Uncompensated Care

Maryland AAHAM December 19, 2014

Overview

• • • • • •

UCC History Summary of FY 2015 UCC Policy

 Prospective reduction

FY2015 Experience Changes to financial assistance policies (Discussion) Future Considerations Q&A

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UCC History

• By statute, funding uncompensated care is a cornerstone of the Maryland system • HSCRC statute requires a “reasonable” amount of UCC rate funding  Staff has wide latitude to determine “reasonable” • Hospital rates include an amount for UCC that is pooled in a state fund and redistributed • Hospital position relative to the state average determines what they pay into, receive from, the pool.

3

UCC History

• UCC policy has long included concepts to fund individual hospitals based on their:    Actual UCC from audited financial statements “Predicted” UCC, as determined by a regression Incentive to collect from patients who can pay • Several policy modifications, particularly on defining the independent variables to be used as predictors of UCC in regression • Discussion of the number of years of data to use- responsiveness vs stability 4

Rate Year 2015 Policy

•

Revised predictive regression variables

•

Two years of actual UCC

•

Hospital-specific, prospective UCC reductions for the projected expansion of Medicaid

5

Rate Year 2015 Policy

• Four regression variables (p. 5) replaced with five variables (still proportion of total charges):      Inpatient Medicaid ED admissions Inpatient commercial insurance admissions Inpatient self pay and charity admissions Outpatient self pay and charity admissions Inpatient self pay and charity ED admissions from 80 th percentile of Medicaid undocumented zip codes 6

Rate Year 2015 Policy

• Inpatient self pay and charity ED admissions from zip codes with 80 th percentile and above of Medicaid undocumented beneficiaries  HSCRC staff used Department of Health and Mental Hygiene data summarizing Medicaid undocumented enrollment by zip code (pregnancy or ED coverage)  Included self pay and charity charges from ED admissions, by hospital, from zip codes with 80 th percentile or higher of Medicaid undocumented enrollment 7

Rate Year 2015 Policy

• • • As part of the 2015 UCC Policy, the HSCRC prospectively reduced UCC provisions to reflect January 1, 2015 Medicaid expansion and the expected associated UCC reduction.

 1.08% statewide reduction • The prospective reduction was limited to the conversion of the Primary Adult Care (PAC) program to Medicaid. Did not include anticipated reductions in UCC as a result of additional Medicaid expansion (116% - 138% FPL) Did not include anticipated reductions in UCC as a result of private insurance expansion 8

Rate Year 2015 Policy

• Since PAC covered only ED services, staff summarized PAC non-ED hospital charges that would be covered under Medicaid • Staff reviewed the data and shared with hospitals  Certain cases were determined to have coverage and were excluded • Remainder was prospectively reduced from UCC provision 9

Hospid STATEWIDE Hospital Name 210001 Meritus Medical Center 210002 Univ. of Maryland Medical Center 210003 Prince Georges Hospital 210004 Holy Cross Hospital of Silver Spring 210005 Frederick Memorial Hospital 210006 Harford Memorial Hospital 210063 Univ. of Maryland St. Josephs Medical Center 210008 Mercy Medical Center, Inc.

210009 Johns Hopkins Hospital 210010 Univ. of Maryland Shore Medical Center at Dorchester 210011 St. Agnes Hospital 210012 Sinai Hospital 210013 Bon Secours Hospital 210015 Franklin Square Hospital 210016 Washington Adventist Hospital 210017 Garrett County Memorial Hospital 210018 Montgomery General Hospital 210019 Peninsula Regional Medical Center 210022 Suburban Hospital Association,Inc 210023 Anne Arundel General Hospital 210024 Union Memorial Hospital 210027 Braddock Hospital 210028 St. Marys Hospital 210029 Johns Hopkins Bayview Med. Center 210030 Univ. of Maryland Shore Medical Center at Chestertown 210032 Union Hospital of Cecil County 210033 Carroll County General Hospital 210034 Harbor Hospital Center 210035 Univ. of Maryland Charles Regional Medical Center 210037 Univ. of Maryland Shore Medical Center at Easton 210038 Univ. of Maryland Medical Center Midtown Campus 210039 Calvert Memorial Hospital 210040 Northwest Hospital Center, Inc.

210043 Univ. of Maryland Baltimore Washington Medical Center 210044 Greater Baltimore Medical Center 210045 McCready Foundation, Inc.

210048 Howard County General Hospital 210049 Upper Chesepeake Medical Center 210051 Doctors Community Hospital 210062 Southern Maryland Hospital 210055 Laurel Regional Hospital 210060 Fort Washington Medical Center 210061 Atlantic General Hospital 210058 Univ. of Maryland Rehabilitation and Orthopaedic Institute 210056 Good Samaritan Hospital 210057 Shady Grove Adventist Hospital 218992 Univ. of Maryland (MIEMSS) 212005 Levindale Geriatric Center and Hospital (1): Includes Revenue Neutrality Factor of 1.00645

(2): Totals may not add due to rounding.

FY2013 Actual UCC 9.78% 3.12% 8.32% 5.99% 6.08% 9.29% 6.84% 14.23% 13.63% 7.68% 5.20% 6.60% 6.76% 22.32% 1.82% 7.20% 5.40% 15.51% 9.26% 6.03% 12.44% 5.13% 8.29% 4.27% 6.99% 7.96% 5.41% 19.09% 7.06% 14.08% 10.86% 6.59% 6.87% 5.07% 5.21% 8.13% 6.89% 8.47% 9.28% 10.13% 8.69% 4.70% 8.59% 7.46% 5.86% 15.22% 6.16% 8.41% 7.23%

Change in UCC Rate Funding: FY2015 vs. FY2014, including related comparisons

A G B Predicted UCC C D = Avg (B+C) * Rev Neu E = B-C F = B - A

Predicted UCC Over / (Under)

FY '12- FY '13 UCC Average Policy Result Prior to PAC (50/50 Blend) (1 )

FY2012 / FY2013 Avg Actual FY2013 Actual

8.82% 3.79% 9.57% 6.33% 5.71% 9.10% 7.54% 13.24% 13.09% 7.86% 5.80% 7.33% 7.24% 21.36% 1.83% 7.83% 6.50% 16.07% 8.84% 6.33% 10.75% 4.63% 6.74% 4.31% 8.25% 8.13% 5.83% 17.59% 7.74% 13.36% 10.10% 7.02% 6.71% 5.33% 4.82% 7.49% 6.49% 7.41% 8.71% 9.01% 8.25% 5.23% 9.12% 8.15% 6.40% 12.65% 6.55% 8.47% 7.23% 9.20% 3.09% 8.55% 6.15% 6.01% 8.61% 6.32% 14.11% 13.01% 7.00% 5.77% 6.25% 6.71% 21.22% 1.82% 7.40% 5.87% 15.34% 9.41% 6.11% 12.04% 4.71% 7.70% 3.98% 6.27% 7.31% 5.29% 17.79% 7.12% 13.66% 11.10% 6.54% 6.85% 4.79% 4.92% 7.61% 6.54% 7.39% 9.17% 9.84% 8.29% 4.73% 8.28% 7.30% 5.53% 13.76% 5.93% 7.62% 7.04% (2) 8.33% 4.44% 10.47% 6.43% 5.34% 9.47% 8.66% 12.21% 13.00% 8.62% 5.77% 8.31% 7.67% 21.22% 1.82% 8.17% 7.04% 16.60% 8.17% 6.47% 9.32% 4.49% 5.69% 4.58% 10.12% 8.85% 6.30% 17.17% 8.27% 12.89% 8.98% 7.42% 6.48% 5.81% 4.67% 7.27% 6.35% 7.33% 8.13% 8.08% 8.11% 5.66% 9.84% 8.91% 7.18% 11.38% 7.09% 9.22% 7.32% (2)

-1.45% 1.32% 2.16% 0.44% -0.75% 0.19% 1.82% -2.02% -0.62% 0.94% N/A 1.71% 0.91% N/A N/A 0.98% 1.64% 1.09% -1.09% 0.45% -3.12% -0.63% -2.59% 0.31% 3.13% 0.90% 0.89% -1.93% 1.21% -1.19% -1.88% 0.83% -0.39% 0.75% -0.54% -0.87% -0.53% -1.15% -1.15% -2.06% -0.58% 0.96% 1.26% 1.45% 1.32% -3.84% 0.94% 0.81% 0.09% -0.87% 1.35% 1.93% 0.28% -0.68% 0.86% 2.34% -1.89% -0.01% 1.62% N/A 2.06% 0.96% N/A N/A 0.77% 1.17% 1.26% -1.24% 0.36% -2.72% -0.22% -2.01% 0.60% 3.85% 1.54% 1.02% -0.62% 1.14% -0.77% -2.12% 0.88% -0.37% 1.03% -0.25% -0.35% -0.19% -0.07% -1.04% -1.76% -0.18% 0.93% 1.56% 1.61% 1.65% -2.38% 1.16% 1.61% 0.28%

H = D - G

1.12% 0.39% -0.53% -0.37% -0.15% 1.35% -0.27% 1.99% -0.60% 1.27% -1.15% 1.56% 0.46% -1.47% 0.00% 0.37% -0.89% 1.64% 0.74% 0.51% 0.80% 0.53% -0.19% -0.11% 0.89% 1.26% 0.05% 1.82% 0.24% 3.42% 0.98% 0.79% 0.66% 1.06% 0.57% 1.68% 1.23% 0.04% 0.96% 0.98% -0.54% 0.09% 0.05% 0.01% 0.98% 0.32% -0.05% 1.22% 0.39%

FY2014 In Rates

FY2015 Policy (pre PAC) Over / (Under) FY2014

7.70% 3.40% 10.10% 6.70% 5.86% 7.75% 7.81% 11.25% 13.69% 6.59% 6.95% 5.77% 6.78% 22.82% 1.83% 7.46% 7.39% 14.43% 8.10% 5.82% 9.95% 4.10% 6.93% 4.42% 7.36% 6.87% 5.78% 15.77% 7.50% 9.94% 9.12% 6.23% 6.05% 4.27% 4.25% 5.81% 5.26% 7.37% 7.75% 8.03% 8.79% 5.14% 9.07% 8.14% 5.42% 12.33% 6.60% 7.25% 6.84% I J = D + I K = J - G PAC Adjustemnt Policy Results with PAC Adjustemnt

FY2015 Policy Over / (Under) FY2014 0.10% 0.02% -3.29% -0.98% -0.74% 0.74% -1.21% 1.05% -1.46% -0.16% -2.28% 0.66% -0.07% -1.72% 0.00% -1.29% -2.74% 0.55% 0.43% -0.39% -0.71% -0.20% -1.53% -0.89% -1.78% -0.18% -1.05% -3.98% -0.70% 2.84% 0.24% 0.02% -0.64% 0.78% 0.04% 0.22% 0.17% -1.05% -0.77% 0.21% -2.36% -0.61% -1.42% -0.79% 0.14% -3.19% -1.09% 0.29% -0.69%

7.80% 3.42% 6.81% 5.72% 5.12% 8.49% 6.60% 12.30% 12.23% 6.43% 4.67% 6.43% 6.71% 21.11% 1.83% 6.17% 4.65% 14.98% 8.53% 5.43% 9.24% 3.90% 5.40% 3.53% 5.58% 6.69% 4.73% 11.79% 6.80% 12.78% 9.36% 6.25% 5.41% 5.05% 4.29% 6.03% 5.43% 6.32% 6.98% 8.24% 6.43% 4.53% 7.65% 7.35% 5.56% 9.14% 5.51% 7.54% 6.14% -1.02% -0.38% -2.76% -0.61% -0.59% -0.61% -0.94% -0.94% -0.86% -1.42% -1.13% -0.90% -0.53% -0.25% 0.00% -1.66% -1.85% -1.09% -0.31% -0.90% -1.51% -0.72% -1.34% -0.78% -2.67% -1.45% -1.10% -5.80% -0.95% -0.59% -0.75% -0.78% -1.30% -0.28% -0.54% -1.45% -1.06% -1.09% -1.73% -0.77% -1.82% -0.69% -1.47% -0.80% -0.83% -3.52% -1.05% -0.93% -1.09% 10

FY2015 Experience

•

In FY2015 Staff collected data on individual patient write offs, net of recoveries

 Most hospitals have submitted, though many found difficult •

May be used to reconcile prospective reduction and other purposes

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FY2015 Experience

•

HSCRC evaluating a further prospective UCC reduction

 CY2014 YTD September data reflect a $252m reduction from CY2013 September data − $328m annualized impact •

$328m impact is double the original prospective reduction

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FY2015 Experience

•

HSCRC Staff has also accumulated the Medicaid expansion dollars by hospital, suggesting this amount is greater than $328m

 Assumed to be matched use MPI from CRISP •

Staff provided data to hospitals on 12/16 to begin reviewing the potential UCC impact

•

Monthly data reflect a lower impact

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ID Hospital 1 Meritus Med. Ctr.

2 Univ of Maryland 3 Prince George's 4 Holy Cross 5 Frederick Memorial 6 Harford Memorial 8 Mercy Medical Ctr 9 Johns Hopkins 10 UM Shore Dorchester 11 St Agnes 12 Sinai 13 Bon Secours 15 MedStar Franklin Square 16 Washington Adventist 17 Garrett County Memorial 18 MedStar Montgomery 19 Peninsula Regional 22 Suburban Hospital 23 Anne Arundel 24 MedStar Union Memorial 27 West.Md.Reg.Med.

28 MedStar St Mary's 29 Hopkins Bayview Med Ctr 30 UM Shore Chestertown 32 Union Hospital 33 Carroll Hospital Center 34 MedStar Harbor Hospital 35 UM Charles Regional MC 37 UM Shore Easton 38 UMMC Midtown Camp.

39 Calvert Memorial 40 Northwest Hospital Ctr 43 UMMC BWMC 44 GBMC 45 McCready Memorial 48 Howard County 49 Upper Chesapeake Medical 51 Doctors Community 55 Laurel Regional 60 Ft Washington Med Ctr 61 Atlantic General 62 MedStar Southern Maryland 63 UofMD St. Joseph 2001 UM Rehab-Ortho 2004 MedStar Good Samaritan 5033 Levindale 5050 Shady Grove 8992 University - MIEMS 99 Total Summary of FY2015 Rate Provisions versus FY2015 YTD Actual (Source: Monthly FS Schedules) FY2015 UCC Funding 2015 Rate Funding 7.83% 6.50% 16.07% 8.84% 6.33% 10.75% 6.74% 4.31% 8.25% 8.13% 5.83% 17.59% 7.74% 13.36% 10.10% 7.02% 6.71% 5.33% 4.82% 7.49% 6.49% 7.41% 8.71% 9.01% 8.25% 5.23% 9.12% 8.15% 6.40% 12.65% 6.55% 8.47% 8.82% 3.79% 9.57% 6.33% 5.71% 9.10% 13.24% 13.09% 7.86% 7.54% 4.63% 5.80% 7.33% 1.83% 7.24% 21.36% 7.23% 2015 Rate Funding less PAC 6.17% 4.65% 14.98% 8.53% 5.43% 9.24% 5.40% 3.53% 5.58% 6.69% 4.73% 11.79% 6.80% 12.78% 9.36% 6.25% 5.41% 5.05% 4.29% 6.03% 5.43% 6.32% 6.98% 8.24% 6.43% 4.53% 7.65% 7.35% 5.56% 9.14% 5.51% 7.54% 7.80% 3.42% 6.81% 5.72% 5.12% 8.49% 12.30% 12.23% 6.43% 6.60% 3.90% 4.67% 6.43% 1.83% 6.71% 21.11% 6.14% PAC Adjustment -1.66% -1.85% -1.09% -0.31% -0.90% -1.51% -1.34% -0.78% -2.67% -1.45% -1.10% -5.80% -0.95% -0.59% -0.75% -0.78% -1.30% -0.28% -0.54% -1.45% -1.06% -1.09% -1.73% -0.77% -1.82% -0.69% -1.47% -0.80% -0.83% -3.52% -1.05% -0.93% -1.02% -0.38% -2.76% -0.61% -0.59% -0.61% -0.94% -0.86% -1.42% -0.94% -0.72% -1.13% -0.90% 0.00% -0.53% -0.25% -1.09% FY2015 YTD Actual October 8.48% 5.01% 14.65% 7.93% 3.07% 10.68% 6.95% 3.80% 5.92% 5.07% 3.39% 9.59% 4.04% 13.59% 8.68% 3.64% 5.71% 4.55% 3.67% 3.52% 5.28% 4.05% 5.94% 8.85% 4.55% 3.26% 5.04% 6.79% 5.45% 8.60% 3.50% 9.73% 6.36% 2.14% 5.42% 4.76% 6.81% 2.39% 12.03% 9.14% 5.96% 7.56% 5.62% 7.56% 4.33% 3.20% 6.37% 17.41% 5.69% FY2015YTD Annualized Charges (October) FY2015 "Savings" Rate Provision Over / (Under) Actual -2.31% -0.36% 0.32% 0.60% 2.36% -1.44% -1.55% -0.27% -0.34% 1.61% 1.34% 2.19% 2.76% -0.82% 0.68% 2.61% -0.30% 0.50% 0.62% 2.52% 0.16% 2.27% 1.03% -0.61% 1.88% 1.27% 2.62% 0.56% 0.11% 0.54% 2.01% -2.19% 1.44% 1.27% 1.39% 0.96% -1.69% 6.10% 0.28% 3.09% 0.47% -0.96% -1.72% -2.89% 2.10% -1.37% 0.34% 3.70% 0.46% $ 15,425,109,969 $ 70,701,933 14

Changes to Financial Assistance Policies

•

Expansion of Medicaid has affected financial assistance policies

 Coverage eligibility under Medicaid  Plan enrollment, service use and premium non-payment  Other potential scenarios 15

Future Considerations

• UCC policy issues likely to be addressed in FY 2016:   Treatment of Medicaid-pending patients Review of undocumented UCC variable • FY 2016 UCC policy review process TBD 16

• Q&A 17