Provider Fee Program Presented by: Nancy Dolson 8/30/17 1 Our - PowerPoint PPT Presentation

Federal Fiscal Year 2016-17 Provider Fee Program Presented by: Nancy Dolson 8/30/17 1

Our Mission Improving health care access and outcomes for the people we serve while demonstrating sound stewardship of financial resources 2

Overview • FFY 2016-17 hospital provider fee model discussion ➢ Hospital provider fee program overview ➢ Fee and payments methodologies ➢ Reconciliation process overview 3

Overview Program Goals • Increase hospital reimbursement for Medicaid and uninsured patients • Fund hospital quality incentive payments • Expand health care coverage in Medicaid and Child Health Plan Plus (CHP+) programs • Reduce uncompensated care costs and need to shift uncompensated costs to other payers 4

Overview • $113 million net new funds for hospitals between October 2016 through September 2017 ➢ $1.2 Billion in total supplemental Medicaid and DSH payments, including $90 million in quality incentive payments • Reduced uncompensated care costs and the need to shift uncompensated care costs to other payers ➢ From 2009 to 2015, Medicaid payment to hospitals improved from 54% to 75% of cost ➢ Between 2013 and 2015, bad debt and charity care decreased by more than 58% 5

Overview • Expanded health care coverage to more than 479,600 Coloradans as of September 30, 2016: ➢ 356,000 adults without dependent children ➢ 98,000 Medicaid parents ➢ 20,000 CHP+ children and pregnant women ➢ 5,600 working adults and children with disabilities • No increase in General Fund expenditures 6

Federal Provider Match from Fee from CMS Hospitals Cash Fund (Provider Fee + Federal Match) Increased Payment to Expanded Coverage to Hospitals Colorado Citizens 7

Overview • Net Patient Revenue (NPR) - limiting total provider fees that can be collected • Upper Payment Limit (UPL) - limiting total supplemental Payments that can be paid • Disproportionate Share Hospital (DSH) Limit - limiting hospital specific DSH payments that can be paid 8

Overview Net Patient Revenue (NPR) • Provider Fee collection limited to 6% of NPR • Estimated using historical data inflated forward • Inpatient NPR = (Inpatient Revenue / Total Hospital Revenue) * Total Hospital NPR * Inflation • Outpatient NPR = (Total Hospital NPR – Inpatient NPR) * Inflation 9

Overview Upper Payment Limit (UPL) • Supplemental payment limited to UPL • Maximum Medicaid is allowed to reimburse to hospitals • Aggregate, not hospital-specific limit • Completed for both Inpatient and Outpatient • UPL Room = Medicaid cost + provider fee cost – MMIS payments – non-provider fee supplemental payments 10

Overview 11

Overview 12

Overview Disproportionate Share Hospital (DSH) Limit • DSH supplemental payment limited to DSH limit • DSH limit = Inpatient & Outpatient Medicaid cost + uninsured cost – total Medicaid payments • DSH funds exceeding hospital-specific DSH limits must be repaid 13

Provider Fee • FFY 2016-17 Hospital Provider Fee Model ➢ $782 million provider fees ▪ Net Patient Revenue / 5.35% ➢ $1.16 billion in hospital supplemental payments ▪ Upper Payment Limit / 97.00% 14

Provider Fee FFY 2016-17 Net Hospital Reimbursement 1 Fees / Payments 2014-15 2015-16 2016-17 Total Supplemental $1,186,200,000 $1,120,800,000 $1,166,000,000 Payments CICP Prior to $(162,900,000) $(162,900,000) $(162,900,000) Provider Fees Total Provider Fees $688,400,000 $670,000,000 $782,300,000 Net Reimbursement $344,800,000 $288,400,000 $220,800,000 to Hospitals 1 rounding may cause calculation discrepancies. 15

Provider Fee FFY 2016-17 Net Hospital Reimbursement 1 Fees / Payments 2015-16 2016-17 Difference Total Supplemental $1,120,800,000 $1,166,000,000 $45,200,000 Payments CICP Prior to $(162,900,000) $(162,900,000) $- Provider Fees Total Provider Fees $670,000,000 $782,300,000 $112,300,000 Net Reimbursement $288,400,000 $220,800,000 $(67,600,000) to Hospitals 1 rounding may cause calculation discrepancies. 16

Provider Fee FFY 2016-17 Fees and Payments 1 Expenditures Fees Federal Funds Total Funds IP Base Rate Supplemental Payment $217,500,000 $217,700,000 $435,200,000 OP Supplemental Payment $161,400,000 $161,500,000 $322,900,000 Uncompensated Care Supplemental Payment $57,700,000 $57,800,000 $115,500,000 DSH Supplemental Payment $101,400,000 $101,400,000 $202,800,000 HQIP Supplemental Payment $44,800,000 $44,900,000 $89,700,000 Total Supplemental Payment $582,800,000 $583,200,000 $1,166,000,000 Medicaid Parents to 100% $22,000,000 $239,800,000 $261,800,000 Adults without Dependent Children (AwDC) $69,900,000 $1,560,400,000 $1,630,300,000 Buy-In for Individuals with Disabilities $25,100,000 $30,600,000 $55,700,000 CHP+ 206% to 250% $8,000,000 $48,500,000 $56,500,000 Continuous Eligibility $30,300,000 $30,500,000 $60,800,000 Prior Period Adjustment - NNEs $3,000,000 $0 $3,000,000 Medicaid Expansion $158,300,000 $1,909,800,000 $2,068,100,000 Administration $22,500,000 $32,200,000 $54,700,000 Cash Fund Reserve $3,000,000 $0 $3,000,000 Transfer to General Fund -25.5-4-402.3 (4)(b)(VIII) $15,700,000 $0 $15,700,000 Total Other Expenditures $199,500,000 $1,942,000,000 $2,141,500,000 Grand Total $782,300,000 $2,525,200,000 $3,307,500,000 1 rounding may cause calculation discrepancies. 17

Provider Fee • Inpatient fee assessed on managed care & non-managed care days ➢ Inpatient fee ▪ Per non-managed care day: $385.35 ▪ Per managed care day: $86.22 • Outpatient fee assessed on percentage of total Outpatient charges ➢ Outpatient fee ▪ Percentage of total charges: 1.8208% 18

Provider Fee • Psychiatric, long term care, and rehabilitation hospitals are fee exempt • Certain hospitals receive a discounted fee ➢ Inpatient fee ▪ High Volume Medicaid & CICP hospitals discounted 47.79% ▪ Essential Access hospitals discounted 60.00% ➢ Outpatient fee ▪ High Volume Medicaid & CICP hospitals discounted 0.84% 19

Provider Fee Provider Fee Calculation Row Description Amount Calculation Row 1 Managed Care Days 5,000 Row 2 Fee Per Managed Care Day $100.00 Row 3 Managed Care Day Fee $500,000 Row 1 * Row 2 Row 4 Non-Managed Care Days 10,000 Row 5 Fee Per Non-Managed Care Day $350.00 Row 6 Non-Managed Care Day Fee $3,500,000 Row 4 * Row 5 Row 7 Total Inpatient Fee $4,000,000 Row 3 + Row 6 Row 8 Total Outpatient Charges $50,000,000 Row 9 Fee Percentage 1.5000% Row 10 Total Outpatient Fee $750,000 Row 8 * Row 9 Row 11 Total Fee $4,750,000 Row 7 + Row 10 20

Provider Fee Provider Fees Fee exempt: Payers include: $782 million ✓ Rehabilitation ✓ General Acute ✓ Long Term Care ✓ Critical Access ✓ Psychiatric ✓ Pediatric IP NPR Limit OP NPR Limit IP Fee OP Fee $407 million $376 million Days Charges 21

Supplemental Payments • Inpatient Base Rate Medicaid Supplemental Payment • Outpatient Medicaid Supplemental Payment • Uncompensated Care Medicaid Supplemental Payment • Disproportionate Share Hospital (DSH) Supplemental Payment • Hospital Quality Incentive Payment (HQIP) Medicaid Supplemental Payment 22

Inpatient Base Rate Supplemental Payment • Increase rates for inpatient hospital services for Medicaid clients • Total Payments: $435.1 million • Inpatient Base Rate Payment = Medicaid rate before add-ons * inpatient percentage adjustment factor * estimated Medicaid discharges * case mix 23

Inpatient Base Rate Supplemental Payment Inpatient Base Rate Supplemental Medicaid Payment Calculation Row Description Amount Calculation Row 1 Medicaid Rate Before Add-ons $6,000 Row 2 Percentage Adjustment Factor 50% Incremental Medicaid Rate Row 3 $3,000 Row 1 * Row 2 Before Add-ons Row 4 Estimated Medicaid Discharges 1,000 Row 5 Case Mix 1.05 Row 6 Total Payment $3,150,000 Row 3 * Row 4 * Row 5 24

Outpatient Supplemental Payment • Increase rates for outpatient hospital services for Medicaid clients • Total Payments: $322.9 million • Outpatient Payment = estimated Medicaid outpatient cost * outpatient percentage adjustment factor 25

Outpatient Supplemental Payment Outpatient Supplemental Medicaid Payment Calculation Row Description Amount Calculation Estimated Medicaid Row 1 $1,000,000 Outpatient Cost Percentage Adjustment Row 2 25.00% Factor Row 3 Outpatient Supplemental $250,000 Row 1 * Row 2 Medicaid Payment 26

Uncompensated Care Payment • Reimbursement to hospitals providing services to uninsured • Total Payments: $115.5 million ➢ $15 million distributed to qualified Essential Access hospitals, based on proportion of beds ➢ $100.5 million distributed to all other qualified Non Essential Access hospitals, based on proportion of uninsured cost 27

Uncompensated Care Payment Uncompensated Care Supplemental Medicaid Payment Calculation (Essential Access Hospitals) Row Description Amount Calculation Row 1 Essential Access Hospital True Row 2 Hospital Bed Count 21 Total Bed Count for Qualified Hospitals Row 3 700 with Fewer than 25 beds % of Beds to Total Beds for Qualified Row 4 3.00% Row 2 / Row 3 Hospitals with 25 or Fewer Beds Row 5 Total Available Funds $15,000,000 Row 6 Uncompensated Care Supplemental $450,000 Row 4 * Row 5 Medicaid Payment 28