Introduction to the Medicaid Program in Texas

1. Introduction to the Medicaid Program in Texas December 2011

2. Medicaid • Overview • Program Administration • How is Medicaid Funded? • Who Does Medicaid Serve? • What Services Does Medicaid Provide? • Who Provides Medicaid Services? • Delivery Models

3. What is Medicaid? • Medicaid is a jointly funded state-federal program that provides medical coverage to eligible needy persons. • Medicaid is an entitlement program, which means that the federal government does not, and a state cannot, limit the number of eligible people who can enroll. • Federal laws and regulations: • Require coverage of certain populations and services; and • Provide flexibility for states to cover additional populations and services.

4. Acute and Long-Term Care • Acute Care • Physician, inpatient, outpatient, pharmacy, behavioral health, lab and X-ray services. • Refers to health care for children and pregnant women for episodic health care needs. • Long-Term Services and Supports (Long-Term Care) • Care for people with long-term care needs, chronic health conditions that need ongoing medical care, and often social support. This includes home and community-based care, as well as in facilities such as nursing homes and can include care for behavioral health conditions. • Acute Care vs. Long-Term Care – Distinction is based on the: • Cognitive and medical condition of patient; • Need for assistance with activities of daily living; • Degree to which a disability is chronic; • Nature of services provided; and • Setting in which services are provided.

5. Medicaid Clients • How many people receive Medicaid? • In June 2011, 3.3 million people received Medicaid. Of those: • Over 2.3 million are children • Over 700,000 are Aged, Blind, and Disabled

6. Figure 1.2: Texas Medicaid Beneficiaries and Expenditures State Fiscal Year 2009 100% 90% Non - Disabled Children 32% 80% Disabled Non - Children 61% 70% Non - Disabled Adults 10% 60% 50% 40% Non - Disabled Adults Aged & Disability 9% Related 30% 58% 20% Aged & Disability Related 30% 10% 0% Caseload Cost Medicaid Clients and Spending

7. Texas Medicaid and the State Budget How much is spent on Medicaid? Total SFY 10-11 budgeted for Medicaid: • $44.9B from all fund sources • $18.8B from General Revenue, GR-Dedicated, and Tobacco Settlement Receipts Medicaid amounts represent: • 75 percent of all appropriations for HHS

8. Joint State and Federal Program • Both the federal and state governments have a role in overseeing and funding the Medicaid program. • At the federal level, Medicaid is administered by the Centers for Medicare and Medicaid Services (CMS) within the U. S. Department of Health and Human Services. • Federal Medicaid regulations require each state to designate a single state agency responsible for the Medicaid program. HHSC has been the single state agency since 1993. Duties include establishing Medicaid policy, administering the Medicaid State Plan (or agreement) with the federal government, and more.

9. Medicaid Eligibility • Medicaid serves: • Low-income families • Children • Related caretakers of dependent children • Pregnant women • Elderly • People with disabilities • Texas Medicaid does not currently serve: • Non-disabled, childless adults

10. Income and Federal Poverty Levels • Financial eligibility for Medicaid and many other social programs is based on a family’s income level compared to the Federal Poverty Level (FPL). • The FPL is intended to identify the minimum amount of income a family would need to meet certain, very basic, family needs. • FPLs indicate annual income levels by family size and are updated each year by the US Department of Health and Human Services.

11. Selected HHS-Relevant Percent ofPoverty Income Levels for 2011 The amounts corresponding to 100% of poverty are based on the U.S. Department of HHS poverty income guidelines for 2011. Based on Annual Income Family Size 100% 10,890 1 2 14,710 3 18,530 4 22,350 5 26,170 6 29,990 7 33,810 8 37,630 At 100% of poverty, for families larger than 8, add $3,820 for each additional person. SOURCE:  Federal Register, Vol. 76, No. 13, January 20, 2011, pp. 3637-3638

12. Medicare and Medicaid • Medicare is a federally funded and administered program. • Medicaid is a jointly (Federal & State) funded program, administered by states. • It is important to note that Medicaid, not Medicare, pays for most long-term care services and supports. • Medicare only covers 100 days of nursing home care per “spell of illness” and beneficiary must be progressing toward rehabilitation goals. • Medicaid covers long-term institutional services and supports and covers the cost of nursing home care for dually-eligible clients not paid by Medicare. • Medicaid also covers community-based long-term care services and supports, not covered in Medicare. • Persons under 65 who receive monthly SSI must wait 2 years before becoming eligible for Medicare. During this period, Medicaid is the primary payor for their health care.

13. Mandatory Services • Federal law requires that all state Medicaid programs pay for certain services and reimburse certain provider types. The following must be covered by Medicaid: • Early Periodic Screening, Diagnosis and Treatment (EPSDT) also known as Texas Health Steps for children under age 21 (includes treatment of any conditions identified as medically necessary) • Check-up includes: medical history, complete physical exam, assessment of nutritional, developmental and behavioral needs, lab tests, immunizations, health education, vision and hearing screening, referrals to other providers as needed. • Federally Qualified Health Centers • Home health care • Inpatient and outpatient hospital

14. Mandatory Services • Mandatory Services (Continued): • Family planning/genetics • Lab and X-ray • Nursing facility care • Pregnancy-related services • Rural Health Clinics • Physicians • Certified Nurse Midwife • Certified Pediatric and Family Nurse Practitioner

15. Optional Services • The state may choose to provide some, all, or no optional services specified under federal law. Optional services provided in Texas include services such as: • Prescription drugs • Physical therapy • Occupational therapy • Targeted Case Management • Some rehabilitation services • Certified Registered Nurse Anesthesiologists • Eyeglasses/contact lenses • Hearing aids • Services provided by podiatrists • Certain mental health provider types

16. Pharmacy Services • The HHSC Vendor Drug Program performs most pharmacy services functions, including policy and program oversight, formulary management, and pharmacy customer services. • Texas contracts with private companies for pharmacy claims processing, prior authorization services, and administration of the drug rebate program. • The state contracts with pharmacies to provide Medicaid clients with pharmacy benefits. • Over 4,200 licensed Texas pharmacies are under contract. • Beginning March 2012, the managed care organizations will be responsible for providing pharmacy benefits to their members

17. Medicaid Providers and Requirements • Medicaid providers include: • Health professionals - doctors, nurses, physical therapists, dentists, psychologists, etc. • Health facilities - hospitals, nursing homes, institutions and homes for persons with mental retardation, clinics, community health centers. • Providers of other critical services like pharmaceuticals or drugs, medical supplies and equipment, medical transportation. • Medicaid providers must be enrolled as a Medicaid provider through the Texas Medicaid & Healthcare Partnership (TMHP)

18. Medicaid Delivery Models • Fee for Service (Traditional Medicaid) • Managed Care: • Managed Care Models in Texas: • Managed Care Organizations (MCOs) • Primary Care Case Management (PCCM) • Managed Care Programs in Texas: • STAR (State of Texas Access Reform) – Acute Care MCO • STAR+PLUS – Acute & Long-Term Services and Supports MCO • PCCM - Managed care model that provides a medical home for Medicaid clients through primary care providers • NorthSTAR – Behavioral Health Care MCO • STAR Health – Comprehensive managed care program for children in Foster Care

19. Fee-for-Service Medicaid • Fee-for-Service Medicaid is the traditional Medicaid program. • A Fee-for-Service Medicaid client is defined as either of the following: • (1) a client who is not enrolled in a managed care plan, such as a health maintenance organization; or • (2) a client who is enrolled in a managed care plan, but the service that is needed is covered by Medicaid, not by the plan. • Eligible clients may receive services from any eligible Medicaid provider

20. Provider Reimbursement: Claims Payment • Payment and processes vary by delivery model • HMO Model: • HMOs are paid a capitated rate by HHSC. • Providers are paid reimbursement rates established by the HMO via a contractual arrangement. • Bills for services, called “claims,” are sent to the HMO for payment. • Fee-for-Service and PCCM Models: • HHSC is responsible for establishing Fee-for-Service (Traditional Medicaid) and PCCM reimbursement methodologies. • Providers are paid Medicaid reimbursement rates for providing eligible Medicaid services to eligible clients. • Primary Care Providers in PCCM receive an additional monthly case management fee for each client. • Bills for services, called “claims,” must be sent to the state for payment.

21. Provider Enrollment • The Claims Administrator for Texas Medicaid is the Texas Medicaid and Healthcare Partnership (TMHP) • TMHP, a coalition of contractors headed by ACS, carries out the fee-for-service and Primary Care Case Management claims payment. • TMHP: • Assists providers in enrolling in the Texas Medicaid Program. • Educates providers on changing Medicaid policies, reimbursement rates and provider requirements.

22. Federal Medical Assistance Percentage (FMAP) • The portion of total Medicaid costs paid by the federal government is known as the Federal Medical Assistance Percentage (FMAP). • Texas FMAP for FFY 2011: 60.56 • Of each dollar spent on Medicaid services in Texas, the federal government pays approximately 61 cents. • Based on average state per capita income compared to the U.S. average • Small changes in the FMAP could result in significant loss or gain of federal funds.

23. Resources • http://hhsc.state.tx.us • “Pink book” --http://www.hhsc.state.tx.us/medicaid/reports/PB8/PinkBookTOC.html • http://www.hhsc.state.tx.us/medicaid/

24. Introduction to the Children’s Health Insurance Program (CHIP) December 2011

25. CHIP: Federal Legislative History • CHIP was created by the federal Balanced Budget Act of 1997, under a new Title XXI of the Social Security Act. It allowed each state to offer health insurance for certain children who are not already insured. • Texas CHIP was implemented in two phases: • Phase I began in 1998 as a Medicaid expansion for children 15 – 18 in families below 100 percent FPL. • Phase II was enacted by the Texas Legislature in 1999 as a separate health insurance program; enrollment began in April 2000. • Current caseload for December 2011: 562,550 children

26. Overview: What is CHIP? • CHIP is a joint state-federal program that provides medical coverage to eligible children up to age 19, who are not already insured. • Federal law and regulations require each state to: • Set eligibility guidelines, service levels, and delivery systems; and • Operate a state plan listing these elements.

27. What is CHIP? • CHIP is NOT an entitlement program, meaning: • The state can determine age and income eligibility; • The state can cap enrollment; and • The state can limit service benefits as approved by the U.S. Secretary of Health and Human Services. • Total federal financial participation is limited to block grant amounts allocated to each state.

28. CHIP Eligibility CHIP serves: • Uninsured children under age 19 • CHIP Perinatal serves unborn children meeting eligibility requirements • Gross income up to 200% Federal Poverty Level (FPL) • U.S. citizens or legal permanent residents • Not eligible for Medicaid • Families with net incomes above 150% FPL must meet assets criteria: • Assets below $10,000 • One vehicle is exempt up to $18,000; additional vehicles are exempt up to $7,500 • Eligibility is determined for a 12-month period; income verification at 6th month for families at 185% FPL and above • CHIP Perinatal eligibility is determined for a 12-month period

29. Cost Sharing: Enrollment Fees • CHIP annual enrollment fee: • $0 for families with net income less than 150% FPL • $35 for families between 151-185% FPL • $50 for families between 186-200% FPL • Families are required to pay the enrollment fee upon enrollment or renewal of CHIP

30. Cost Sharing: Current Co-payments Families enrolled in CHIP are responsible for co-payments for certain plan benefits

31. Cost Sharing: Co-payments effective March 1, 2012 Families enrolled in CHIP are responsible for co-payments for certain plan benefits

32. Current CHIP Benefits • Inpatient Hospital Services, including Inpatient Rehabilitation Hospital • Outpatient Hospital and Ambulatory Health Care Services • Lab and X-ray for inpatient, outpatient and ambulatory health care • Physician/Physician Extender Professional Services (surgical and medical), including services such as immunizations and well-baby and well-child examinations • Emergency Services • Prescription Drugs

33. Current CHIP Benefits • Physical/Speech/Occupational Therapy • Home Health • Transplants • Durable Medical Equipment (DME) • Dental Services • Hospice Care Services • Skilled Nursing Facilities • Vision Benefits (eye exams and eyeglasses) • Chiropractic Services • Tobacco Cessation • Behavioral health and substance abuse services

34. CHIP Perinatal Benefits • CHIP Perinatal provides a limited, basic prenatal care benefit package that includes: • Up to 20 prenatal and 2 postpartem visits • First 28 weeks of pregnancy ― one visit every four weeks • 28 to 36 weeks of pregnancy ― one visit every two to three weeks • 36 weeks to delivery ― one visit per week • Additional prenatal visits allowed if medically necessary • Pharmacy, prenatal vitamins, limited laboratory testing, assessments, planning services, education and counseling • Prescription drug coverage based on the current CHIP formulary • Hospital facility charges and professional services charges related to the delivery • No cost-sharing requirements

35. CHIP Delivery Models • CHIP Service Delivery Models include: • Managed Care Organization (MCO): A type of health care plan that arranges for or provides benefits to covered clients • The state pays the CHIP MCOs on a capitation basis: a set dollar amount PMPM to cover the health care costs of clients. • Client selects an MCO and a Primary Care Provider (PCP) • PCP authorizes services within the network • Providers are paid reimbursement rates established by the MCO • EPO: A health plan that arranges for or provides benefits to covered persons through a network of exclusive providers • Limited to services provided to client in network, except for emergencies • Dental Maintenance Organization (DMO) for dental services

36. Federal Match Rate • As in Medicaid, the federal government pays a percentage of CHIP program costs. • The federal government pays a higher percentage for CHIP than for Medicaid. • In 2011, the federal government pays 72.39% of CHIP medical care expenditures; compared to 60.56% of Medicaid medical care expenditures. • Of every dollar spent on CHIP medical costs, $0.72 is paid for by the federal government.

37. Resources • http://www.chipmedicaid.org • http://www.hhsc.state.tx.us