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HCA Presentation Ann Foster Division of Finance and Rate Setting Department of Health September 9, 2016 September 9, 2016 2 Agenda 2015 16 Global Cap Results Overview of 2016 17 Global Cap Projections Results through June

  1. HCA Presentation Ann Foster Division of Finance and Rate Setting Department of Health September 9, 2016

  2. September 9, 2016 2 Agenda • 2015 ‐ 16 Global Cap Results • Overview of 2016 ‐ 17 Global Cap Projections • Results through June 2016 • MLTC Rates • Minimum Wage • FLSA Survey

  3. September 9, 2016 3 2015-16 Closeout Results • Global Cap spending was $3 million below target for closeout. Medicaid Spending (FY 2016) (dollars in millions) Category of Service Estimated Actual Variance Medicaid Managed Care $12,400 $12,466 $66 Mainstream Managed Care $8,760 $8,673 ($87) Long Term Managed Care $3,640 $3,793 $153 Total Fee For Service $9,658 $9,689 $31 Inpatient $2,923 $3,014 $91 Outpatient/Emergency Room $458 $491 $33 Clinic $551 $570 $19 Nursing Homes $3,469 $3,379 ($90) Other Long Term Care $653 $676 $23 Non-Institutional $1,604 $1,559 ($45) Medicaid Administration Costs $498 $504 $6 OHIP Budget / State Operations $257 $271 $14 Medicaid Audits ($358) ($261) $97 All Other $2,502 $2,285 ($217) Local Funding Offset ($7,216) ($7,216) $0 TOTAL $17,741 $17,738 ($3)

  4. September 9, 2016 4 Variance Highlights • Long Term Managed Care (+$153M)  Timing-related (+$102M): additional Federal receipts and cash advances to several plans.  Other (+$51M): due to higher than expected enrollment of approximately 5,400 recipients. This is in addition to the 6,375 recipients added in the Mid-Year update. • Long-Term Care (-$67M)  Primarily due to delayed rate packages. .

  5. September 9, 2016 5 Global Cap for 2016-17 is $18.5 billion • Reflects annual growth of $771 million (primarily for price and utilization).  Managed Care trends for Mainstream and Long Term Care set by Mercer.  Various FFS rate changes (includes increases for case mix, inpatient, and outpatient/clinic rates).  Assumes 93,400 new enrollees from March 2016.

  6. September 9, 2016 6 2016-17 Global Cap Projections – DRAFT • The Global Spending Cap will increase to $18.5 billion in 2016-17, reflects underlying growth of $771 million. Price • Trend increases for mainstream managed care and long term managed care; and (+$524 million) • Increases for various FFS rate packages. Utilization • Annualization of 2015-16 new enrollment (194,000); and (+$215 million) • New enrollment for 2016-17 (93,400). • State Contribution for the Essential Plan ($500 million); offset by MRT/One- Removal of the 53 rd cycle (-$207 million); • Timers/Other • Annualization of CFCO enhanced FMAP (-$130 million); and (+$32 million) • Additional Accounts Receivable collections (-$108 million).

  7. September 9, 2016 7 2016-17 Global Cap Projections – DRAFT  “ Online ” spending Medicaid Spending -- 2016-17 includes health care (dollars in millions) provider claims Category of Service Online Offline Total reimbursement. Medicaid Managed Care $13,888 ($357) $13,531 Mainstream Managed Care $9,369 ($62) $9,307  “ Offline ” spending Long Term Managed Care $4,519 ($295) $4,224 Fee For Service $7,823 $748 $8,571 primarily includes grants, $2,820 $662 $3,482 Acute Care DSH/IGT payments and $3,627 ($17) $3,610 Long Term Care Non-Institutional $1,376 $103 $1,479 administrative costs. Medicaid Administration Costs $0 $480 $480 OHIP Budget / State Operations $0 $383 $383  “ Offline ” offsets primarily Medicaid Audits $0 ($318) ($318) Other State Agency $3,154 ($1,017) $2,137 include reimbursements All Other $0 $884 $884 from local governments, Local Cap Contribution $0 ($7,157) ($7,157) $24,865 ($6,354) $18,511 TOTAL other state agencies, pharmacy rebates, cash audits and CFCO.

  8. September 9, 2016 8 Long Term MC ($4.2 billion in 2016-17) – DRAFT • Projected increases include: Components ($ in Millions) Price Utilization Base/Trend Update $168 -- Annualization of 2015-16 Enrollment -- $256 New Population Shifts – 7,105 individuals -- $98 New Enrollment – 12,000 individuals -- $152 Total Increase $168 $506 • Other spending primarily reflects the enhanced FMAP for CFCO (-$132 million), recovery of provider cash advances (-$70 million) and removal of the 53 rd cycle (-$20 million).

  9. September 9, 2016 9 Fee-For-Service Categories – DRAFT Long Term Care Services ($3.6 billion in 2016-17) 2015-16 Category of Service ($ in millions) Price Utilization Other 2016-17 Budget Actual Nursing Homes $3,378 $10 ($311) $10 $3,087 Other Long Term Care $675 ($21) ($105) ($26) $523 Total $4,053 ($11) ($416) ($16) $3,610 • Projected increases include:  Price: Primarily represents case mix increases and cash receipts assessment reconciliations, offset by the annualization of CHHA rebasing.  Enrollment/Utilization: Reflects the movement of populations to managed care. • Other spending reflects the removal of the 53 rd cycle (-$65 million), enhanced FFP for CFCO (-$14 million) and ACA (-$8 million); offset by the restoration of the 2% ATB (+$70 million).

  10. September 9, 2016 10 Results through June 2016 • Medicaid expenditures through June 2016 are $8 million above estimates Medicaid Spending (dollars in millions) Cumulative Category of Service April May June Variance Medicaid Managed Care $12 ($7) $13 $18 Mainstream Managed Care $6 ($2) $4 $8 Long Term Managed Care $6 ($5) $9 $10 Total Fee For Service $21 $19 ($3) $37 Inpatient $4 $4 ($5) $3 Outpatient/Emergency Room $3 $4 $0 $7 Clinic $1 ($1) $2 $2 Nursing Homes $6 $1 ($11) ($4) Other Long Term Care $4 $6 $5 $15 Non-Institutional $3 $5 $6 $14 Medicaid Administration Costs ($2) $1 $3 $2 OHIP Budget / State Operations ($9) ($8) ($3) ($20) Medicaid Audits ($1) $0 $0 ($1) All Other ($22) $3 ($9) ($28) Local Funding Offset $0 $0 $0 $0 TOTAL ($1) $8 $1 $8

  11. September 9, 2016 11 Accounts Receivable Balance as of August 2016 o The accounts receivable balance $200 declined by $64 million from $9 Inpatient March 2016. Clinic $32 $150 Home Care $18 o Global Cap projecting a reduction Nursing Homes of $140 million in SFY 2016 ‐ 17. $100 Other $74 o Goal is to eliminate AR balance by $50 March 2018. $28 $0 $184 million

  12. September 9, 2016 12 Cost Report Status Cost Report Status Due Date Expected Received Long Term Home Health Care August 15 48 48 Personal Care September 15 410 51 CHHA September 15 130 17

  13. September 2016 13 2016 MLTC Partial Capitation Rate Methodology • Updated cost report base period data from CY12&13 to CY13&14. • Continue Wage Parity and FLSA wage adjustments. • Administrative cost capped at $215 pmpm. • Rates include a 1% surplus. • Fraud, Waste and Abuse reduction applied based on legislation for plans and OMIG to work together to obtain savings. 13

  14. September 2016 14 MLTC Pools • Quality Incentive Pool Projection – $140 Million  Funded by Surplus Reduction from 3% to 1%. • High Cost High Need Risk Pool - $140 million  2% Withhold and redistribution done simultaneously at the end of SFY16-17. • Nursing Home Price Mitigation Pool - $22 Million  Requires accurate encounter data reporting including begin and end service dates. Anticipated Rate Adjustments • Minimum Wage Adjustment – October 2016 . • New CFCO Services – tentatively December 2016. 14

  15. September 9, 2016 15 Minimum Wage • Stakeholder workgroups began in early July:  Provider Associations  Plan Associations  Joint Meeting of Provider and Plan Associations • Draft wage increase of $1.33 to worker cost (NYC). • Draft wage increase of $0.99 to MLTC rates (NYC) in October rate package. • Next Stakeholder workgroup with DLTC, OMIG and DOL regarding compliance and enforcement. • Currently developing fiscal for Upstate Region and subsequent fiscal years.

  16. September 9, 2016 16 FLSA Survey • DOH and Mercer recently conducted a direct-to-provider survey to assist the Department in obtaining data on the costs incurred by providers for new FLSA requirements including:  Overtime  Travel  New live-in rules • 257 surveys were completed. • Information from survey expected in October to inform future rate adjustments.

  17. Questions

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