Assembly Bill (AB) 85 Redirection of 1991 Realignment PowerPoint Presentation

Assembly Bill (AB) 85 Redirection of 1991 Realignment PowerPoint Presentation

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Designated . Public Hospital Counties. Background. California elected to implement a state-run Medicaid Expansion starting in . 2014..   With the state taking on the obligation for . the county indigent population currently served by counties, it . ID: 725504

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Presentations text content in Assembly Bill (AB) 85 Redirection of 1991 Realignment

Slide1

Assembly Bill (AB) 85

Redirection of 1991 Realignment

Designated

Public Hospital Counties

Slide2

Background

California elected to implement a state-run Medicaid Expansion starting in

2014.

  With the state taking on the obligation for the county indigent population currently served by counties, it is assumed that counties’ costs associated with the indigent population will decrease.  Assembly Bill (AB) 85 lays out a process by which a portion of the 1991 County Health Realignment Funds would be redirected to support Social Services programs.

2

Designated Public Hospital Counties

Slide3

Background

DPH Counties’ formula should they not choose to redirect 60% of health realignment is addressed in Section

17612.

Formula components that differ for LA County are specified under Section 17612.5. Redirection to begin effective January 2014.3

Designated Public Hospital Counties

Slide4

List of 11 DPH Counties

Alameda

Contra CostaKernMontereyRiverside

San BernardinoSan FranciscoSan MateoSan JoaquinSanta ClaraVentura*Los Angeles County formula specified in Section 17612.5 and addressed in a separate presentation4

Designated Public Hospital Counties

Slide5

Overview

DPH Counties have

2 options

for determining the redirected amount.

Each county must inform DHCS of tentative decision by 11/1/13

Must adopt a resolution by 1/22/14

60% of 1991 Health Realignment Funds

+

60% of Maintenance of Effort

MOE is capped at 25.9% of the total value of counties’ 2010-11 health realignment allocation

County Savings Determination Process (Formula)

Lesser of:

(Revenues – Costs) x.80 (.70 in 13/14)

Or

County Indigent Care Realignment

(Health realignment amount x health realignment indigent care percentage)

If

DPH counties do

not adopt a resolution or

fail

to inform DHCS of their chosen option, then the calculation is 62.5% of County Realignment funds and 62.5% of the

MOE.

Counties that select the 60%/40% option may later petition the Health Care Funding Resolution Committee to elect the formula option.

5

Designated Public Hospital Counties

Slide6

County Savings Determination Process

The purpose of the formula is to calculate the health care savings the county is experiencing as a result of health care reform. This is achieved by determining if the overall available revenues exceed the costs the county is incurring (subject to a cost containment limit)

Revenues

Medi-Cal revenuesUninsured revenues

Medicaid Waiver demonstration revenues

Hospital fee direct grants

Special

local health

funds

*

County indigent care health realignment amount

Imputed county low income health amount (county subsidy

)

*

Imputed gains from other payers (profits

)*

*calculated based on historical allocation

6

Designated Public Hospital Counties

Slide7

County Savings Determination

Process (

continued)

Costs (not to exceed the cost containment limit)Medi-Cal CostsUninsured CostsLesser of:

actual other entity IGT amount in FY or imputed other entity IGT amount

based on historical

period

New

mandatory other entity IGT amounts

required by the state

County Indigent Care Health Realignment Amount

Health Realignment Amount x Health Realignment Indigent Care Percentage

= MIN((SUM(items

1+2+3+4+5+6+7+8)

SUM(9+10+11+12))

x .

80*

[or] County Indigent Care Health Realignment Amount)

*In 2013/14, the savings percentage will be .70 7

Designated Public Hospital Counties

Slide8

REVENUES

8

Designated Public Hospital Counties

Slide9

Definitions – Medi

-Cal Revenue

Total amount paid to the county public hospital health system for services provided to Medi-Cal beneficiaries.

Includes: Medi-Cal FFS, payments from Medi-Cal managed care plans; supplemental payments; DSH payments Excludes:Nonfederal share (CPEs and IGTs)Payments to Medi-Cal managed care plansFees imposed on transfersAdministrative or processing fees

Nursing facility, mental health and substance use disorder services revenues

9

Designated Public Hospital Counties

Slide10

Definitions – Uninsured Revenues

Self-pay payments made by or on behalf of uninsured patients to the county public hospital system.

Excludes:

Health realignment amountImputed low-income health amount Nursing facility, mental health and substance use disorder services revenues10

Designated Public Hospital Counties

Slide11

Definitions – Medicaid Demonstration Revenues

Payments

under

the Bridge to Health Care Reform section 1115 Waiver, including:Safety Net Care Pool Uncompensated CareDelivery System Reform Incentive PoolExcludes:Nonfederal share (CPEs and IGTs)

Payments to Medi-Cal managed care plans

Fees imposed on transfers

Administrative or processing fees

Nursing facility, mental health and substance use disorder

services revenues

11

Designated Public Hospital Counties

Slide12

Definitions – Hospital Fee Direct Grants

Direct

grants, if any,

funded by the current or future Hospital Quality Assurance Fee (QAF) program12Designated Public Hospital Counties

Slide13

Definitions - Special Local Health Funds

Assessments and fees

used

for health-related purposes Calculated as the greater of:The actual amount expended by a county for the provision of health services to Medi-Cal and uninsured beneficiaries during the fiscal year ORThe amount that a county receives x the average of the historical percentages (FY08/09-FY11/12) for the provision of health services to

Medi-Cal and uninsured beneficiaries

13

Designated Public Hospital Counties

Slide14

Definitions - Special Local Health

Funds (continued)

Tobacco Settlement Funds

The amount of tobacco settlement funds used in the revenue calculation will be the greater of:The actual amount of tobacco settlement funds expended by the county during the fiscal yearORThe tobacco settlement funds that the counties receive x the average of the historical percentages expended.14Designated Public Hospital Counties

Slide15

Definitions – County Indigent Care Health Realignment Amount

=

Health Realignment amount for that fiscal year

XHistorical health realignment indigent care percentage15Designated Public Hospital Counties

Slide16

Health Realignment Indigent Care Percentage

County-specific percentage determined as follows:

The average of the percentages for each historical fiscal year of the percentage of county health realignment that was used to provide health services to the indigent.

If the county does not provide the required information or insufficient data, the percentage shall be set at 85%.16Designated Public Hospital Counties

Slide17

Definitions – Imputed County Low Income Health Amount

Predetermined county general fund subsidy used for services to

Medi

-Cal and uninsured patientsCalculated as follows:Take the historical amount for each historical fiscal year (FY08/09-FY11/12)Find the average percentage increaseAverage the historical amounts in (1.) and multiply it by the lessor of the average percentage increase in (2.) or the applicable blended CPI

17

Designated Public Hospital Counties

Slide18

Definitions - Imputed Gains from Other

Payers (Profits)

Predetermined

county revenues in excess of costs generated from all other payers available for services to Medi-Cal and uninsured patientsCalculated as:The average of gains from other payers used to offset the low-income shortfall for each of the historical years (FY 08/09–11/12)

18

Designated Public Hospital Counties

Slide19

Historical Allocation of Revenues to the Low Income Shortfall

AB 85 requires the DHCS to

submit to the Legislature by August 1, 2013 a “fair and reasonable methodology” to allocate three specific funding amounts for the purposes of determining the historical amounts and percentages necessary for the county public hospital health system formula. Section 17612.2(ab)(2)(C) identifies the three funding amounts:Unrestricted special local health funds One time and carry-forward revenues County general purpose funds A

reasonable allocation methodology for these amounts was necessary given the nature of these funding sources as they are available to fund the entire health system costs and are not specified for use for any specific populations.

19

Designated Public Hospital Counties

Slide20

COSTS

20

Designated Public Hospital Counties

Slide21

Definitions - Medi

-Cal Costs

Costs incurred for providing

Medi-Cal services to Medi-Cal beneficiariesIncludes:Fee-for-service costsManaged care hospital and non-hospital costs

Managed care out-of-network costsRelated administrative costs

21

Designated Public Hospital Counties

Slide22

Definitions - Uninsured Costs

Costs incurred purchasing, providing or ensuring the availability of services to uninsured patients during the fiscal year

Determined pursuant to “Bridge to Health Care Reform” Section 1115 Waiver protocols and WIC 14166.8

No reduction factor applied for undocumented personsExcludes nursing facility, mental health and substance use disorder services costs22

Designated Public Hospital Counties

Slide23

Definitions – Other Entity Intergovernmental Transfers (IGTs)

IGTs

and related state imposed fees by

a county public hospital health system used to fund the nonfederal share of Medi-Cal payments and Demonstration payments to an entity other than the county public hospital health system or to a Medi-Cal managed care plan

23Designated Public Hospital Counties

Slide24

Definitions - Imputed Other Entity Intergovernmental Transfers (IGTs)

Average of the predetermined historical

other entity IGT amounts

(FY08/09- FY11/12)Each historical year amount is determined based on the public hospital health system county’s records.24Designated Public Hospital Counties

Slide25

Definitions - New Mandatory Intergovernmental Transfers (IGTs)

Other entity IGTs required by the state after July 1, 2013

25

Designated Public Hospital Counties

Slide26

Blended Consumer Price Index (CPI)

Bureau of Labor Statistics data

Non-seasonally adjusted CPI for All Urban Consumers – US city average

Hospital and Related Services – weighted at 75%Medical Care Services – Weighted at 25%26Designated Public Hospital Counties

Slide27

Cost Containment Limit (Formula)

Base Year Total Costs

X

Blended CPI*base year = FY ending 3 years prior to subject FY.27

Designated Public Hospital Counties

Slide28

Cost Containment Limit

IF

the subject years actual costs exceed the calculated cost containment limit for the year THEN the cost containment limit is used for the calculation OR adjustments to the cost containment limit can be soughtIf the cost containment limit is applied, a reduction to the revenues in the formula is also applied. The reduction to revenues is calculated as 50% of the amount that actual costs exceed the cost containment limit.28

Designated Public Hospital Counties

Slide29

Adjustments to the Cost Containment Limit

If adjusted patient days of service in subject FY is in excess of 10% of those in the base year, the excess days will be multiplied by the cost per adjusted patient day for the base year and added to the trended base year amount.

Electronic health records and related implementation and infrastructure

Costs related to state or federally mandated activities, requirements, or benefit changesCosts resulting from a court order settlement29Designated Public Hospital Counties

Slide30

Adjustments to the Cost Containment Limit (

Continued)

Costs incurred in response to seismic concerns, including costs to meet facility standards

Costs incurred as a result of a natural disaster or acts of terrorism

Other costs as approved by DHCS

30

Designated Public Hospital Counties

Slide31

Timeline

FY

2013/1410/31/13

– County calculates and provides the predetermined amounts and historical percentages and submits calculations, supporting documentation to DHCS for:Imputed County Low-Income Health AmountImputed gains from other payersImputed other entity IGT amountSpecial local health funds12/15/13 – State notifies counties if we disagree with data listed above1/13/14 – If no agreement has been reached regarding data, DHCS shall use county’s data until a decision is made.The County Health Care Funding Resolution Committee shall decide whether the data is accurate/sufficient within 45 days.

By 6/30/15 – Counties submit final data to stateBy 12/31/15 – State provides final FY 2013/14

calculations to counties

31

Designated Public Hospital Counties

Slide32

Timeline (continued)

FY

2014/15 and future yearsNovember

- 5 months after the end of each fiscal year, counties using the formula submit reports on all revenue and cost data to DHCS.January - DHCS completes the interim calculation the January prior to the starting fiscal year, using the most current/accurate data available.May – DHCS updates the interim calculation in May before the start of the fiscal year.June - 12 months/by June 30th of the year after subject fiscal year, counties submit final data to DHCS.July - December – DHCS completes the final calculation and submits to counties by December 31

st of the fiscal year following the receipt of the final data – one and a half years after the subject fiscal year.

32

Designated Public Hospital Counties


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