CHASE Board December 18, 2018 Nancy Dolson Department of Health - PowerPoint PPT Presentation

CHASE Board December 18, 2018 Nancy Dolson Department of Health Care Policy and Financing

Hospital Transformation Program ➢ November meeting comment summary ▪ Program purpose and coordination with other activities ▪ Federal waiver process ▪ Stakeholder and public comment process ▪ Department and CHASE Board roles and responsibilities ▪ Program design, implementation, reporting, and evaluation 2

Hospital Transformation Program ➢ Stakeholder engagement ▪ Engagement with subject matter experts, Regional Accountable Entities, health alliances, community organizations, client and consumer advocates ▪ Rural and urban hospital workgroups ▪ Quality measures workgroup 3

Hospital Transformation Program ➢ Waiver process ▪ Comprehensive program description including goals and objectives ▪ Hypotheses and evaluation indicators ▪ Budget neutrality ➢ Public notice ▪ State 30 day public notice and comment period ▪ Federal 30 day public comment period 4

CHASE Annual Report ➢ Statutory requirements 25.5-4-402.4(e), C.R.S. ▪ Recommendations by the CHASE board regarding the fee ▪ Description of the fee, including formula and how it is assessed and collected ▪ Itemization of fee and revenue by hospital, including quality incentive payments ▪ Itemization of costs incurred administering fee ▪ Estimates of differences between cost of care and payment by payer ▪ Efforts to seek federal waiver for Hospital Transformation Program 5

CHASE Annual Report ➢ Itemization of fee and revenue by hospital, including quality incentive payments ▪ Fees: $894.5 million ▪ Payments: $1.3 billion ✓ Disproportionate Share Hospital (DSH) $207.9 million ✓ Hospital Quality Incentive Payments (HQIP) $97.6 million ✓ Net reimbursement: $407 million 6

Administrative Expenditures ➢ State Fiscal Year (SFY) 2017-18 ▪ Administration is $68.5 million of $3.3 billion total expenditures ▪ 2.08% administrative costs (staff costs 0.18%) ➢ Senate Bill 17-267 established 3% administrative cap ▪ No General Fund dollars to be used for administering the enterprise ➢ Budget submissions include history, current year, and projections for next two fiscal years 7

Administrative Expenditures ➢ CHASE funds health plan for more than 450,000 Coloradans ▪ One-third of total Medicaid and CHP+ caseload of 1.3 million ➢ CHASE pays its share of ▪ Information technology services (Colorado Benefits Management System [CBMS], the Colorado interChange, Business Intelligence and Data Management system [BIDM]) ▪ Payroll and other staff costs, county eligibility, utilization management and audit contracts, etc. 8

Administrative Expenditures ➢ Department’s administrative costs ▪ SFY 2017-18 administrative costs were $318 million ✓ 3.19% administrative (staff costs 0.42%) ➢ America’s Health Insurance Plans (AHIP) ▪ Comparable administrative allowance for commercial health carriers is 13.4% 9

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Cost Shift ➢ Content in the proposed CHASE Annual Report similar to last year’s ➢ As directed by CHASE Board, staff and Colorado Hospital Association continue assessing drivers of hospital cost growth ▪ Draft report to be provided for board input and discussion 11

Cost Shift – Payment to Cost Ratio CICP/Self Year Medicare Medicaid Insurance Overall Pay/Other CY 2009 0.78 0.54 1.55 0.52 1.05 CY 2010 0.76 0.74 1.49 0.72 1.06 CY 2011 0.77 0.76 1.54 0.65 1.07 CY 2012 0.74 0.79 1.54 0.67 1.07 CY 2013 0.66 0.80 1.52 0.84 1.05 CY 2014 0.71 0.72 1.59 0.93 1.07 CY 2015 0.72 0.75 1.58 1.11 1.08 CY 2016 0.71 0.71 1.64 1.08 1.09 CY 2017 0.69 0.69 1.66 1.14 1.08 The payment less cost per patient for the CICP/Self Pay-Other payer group result may be due to hospitals reporting revenue incorrectly as CICP revenue, rather than Medicaid revenue, or because of a decline in the allocation of bad debt and charity care to this payer group. More analysis is needed. 12

Cost Shift – Payment less Cost per Patient by Payer Group CICP/Self Year Medicare Medicaid Insurance Overall Pay/Other CY 2009 ($2,853) ($4,480) $6,820 ($4,563) $542 CY 2010 ($3,361) ($2,586) $6,518 ($2,897) $701 CY 2011 ($3,097) ($2,488) $7,358 ($3,920) $918 CY 2012 ($3,886) ($2,465) $7,746 ($4,013) $903 CY 2013 ($5,318) ($2,418) $7,717 ($2,070) $747 CY 2014 ($4,706) ($3,665) $8,838 ($860) $1,039 CY 2015 ($4,648) ($3,252) $8,699 $1,286 $1,243 CY 2016 ($5,082) ($3,910) $10,391 $862 $1,347 CY 2017 ($5,660) ($4,454) $11,110 $2,011 $1,373 While costs have increased at an annual average rate of 5.1% over the eight-year period, payments have increased an average of 5.7% per year resulting in an average annual increase in margin of 19.2%. 13

Thank You Nancy Dolson Special Financing Division Director Department of Health Care Policy & Financing nancy.dolson@hcpf.state.co.us