Transcript Legislative Challenges on the Horizon

Legislative Challenges on the Horizon
Brian D. Ballard
Managing Partner, Smith & Ballard
Robert Broadway
Vice President, Corporate Strategy
Bethesda Healthcare System
Outcome of 2010 Legislative Session
Budget Overview
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Legislature faced a $3 billion revenue shortfall leading up to the 2010
Session, including a $1.8 billion shortfall in the Medicaid program.
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$70.4 billion state budget for FY 2010-2011 passed.
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Included across the board spending cuts, federal stimulus funds,
$400 million in Gaming Compact funding, and $600 million in Trust
Fund sweeps.
$371 million vetoed by the Governor.
Medicaid Spending
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Approximately 26% of the state budget
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Approximately $20 billion appropriated for Medicaid services
Caseload Growth
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Florida is facing close to 2.9 million people on Medicaid for FY
2010-2011
Additional 1.4 million people added to Medicaid program by
2014 under federal health care reform (Eligibility expanded to
133% federal poverty level)
Chart provided by Florida House Full Appropriations Council
Key Health Care Budget Items

Hospital inpatient and outpatient cuts – 7%, except for free-standing,
licensed Children’s hospitals and rural hospitals ($287 million reduction)
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Legislative authority to allow hospitals taking cuts to “buy back”
reductions with the use of local tax money.
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Fully fund Medicaid eligibility for pregnant women to 185% of the
federal poverty level.
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Medically Needy and MEDS AD programs fully funded through June 30,
2011 rather than partial year funding.
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Dept. of Health budget cuts included $4.9 million reduction to Area
Health Education Networks; $3.4 million to Children’s Medical Services;
and $$2.6 million to Healthy Start Coalitions.
$9.4 million for creation of the Florida Health Information Exchange
Infrastructure.
Low Income Pool Funding
6-Month Enhanced FMAP Funding
Appropriates $1 billion for various LIP funded programs and includes the
following key components:
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Allocation factor is set at 14.8% for IGT contributors.
Appropriates funding for the LIP categories (e.g., Regular DSH,
Safety Net Payment, Provider Access Payments, etc).
Provides an additional $26 million for non-hospital primary care
services. Requires AHCA to award grants to those programs most
capable of reducing health spending and improving the health
status of uninsured and underinsured persons.
Allows AHCA to make LIP Medicaid payments to hospitals in an
accelerated manner that is more frequent than on a quarterly basis.
12-Month Enhanced FMAP Contingency Plan
If the enhanced FMAP is extended until June 30, 2011 by the U.S. Congress
during the upcoming fiscal year, the LIP distribution will be amended as follows:
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Provides $30 million in nonrecurring general revenue, $25 million to be
allocated for Jackson Memorial and $5 million for Shands Hospital.
Provides an additional $50 million for non-hospital primary care issues ($10
million in payments to primary care hospitals and $40 million for primary
care issues).
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Establishes a new Safety Net category with distributions based on Medicaid
and charity care days, totaling $10.5 million.
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Includes hold harmless payments for public and children’s hospitals of $7.3
million to maintain FY 2009-2010 level of LIP funding.
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Includes buy back of historical rate reductions for trauma hospitals of $141
million.
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Allocation factor of 14.6% due to FMAP change.
U.S. Congress approved H.R. 1586 (Public Law 111-226), which provides
for a two quarter extension of the increase Federal Medical Assistance
Percentage (FMAP). containing a six-month extension of an enhanced
match for the Medicaid (FMAP) and Title IV-E programs. Provides states
$16.1 billion through a “phased-down” enhanced match:

6.2% FMAP increase until December 2010 (included in current
Appropriations Act FY 10/11)
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Phased-down enhanced match based on H.R. 1586:
3.1% FMAP increase for first calendar quarter of FY 2011
1.2% FMAP increase in the second calendar quarter
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Revised blended FMAP rate for the Medicaid program is 64.83%
Current implementation approach under consideration is a proportional
reduction to the LIP items funded with enhanced FMAP. Legislative Budget
Commission meets on September 14 to take action on budget amendments
incorporating the revised FMAP formula.
Key Medicaid Proposals
Medicaid Reform
Legislature proposed significant changes to the current fee for service system with
a complete transition into managed care. The Senate proposed shifting Medicaid
recipients in 19 counties in 1 year using the existing 1115 Medicaid Reform Waiver.
The Senate also approved seeking a federal Medicaid waiver to allow the state to
manage the Medicaid program within an annually specified appropriation.
The House proposed an overhaul of Medicaid with transition to managed care by
2013:
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The state is divided into 6 regions.
HMOs and Provider Service Networks (PSNs) are approved to provide
services through a competitive procurement with each plan approved by
AHCA.
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Number of HMOs and PSN’s is limited in each region.
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HMOs and PSNs provide services in the entire region – not just specific
county/counties in that region.
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Hospitals are required to participate in the managed care plans;
reimbursement fees are set between 100% and 150% of Medicaid rate after
the procurement process is complete.
Senate Bill 1484 Relating to Medicaid
Makes changes to the statutes to conform to the funding decisions included
in the General Appropriations Act for FY 2010-11.
Key provisions include the following:
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Directs AHCA to request an extension of the 1115 Medicaid Reform Waiver by
July 1, 2010, and to preserve the LIP provisions of the waiver.
Directs AHCA to convene a workgroup of stakeholders to develop
methodologies to maintain the use of intergovernmental transfers and
certified public expenditures in a Medicaid managed care environment.
Requires AHCA to issue a report by Jan. 1, 2011on the developed
methodologies.
Creates the Medicaid and Public Assistance Fraud Strike Force with the Dept.
of Financial Services to develop a statewide strategy and coordinate state
and local efforts and resources to prevent, investigate and prosecute
Medicaid and public assistance fraud.
Directs HMOs to adopt anti-fraud plans. Requires all Medicaid HMOs to report
suspected instances of overpayment, fraud, abuse to the Office of Medicaid
Program Integrity within 15 days
2011 Session – What to Expect
Budget Challenges
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Slow Economic Recovery
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Potential $2.5 billion budget gap
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Uncertainty of the 1115 Medicaid Waiver Extension/LIP Funding
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Deep Sea Horizon Oil Impact
Medicaid Reform
Hospital Issues
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Alternative Managed Care Models Critical
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PSN Expansion
Medical Homes
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Adequate Rate Reimbursement levels
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Preservation of LIP and Intergovernmental Transfers (IGTs)
HMO Issues
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Increase transition of Medicaid recipients from fee-for-service to full
risk-bearing managed are plans
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Increase Nursing Home Diversion slots and require non-skilled nursing
home patients to enter diversion
Additional enrollment in special needs plans
Integrate long-term care services into managed care model
Tort Reform
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Medical Malpractice Reform for doctors who accept Medicaid patients
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Sovereign Immunity for ER Physicians (proposals filed during the 2010
session)
Florida Politics
2010 General Election Landscape
Governor’s Race
Rick Scott (R)
Alex Sink (D)
Cabinet Races
Attorney General:
CFO:
Ag Commissioner:
Pam Bondi (R)
Jeff Atwater (R)
Scott Maddox (D)
Legislative Races
11 State Senate
26 State House
1 U.S. Senate
24 U.S. Representatives
Dan Gelber (D)
Loranne Ausley (D)
Adam Putnam (R)
Reapportionment on the Horizon
Highlights
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Every 10 years, after the federal Census, the boundaries of the state’s
congressional, state House and state Senate districts are redrawn.
The Census Bureau completes delivery of redistricting data to states in
April 2011.
Approximately Timeframes for Reapportionment Process:
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July-November 2011- public testimony taken
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January or February 2012- Reapportionment Session
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March-April 2012-prepare new state legislative and congressional
districts maps for submission to the Florida Supreme Court and
U.S. Justice Department.
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Joint Resolution on legislative redistricting not subject to veto by the
Governor.
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Congressional redistricting is enacted by the Legislature but subject to
gubernatorial veto.
Get Involved in Government Relations
Why?
How?
Hospital Representatives are vital to educating legislative candidates
and lawmakers on the changing
dynamics of the healthcare industry.
Campaign Activities
Local visits with legislators/educational briefings
Capitol visits before and during Session
When?
Key Dates:
Organizational Session – November 16, 2010
House & Senate Interim Committee meetings –December to February
Regular Session- March 8, 2011
Q&A