District of Columbia’s Public Health Care Programs in a Post Reform Environment

1. District of Columbia’s Public Health Care Programs in a Post Reform Environment Presentation for the: Health Insurance Forum Department of Health Care Finance May 26, 2011 Washington DC

2. Presentation Outline  • Overview of District’s Medicaid Program • Broad Goals of Health Care Reform • Increased Access Through Program Expansion • Service Delivery Reform To Promote Quality • Increased Coverage Through Exchange • Mayor’s Health Care Reform Implementation • Committee

3. Key Facts About the Department of Health Care Finance • Total Agency FY12 Budget Exceeds $2.1 Billion • 96% of budget spent on Provider Payments • Hospitals • Managed Care Organizations • Institutional Care (e.g. Nursing Homes) • Physician Payments • DC Medicaid provides health insurance coverage to almost 1 in 3 District residents – over 180,000 people

4. Managed Care Is A Growing Component of Medicaid in the District of Columbia 33% 37% 36% 37% 64% 63% 63% 67% Notes: D.C. fiscal year is October 1 through September 30; enrollment was averaged from October to September to create average monthly enrollment. Data were not available for managed care and fee for service enrollment prior to FY2007. Due to new coverage option state plan amendment and an 1115 waiver for childless adult beneficiaries with incomes between 133 percent and 200 percent of the Federal Poverty Level, over 30,000 individuals were moved from Alliance (not included in the data above) onto the Medicaid program. The net result is a rapid increase in managed care enrollment in FY2010 and FY2011, when looking at Medicaid enrollment data only.

5. The Elderly And Disabled Represent 29 Percent Of Medicaid Program Beneficiaries Demographics Of Beneficiaries In The District of Columbia’s Medicaid Program Blind & Disabled 29% Children Aged Adults Notes:Distributions may not sum to 100% due to rounding effects. Distribution of beneficiaries by category is based on average Medicaid enrollment in FY10.

6. …Yet They Account For 73 Percent Of Medicaid Program Spending, FY10 Aged Aged 29% Blind & Disabled 73% Adults Blind & Disabled Adults Children Children Notes: Distributions may not sum to 100% due to rounding effects. Source: Spending from ad hoc MMIS report 1/26/2011. FY 2010 date-of-service spending excluding DSH, cost settlements, Medicare premiums, and drug rebate.

7. The Cost of Serving the Elderly and Disabled Is Substantially Greater Than The Cost of Care For Children in Medicaid, FY10 Source: Spending from ad hoc MMIS report 1/26/2011. FY 2010 date-of-service spending excluding DSH, cost settlements, Medicare premiums, and drug rebate.

8. Presentation Outline • Overview of District’s Medicaid Program  • Broad Goals of Health Care Reform • Increased Access Through Program Expansion • Service Delivery Reform To Promote Quality • Increased Coverage Through Exchange • Mayor’s Health Care Reform Implementation • Committee

9. Broad Goals of Health Care Reform Fit Neatly With District’s History and Focus On The Uninsured • New law requires States to expand the Medicaid program to all persons under age 65 with incomes up to 133% of FPL • Undocumented immigrants are not eligible • Federal government will pay: • 100% of this expansion for years (2014-16) • 95% in 2017 • 94% in 2018 • 93% in 2019 • 90% for 2020 and beyond

10. DC’s Current Medicaid Eligibility Levels Already Exceed Targeted Thresholds For Health Reform DC Medicaid Income Eligibility Thresholds As A Percent of Federal Poverty $32,670 $32,670 2014 Heath Reform Eligibility Threshold 133% of Federal Poverty (Family of One) $24,176 $21,780 $21,780 $14,483 Childless Adults (Medicaid) Medicaid Eligibility Groups Families w/ Children Institution and Waiver Pregnant Women Children Age (0-18) Note: The District will receive federal support for its eligibility expansion in 2020. Federal government will pay 90% of the cost of expansion. .

11. Health Reform Focus On Quality Could Significantly Impact Programming For Medicaid In The District • Significant aspects of the ACA focus on improving the quality of care and by extension patient outcomes • Although spending approaches $2 billion questions persist about the health status of Medicaid and Alliance beneficiaries • Threshold question is how do we strengthen the link between the dollars we spend and better patient outcomes • Progress being made with evidence based approaches to target problems in prenatal care and we are now beginning to seeing fewer adverse prenatal outcomes in the District

12. Key Questions And Much Work Remain….. • How do we get beneficiaries to practice preventive health? • Regular visits to primary care and follow regimens • Healthier lifestyle choices – health status has complex social determinants • How do we move beneficiaries away from hospitals as a source of primary care? • Medicaid is too hospital-based ($300 million on inpatient care) • Need more urgent care facilities • Better management of patient care

13. Affordable Care Act Offers Options Through Medical Homes Concept • Health Homes – law permits Medicaid enrollees with chronic physical or mental health conditions to designate a provider as a health home • Goal is to address care coordination issues • Team of health professionals to coordinate and deliver care • A mandated list of comprehensive care management and social support services • Disease management services • Prevention services • Federal government will pay 90 percent of the cost for 2 years

14. Affordable Care Act Offers Options Through Accountable Care Organizations • Accountable Care Organizations – program that ties provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. • Four core principles for all ACOs: • Provider-led organizations with a strong base of primary care • Payments linked to quality improvements that also reduce overall costs • Reliable and progressively more sophisticated performance measurement to support improvement and provide confidence that savings are achieved through improvements in care • Shared savings model

15. Insurance Exchange Is Most Ambitious Goal of Affordable Care Act • The Affordable Care Act relies on states to establish health insurance exchanges • Goal is to create an insurance marketplaces that provide affordable, good-quality coverage options to individuals and small businesses • Forty-eight States and the District of Columbia were awarded their first Exchange grants in September 2010. • Those grants were for planning purposes and the next round of grants will be for the purpose of establishing an Exchange • DHCF has contracted with Mercer Consulting to provide guidance as to how the District’s Exchange should be constructed

16. Key Questions………. Who will have access to the Exchange and how do you avoid the problem of adverse selection? How should the Exchange be structured? How much purchasing authority should an Exchange have? What benefits should be offered in an Exchange?

17. Presentation Outline • Overview of District’s Medicaid Program • Broad Goals of Health Care Reform • Increased Access Through Program Expansion • Service Delivery Reform To Promote Quality • Increased Coverage Through Exchange  • Mayor’s Health Care Reform Implementation • Committee

18. Mayor Vincent Gray’s Health Reform Implementation Will Advise Him On Health Reform Policy • Mayor Vincent C. Gray announced the creation of the Mayor’s Health Reform Implementation Committee (HRIC) in April 2011 • The Committee will advise and make recommendations to the Mayor’s office on the implementation of the Affordable Care Act • The panel will be chaired by Wayne Turnage, Director of the Department of Health Care Finance and co-chaired by Department of Health Director Dr. Mohammad Akhter and Department of Insurance, Securities and Banking Commissioner William White.

19. Mayor Vincent Gray’s Health Reform Implementation Will Advise Him On Health Reform Policy • HRIC will direct the work three subcommittees • Eligibility and Medicaid Expansion • Insurance • Health Delivery System • Additional committee members will come from related agencies such as the Department of Human Services, the Department of Mental Health and the Department of Disability Services • The committee will submit its recommendations to Deputy Mayor for Health and Human Services B.B. Otero so that her office can ensure interagency coordination in implementing the committee’s recommendations