Healthcare Financial Management Association Northeast Ohio Chapter OHA Update Charles Cataline

1. Healthcare Financial Management Association Northeast Ohio Chapter OHA Update Charles Cataline Senior Director, Health Policy Ohio Hospital Association charlesc@ohanet.org www.ohanet.org NE Ohio HFMA

2. Agenda • Ohio 2012/2013 State Budget How did it pan out for hospitals? What’s next? • Medicaid • RAC • MITS • Other Medicaid • Medicare • MAC Conversion Update • ACO Final Rule • 2012 OPPS Final Rule & Others • BWC • Other?! NE Ohio HFMA

3. OHA Budget Goals • Minimize Losses on Hospital Franchise Fee Program • Maintain Medicaid Funding • Preserve Base • Keep 5% Payment Update From 2009 • Preserve HCAP for Hospitals • Reduce Regulatory Burden NE Ohio HFMA

4. Hospital Franchise Fee • H.B. 153 (state budget) Extends Franchise Fee for Two Years – Now Sunsets 10/1/13 • Fee Rate & Timeline to be Determined in Administrative Code Rules • Preliminary Rates (SFY ’10 Cost Reports) 2.562% in 2012; 2.722% in 2013 • Preliminary Timeline: Equal Installments Nov. 30, Jan. 15, Mar. 15, and May 15 • Supplemental Payments Under UPL Expanded & Managed Care Incentive Payment Created NE Ohio HFMA

5. Hospital Franchise Fee NE Ohio HFMA

6. Supplemental Payments • Existing Supplemental Payments Continued • Children’s, Public/State/Private UPL Programs • Paid Semiannually • ~$128M per year • New Supplemental Payments Created • Inpatient - 4 Payments • Across the Board; Private Teaching, Specialty & Magnet; CAH/Rural • $215M in 2012; $260M in 2013 • Outpatient - 4 Payments • Across the Board • $67M in 2012; $98M in 2013 NE Ohio HFMA

7. Managed Care Incentive Payments • Response to “Non-Contracting” Budget Debate • $162M Per Year - Starting Oct. 2011 • Hospital Must Contract With at Least One MCP • Lump Sum Payment 4/5 Times Per Year Based on Contracted Inpatient Business • Process/Policies Still in Development; OHA Negotiating Details with OAHP • OHA Serves as Conduit - Hospital Must Authorize OHA to Receive Funds • Goal is to Ease Administrative Burden and Ensure All Funds are Distributed NE Ohio HFMA

8. Looking Ahead NE Ohio HFMA

9. “Modernizing” Hospital Payments * In managed care section NE Ohio HFMA

10. State Budget: The Bottom Line • Franchise Fee Extension: ~$1 Billion in Fees • Will Fund ~$1.5B in Enhanced Hospital Payments • $530M “Net Gain” for Ohio Hospital Industry • 172 Hospitals Gain While 38 are Negatively Impacted • State gets $1.2B to support Medicaid program • Medicaid “Modernizations” Reduced From As-Introduced State Budget Projections • Original Fiscal Impact of $557M Reduced to $376M NE Ohio HFMA

11. Medicaid RAC • CMS Final Rule Out • ODJFS Contract Awarded to CGI • Few Details so Far – Intro at Nov. 16 Ohio RAC Summit • Watch for Public Rules • Actual Start Date Will be Fall 2011 or Later • Will Not Replace MIP or PERM Programs • OHA Will Seek Program Like Medicare RAC but ODJFS Will Take the FI/MAC Role • State-Specific Standards • Timelines • Medical Records • Audit • Appeal & Recoupment Policies NE Ohio HFMA

12. Medicaid Information Technology System • Overall, MITS is working • Hospital Payments are Lower than MMIS but Not at Crisis Level • Biggest Problems • Software is Not User Friendly; Learning Curve is Steep • MITS Edits are Causing Unexpected Rejections and Payment Shifts • ODJFS / HP Helpdesk is Overwhelmed • Cost of Vendor Eligibility Verification is Way Up! • Pre-Cert Issues Causing Additional Headaches • OHA & LMPG Working with ODJFS NE Ohio HFMA

13. Other Medicaid • Medicaid Managed Care RFA Delayed • RFA Now Due 1/1/12; New MPC Contracts Effective 1/1/13 • Medicaid Cost Report UC Data Expansion • Required by Feds; Myers & Stauffer • Three New Schedules for SFY 2011; UC Data Broken into CR Revenue Areas • Additional SFY 2011 Data Due When M&S Audits in 2013 • Required with Annual Medicaid CR Thereafter • SFY 2011 CR Delayed 30 Days • Expect Hospital Charge Audits From Permedion • OHA Finance Committee Discussing Expanded HCAP-Related Free Care Eligibility Timelines NE Ohio HFMA

14. MAC Conversion • So Far so Good • CGS Website Under Expansion • Note Contact List at http://www.cgsmedicare.com/parta/help/contact_info.html • No Noted Problems with “Pay Forward” • No Date for End of RAC Brownout Set Yet • Be Prepared for Months of RAC Reviews to Move Quickly • Demand Letters could be a Problem, too! • CGS LCDs go Into Effect on DOS 10/17/11 • Final MAC Jurisdictions Announced NE Ohio HFMA

15. Other Medicare • Final Rules Season! • Accountable Care Organizations • Significant Moderation To Address Industry Concerns • CY 2012 Outpatient PPS/ASC • 1.9% Hospital Update; 1.6 % for ASCs • Supervision and Wage Index Still an Issue • Quality Reporting for ASCs Implemented • Value Based-Purchasing Updates Included • CY 2012 ESRD PPS • 2.1% Update; 2nd Year of Transition for Many • CY 2012 Physician Fee Schedule • CY 2012 Home Health • Provider Revalidation Coming NE Ohio HFMA

16. Bureau of Workers’ Compensation • Outpatient Medicare-based PPS in Transition • 198% Medicare 1/1/11 – 3/31/12 (Childrens = 253% / CAH Exempt) • 181% Medicare 4/1/12 – 3/31/13 • 166% Medicare After • 2011 Medicare OPPS Pricer Factors in Place Until 3/31/12 • Annual OPPS Pricer Update April 1 Thereafter • Medicare v. BWC PPS Chart Available at http://www.ohanet.org/Issue/BWC • FFY 2012 Inpatient PPS Effective 2/1/12 • 2011 Medicare IHPPS GROUPER In Place Until 1/31/12 • BWC Proposes Partial Return of CMS Coding Improvement Cuts, No ACA Return • OHA Still in Negotiations; Public Hearing Nov. 15 NE Ohio HFMA