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AHCCCS Update September 19, 2012

AHCCCS Update September 19, 2012. Health Care Reform. PPACA expanded Medicaid to 133% of the federal poverty limit on January 1, 2014. Nationally Medicaid is estimated to grow by 16 million lives Create Health Exchange provide tax credit subsidy for individuals from 100% to 400%

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AHCCCS Update September 19, 2012

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  1. AHCCCS Update September 19, 2012 Our first care is your health care Arizona Health Care Cost Containment System

  2. Health Care Reform PPACA expanded Medicaid to 133% of the federal poverty limit on January 1, 2014. Nationally Medicaid is estimated to grow by 16 million lives Create Health Exchange provide tax credit subsidy for individuals from 100% to 400% Nationally Exchanges are expected to cover 24 million lives by 2019 State needs to determine who will operate Exchange Made a number of commercial insurance reforms Established Individual Mandate Our first care is your health care arizona health care cost containment system

  3. Supreme Court Ruling • Surprise – • Individual Mandate – stands • Medicaid – Justice Roberts “We disagree. The court today limits the financial pressure the Secretary may apply to induce States to accept the terms of the Medicaid expansion. As a practical matter, that means States may now choose to reject the expansion; that is the whole point. But that does not mean all or any will.” Our first care is your health care Arizona Health Care Cost Containment System

  4. What does this mean for Arizona? It is complicated • Proposition 204 voter mandate • Current freeze due to limited resources • Federal waivers that expire on January 1, 2014 that provided temporary assistance for uncompensated care • Executive seeking input on important decisions re: Medicaid and Exchange Our first care is your health care Arizona Health Care Cost Containment System

  5. Our first care is your health care Arizona Health Care Cost Containment System

  6. Population Fiscal Summary Our first care is your health care Arizona Health Care Cost Containment System

  7. Public Forums Outlining Executive principles, facilitating stakeholder discussions and gathering input on community perspectives re: ACA • Flagstaff • Phoenix • Yuma • Tucson Our first care is your health care Arizona Health Care Cost Containment System

  8. Process and Timeline for Deliberations • Ongoing: Submit clarifying questions to Federal Government and await further guidance on Federal interpretation of Supreme Court ruling for Medicaid. • August 2012: Update fiscal estimates on State options. • July – November 2012: Engage stakeholders and obtain public input. • November – December 2012: Incorporate final decisions into normal policy-making process. Our first care is your health care Arizona Health Care Cost Containment System

  9. Total AHCCCS Population Our first care is your health care Arizona Health Care Cost Containment System 10

  10. Childless Adult Population Our first care is your health care Arizona Health Care Cost Containment System 11

  11. Our first care is your health care Arizona Health Care Cost Containment System

  12. AHCCCS Coverage Solutions: Current Status of the AHCCCS Program • Current Waivers that end Jan. 2014: • Freeze and coverage for Childless Adults • Safety Net Care Pool using local dollars to cover uncompensated hospitals costs ($332 M program - $150 M paid to date). • KidsCare II allowing coverage for 22,000 children using local dollars. • First-ever funding program to support uncompensated care costs for Indian Health Services and Tribally Operated facilities ($17 M paid to date). Our first care is your health care Arizona Health Care Cost Containment System

  13. Our first care is your health care Arizona Health Care Cost Containment System 15

  14. AHCCCS Coverage Solutions: Building on a Tradition of Flexibility, Partnership • Flexibility, partnership are cornerstone of AHCCCS success, mainly through 1115 Waiver, which: • Created first statewide, mandatory Medicaid Managed Care program (1982); • Permitted Home and Community Based Services to allow elderly and individuals with disabilities to stay at home instead of being placed in institutions for their care (1989). • Allowed coverage for Childless Adults in response to Prop. 204 (2001); • Supported personal responsibility through mandatory copays for Childless Adults (2003); and • Provides State ability to manage program during fiscal crisis. Our first care is your health care Arizona Health Care Cost Containment System

  15. Opportunities for Operational Efficiencies • Currently, multiple agencies across state government are performing the same function of purchasing healthcare services for the State. • Modernizing Arizona’s healthcare infrastructure presents opportunities to consolidate some of these functions. • Streamlining government functions supports best practices, leverages existing capacity and achieves greater efficiencies. • The State could better focus on reform initiatives to align incentives in healthcare, pay for quality of care and not quantity of services, modernize reimbursement strategies (e.g., use of APR-DRGs), and pursue innovation grants. Our first care is your health care Arizona Health Care Cost Containment System

  16. Medicaid Policy Questions • What is available in resources to restore Proposition 204? • What flexibility will the federal government provide to the state going forward for this population? • What match rate will the state receive for Prop 204 – standard or enhanced - $1.5 B difference (4 years) • What should the state do regarding the adult population between 100-133% - Exchange or Medicaid? Our first care is your health care Arizona Health Care Cost Containment System

  17. Health Insurance Exchange Timeframes • September 2012: Essential Benefits decision • November 2012: Submit State’s Intent regarding Exchange to HHS Secretary • January 2013: HHS Secretary Certifies Exchange • July 2013: Systems Readiness Testing • October 2013: Exchange enrollment begins • January 2014: Exchange coverage begins • January 2015: Exchange must be self-sustaining through user fees, assessments or other funding sources Our first care is your health care Arizona Health Care Cost Containment System

  18. Exchange Tax Credits • Law provides for refundable, advanceable Credits • Up to 133% FPL – 2% of income • 133-150% FPL – 3-4% of income • 150-200% FPL – 4-4.63% of income • 200-250% FPL – 6.3-8.05% of income • 250-300 FPL – 8.05-9.5% • 300% + - 9.5%

  19. Health Insurance Exchange: Funding • State v. Federal Exchange operation considerations: • Customer Support • Competition and Choice • AHCCCS eligibility determination • Start-up Funding Our first care is your health care Arizona Health Care Cost Containment System

  20. Other Issues Our first care is your health care Arizona Health Care Cost Containment System

  21. Dual Members Demonstration Unprecedented historical opportunity to improve care April – Presentation to CMS and OMB May - Meetings with 1. CMS Administration 2. Congressional Staff 3. MEDPAC/MACPAC June – Hosted California Staff July – Congressional Testimony Concerns expressed include (non CMS) Speed – Size – Health Plan Capacity – Unresolved Issues – Medicare Principles Current model is fragmented, unsustainable and results in lack of accountability and sub-optimum outcomes Our first care is your health care Arizona Health Care Cost Containment System

  22. Arizona Dual Eligible Demonstration Proposal • Arizona 1 of over 20 states to submit proposal • Arizona has proven success of alignment • Submitted to CMS on May 31, 2012 • 3 Year Demonstration • Goal – Statewide move from 40,000 integrated members to 100,000 • 3 way contract – CMS – State – Plans • Still unanswered questions –requires flexibility Our first care is your health care Arizona Health Care Cost Containment System

  23. KidsCare Program • KidsCare II • Originally 21,000 slots • Slow startup allowed for additional enrollment – 22,200 currently enrolled • Cap instituted September 7 • 1-1-14 end date • New Prop 204 Sales Tax • Directs $25 million to KidsCare (potentially a “KidsCare III program) • Additional funding not really needed, since ACA provides 99% federal match for KidsCare Our first care is your health care Arizona Health Care Cost Containment System

  24. Care Coordination Strategies • Care Management Coordinator • AHCCCS working with 3 populations with Inpatient stay • Long Term Care – contacting tribal case manager • Newborns – contacting moms to coordinate pediatric visit • Diabetic Patients – connecting member back to I.H.S & 638 system Our first care is your health care Arizona Health Care Cost Containment System

  25. Implementing Legislative Changes • Breast and Cervical Cancer program • Allows screening by a broader array of providers • Expected to increase program enrollment • Ambulance Rates • CY 2013 rates at 68.59% of ADHS as of Aug 2 (proposed rule) • Future rates determined through collaborative stakeholder process that includes: • Predictability • Limited annual impact • Potential acknowledgement of changes in uncompensated care

  26. Outstanding Waivers • Integration Waivers • CRS members • Individuals with SMI – Maricopa RBHA to provide physical health and behavioral health • Nursing Facility assessment

  27. Hearings • OALS and OAH implementing plan to reduce backlog • Of 1237 cases: • 340 vacated • 403 withdrawn • 442 set for prehearing • 52 received hearing

  28. Other Issues • Managed Care RAC RFI – closed Sept 5, 2013 - 7 responses received – currently under review • State Innovation Models (SIM) grant • Governor’s Office would lead application • Concerns regarding: • Resource diversion from priority projects • Coordinating various stakeholders/players • Breadth of scope Our first care is your health care Arizona Health Care Cost Containment System

  29. Other Issues • Numerous federal efforts around updating and improving quality measures • CHIPRA Core – Comprehensive Well Child Core – Adult Core - Dual Eligible – Multiple Chronic Disease – Meaningful Use – CMS Access Measures • HIT – looking to leverage ARRA investment • 986 EP - $20 m – 47 Hospitals - $56 m • New IP Payment methodology – All Payer Refined – Diagnosis Related Groups (APR-DRGs) Our first care is your health care Arizona Health Care Cost Containment System

  30. Other Issues • Audits and Reviews • Sunset Audit – 2 of 4 reports complete • Eligibility 1.1% Error Rate – see attachment • Medicare Part B Payments – Disallowance • PERM Review • RAS Recovery Audit • CMS ALTCS Review – GAO Managed Care Review • Nursing Facility Assessment Fee Legislation Our first care is your health care Arizona Health Care Cost Containment System

  31. NAMD • 501(c)(3) entity to facilitate dialogue among states, develop consensus on critical issues, represent Medicaid directors in national policy debates, and provide technical assistance to states. • Medicaiddirectors.org Our first care is your health care Arizona Health Care Cost Containment System

  32. State Personnel Reform • Modernized state management of employees to increase productivity, attract talent and retain high performing employees. • Certain current employees and all new employees will have “uncovered” status. • State agencies are implementing over the next year. Our first care is your health care Arizona Health Care Cost Containment System

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