LTSS overview for Policy Summit September 5, 2012

1. DRAFT LTSS overview for Policy Summit September 5, 2012 PRELIMINARY WORKING DRAFT, SUBJECT TO CHANGE

2. Today, we face major health care challenges in Arkansas • The health status of people in Arkansas is poor, with the state ranked at or near the bottom of all states on national health indicators, such as heart disease and diabetes • The health care system is hard to navigate, and it does not reward physicians and other providers to work as a team when caring for patients • Health carespending is growing unsustainably: • Insurance premiums doubled for Arkansas employers and families in past 10 years (adding to uninsured population) • Large (and growing) budget shortfalls projected for Medicaid

3. Medicaid and the new economy

4. Medicaid and the new economy

5. Medicaid and the new economy

6. Medicaid and the new economy

7. Medicaid and the new economy Notes: 1 - Due to rounding some annual totals may be off by one tenth in chart. 2 - Range of estimated shortfall in SGR is between $250-$400 million for SFY 2014.

8. Medicaid and private insurers believe paying for patient results, not just individual services, is the best option to control costs and improve quality  Transition to payment system that rewards value and patient health outcomes by aligning financial incentives Reduce payment levels for all providers regardlessof their quality of care or efficiency in managing costs  Pass growing costs on to consumers through higher premiums, deductibles and co-pays (private payers), or higher taxes (Medicaid)  Intensify payer intervention in decisions though managed care or elimination of expensive services (e.g. through prior authorizations) based on restrictive guidelines  Eliminate coverage of expensive services or eligibility 

9. The shift to paying for results is just one part of a broader program to improve the way that care is delivered in Arkansas… Objectives • Improve the health of the population • Enhance the patient experience of care • Enable and encourage patients to take a more active and informed role in their own care • Reward providers for high quality, efficient care • Reduce or control the cost of care For patients For providers How care is delivered Medical homes + Health homes Episode-based care delivery Four aspects of broader program • Results-based payment and reporting • Health care workforce development • Health information technology (HIT) adoption • Expanded access for health care services

10. Breakdown of total Arkansas Medicaid spend by setting of care PRELIMINARY Medicaid spend by area, includes cost settlements $ Millions; percent of total $1,900 M $900 M $530 M $450 M $500 M Waiver 15% Personal care 5% Skilled Nursing Facilities 70% Other 10% Medical Long- term care Develop. Disabilities Behavioral health Other SOURCE: SFY 2011 financial data

11. Basic facts about Medicaid Long-Term Services and Supports (LTSS)in Arkansas PRELIMINARY • Nursing home residents: ~12,000 • Waiver recipients: ~8,500 • Total LTC expenditures: $900 M • Total “halo1” expenditures: $150 M • Nursing homes: 229 • Assisted Living Facilities: 77 • Area Agencies on Aging: 8 • Adult day care facilities: 26 1 Includes all Medicaid expenditures for services not provided by LTSS provider (e.g., medical, behavioral health, pharmacy. Does not include Third-Party Liability or Medicare expenditures) NOTE: Does not include populations in Developmental Disabilities (DD) or Behavioral Health (BH) facilities. Waiver programs include: ElderChoices, Adults and Physical Disabilities, Assisted Living SOURCE: SFY2011 Medicaid claims data; SFY2012 Office of Long-Term Care fact sheet

12. Matching level of care to need • Eligibility and budgeting decisions should reflect client needs Removing adverse incentives • Incentives should reward positive care planning and appropriate staffing levels Coordinating care • Some clients have high costs outside of the long-term care system (e.g., medical costs) • Performance on case management should be consistent across providers and clients Helping people get to the right setting of care • Clients need to make setting of care decisions without a full understanding of long-term supports and services Ensuring a diverse array of service • Match array of services with client need and preference Opportunities within current LTSS system PRELIMINARY

13. Potential initiatives to address opportunities through the Arkansas Payment Improvement Initiative Create assessment-based episodes to determine eligibility and budgeting for clients in long term care 1 Create health homes to improve the quality and consistency of care coordination 2 • Launch a set of complimentary initiatives to ensure success of payment changes • Make sure that people are informed about all options and can access all available options no matter how they enter the system • Explore options for offering a continuum of services through Community First Choices option. 3