FY 2013 Medicaid Budget Update

1. FY 2013 Medicaid BudgetUpdate Medicaid Advisory Committee April 26, 2012

2. Good news • Physician fee increase intact • Alcohol tax revenue used to support: • 300 new community waiver slots in OAW • 180 new community waiver slots in LAH • Increase in OAW case management support • No capping of the PAC program

3. Legislative Changes to Governor’s Budget, in General Funds • Increase Community LTSS Provider rates by 1.5% • Reduced to 1% (Reduction of $.9M) • Fund the Chronic Health Home project for the full fiscal year • Reduced to six months; added $100,000 for planning • Additional funds for personal care services…………………....$2.6M through use of funding available from eliminating the Nursing Facility bedhold payments • Took full bedhold savings, but only reallocated 50% ($1.3 M) back to personal care. Contingent on BRFA

4. Legislative Changes to Governor’s Budget, in General Funds (con’t) • MCO 1% reduction ……………………………..… $15.9 M • Added an additional 1% reduction $15.7M • Reduce the medically needy inpatient hospital benefit package …………………………………. $36M • Requires a report on how it will be implemented by 9/15/12 • Implement tiered outpatient rates which means different rates for different types of services ….… $30M • Requires a report on how it will be implemented by 9/15/12 • Implement a DSH pool …………………………... $9.1M • Requires a report on how it will be implemented by 9/15/12 Contingent on BRFA

5. Legislative Changes to Governor’s Budget, in General Funds (con’t) • Nursing Home increased from 5.5% to 6% …………………………. $5.5 M • Increased revenue estimate to $6.9M Contingent on BRFA • New Medical Day Care of 5.5% ……………………………… $3.4 M • Rejected

6. Legislative Changes to Governor’s Budget, in General Funds (con’t) • Reduce funding for non-emergency transportation………………………………….……$.6M • Delete funds for early takeover of MMIS…………$6M • Tighten criteria for dental orthodontia program………………………………………….….$.3M • Increase nursing home payments for targeted needs ………………………………………………………..$3M

7. Budget Language and Narratives • Inform the Committees immediately if budgetary actions impact the Medicare Waiver and deteriorate Maryland’s position on the waiver test. Due by 12/1/2012 • Change the methodology for payment of the MCO Rural Access Incentive and report back on how to best do this. Due by October 15, 2012 • Conduct a study that estimates the value of the tax exempt status enjoyed by not-for-profit nursing homes. Due by 1/1/2013 • Study the use of Psychotropic medications among children in foster care. Due by December 1, 2012

8. “Doomsday” Budget Items • No rate increase for Mental Health providers • No rate increase for DD providers • Statewide reduction in 500 FTE • No COLA for state employees • Increased share of health insurance premiums for state employees

9. Additional Issues • “Doomsday” Budget itself not in balance, in the amount of $80 MM • Failure of BRFA to pass also causing deficit of $70 MM • As a result, across state government the budget is out of balance by $150 MM • Additional cuts therefore will be necessary