2010-11 Budget Highlights

1. 2010-11 Budget Highlights Office Of Medical Assistance Programs

2. MA Continues To Receive Over 20% of General Funds Corrections 7.1% Debt Service 3.8% Medical Assistance Programs / Long- Term Living 21.7% Total General Fund Expenditures: $26.27 Billion State $ 2.76 Billion ARRA $29.03 Billion Total Other DPW Human Services Programs 16.1% All Other 9.3% Pre K-12 Education 35.2% Higher Education 6.8%

3. Short Term Extension Of Enhanced FMAP Will Help MA Meet Rising Needs Original sunset: 12/31/10 Now: Expect states will receive enhanced FMAP through FY10-11 Federal dollars will help us avoid most – but not all – painful cuts in this budget Additional FMAP (billions) 3

4. Over $15 Billion For MA/LTLFY 10-11 State & Federal Funding Other $ .4 billion ARRA $ 1.8 billion General Funds $ 4.5 billion Federal Funds $ 8.7 billion Total = $15.4 billion 4

5. FY 10-11 MA Budget • Preserves Eligibility • Preserves Services • Maintains Focus on Quality 5

6. We Preserved Services For Those In Need Adults w/o Children 6% 121,845 $944,785 6% 14% 294,205 Elderly $4,908,301 32% 21% 448,921 Disabled $5,740,213 37% Families 59% 1,265,814 $3,844,828 25% 6 Number of Eligible People Expenditures

7. Notable Changes In MA Budget 1. Federal Rebates for MC Pharmacy 2. Pharmacy Initiatives 3. Reduction In Hospital Supplementals 4. MCO Funding 5. Enhancing Program Integrity 7

8. Federal Rebates For MC Pharmacy • Savings of $102.5 Million in Outpatient Appropriation • Proposal to allow states to collect federal rebates for prescription drugs provided through Managed Care Organizations. • Needs federal legislation 8

9. Pharmacy Initiatives Savings of $4.6 Million in Outpatient Appropriation Expand RX Care Management Enhance Specialty Pharmacy Drug Program Verify Recipient Date of Birth On All Pharmacy Claims Expand Pharmacy Automation 9

10. Hospital Supplementals Maintains Funding for: OB/NICU Trauma Burn Centers Critical Access Centers Reductions in : Inpatient DSH Outpatient DSH Medical Education Community Access Fund

11. MCO Funding Restores MCO P4P Funding Not funded in FY 09-10 budget Use to incent MCOs to improve quality and access to care Has resulted in measurable increases in outcome performance measures Provides 4% Rate Increase Ensures ability to support actuarially sound rates 11

12. Enhancing Program Integrity • Savings of $4.5 Million in Outpatient and Inpatient Combined • Expand efforts to identify and recover payments • to third party • Augment resources to increase recoveries • Increase data mining, TPL and review activities 12

13. Enhancing Program Integrity(continued) State False Claims Act (SFCA) Deficit Reduction Act of 2005 incents states to enact a SFCA modeled after the federal FCA Once the SFCA is approved by CMS, the state will receive an enhanced federal MA percentage of the amount recovered for global settlements A qualifying SFCA will result in an increase in fraud and abuse related recoveries by producing a deterrent effect to providers who consider submitting false MA claims Recipient Restriction Language enhanced to explain criteria used for evaluation of appropriate restrictions Authorizes stricter penalties for individuals who abuse their MA benefits 13

14. Other OMAP FY 10-11 Priorities • Expanding Access Plus Program • Completing Transition of New Health Choices Plan and • Reprocuring Southwest • Implementing Electronic Prescribing • Encouraging Electronic Health Records • Expanding PSAE to Nursing Facilitiesand Other Providers 14

15. In Sum OMAP Budget Reflect Our Guiding Principles Support sustainability—preserve services for those who need them Improve quality and results—ensure services to improve the lives of those who receive them Ensure accountability—ensure efficient use of tax dollars

16. But There Are Still Risks to the Budget… • The Economy • MCO Pharmacy Rebates • Enhanced FMAP