2014-15 Executive Budget and Global Cap Update

February 5, 2014

  • Update is also available in Portable Document Format (PDF, 478KB)

Agenda

  • 2013-14 Global Cap Recap
  • 2014-15 Global Cap Projections
  • MRT Phase IV Recommendations
  • Other Programs/Proposals in the Global Cap
  • Article VII Highlights

2013-14 Global Cap Recap

2013-14 Global Cap Recap

  • Reflects annual growth of $512 million (primarily for price and utilization).
  • $730 million in resources will be transferred from the Global Cap to stabilize Mental Hygiene funding:
    • Part of the $1.1 billion revenue shortfall for developmental disability services.
  • Health care coverage will be provided to an additional 127,000 fragile and low income recipients; excludes impact of the ACA.
  • Monthly Global Cap Report was expanded:
  • Through November spending under the Global Cap was $59 million below estimates; primarily due to:
    • Lower category of service spending ($80 million), administrative costs ($27 million), and State operations ($9 million); offset by
    • Higher accounts receivable balances ($25 million) and an advanced SUNY IGT payment ($23 million).
  • Health care coverage was provided to an additional 102,000 fragile and low income recipients through November:
    • Medicaid Managed Care enrollment increased by 120,000 recipients.
    • Fee for Service enrollment decreased by 18,000 recipients.

• Medicaid expenditures through November 2013 are $59 million or 0.5% below projections.

Medicaid Spending November 2013
(dollars in millions)
Category of Service Estimated Actual Variance
Total Fee For Service $6,892 $6,762 ($130)
          Inpatient $1,946 $1,924 ($22)
          Outpatient/Emergency Room $336 $303 ($33)
          Clinic $416 $463 $47
          Nursing Homes $2,259 $2,271 $12
          Other Long Term Care $826 $770 ($56)
          Non‐Institutional $1,109 $1,031 ($78)
Medicaid Managed Care $7,431 $7,494 $63
Family Health Plus $655 $642 ($13)
Medicaid Administration Costs $349 $322 ($27)
Medicaid Audits ($391) ($378) $13
OHIP Budget / State Operations $87 $78 ($9)
All Other $1,214 $1,258 $44
Local Funding Offset ($5,042) ($5,042) $0
TOTAL $11,195 $11,136 ($59)

• Medicaid enrollment through November 2013 increased by 102,068 recipients since April 1, 2013.

SFY 2013‐14
  March 2013 November 2013 Increase /
(Decrease)		 % Change
Managed Care 3,936,431 4,056,220 119,789 3.0%
          New York City 2,574,775 2,611,167 36,392 1.4%
          Rest of State 1,361,656 1,445,053 83,397 6.1%
Fee‐For‐Service 1,314,647 1,296,926 (17,721) ‐1.3%
          New York City 626,980 630,902 3,922 0.6%
          Rest of State 687,667 666,025 (21,642) ‐3.1%
TOTAL 5,251,078 5,353,146 102,068 1.9%
          New York City 3,201,755 3,242,069 40,314 1.3%
          Rest of State 2,049,323 2,111,078 61,755 3.0%

• Global Cap spending is projected to be under target by $75 million in 2013-14 and $225 million in
  2014‐15 ‐‐ the MRT is working.

(dollars in millions) 2013‐14 2014‐15 TOTAL
Lower Utilization/Costs in various COS (125) (165) (290)
Lower Medicaid Administration/State Operations costs (50) (60) (110)
Reestimate of ACA Savings 100 0 100
TOTAL 75 225 300

2014-15 Global Cap Projections

2014-15 Global Cap Projections

Medicaid All Funds Spending
($ Millions)
  2013‐14 2014‐15 2015‐16 2016‐17
State Funds $21,383 $21,996 $23,042 $23,592
          DOH State Funds $16,421 $16,962 $17,741 $18,329
          OSA State Funds $4,962 $5,034 $5,301 $5,263
Federal Funds $25,445 $27,653 $30,546 $32,428
Local Funds $8,780 $8,544 $8,419 $8,334
All Funds $55,608 $58,193 $62,007 $64,354

• The Global Spending Cap is projected to grow $540 million in 2014-15; highlights include:

Price
(+$365 million)
  • 3% increase in mainstream managed care premiums; QI increase for FHP migration to MC;
  • 2% increase for managed long term care premiums;
  • fee‐for‐service rate adjustments; and
  • 1.5% for ACA MCO tax.
Utilization
(+$700 million)
  • annualization of FY 2014 net enrollment growth;
  • new enrollment for FY 2015, including the ACA "woodwork".
MRT/One-Timers/Other
(-$525 million)
  • enhanced FFP with the ACA (‐$962 million);
  • decrease in the MH Stabilization funding (‐$285 million);
  • Implementation of administrative savings (‐$45 million); offset by
  • funding for financial plan relief (+$300 million)
  • restoration of the 2% ATB reductions (+$237 million);
  • funding for wage parity (+$175 million);
  • various other changes, net (+$55 million).

MRT Phase IV Recommendations

MRT Phase IV Recommendations

Fiscally Neutral Package of Savings and Investments

Dollars in Millions ‐‐ Investments (Savings) 2014‐15
Gross		 2014‐15
State		 2015‐16
Gross		 2015‐16
State
Start‐up Investment for BHOs/HARPs 120 60 120 60
Supportive Housing 18 18 85 85
Increased VAP Funding 40 20 304 152
Nursing Home Case Mix Cap (43) (22) (32) (16)
Pharmacy Initiatives (33) (16) (62) (31)
Additional Federal/Other Revenues (91) (66) (93) (57)
Basic Health Program 0 0 (300) (300)
All Other Investments (Savings) 52 6 88 32
Medicaid Re‐estimate (600) (300) (450) (225)
Financial Plan Relief 300 300 300 300
Net Medicaid Proposals (237) 0 (40) 0

Start-up Investment for BHOs/HARPs

  • Dedicates $120 million to successfully transform the Behavioral Health System as the State transitions to Managed Care:
    • Targeted VAP program to preserve critical access to behavioral health inpatient and other services ($40M);
    • Funding new 1915(i) - like services ($30M).
    • Facilitating the transition of Behavioral Health services for adults and kids into Managed Care ($20M);
    • Integration of Behavioral and Physical Health ($15M);
    • Health Homes Plus for Assisted Outpatient Treatment (AOT) ($10M); and
    • OASAS Residential Restructuring ($5M);

Supportive Housing

  • Dedicates $100 million in SFY 2014-15 to expand access to supportive housing services:
    • Continue $75 million in MRT dollars to fund various supportive housing initiatives;
    • Allocate $18 million in new supportive housing dollars; and
    • Designate $7 million to fund new supportive housing initiatives associated with Medicaid savings derived from the closure of hospital and nursing home beds.

VAP/Safety Net Program

  • 2013‐14 Enacted Budget allocated $152 million for VAP/Safety Net Programs and $30 million for Financially Disadvantage Nursing Homes.
  • 2014‐15 Executive Budget includes $194 million for VAP of which $30 million continues to be set aside for Financially Disadvantage Nursing Homes.
  • 2015‐16 funding was expanded to include provider payments linked to performance.
  • Over 180 applications, with a total estimated request of $1.2 billion (excluding capital), have been received to date.
(dollars in millions) 2013‐14 2014‐15 2015‐16
VAP I (announced 9/12) 55.6 17.8 0.8
VAP II (announced 12/13) 45.5 63.2 40.9
VAP II (announced 1/14) 55.8 17.8 1.6
Total Awarded 156.9 98.8 43.3
Total Funding Enacted/Recommended 182.0 194.0 458.0
Total Funding Available 25.1 95.2 414.7

NH Cap and Pharmacy Initiatives

  • Nursing Home Case Mix Cap ($43 million):
    • Addresses program integrity issues related to potential up-coding of rehabilitation services by limiting the case mix to a maximum of 2% every six months.
  • Pharmacy Initiatives ($33 million):
    • Prior Authorization for Non-Medically Acceptable Indicators for prescription drugs ($20 million);
    • Reduce Inappropriate Prescribing and Align Point of Sale editing ($7 million);
    • Require Minimum Supplemental Rebates for Brand Drugs ($3 million); and
    • Eliminate e-Prescribing Incentive Payment ($3 million).

Additional Federal/Other Revenues

  • Additional Federal/Other Revenues ($91 million):
    • OMIG Fraud and Abuse Integrity Initiative ($30 million);
    • Community First Choice Option ($28 million);
    • Spousal Support ($20 million); and
    • CHIPRA Performance Bonus Award ($13 million);

Basic Health Plan

  • Basic Health Plan ($300 million in 2015-16):
    • BHP is an option for states under the ACA; it is funded by 95% of the value of the tax credits available to individuals who would have otherwise enrolled in the Marketplace.
    • BHP would be available to individuals under age 65 with income between 138-200% of FPL who are not eligible for Medicaid or CHIP and individuals with incomes below 138% of FPL who are ineligible for Medicaid due to immigration status.
    • Enrollment in BHP would begin April 2015; requires CMS approval.

All Other Investments (Savings)

Dollars in Millions ‐‐ Investments (Savings) 2014‐15
Gross
All Payer Database/SHIN‐NY 30
Conditions of Participation (CoP) Investment 17
Regional Health Planning 7
Various MRT Investments MRT 7
Waiver Implementation 6
Health Home Criminal Justice Initiative 5
Transition of Foster Care to Managed Care 5
Reduce/Eliminate A/R Balances (within 2 to 3 years) (16)
Basic Benefit Initiatives (5)
Program Integrity Initiatives (4)
Net All Other Investments (Savings) 52

Other Programs/Proposals in the Global Cap

A/R Balance - January 2014

  • A/R balances are projected to be reduced to $100 million on March 31, 2015.
  • The A/R reduction proposal:
    • Negotiates equitable repayment arrangements with providers owing significant liabilities.
    • Revises collection enforcement policies for providers below the standard recoupment percentage.
balance

2% ATB Restoration

  • $120 million of the 2% ATB cut was partially restored in 2013-14:
    • MMC/FHP ($87 million).
    • Various FFS categories ($33 million).
  • The balance ($237 million) of the 2% ATB will be restored effective April 1, 2014.
Category of Service 2013‐14
Target		 2014‐15
Restoration
Inpatient $58.5 $43.3
Outpatient/Emergency Room $6.3 $6.3
Clinic $3.3 $3.3
Nursing Homes $72.9 $67.6
Other Long Term Care $46.7 $24.4
Managed Care $78.2 $0.0
Long Term Managed Care $13.1 $12.6
Family Health Plus $10.8 $0.0
Non‐Institutional $67.3 $79.0
Totals $357.1 $236.5

Wage Parity

  • Effective March 1, 2014, Home Care Worker Wage Parity requires compensation be:
    • "no less than the prevailing rate of total compensation as of 1/1/11 or the total compensation mandated by the living wage law, whichever is greater."
  • DOH and DOL collaborated on developing the worker prevailing wage for managed long term care and fee-for-service providers ($20.95):
    • Rate accommodates wage parity for NYC ($14.09) and Westchester, Nassau and Suffolk counties ($10.93) plus additional costs such as taxes, worker´s compensation, overtime as well as 30% in administration costs.
  • The Global Cap set aside $350 million (gross) to accommodate this expense.
  • VAP funding ($20 million) is available to assist Licensed Home Care Service Agencies with consolidation and transition costs.

Article VII Highlights

Article VII Highlights

  • Extends Global Cap through March 2016.
  • Repeals 2% Across the Board payment reduction effective April 1, 2014.
    • Provides flexibility in restoring alternate savings measures.
  • Creates a Global Cap Dividend payment.

MRT: Additional Information