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The Future of Medicaid

The Future of Medicaid. Michigan Association of Health Plans Meeting July 18, 2011 Steve Fitton Director, Medical Services Administration. Topics. Medicaid Yesterday Medicaid Today The Future of Medicaid. Medicaid Yesterday. Providing Historical Context. Michigan Medicaid Caseload.

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The Future of Medicaid

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  1. The Future of Medicaid Michigan Association of Health Plans Meeting July 18, 2011 Steve Fitton Director, Medical Services Administration

  2. Topics • Medicaid Yesterday • Medicaid Today • The Future of Medicaid

  3. Medicaid Yesterday Providing Historical Context

  4. Michigan Medicaid Caseload Thousands

  5. Michigan’s Medicaid Eligibility Percentage Per Capita

  6. Total MI Medicaid Expenditures $’s Millions

  7. Governors Weigh In • "Medicaid is poised to wreak havoc on the state's budget for years to come," Gov. Gary Herbert (R-UT) told a House subcommittee in March, "threatening our ability to fund critical services, such as transportation and education." • "Medicaid costs are getting out of control," said Gov. Rick Scott (R-FL), a former hospital executive who has proposed a dramatic privatization of the program in his state.

  8. “One of Medicaid’s biggest problems is mission creep. . . In short, an ever expanding Medicaid program is devastating for the nation’s and the state’s finances, and by spreading itself so thin it fails to provide adequate care for those who need it.” Sen. Orrin Hatch June 15, 2011

  9. Scott Gottlieb – Wall Street JournalMarch 10, 2011 “So why do Medicaid patients fare so badly? Payment to providers has been reduced to literally pennies on each dollar of customary charges because of sequential rounds of indiscriminate rate cuts….Meanwhile, patients' can’t get timely access to routine and specialized medical care.”

  10. National Health Expenditures and Their Share of Gross Domestic Product, 1960-2009 Dollars in Billions: 5.2% 7.2% 9.2% 12.5% 13.8% 14.5% 15.4% 15.9% 16.0% 16.0% 16.1% 16.2% 16.6% 17.6%

  11. Per Capita Health Care Spending 1970-2009

  12. Average Annual Premiums for Single and Family Coverage, 1999-2009 * 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 and the UninsuredNon-elderly, 2006-2008

  14. Change in Health Insurance Coverage and UninsuredNon-elderly, 2000-2002 to 2006-2008

  15. Michigan Medicaid GF ExpendituresActual vs Expected

  16. Medicaid GF Expenditures as part of Michigan’s Budget

  17. Florida Center for Fiscal and Economic Policy “Significant increases in Medicaid enrollment (and therefore Medicaid spending) and reductions in state revenue are simultaneous consequences of the same recession. In short, Medicaid was able to meet the additional need while simultaneously reducing the financial burden to the state.”

  18. Medicaid Today

  19. Michigan Medicaid – Big Program • $12 billion appropriation in FY11 • Covers 19% of the state population • Covers nearly 40% of all children in MI • General Fund spending 21.8% of total

  20. FY12 BudgetNo Major Medicaid Reductions • Preserves eligibility, coverage of optional services without rate reductions • Recognizes vital role of Medicaid providing health coverage to vulnerable citizens • Endorses MI Medicaid as a good investment • Affirms MI Medicaid’s commitment to managed care

  21. Governor’s Letter to Rep Upton • MI’s 2012 “budget spends less general fund dollars on the program than a decade ago, due to Michigan’s enactment of innovative, transparent, and responsible financing methods”. • MI has led the way in reforms, including the transition of Medicaid beneficiaries to managed care in the 1990s…

  22. Affirmation ≠ Status Quo • FY12 Budget adopts many initiatives to push forward (plenty of work to do): - Claims tax substitution for HMO use tax - CSHCS converted to managed care - MiPCT - Integrated care for dual eligibles - Funding for EHR adoption

  23. The Future of Medicaid

  24. Medicaid’s Future • Goals • Future directions to meet those goals • Federal Impacts – Anticipated, Feared, and Imagined

  25. Medicaid Goals • Triple Aim • Improve Health • Improve Care • Lower Costs • Promoted by CMS • Adopted by MI Dept of Community Health as basis for our Strategic Priorities

  26. Future Directions to Meet Goals • Preserve and build on what has worked • Pursue both transformative and incremental improvement strategies

  27. Preserve/Build on What Has Worked • Managed Care - CSHCS - Dual Eligibles • Innovative, Transparent, and Responsible Financing Methods - Continue with Provider Taxes - Claims Tax

  28. Pursue Improvement Strategies • Service integration • Value purchasing • Technology • Fraud, waste, and abuse

  29. Service Integration • Patient Centered Medical Home (MiPCT) • Duals – true integration • Health Homes • Physical Health – Mental Health

  30. Value Purchasing(i.e., align incentives for outcomes) • Bundled Payments • Duals • MiPCT • CSHCS – link with birth outcomes

  31. Technology • EHR • HIE • Implications of Health Reform and Exchange on State Systems

  32. Fraud, Waste, and Abuse • Point of federal emphasis • bi-partisan agreement • DCH Health Services Inspector General • Need to understand distinct differences in these terms • Point is increased accountability and increased scrutiny

  33. Federal Impacts • Affordable Care Act • Deficit Reduction

  34. Affordable Care Act • Expands Medicaid coverage to 133%FPL • (modest cost to MI in out years) • Many different cost effectiveness initiatives/demonstrations • Increases primary care reimbursement to 100% of Medicare in ’13 and ‘14 • Exchange – huge implications for Medicaid • Basic health plan

  35. ACA Demonstration and Planning Grant Opportunities • Money Follows the Person • Health Homes – chronically ill enrollees • Global payment system for some hospitals • Pediatric ACOs • Emergency psych demo project • CHIP obesity demo • Exchange planning grants • Develop/upgrade MA eligibility systems

  36. Deficit Reduction • Cost Shift to States (serious money) - Blended FMAP - Provider tax constraints - Block Grants • Duals – potential opportunity for states

  37. Huge Challenges • Affordability – for employers, individuals, government and relief to overall economy • Improve health of the population • Improve care and care processes

  38. “Medicaid should be transformed within the context of 100% insurance coverage as a national objective. Leaving 43 million Americans uncovered is immoral, it is unjust, and over the long run it is more expensive.” “A Vision for a 21st Century Medicaid Solution” Newt Gingrich, The Center for Health Transformation

  39. QUESTIONS

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