Charles Cataline Vice President, Health Economics and Policy Ohio Hospital Association

1. Northeast Ohio Chapter 2013 Gerry Haggerty Annual Leadership InstituteHot Topics in Health Care Charles Cataline Vice President, Health Economics and Policy Ohio Hospital Association charlesc@ohanet.org May 16, 2013

2. Agenda • Federal Update • It’s Medicare PPS Proposed Rules Season! • Overview of Federal Budget Challenges • State Update • OHA’s State Budget for 2014/2015 • What are the Latest Medicaid “Modernization” Targets • Medicaid Managed Care Rebid & Expansion • Medicaid APR-DRG Conversion • BWC 2014 Hospital Payment Targets • Other Finance / PFS Current Issues • HCAP Uncompensated Care Reporting Requirements • Is this the Last of the Big Changes to Policies & Procedures? • Medicaid Family Planning Benefit Interaction with Other State and Federal Rules and Programs • Medicare Rebilling Rules NE Ohio HFMA

3. Federal Update It’s Medicare PPS Proposed Rules Season! • IPPS • Update Less Than 1% • Sequestration Continues (Effect on MA Disputed) • Coding Adjustment Continues • VBP & Re-admissions Data Updated • DSH Payment Cuts Start - Ohio May do Okay • Inpatient vs. Outpatient Status Sill being Debated • “Two Midnights” Rule ?! • LTCH PPS • Year Two of Budget Neutrality Adjustment • “25% Rule” Implemented • Bigger Changes Proposed for FFY 2015 NE Ohio HFMA

4. Federal Update Federal Budget Challenges • ATRA 2013 Still Rolling Out (Next Slide) • Sequester On Until Congress Acts • Medicare Wage Index Fight Continues • President’s 2014 Budget Includes: • Medicare Cuts to Medical Education, CAH, Bad Debt, Post Acute Providers, Managed Care, Additional Fraud & Abuse Effort, Additional Cost Sharing • Medicaid Cuts to DSH, DME and Additional Fraud & Abuse • Expect Additional Attention Paid to Billed Charges, Charity Care & Self-Pay Bills NE Ohio HFMA

5. American Taxpayer Relief Act of 2013 • Medicare Payments Sequestered by 2% • Budget Control Act of 2011 says it Covers FFYs 2013 - 2021 • Extended the “Medicare doc fix” for One Year (+$25 B / 10 Years). Paid for by Reductions to Medicare and Medicaid, • Medicare Inpatient Coding Offset (-$10.5 Billion/10 Y) • Medicaid DSH Payment Cut (-$4.2 Billion/10 Y) • Medicare Outpatient Radiology Reduction (-$300 Million/10 Y) • Medicare End Stage Renal Disease Payment Reduction (-$4.9 Billion/ 10 Years) • Extends Outpatient Therapy Caps in Hospitals Through 2013: • Includes Services Delivered at CAHs! • Increases Multiple Therapy Services Reduction to 50% • NO changes to GME, outpatient E&M, or CAH & SCH status (Yet?!). NE Ohio HFMA

6. Congressional Deficit Reduction Ideas Medicare • Slash GME & DSH Programs • Eliminate CAH, MDH, SCH Designation • Normalize Provider Payment Rates Among States • Increased Oversight of “Fraud, Waste, Abuse” • Increase Eligibility Age, Cost Sharing & FICA Taxes • Coordinate Care and Bundle Services Across Providers, Payers and Plans-of-Treatment, Especially “End-of-Life” Care • Increased Use of Generic Drugs & Biologicals Medicaid • Reduce DSH • Restrict States’ use of Provider Assessments • No Effect Expected for Hospitals but Cuts to Long Term Care, SNFs • Reduce FMAP Floor • Block-Grant all Medicaid • Block-Grant Medicaid Long-Term Care Payments NE Ohio HFMA

7. Medicaid Managed Care • Effective July 1 - NO PHASE IN • Combines Contracts for CFC and Much of ABD Population • CFC = 1.6 M Enrollees; ABD = 125,000+ Enrollees • Five Existing MCPs Selected to go Statewide • Three Regions to Continue – OMA wants at least 30,000 enrollees per plan per region • OHA ABC Committee Will Monitor • Wellcare & AmeriGroup • Open Enrollment Underway • Expected to Continue Through Fall • New Enrollees That do not Pick Will be Auto-Assigned, but can Change MCP After • OMA Predicts Not Much Movement Among Current Enrollees • Approved Plans of Treatment Must be Respected NE Ohio HFMA

8. Ohio Dually Eligible Integrated Delivery System • Target Implementation Date is October 2013 (?). • CMS Approved, but Implementation Could be Delayed Watch for Details soon! • Readiness Reviews Being Done in Phases • Access (Provider Panel) and Coverage in Later Phase • Utilizes a “Payment Structure That Blends Medicare and Medicaid Funding” • Approx. 196,000 Medicare-Medicaid Enrollees in Ohio Currently Receiving Benefits Primarily Through FFS • Approx. 115,000 Included in the Demonstration Program NE Ohio HFMA

9. Proposed Ohio Dually Eligible Integrated Delivery System • Target Population • Full-Benefit Dual Eligible Enrollees Excluding: • Those Eligible for the Medicare Savings Program • Dual Eligibles with Intellectual and Developmental Disabilities Served Through an IDD 1915(c) HCBS Waiver or an ICF-IDD. • Those Not Under Waiver can Opt In • Dual Eligibles Enrolled in PACE • Dual Eligibles under 18 • Duals With “Severe or Persistent Mental Illness” will be Included, Assuming the State Creates Medicaid Behavioral Health Homes • Individuals with SPMI in the Demonstration do not Have to Change Providers for Behavioral Health Services. NE Ohio HFMA

10. Proposed Ohio Dually Eligible Integrated Delivery System • Model Design • At Least Two Competing Health Plans in each of Seven Regions Chosen for the Demonstration (Most Rural Areas Exempt) • Enrollees can Choose Between the Two Health Plans in Their Region • All Regions Have at Least 3 Medicare Advantage Plans Currently Serving Medicare Beneficiaries • The Demonstration will Auto-Enroll the Eligible Population With an Option to opt out for Medicare-Covered Benefits • If They opt out for Medicare They Will Still be Enrolled in Medicaid Managed Care • Enrollees Will Have the Option of Switching Plans Twice a Year and can opt out of Medicare at any Time NE Ohio HFMA

11. Ohio Dually Eligible Integrated Delivery System NE Ohio HFMA

12. Proposed Ohio Dually Eligible Integrated Delivery System • Draft Payment System • Medicare and Medicaid will Contribute to the Blended Payments in a Manner that Expected Aggregate Savings are Proportionately Shared Between the two Programs • The Blended Capitation Payment Structure is Expected to Provide Plans the Flexibility to Utilize the Most Appropriate Cost Effective Service for the Enrollee, Eliminating Incentives to Shift Costs Between Medicare and Medicaid • Reimbursement will Include Pay-for-Performance Incentives • OHA’s Concerns • Aggressive Implementation Schedule • Can MCPs Really Integrate and Manage this Array of Providers, Agencies and Services? • How Would This Affect Existing UPL Programs • Is it Right to Limit Enrollees Freedom of Choice? NE Ohio HFMA

13. Medicaid APR-DRG Conversion Overview • Year-Long Process to Determine Relative Weights, Base Rates & Payment Policies (Note: More to Come!) • OHA Goal: Fairness and Equity Across Membership; • Implementation Delayed to 7/1/13 • Added Approx. $84 M / Year in Inpatient Payments for In-state Hospitals • Addressed rural hospital Inadequacies by Repurposing dollars From Out-of-state Hospitals ($24 M / Year) • Has Risk Corridors For Urban Hospitals to Ensure Stability & Predictability and Minimize Winners & Losers • Preserves Most Reimbursement Policies and Payment Logic Within the Current System (For Now?!). NE Ohio HFMA

15. Medicaid APR-DRG Conversion Policy Shifts July 1 • CMS Grouper 15 to APR-DRG Ver. 30 ( Ver. 31 Starts Oct. 1) • Outliers • Rebased Base Rates • Newly Calibrated Relative Weights • Stop Loss/Stop Gain Applications Within Peer Groups • Med-edPayments Help Harmless Remaining Questions • MCP Readiness & Compliance • Stop Loss Transitions in Out Years of Three-Year Transition • Accuracy of Payments & Projections – Contingencies? • Additional Discussion Expected (After July 1?) About: • Peer Groups, Next Scheduled DRG Re-base & Re-Calibration, Medical Education Payments, HAC, Other? NE Ohio HFMA

16. Medicaid Cost Report Data & DSH Audits • 2010 Myers & Stauffer Audits Underway! • CMS: SFY 2011 Audits get Serious • Expect Medicaid Cost Report UC Data Expansion to Continue for One More Year (?) • Watch for Revised Instructions on 2011 & 2012 Logs and Medicaid Cost Reports • Required Electronic UC Logs are at: http://jfs.ohio.gov/ohp/bhpp/COSTRPT.stm NE Ohio HFMA

17. Medicaid Cost Report Data & DSH Audits Major Changes for SFY 2011 Audits • Standardized Electronic Logs Required • Use revised Medicaid cost report version, including revised schedules C, F, I and new J-series schedules • In accordance with the Federal DSH Audit Proposed Rule (Jan. 2012) if services provided by the hospital are not covered under insurance, those services should be categorized as uninsured. If yes, those services should be categorized as insured. • Uninsured hospital services must reflect charges incurred during the cost report year, regardless of the patient's financial category (DA, <100%, >100%). • Sch F must reflect gross uninsured charges and costs NOT net of payments NE Ohio HFMA

18. Medicaid Cost Report Data & DSH Audits Major Changes for SFY 2011 Audits (Cont.) • Payments for uninsured hospital services must reflect payments received during the cost report year, regardless of the patient's financial category, or write off or service date. Other Questions • Why is Data Duplicated on Logs? • What About Updates to UC Data After CR is Verified? • What About Timing of CPA Data Reviews? • Do “Agreed Upon Procedures” Need to be Revised? • What Happens if Hospital Can’t Comply with 2011 Audit Log and CR Requirements? NE Ohio HFMA

19. 2014/2015 Biennial State Budget NE Ohio HFMA

20. 2014/2015 Biennial State Budget Principal OHA Advocacy Targets • Support Ohio Medicaid Program Expansion • Preserve and Protect HCAP • Preserve the Hospital Franchise Fee and Appropriate Matching Funds and Supplemental Payment Programs • Protect Hospital, Physician and Other Practitioners’ Medicaid Reimbursement NE Ohio HFMA

21. 2014/2015 Biennial State BudgetState Estimates for Major Hospital Line Items NE Ohio HFMA

22. 2014/2015 Biennial State BudgetState Estimates of New “Modernization” Targets NE Ohio HFMA

23. Possible OHA Advocacy Targets in Ohio Senate • Restore Outpatient Cuts • Work on Problems with Hospital Readmissions Program • Do Something About High Medicaid RAC Interest Rates • Shore up Network Adequacy in Health Care Exchange • Eliminate Additional and Duplicative Data Requirements on Hospitals What About Medicaid Reform? NE Ohio HFMA

24. 2014/2015 Biennial State Budget Medicaid Reform and Health Care Exchanges: Are They Compatible? Exchange in Ohio • “Feds” Run, Build & Maintain IT Infrastructure • State Retains Control Over Medicaid Eligibility and Regulation of Insurance Market • QHP Certification (Who Sells on Exchange) • Product Approval • Rate Approval • Solvency Requirements • Plan Compliance Can “ Arkansas Model” Help w/ Ohio Medicaid Reform ?! NE Ohio HFMA

25. Medicaid and the Exchange • The “Arkansas Model”—What is it? • High level: Achieves Medicaid Expansion by Using the Health Care Exchange as a Vehicle • Details Unknown at This Point, but the Approach is Essentially a Medicaid Premium Support Model • Enrollees Remain on Medicaid & Are Entitled to Same Benefits and Cost-Sharing Protections • Out of pocket expenses,. deductibles and co-pays, must be same as under Medicaid • States Must Have a Mechanism to “Wrap-Around” Private Coverage to the Extent Benefits are Less and Cost Sharing is Greater Than Medicaid • Requires Sec. 1115 Waiver & Expires at End of 2016 NE Ohio HFMA

26. What is Medicaid Premium Support ? • Existing Law Allows States to Pay Premiums for Individuals to Buy Coverage Through Private Plans. • Beneficiary Receives $ From State to Purchase, Instead of State Paying $ Directly to MMC Plan • Such Arrangements Must be “Cost Effective” • The Cost of Coverage Through Premium Assistance Must be the Same or Less than Providing “Comparable Coverage” to the Individual in the Medicaid Program. NE Ohio HFMA

27. Medicaid Premium Support Under Arkansas Model • “Arkansas Model” is Essentially a Premium Support Model Where the Premium Support Payments Would be Used by Beneficiaries to Purchase Private Insurance Through an Exchange • The Premium Support Would be in Addition to Federal Subsidies Available to Those Between 100-400% FPL to Purchase Coverage on an Exchange • (Note: Those below 100% FPL are not eligible for federal subsidies, though would be eligible for premium support if coverage is extended.) NE Ohio HFMA

28. OHA’s Initial Concerns AboutArkansas Model • Network Adequacy • MC Plans Controlling and Limiting Access • Blending of Public and Private Markets • Private Plan Reimbursement Set at Medicaid Levels • Additional, Unreimbursed Administrative Burden on Hospitals NE Ohio HFMA

29. Exchange in Ohio: Important Dates • Ohio Department of Insurance Having Lot of Conversations with Potential Exchange Plans, but no Final Filings Yet • Late May: Deadline for Plans to Submit Applications to ODI End of July: ODI Sends Approved QHPs to Feds • August: Feds Upload into Federal Exchange • “Correction Window” for States and Plans • Only After do Plans Sign Contract to Sell in Exchange • October: Open Enrollment. • Expectation is Something (?) Will be in Place • January 2014: Exchanges “go Live” NE Ohio HFMA

30. Other Finance/PFS Current Issues • Medicare • Re-billing Rules Expanded in Adm. Ruling & Proposed Rule GO TO: http://www.cms.gov/Center/Provider-Type/Hospital/Other-Content-Types/Quick-Reference-CMS-1455-R.pdf • Other • IRS Proposed Rule on Charitable Hospitals • Public Hearing Held in December • Hospitals: Proposed Rule Needs to be More Flexible and Will Force Them to Leave Accounts Open for Months • Consumer Groups: Leave Proposed Rule as is! • IRS: Hospitals Within Systems Can Employ the Same Policy (What is a System?); Hospitals May Pursue Bill Collection During the Second 120-Day Period NE Ohio HFMA

31. Other Finance/PFS Current Issues • Medicaid • Primary Physician Payment Increase Still in the Works • OMA Waiting for CMS State Plan Approval • Medicaid Family Planning Benefit • Policy Interpretation and Potential Conflict With Patient Notification, Free Care, DSH Limits & 340(B) Programs • OHA Letter At OMA – OMA Conferring With CMS • Medicaid RAC Roll-out • Interest Payments On OHA Advocacy List • Still Waiting for Automated MITS Recovery System • BWC 2014 PPS’ • Process Just Starting • Problem with New BWC Budget Targets for IPPS & OPPS NE Ohio HFMA

32. Questions / Comments? NE Ohio HFMA