal Visits

86.9% 88.9% 88.4% 90.3% 89.6%

50%55%60%65%70%75%80%85%90%95%

2009 2010 2011 2012 2013

MI W

eigh

ted

Aver

age

(%)

31

Managed Care Plans Postpartum Visits

68.5%71.4% 70.7% 70.3% 70.5%

50%

55%

60%

65%

70%

75%

2009 2010 2011 2012 2013

MI W

eigh

ted

Aver

age

(%)

32

Managed Care Plans Diabetes Testing (HbA1C)

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85.0% 83.9% 85.0% 85.7% 85.2%

50%

55%

60%

65%

70%

75%

80%

85%

90%

2009 2010 2011 2012 2013

Managed Care Plans Percentage of Adults with Preventive/Ambulatory Visit

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013

20-44 45-64 65+ Total

Michigan Medicaid Works

• Cost effective • Efficient • Provides access to services • Provides quality services • Highly ranked nationally in numerous areas • Providing value day after day and year after year

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FY14 Major Initiatives

• Healthy Michigan Plan • Integrated Care – MI Health Link • Expansion - Healthy Kids Dental

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Healthy Michigan Plan Waiver Progress

• Public Act 107 of 2013 signed into law September 2013

• Healthy Michigan Plan Waiver submitted to

Federal government November 8, 2013 • Federal government approved waiver

December 30, 2013

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Healthy Michigan Plan Requirements

Section Number Description Effective Due

Date Comments

105D(1)(A) DCH may begin enrollment of individuals under 105(D) if waiver is approved by 1/1/2014. 1/1/2014 Approval received 12/30/13

105D(12) DCH in collaboration with contracted health plans and providers shall create financial incentives for contracted health plans, providers, and enrollees.

1/1/2014

Completed 12/30/13 - Managed Care report sent to legislature Subsection C applies whether or not either or both of the waivers requested under section 105D are approved, the PPACA and ACA is repealed, or the state terminates or opts out of the program established under this section

105D(1)(B) DCH shall pursue a range of consequences for enrollees who consistently fail to meet their cost-sharing requirements. DCH to report plan of action to the legislature.

6/1/2014

105D(27)(B) By June 1, 2014 DCH shall determine, and SBO shall approve, how annual state savings and other nonfederal net savings shall be calculated.

6/1/2014

This calculation will determine whether federal gov't matching funds are under 100% of annual state savings and other nonfederal net savings.

105D(7)

DCH shall develop a methodology that decreases the amount an enrollee's required contribution may be reduced per section (1)(E), based on, but not limited to, enrollee's failure to pay cost-sharing requirements and inappropriate utilization of the ED

6/1/2014

105D(1)(F) DCH design and implement a co-pay structure that encourages the use of high-value services, while discouraging low-value services. 7/1/2014

105D(4) DCH pursue any and all necessary waivers to enroll dual eligible persons into the 4 integrated care demonstration regions by July 1, 2014

7/1/2014

This section applies whether or not either or both of the waivers requested under section 105D are approved, the PPACA and ACA is repealed, or the state terminates or opts out of the program established under this section

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Public Act 107 of 2013

Section Number Description Effective Due

Date Comments

105D(27)(B) By September 1, 2014 the calculations and methodology used to determine annual state savings and other nonfederal net savings shall be submitted to the legislature.

9/1/2014

This calculation will determine whether federal gov't matching funds are under 100% of annual state savings and other nonfederal net savings.

105D(28)

DCH shall submit (given a guideline included in the procedure developed in this subsection) to the Dept. of Treasury all requests for the offset of state tax refunds claimed on returns filed or to be filed for that tax year of an enrollee who owes a liability to the state of past due uncollected cost-sharing, as allowable by the federal government.

11/1/2014 (annually

thereafter)

105D(30)

DCH shall submit a report to the legislature that identifies the causes of overutilization and improper emergency service usage that includes specific best practice recommendations for decreasing overutilization of EDs and improper Emergency Service usage, as well as how those best practices are being implemented. Both broad recommendations and specific recommendations related to the Medicaid program, enrollee behavior and health plan access issues shall be included

12/31/2014

105D(8)

DCH shall make an initial baseline (FY 2012-2013 Data) uncompensated care report containing at least the data described within this subsection. The Medicaid Hospital Cost Report shall be part of the uncompensated care definition and calculation. DCH shall also collect and examine other relevant financial data for all hospitals and evaluate the impact that providing medical coverage to the expanded population has on the actual cost of uncompensated care for all hospitals in the state.

12/31/2014

105F(3) The Advisory Committee shall issue a report with recommendations on the creation of a database on health care costs and health care quality in MI.

12/31/2014

This section applies whether or not either or both of the waivers requested under section 105D are approved, the PPACA and ACA is repealed, or the state terminates or opts out of the program established under this section

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Healthy Michigan Plan Requirements (continued) Public Act 107 of 2013

Healthy Michigan Plan - Implementation

• Many system changes • Promulgate Policy • Managed Care Plans are preparing for

program • Establish Plan Rates • Provider Engagement • Three state plan amendments • Converting current Adult Benefits Waiver

beneficiaries into the Healthy Michigan Plan 40

Healthy Michigan Plan – Special Terms & Conditions

• MI Health Account Operation Protocol - Due March 2014 • Healthy Behaviors Incentives Program Operational Protocol –

Due March 2014 • Quarterly Progress Report – Due 4/1/14 and quarterly

thereafter • Administrative Cost and Budget Reporting – Due 4/1/14 and

quarterly thereafter • Monthly Enrollment Reports – Due 4/20/14 and monthly

thereafter • Healthy Michigan Evaluation Plan – Due 4/29/14 • Comprehensive State Quality Strategy – Due 4/30/14 • Ongoing monthly calls with federal staff • Annual report 41

Healthy Michigan Plan – Consumer Engagement

• MI Health Account • Quarterly statements

• Healthy Behaviors • Identifying areas of improved health

through health risk assessment • Informing and encouraging healthy

behaviors • Rewards for engaging in healthy behaviors

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Integrated Care – MI Health Link • Three year demonstration with Center for Medicare and

Medicaid Services for people dually eligible for Medicare and Medicaid

• Four regions: Upper Peninsula, Southwest (eight counties), Macomb and Wayne counties

• Selected eight Integrated Care Organizations for the four regions • UP: Upper Peninsula Health Plan • Southwest: CoventryCares, Meridian Health Plan • Macomb/Wayne: Amerihealth, CoventryCares, Fidelis, Midwest,

Molina, UnitedHealthcare • All Medicare and Medicaid covered services included (primary,

acute, pharmacy, long term supports and services, behavioral health) 43

Integrated Care - MI Health Link • Program development continues –

• merging Medicare and Medicaid enrollment processes • quality management strategies • service parameters • payments and encounters • systems changes • care coordination strategies • combined appeals processes

• Create an integrated care Ombudsman Program • Complete rate setting process • Finalize three-way contract • Readiness Reviews conducted with Centers for Medicare &

Medicaid Services contractor

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Making Dental Health a Priority

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 *FY15 -

100

200

300

400

500

600

700

$0

$20

$40

$60

$80

$100

$120

$140

Thou

sand

s

Mill

ions

Enrollees

80 c

ount

ies

75 c

ount

ies

65 c

ount

ies

78 c

ount

ies

Exec Rec

$5.4M to expand Healthy Kids Dental to reach 100,000 more children

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Healthy Kids Dental Coverage by County

46

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Governor Snyder’s FY 15 Recommendation

Description

FY 2015 Recommendation

GF/GP Gross On-going Investments

Healthy Kids Dental Phase-In $5.4 $15.7 Primary Care Physician Rate Increase $26.0 $75.5 MIChoice Wait List Elimination $9.0 $26.2 Programs for All-Inclusive Care for the Elderly $5.7 $16.4 Wayne State Psychiatric Residency Program $5.6 $5.6 One-Time Investments Dental Clinic Program $4.1 $4.1 Other Adjustments Special Medicaid Rural Hospital Payments ($12.0) ($35.6) Healthy Michigan Plan Savings ($232.1) $0 State Restricted Revenue Shortfall in Medical Services $0 $110.0

FY 2015 Program Investments and Other Adjustments (in millions)

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Description

FY 2014 Recommendation

GF/GP Gross

Caseload and Utilization Adjustment $31.5 $81.0 2.5% for Health Plan Actuarial Soundness $30.8 $89.4 Federal Medical Assistance Percentage (FMAP) from 66.32% to 65.54% $62.3 $0

Protect Michigan’s Health Care Safety Net FY 2015 Key Budget Adjustments (in millions)

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Legislative Liaison: Karla Ruest Phone: (517) 373-1629 Email: Ruestk@michigan.gov Website: http://www.michigan.gov/mdch Facebook: http://www.facebook.com/michigandch Twitter: @MIHealth, https://twitter.com/mihealth Useful Links: Executive Budget: http://www.michigan.gov/mibudget2015 MI Healthier Tomorrow: www.michigan.gov/mihealthiertomorrow Healthy Michigan Plan: www.michigan.gov/healthymichiganplan MIChild: www.michigan.gov/michild

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MDCH Contact Info and Useful Links