Medicaid Reform

1. Medicaid Reform Presentation to the Board of County Commissioners November 13, 2007

2. Medicaid Reform July 30, 1965: The Medicaid program, authorized under Title XIX of the Social Security Act, was enacted to provide health care services to low-income children deprived of parental support, their caretaker relatives, the elderly, the blind, and individuals with disabilities. President Johnson signing the Medicare program into law, July 30, 1965. Shown with the President (on the right in the photo) are (left to right) Mrs. Johnson; former President Harry Truman; Vice-President Hubert Humphrey; and Mrs. Truman. Photo courtesy of LBJ Presidential Library.

3. Medicaid Reform At the bill-signing ceremony President Johnson enrolled President Truman as the first Medicare beneficiary and presented him with the first Medicare card. This is President Truman's application for the optional Part B medical care coverage, which President Johnson signed as a witness. SSA History Archives.

4. Medicaid ReformPresentation Outline • Medicaid Overview • Reform Efforts • Local Impacts • Orange County (PCAN) • Hospitals • Health Department • Summary

5. Medicaid Reform Overview History • 1967: The Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) – established health services benefit for all Medicaid children under age 21. • 1972: Federal Supplemental Security income program (SSI) provided States the opportunity to link to Medicaid eligibility for elderly, blind, and disabled residents.

6. Medicaid Reform Overview 1981: States were required to pay hospitals treating a disproportionate share of low-income patients additional payments "DSH“ which led to IGT 1996: The Aid to Families with Dependent Children (AFDC) entitlement program replaced by the Temporary Assistance for Needy Families (TANF) block grant.” Devolution” History

7. Medicaid Reform Overview 1997: The Balanced Budget Act of 1997 (BBA), created the State Children's Health Insurance Program. 2005: Florida Legislature approved reform efforts History

8. Medicaid Reform Overview Enrollees Orange 121,300 Florida 2,875,700 National 58,420,500

9. OverviewMedicaid Enrollees and Expenditures on Benefitsby Eligibility Category 100 % Elderly 9% Elderly 26% Blind & Disabled 16% 75% Adults 27% Blind & Disabled 43% 50% Children 48% Adults 12% 25 % Children 19% 0 % Enrollees Total = 52.4 million Expenditures Total = 235 billion Source: Kaiser Foundation from Congressional Budget Office: 2003

10. National/State/Orange co Florida Medicaid

11. PCAN Clinic Sites

12. OverviewMandatoryServices

13. OverviewOptionalServices

14. OverviewOptionalServices

15. Reform Efforts

16. Reform EffortsWhy Medicaid Reform? • Medicaid is not as effective as it should be in meeting the needs of enrollees • Too expensive • at current rate of growth Medicaid will be 59% of the state budget by 2015 • Consumers have little choice • A lack of access to specialists • Does not focus on the health status of the recipient: claims payment vs. health improvement

17. Reform Efforts 2005 Authorization • Reform authorized Pilot Programs • Initially Broward & Duval • Expand to Baker, Clay and Nassau within one year of Duval implementation • Only targeted Medicaid eligibility groups

18. Reform Efforts What is new? 2005 Authorization • More choices for beneficiaries • HMOs and PSNs • Customized benefit package • Choice counseling • Enhanced benefit accounts • Risk-adjusted rates • Low Income Pool (IGT)

19. Reform EffortsPilot Outcomes • Staffing levels were inadequate • Performance, quality and cost data is not available to evaluate cost effectiveness • Lack of access to key documents and information • Drug coverage information is not accessible

20. Reform EffortsPilot Outcomes • Pre-reform problems still exist • Fraud and abuse still a problem • Expansion will potentially impact the finances of County Health Departments.

21. Reform EffortsRecommendations • Develop benchmarks for resolution of issues encountered to date prior to further expansion • Further expansion of Medicaid Reform should be delayed

22. Local Impact The “Triple Whammy” Reform State budget County budget implications

23. Local Impact“Triple Whammy” PCAN Hospitals Health Department

24. Local Impact The Low Income Pool (LIP) ensures continued government support for the provision of health care services to Medicaid, underinsured and uninsured populations and is capped at $1 Billion dollars.

25. Local Impact • These health care expenditures may be incurred by • The State • Hospitals • Clinics • Other provider types for uncompensated medical care

26. Local ImpactIGT Process Orange County Budgeted 12.1 Million County Tax Dollars $1,000,000

27. Local ImpactIGT Process County Tax Dollars $1,000,000 Agency for Health Care Administration Federal Match in FY 07 was $.5876

28. Local ImpactIGT Process County Tax Dollars $1,000,000 Agency for Health Care Administration Federal Match Drawdown

29. Local ImpactIGT Process County Tax Dollars $1,000,000 Agency for Health Care Administration Federal Match Drawdown yields $1,586,700

30. Local ImpactIGT Process County Tax Dollars $1,000,000 Agency for Health Care Administration Federal Match Drawdown yields $1,586,700 $1,200,000 To Orange County

31. Local ImpactIGT Process County Tax Dollars $1,000,000 Agency for Health Care Administration Federal Match Drawdown yields $1,586,700 $386,700 for statewide Medicaid $1,200,000 To Orange County

32. Local ImpactIGT Process $1,200,000 returned to Orange County DSH Hospitals ORHS $600,000 Florida $600,000 14.4 million returned

33. Local ImpactIGT Process ORHS $600,000 Florida $600,000 Third Party Administrator

34. Local ImpactIGT Process ORHS $600,000 Florida $600,000 Third Party Administrator Secondary Care Clinics Inpatient

35. Local Impact Clinic Site Funding Funding mix consists of: County General Revenue IGT-Medicaid HRSA Grants Medicaid and Medicare Self pay (sliding scale) Other Third Party Payors Other grants (ie. Healthy Start)

36. Local Impact Clinic Site Funding $36 Million Dollars Patient Billings $11 Million IGT $6 Million

37. Local Impact Funding Pressures • Medicaid Reform • Loss of patients • Loss of revenue • Provider Service Networks • Reform • Non-reform

38. Local Impact Funding Pressures • State Budget reductions • Loss of revenue • IGT (LIP) Funding • Reimbursement rates

39. Local ImpactProjected Reductions

40. Local Impact Funding Pressures • County budget reductions • Jeopardizes the IGT funding • Ancillary services may be curtailed • Clinic sites might be closed

41. Funding Pressures Who will be affected?

42. Primary Care Hypertension Diabetes Asthma Heart Disease Acute Care Secondary Care Oncology/Hematology Diabetes Cardiology Orthopedics Gastroenterology They WillInfants, Children and Adults Top 5 Diagnosis

43. Funding Pressures What services may be affected?

44. Primary care Specialty care Acute care Behavioral health Dental care Pharmacology Radiology Laboratory Nutritional guidance Disease prevention Cancer screening Immunizations Annual examinations Referral services Health education PCAN Services

45. Medicaid ReformSummary • Change in Medicaid program inevitable • Serious financial pressures exist at stae and County level • Viability of safety net providers at risk • The uninsured are at the greatest risk

46. Medicaid Reform Presentation to the Board of County Commissioners November 13, 2007

47. Provider Service Network (PSN) • A Provider Service Network (PSN) is a network established or organized and operated by a health care provider or group of affiliated health care providers

48. Provider Service Network (PSN) • A Provider Service Network (PSN) is a network established or organized and operated by a health care provider or group of affiliated health care providers • PSNs provide a substantial portion of the health care items and services contracted directly through the provider or affiliated group of providers.

49. Provider Service Network (PSN) • A Provider Service Network (PSN) is a network established or organized and operated by a health care provider or group of affiliated health care providers • PSNs provide a substantial portion of the health care items and services contracted directly through the provider or affiliated group of providers. • The health care providers must have a controlling interest in the governing body of the PSN

50. PCAN as a PSN? PRO: • PCAN has the necessary infrastructure and linkages necessary to be a PSN within Orange County. • Patients can remain in a medical home despite coverage. • PCAN provides excellent care CON: • Timetable • PSN must be built around 5 counties-Orange, Osceola, Seminole, Lake and Brevard • Specialists