2013-14 Executive Budget

MRT Phase III Proposals and Global Cap Update

January 29, 2013
2:00 - 3:00 p.m.

Overview

  • New York State Budget Overview
  • MRT Phase III Recommendations
  • Recap of 2011-12 Medicaid Global Cap Results
  • Components of $600 Million Annual Medicaid Global Spending Cap Growth in 2012-13
  • Results through November 2012
  • Successfully Maintaining the $15.9 Billion Global Cap

New York State Budget Overview

Current Financial Plan
SFY 2014 Executive Budget

current financial plan

Medicaid All Funds Spending

($ Millions)
  FY 2013 FY 2014 FY 2015 FY 2016
State Funds $21,783.7 $22,445.8 $23,238.7 $24,514.6
    DOH State Funds $15,911.7 $16,421.3 $16,977.6 $17,804.6
    OSA State Funds $5,872.1 $6,024.4 $6,261.1 $6,710.1
Federal Funds $24,058.6 $26,295.6 $29,517.6 $31,748.6
Local Funds $8,153.3 $8,885.9 $8,309.3 $8,135.7
All Funds $53,995.6 $57,627.3 $61,065.5 $64,398.9

Global Cap Spending Estimates

($ Millions)
  FY 2013 FY 2014 FY 2015
Medicaid Services Spending Subject to CPI Trend $15,320 $15,913  
    % Growth   3.9%  
BIP Shift to StOps (Exec. Budget Action)   ($10)  
Medicaid Services Spending Subject to CPI Trend   $15,903 $16,523
    % Growth     3.9%
Adjustments      
    LDSS Admin Ceiling $545 $545 $545
    State Operations - No Growth $51 $157 $157
    Local Medicaid Takeover (Including NYC) $0 $61 $187
    Monroe County Opt in Local Cap $0 ($183) ($185)
    Admin Efficiency Savings - Discretionary ($5) ($22) ($71)
    FFP $0 ($40) ($179)
Financial Plan $15,912 $16,421 $16,978

Medicaid Growth Before & After MRT (2010-11 Base Year)

before and after

MRT Phase III Recommendations

MRT Phase III Recommendations

Fiscally Neutral Package of Savings and Investments
$ in Millions -- Investments (Savings) 2013-14
Gross		 2013-14
State		 2014-15
Gross		 2014-15
State
Supportive Housing $12.50 $12.50 $12.50 $12.50
Payment Reform (VAP/SN, NH Quality Pool) $62.00 $31.00 $39.00 $19.50
Health Home Investments $25.08 $17.02 $10.08 $5.04
Integration of Behavioral & Physical Health Clinic Services $15.00 $7.50 $15.00 $7.50
MLTC Quality Incentive $20.00 $10.00 $20.00 $10.00
Balance Incentive Program Implementation $20.00 $10.00 $0.00 $0.00
Various Pharmacy Saving Initiatives ($26.51) ($13.27) ($35.66) ($17.83)
Spousal Support ($68.60) ($34.30) ($137.00) ($68.50)
All Other Investments/Savings Initiatives $3.58 $2.27 ($4.40) ($1.26)
Federal Health Care Reform $0.00 ($43.00) $0.00 ($43.00)
Repeal Family Health Plus $0.00 $0.00 ($106.00) ($38.50)
Medicaid Benchmark Plan $0.00 $0.00 $307.00 $115.13
Net MRT Phase III Recommendations $63.05 ($0.28) $120.52 $0.58

Supportive Housing

  • Dedicate $91 million to expand access to supportive housing services:
    • Continue $75 million in MRT dollars to fund various supportive housing initiatives;
    • Allocate $12 million in new funds; and
    • Designate $4 million for fund new supportive housing initiatives associated with Medicaid savings derived from the closure of hospital and nursing home beds.

Payment Reform

  • Increase funding for Essential Community Provider Network and Vital Access Providers:
    • Total VAP/SN Pool will increase to $182 million in 2013-14 and $153 million in 2014-15.
    • Includes reallocation of $30 million from the NH Financially Disadvantaged Program to the VAP/SN Pool for Nursing Homes.
  • Increase Nursing Home Quality Pool:
    • From $50 million to $60 million in 2013-14.
  • Develop Price for Specialty Nursing Homes:
    • $5 million allocated in 2014-15 to help transition to the new price.

Health Homes and Health Clinic Investments

  • Health Homes Infrastructure Development and Governance Support Grants:
    • 1 year funding of $15 million in 2013-14.
    • Distributed based upon lack of prior access to HEAL funding and Federal Innovation Grants.
  • Health Home Plus Design targeted at AOT/State Psychiatric Center Discharges:
    • $10 million will primarily be used to support patient case loads.
  • Integration of Behavioral and Physical Health Clinic Services ($15 million)

MLTC Quality Incentive/BIP Implementation

  • MLTC Quality Incentive:
    • $20 million will be paid to plans that have high levels of performance (quality, satisfaction, and plan performance).
  • Balance Incentive Program Implementation:
    • BIP is a provision of ACA to provide enhanced long term services which will allow NYS to receive significant enhanced FMAP (roughly $200 million).
    • 1 year funding of $20 million in state operations costs.

Various Pharmacy Savings

  • Eliminate Prescriber Prevails ($21 million):
    • Atypical antipsychotic drug class (MCOs).
    • All drug classes (FFS).
    • Opioids in excess of 4 prescriptions in a 30-day period.
  • Reduce Pharmacy FFS Reimbursement Rate ($4 million)
  • Tighten Early Fill Edit ($1 million):
    • Refill when medication on hand is equal or less than a 7-day supply.
  • Require Minimum Supplemental Rebates for Brand Drugs ($1 million)

All Other Investments (Savings)

  • Spousal Support:
    • Requires spouses to contribute to cost of care.
  • Basic Benefit Review Workgroup:
    • Expand tobacco cessation counseling to dentists.
    • Discontinue coverage for lumbar discography.
    • Limit coverage of Transcutaneous Nerve Stimulation to pain associated with knee osteoarthritis.
    • Discontinue coverage for implantable infusion pumps for non-cancer pain.

All Other Investments (Savings)

  • Indigent Care Pool Reform:
    • Brings methodology into compliance with Federal DSH requirements and strengthens Financial Aid Law.

Federal Health Care Reform

  • Additional FFP for childless adults in January 2014:
    • $83 million in savings -- $43 million dedicated for Medicaid initiatives and $40 million used to support the Financial Plan.
  • Repeal Family Health Plus ($106 million in savings):
    • FHP enrollees will be subsumed into the new Medicaid eligibility category starting in January 2014.
  • Define Medicaid Benchmark Plan as the Current Medicaid Benefit ($307 million in costs):
    • Requires new adult eligibility group to be enrolled into a benchmark plan starting in January 2014.

Article VII Highlights

  • Global Cap and 2% ATB reduction extended through March 2015.
  • NH wage parity to create a "wage floor" to protect workers on the move to managed care
  • Medicaid State Operations spending is consolidated within the Global Cap.
  • Shift CHP rate setting to DOH.
  • Eliminate all statutory barriers to "Care Management for All."
  • Authorize Developmental Disability Individual Support and Care Coordination Organizations (DISCOs).

Recap of 2011-12 & 2012-13 Global Cap

Recap of 2011-12 Global Cap

  • Spending under the 2011-12 Global Cap was $14 million below the $15.3 billion target.
  • Accounts receivable balance totaled $575 million as of March 31, 2012:
    • Peaked at over $750 million in January 2012.
  • Health care coverage was provided to an additional 154,000 fragile and low income recipients:
    • Medicaid Managed Care enrollment increased by 230,000 recipients.
    • Fee for Service enrollment decreased by 76,000 recipients.

Components of $600M Annual Growth in 2012-13

  • Annual growth of $600 million over last year includes costs associated with both price and enrollment increases, offset by a net change in one- time revenue and spending actions as well as the continuation of MRT initiatives.
Price (+$363 million) Price includes an increase in managed care premiums and fee-for- service pharmacy costs, as well as various inpatient and outpatient rate changes.
Utilization (+$433 million) Utilization reflects the annualization of 2011-12 net enrollment growth (154,000 recipients) as well as assumed new enrollment for 2012-13 (ranging from 90,000 to 120,000 recipients; excluding the additional Child Health Plus enrollees estimated at 95,000).
One-Timers (−$67 million) One-Timers primarily include the loss of enhanced FMAP which expired in June 2011 (+$703 million), offset by 53rd Medicaid cycle in 2011-12 (-$325 million) and accounts receivable recoupments in 2012-13 (-$259 million).
MRT/Other (−$129 million) Other reflects the annualization of MRT Phase I savings ($156 million) offset by MRT Phase II initiatives ($27 million).

Results through November 2012

  • Medicaid expenditures through November 2012 are $46 million or 0.4% below projections.
Medicaid Spending November 2012 (dollars in millions)
Category of Service Estimated Actual Variance
Total Fee For Service $7,630 $7,627 ($3)
      Inpatient $2,086 $2,072 ($14)
      Outpatient/Emergency Room $359 $351 ($8)
      Clinic $428 $441 $13
      Nursing Homes $2,269 $2,265 ($4)
      Other Long Term Care $1,251 $1,262 $11
      Non-Institutional $1,238 $1,236 ($2)
Medicaid Managed Care $6,085 $6,089 $4
Family Health Plus $619 $616 ($4)
Medicaid Administration Costs $372 $330 ($42)
Medicaid Audits ($237) ($239) ($2)
All Other $823 $825 $2
Local Funding Offset ($4,897) ($4,897) $0
      TOTAL $10,396 $10,351 ($46)

A/R Balance - January 2013

a/r balance-jan 2013

Medicaid Enrollment

  • Medicaid total enrollment reached 5,240,040 enrollees at the end of November 2012. This reflects an increase of roughly 191,700 enrollees (includes 74,300 Child Health plus recipients), or 3.8%, since March 2012.
medicaid enrollment chart
Month/Year Total Medicaid Enrollees
Feb-11 4,860,860
Mar-11 4,890,367
Apr-11 4,892,180
May-11 4,904,134
Jun-11 4,924,235
Jul-11 4,922,796
Aug-11 4,940,274
Sep-11 4,953,987
Oct-11 4,958,862
Nov-11 4,970,284
Dec-11 4,977,413
Jan-12 4,998,551
Feb-12 5,023,001
Mar-12 5,048,295
Apr-12 5,062,989
May-12 5,084,054
Jun-12 5,093,895
Jul-12 5,116,463
Aug-12 5,149,788
Sep-12 5,170,969
Oct-12 5,216,057
Nov-12 5,240,040

MMC/FHP Enrollment

  • Medicaid Managed Care enrollment in November 2012 reached 3,837,839 enrollees, an increase of almost 246,500 enrollees (includes 74,300 Child Health plus recipients), or 6.9%, since March 2012.
mmc/fhp enrollment chart
Month/Year Total Managed Care
(73% of Total Enrollees)		 Fee for Service
(27% of Total Enrollees)
Feb-11 3,346,942 1,513,918
Mar-11 3,361,399 1,528,968
Apr-11 3,366,787 1,525,393
May-11 3,384,854 1,519,280
Jun-11 3,415,833 1,508,402
Jul-11 3,425,297 1,497,499
Aug-11 3,445,921 1,494,353
Sep-11 3,456,416 1,497,571
Oct-11 3,452,435 1,506,427
Nov-11 3,483,677 1,486,607
Dec-11 3,508,113 1,469,300
Jan-12 3,540,011 1,458,540
Feb-12 3,575,817 1,447,184
Mar-12 3,591,307 1,456,988
Apr-12 3,611,698 1,451,291
May-12 3,662,693 1,421,361
Jun-12 3,680,780 1,413,115
Jul-12 3,713,207 1,403,256
Aug-12 3,760,496 1,389,292
Sep-12 3,786,642 1,384,327
Oct-12 3,815,673 1,400,384
Nov-12 3,837,839 1,402,201

Status of Local Administration Takeover Implementation

  • The State continues to achieve significant milestones in the takeover of local administration:
    • By the end of SFY 2013, the Enrollment Center will operate in 31 counties to directly recertify individuals in Medicaid and FHP.
      • Six counties will be added in March 2013 (Allegany, Madison, Onondaga, Ontario, Steuben, and Wyoming).
  • 85 additional State Admin FTEs have been filled:
    • DOH anticipates the balance of new staff hired by the end of the SFY.
  • The State realized $40 million in local administrative savings in FY 2012; anticipate FY 2013 to equal or exceed this value in additional savings.

Potential Risks to Global Cap

  • School Supportive Health Services ($75 million)
  • Pharmacy Rebates
  • Medicaid Rate Packages
    • APG Investments, CHHA Cap Reconciliation, GME Reconciliation
  • Flu Epidemic
    • More than 19,000 confirmed cases to date; an increase of 400% over last year
  • Accounts Receivable Balances ($360 million as of January 2013)
  • Impact of Hurricane Sandy

Keys to Successfully Maintaining the $15.9 Billion Global Cap

  • Continue working collectively with the health care industries to:
    • Shift less severe patients from the hospital and emergency room to more appropriate ambulatory/primary care settings;
    • Better management of the dual-eligible (Medicaid-Medicare) population and control of Long Term Care spending;
    • Shift Medicaid recipients from costly fee-for-service into Medicaid Managed Care where services are better coordinated and financial incentives are more rational; and
    • Voluntarily repay over $350 million (as of January 2013) to the State for outstanding liabilities owed by providers.

Keys to Successfully Maintaining the $15.9 Billion Global Cap

  • Centralized Medicaid administration.
  • Improvement in economy will drive lower enrollment growth.
  • Continued successful implementation of MRT Phase I and Phase II initiatives.

2013-14 Executive Budget MRT Phase III: Questions?

  • If you have questions from today´s presentation, please join us on Twitter for an opportunity to ask questions and have them answered in real time.
  • When: Tuesday, February 5, 2:00 PM - 3:00 PM
  • How to participate in the live Twitter chat:
    • If you´re not already on Twitter, join at www.twitter.com
    • Follow the MRT on Twitter: @NewYorkMRT
    • Login to Twitter between 2:00 PM and 3:00 PM on Tuesday, February 5
    • Ask questions by including @NewYorkMRT and #NYMRT in your tweets
    • You don´t have to tweet - you can watch the conversation just by following >@NewYorkMRT on Twitter - updates will show up in your news feed.

MRT: Additional Information