Medicaid DSH
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Transcript Medicaid DSH
Medicaid DSH
John Berta
Senior Director, Policy Analysis
Texas Hospital Association
June 19, 2014
THA – Who We Are
The Texas Hospital Association is a nonprofit trade
association representing Texas hospitals and health
systems. In addition to providing a unified voice for
health care, THA serves its 500+ members with timely
information, data analysis, education on essential
operational requirements, networking and leadership
opportunities.
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Serving Texas Hospitals/Health Systems
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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FY2011 DSH (and Before)
DSH & UPL – Pre-Waiver
Programs Related to each other
Public Hospitals have incentive to Fund DSH
Fully Funded for Every Year
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DSH Funding Incentive
UPL at Maximum – No Other Funds Available
IGT
~$0.40
Paid $1.00
DSH
IGT
~$0.40
Paid ~$0.55
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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FY2012 Financing Transformation
Transformation Waiver
– Shifting Landscape
– DSH & UC - Closer Connection
– Additional PCP Costs Allowed for UC
– Result = Alternate Funding Opportunities for
Public Hospitals
DSH Audit
– Dollars Recouped beginning in Program Year
2011
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FY2012 - Shifting Landscape
FY2011 UPL $2.8B
FY2012 UC & DSRIP $4.2B
DSH & UC Closely Aligned
Medicaid Shortfall Growing Larger
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Medicaid Disproportionate Share FY2012
Public Hospitals Agree to Fund $502M of
$569 Potential
DSH Dollars Unspent
THA Forms Task Force on DSH
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THA Task Force Concepts 2012-2013
Medicaid Disproportionate Share
Hospital Task Force – 6/1/2012
–the money follows the work
–shared responsibility for funding the
Medicaid DSH program
–protection for the most vulnerable
classes of hospitals
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UC and DSRIP Funding= $29B
UC/UPL Transition- $466M
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Medicaid DSH FY2013 - Issues
FY 2013 Payments – 100% Amounts - $138M
GR $323M IGT
New DSH Rule
– Lubbock and Odessa drop out of 8 hospital coalition leaving big 6
– DSH is Regionalized
– Pass 3 Rural Funding Mechanism Developed
– GR and IGT are separated
– Texas Children’s Lawsuit
Max TPL payment = Cost
DSH paid @ 90% (10% Expected)
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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Medicaid Disproportionate Share FY2014
New Rider 86 covers DSH & UC
$300M GR authorized for FY2014 & FY2015
– 2014 = $160M
– 2015 = $140M
No General Revenue Funds appropriated
after FY2015
Other Budget Riders not written in this
manner
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Medicaid DSH Rider 86
Proportional allocation of supplemental hospital
payments among large public, small public, and
non-public providers
Mechanisms though which Medicaid payments
are made through managed care organizations
Recommended statutory changes and any other
legislative direction needed to fully implement
the plan
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Medicaid DSH Rider 86 (cont’d)
Assess the extent to which supplemental
payments are needed to cover Medicaid and
uninsured/uncompensated care costs
Transition plan from supplemental payments
to rates that recognize improvements in
quality of patient care, the most appropriate
use of care, and patient outcomes
No General Revenue Funds appropriated
after FY2015
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Medicaid DSH Rider 86 (cont’d)
FY 2014 request must show a measurable
progress in developing the plan
FY 2015 request should include the final plan
No GR funds may be expended for FY 15
until plan is finalized
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Medicaid DSH FY2014
2011-Before Transformation Waiver
Non-State Hospital DSH Pool = $1.2B
UPL Payments = $2.8B
Total = $4.0B
2014-After Transformation Waiver
FY2014 UC & DSRIP = $6.2B
FY2014 DSH Non State = $1.3B
Total = $7.5B
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2014 DSH – Attributes - 1
State-owned hospitals – No change
2013 – Regional Approach (RHP)
2014 – Hospitals in statewide pools
2013 – Funds for Low Income and Medicaid
2014 – Days added together
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2014 DSH – Attributes - 2
2013 - GR funded non RHP areas
2014 – Hospitals share in GR and related FF
2014 – 3 Pools = all GR and FF in Pools 1&2 shared
by all (e.g. net DSH proceeds)
2014 - Pool 3 = IGT back to IGT hospitals
2013 – Pass 3 Methodology in place
2014 – No change
2013 – 6 Large public hospitals transfer for their region
2014 – Fed Funds on IGT by 6 shared by all
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2014 DSH – Attributes - 3
2013 – no provision
2014 – Most other public hospitals IGT ½ of their
DSH (Lubbock & Ector IGT for themselves)
2014 – Non-8 public hospitals have their days
weighted such that net DSH is equal
2014 – Big 6 = $377 total = $396
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2014 UC Attributes - 1
UC funds are divided into seven pools
– state-owned hospitals
– COTH members (6 large public)
– other public hospitals
– private hospitals
– physician group practices
– governmental ambulance
– publicly owned dental providers
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2014 UC Attributes - 2
Pool amounts are Allocated pro-rata
Allocation basis:
– Hospitals - Post DSH Payment unpaid HSL
– Other groups – UC Cost
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2014 UC Attributes - 3
6 Large transferring hospitals receive “bump”
on allocation basis (pre-allocation basis)
UC pre-allocation “bump” equals amount of
DSH IGT made for other hospitals
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$284M added to 6 UC Pool
Net DSH proceeds = $1.344B - $395M IGT =
$949M
Big 6 = 23% of $949M net proceeds
Total IGT = $395M * 23% = $93M
$377M – $93M = $284M
$284M = UC bump for big 6
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2014 UC Attributes - 4
Special Provision for smaller (Rider 38)
hospitals:
– The reduction in future years is limited to
decreases in UC Pool
– E.g. $3.9 billion to 3.1 billion
– Reduction is still significant but no greater than
this amount
– Applies to county < 60k, RRC,SCH,CAH
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2014-17 Key Dates
Fall 2014 - FY 2014 DSH paid (1/2 paid)
Jan 2015 – 84th TX Leg in session
Spring 2015 – last half of 2014 DSH Paid
June 2015 TX Leg leaves
FY2015 DSH – needs final plan
FY2016 – last year of 5 year waiver
2017 DSH cuts begin
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Medicaid DSH - Outline
I. FY2011
II. FY2012-13 – Waiver DY1 & DY2
III. FY2014-15 – DY3 & DY4
IV. FY2016 and Beyond
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Medicaid DSH – Future Years
Composition of 84th Legislature
Federal DSH Allotment
DSH Audit Outcomes
Waiver
Extension/Renewal/Replacement
–Available UC Funds
–CMS Negotiation / Federal Outlook
Medicaid Shortfall ~$3B
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Medicaid Federal DSH Reductions
Revised Schedule Allotments - April 3, 2014
Total
Year
Reduction
Note – if Texas maintains existing policy then
100% of the reduced allotment will be absorbed
by non-state hospitals
2017
TX~20%
1,800,000,000
2018
TX~50%
4,700,000,000
2019
4,700,000,000
2020
4,700,000,000
2021
4,800,000,000
2022
5,000,000,000
2023
5,000,000,000
2024
4,400,000,000
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Questions?
John Berta
Texas Hospital Association
512/465-1556
[email protected]
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