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Health Care Reform in Maryland: Driving Change and Improving Access to Quality Care

This article discusses the key components of health care reform in Maryland, including Medicaid expansion, health insurance exchange, and insurance market reforms. It also addresses the challenges and goals of reform implementation, such as reducing the uninsured rate and improving the delivery system.

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Health Care Reform in Maryland: Driving Change and Improving Access to Quality Care

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  1. Health Care Reform – The View from MarylandAAHAM Monthly MeetingOctober 21, 2011Valerie Shearer Overton

  2. Health Reform – Driving Change • Exponential growth in health care costs • Better access to insurance coverage • Connecting spending and quality • Improving the health of the community

  3. Key Components – PPACA • Medicaid Expansion--U.S. citizens up to 133% of FPL (Maryland currently at 116%) • Health Insurance Exchange--individuals and small businesses • Federal Subsidies--individuals between100-400% FPL • Individual Insurance Mandate

  4. Key Components – PPACA • Insurance Market Reforms--guaranteed issue, no pre-ex, no annual/lifetime caps • Medicare pilots (Readmissions, Value Based Purchasing, ACOs, HAI) • Community Benefits: • – Community health needs assessments

  5. Reform in Maryland • Estimated to cut the uninsured rate by half (14% to 6.7%); estimated $829 million in state savings between FY 2011 - FY 2020 • Set against existing State budget challenges • – Initial $1.6 billion FY 12 structural deficit • – In FY 12, Medicaid must identify an additional $40 million savings • – $1.2 billion FY 13 structural deficit

  6. Reform in Maryland • Over $650 million in hospital assessments annually: • – Medicaid expansion to 116% FPG (2008) • – Medicaid budget assessment • – Maryland Health Insurance Program (MHIP) State’s high risk pool

  7. HCRCC Established • Health Care Reform Coordinating Council • Created by Executive Order--March 2010 • Charged with coordinating state agency activity and identifying/developing recommendations on issues critical to successful reform implementation • Reported to General Assembly January 1, 2011

  8. Established Six Work Groups • Exchange and Insurance Markets • Entry into Coverage • Education and Outreach • Public Health, Safety Net and Special Populations • Health Care Workforce • Health Care Delivery System

  9. Exchange/Insurance Markets • First items to be addressed by states under PPACA • Exchange (SB 182/HB 166): • – How exchange should be developed to advance goal of expanding access and affordability and to function in concert with the state’s existing insurance markets, including Medicaid

  10. Exchange/Insurance Markets • Established governance structure, functions mandated by PPACA, and areas of study (by 12/2011): • – Market rules inside and outside Exchange • – Navigator and consumer assistance program • – SHOP Exchange • – Financial model (self sustaining by 2015) • – Communications and Marketing • – Transformation to nonprofit (2015)

  11. Exchange/Insurance Markets • Insurance Market Reforms: • – Benefit Expansion (lifetime max, children to 26, elimination of pre-exs under 18) • – Disclosure of insurance information to enrollees • – MLR (80% SGM and IND in 2011, 85% LGM) • – Premium rate review

  12. Premium Rate Review • Carriers must publicly disclose any proposed rate increase of 10% or more in the individual or small group market • Reviewed by state or federal regulators (state regulators in MD) • Grant monies to “enhance and increase transparency” of Maryland’s rate review process • FY 2012 State budget language directs MIA to develop a mechanism to identify hospital assessments and rate increases in insurer premiums (Report due to General Assembly 12/2011)

  13. Workforce • Charge is to strengthen Maryland workforce capacity • Recommended solutions on: • Recruitment/retention • Education/training (LARP) • Improved medical liability climate • GWIB September interim report

  14. Public Health, Safety Net andSpecial Populations • Focus is on role of public health in a reformed health care system • Emerging themes: • Health care reform will leave approximately 400,000 uninsured Marylanders - safety net will still have a role

  15. Public Health, Safety Net andSpecial Populations • Emerging themes Cont.: • Health IT will play an important role to enable seamless, integrated care for those who fall in and out of coverage • Medicaid reimbursement will need to reflect the true cost of providing care • Need for the state to invest in community-based mental health resources

  16. Delivery System Changes - Focus • Electronic medical records (CRISP, state payor incentives for PCPs) • Payment system: • HSCRC bundled payments: • Phase I – Total Patient Revenue (TPR) • Phase II – Voluntary Admissions/Readmissions • Phase III – Statewide TPR

  17. Delivery System Changes - Focus • Patient Centered Medical Homes (CareFirst and MHCC pilots) • ACOs?

  18. HSCRC Payment Reforms Phase I:Global Budgets for 10-13 Rural Hospitals (2010) Phase II: Admission-Readmission Episode Payment for 25 Urban/Suburban Hospitals (2011) Phase III: Extend Global Budget Incentives to other Suburban Hospitals (Population Based Rate Setting) (2012)

  19. Phase I - TPR TPR = RegulatedTotal GrossPatientRevenue Excludes: Unregulated Services

  20. Overview - TPR • TPR is a fixed revenue base, regardless of: • – Increase or Decrease in Volumes • – Change in patient acuity • – Inpatient / Outpatient Mix • Adjustments are made for the following: • – Annual Payment Update Factor • – Changes in Uncompensated Care • – Population Change

  21. Overview - TPR • Effective and efficient use of health care services in the market is required to reduce hospital costs under the fixed cap • Wholesale shifting of services to an unregulated setting is prohibited: • – Volume increases in existing unregulated services, and, expanded use of alternative care settings is encouraged • Physician relationships are critical to the success of TPR

  22. Total Patient Revenue Hospitals & Possible Candidates for TPR W. Maryland HS $291m Carroll Co.$202m Union of Cecil $128m Wash. Co. $248m Garret Co. $42m $783 Mill. Chester River $56m Mem. Easton $160m Dochester $52m $500 Mill. Civista $111m Calvert $118m $355 Mill. Atlantic Gen. $85m St. Mary’s $126m McCready $19m HSCRC has established a fixed payment now for all Hospital services in 3 large regions of the State

  23. Phase II - ARR • Currently negotiating with 25 hospitals to establish a 30-day admission/readmission constraint • Constitutes a large expansion of the payment bundle (beyond single admission) for a substantial portion of the industry ($7.2 billion in inpatient revenue) • Actual revenue at risk = 8-9% of total revenue

  24. Phase II - ARR • HSCRC believes 30-50% reductions are possible = savings of between $200 and $325 million per year for candidate hospitals (hospitals indicate more in the 20-30% range) • HSCRC then has ability to “bend overall cost curve” (annual payment updates)

  25. Challenges - ARR • Transitional care (labor intensive) requires funding • Fragmented care, inadequate chronic care • Patient compliance • Payors do not pay for care coordination and transitional care (including Medicare)

  26. Quality of Care Initiatives • Phase I: Value-Based Purchasing linked to payment 2008 • 19 core measures--4 clinical domains & patient experience of care • Relative performance linked to rewards/penalties in annual inflation update • Includes hospital scores on Patient Satisfaction measures as well

  27. Quality of Care Initiatives • Phase II: Maryland Hospital Acquired Conditions2009 • 49 Potentially Preventable Complication Categories • Payment Incentives linked to relative hospital performance on risk-adjusted rates of complications (not present on admission) • HSCRC reports a 12% reduction in complication rates from 2009 to 2010 • Estimated savings of $62.5 million in cost out of total complication related costs of $552 million

  28. Quality of Care Initiatives • Phase III: Maryland Hospital All-Cause Readmissions • Phase IV: Working toward establishing a Balanced Portfolio of Quality-Related Measures

  29. HSCRC Value Index – Cost per Case & Complications High cost Lower Quality High Quality Balanced Portfolio of Quality & Patient Satisfaction Metrics Low cost - higher quality hospitals Low cost

  30. Maryland Medical Home Pilot Program • CareFirst pilot underway January 2010 • MHCC pilot launched July 2010 • Fifty practices, 200 providers, and 200,000 patients • NCQA Level I recognition within 6 months and Level II within 18 months • Practices receive fixed payment + incentive payment • MHCC attempting to enroll self-funded employers

  31. Health Care Delivery System - Focus Remains • Creation of new Payment Delivery System Reform Subcommittee under the HCRCC • MHA submitted potential nominees • Will examine projects that improve the patient experience, reduce costs, or improve health outcomes: • – Secretary has already suggested TPR, ARR and PCMH as areas of immediate interest

  32. What Does Reform Mean for Maryland? • Additional pressure on our waiver • Modernization efforts underway • Higher quality and efficiency expectations than the nation • Lower overall HSCRC rate updates • Newly insured patients--sustained and increased state budget pressures (Medicaid, small group and individual)

  33. Questions?

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