Evaluation of Florida's Family Planning Waiver Program: Report on Cost Effectiveness. During Demonstration Year 9, ,
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1 Evaluation of Florida's Family Planning Waiver Program: Report on Cost Effectiveness During Demonstration Year 9, , Using Required CMS Methodology Prepared for the Office of Medicaid Research and Policy, Bureau of Medicaid Quality Management, Florida Agency for Health Care Administration By the Maternal Child Health and Education Research and Data Center April 11, 2009
2 TABLE OF CONTENTS INTRODUCTION... 1 METHODOLOGY... 1 Linkage of Data Sources... 1 Baseline Fertility... 3 Averted Births... 4 Average Expenditures Associated with Pregnant Women and Infants up to Year One... 5 Cost Savings... 5 RESULTS... 5 DISCUSSION... 9 APPENDIX A. Budget Neutrality Worksheet For Demonstration Year (DY) 9 Prepared By MCHERDC For Florida Medicaid APPENDIX B. Number Of Family Planning Waiver Participants, Estimated Births Averted, And Reported Savings Prepared By MCHERDC For Florida Medicaid i
3 Introduction This report on Demonstration Year (DY) 9 of the family planning waiver corresponds to program year December 1, 2006 to November 30, The report was prepared by the Maternal Child Health and Education Research and Data Center (MCHERDC) at the University of Florida, using a methodology for estimating cost effectiveness that relies on a set of budget neutrality templates required by the Centers for Medicare and Medicaid (CMS). The present report follows the format that MCHERDC has used in previous reports submitted, based on the Special Terms and Conditions (STC) that the Medicaid Program Office agreed to with CMS between August 1 and November 30, Methodology The evaluation design was prescribed by the Centers for Medicare and Medicaid in the Special Terms and Conditions required of all section 115 demonstration waivers. That design calls for the state of Florida to estimate savings by comparing fertility rates in the year prior to the waiver ( ) to fertility rates of all women participating in the waiver during demonstration year 9, Linkage of Data Sources The primary data sources for the analyses are Florida birth vital statistics records, and Medicaid eligibility and claims files. The vital statistics and Medicaid files are linked to each other through a multi-pass deterministic merging algorithm. The raw data contains over 2 million eligibility records and over 200,000 births each year. Medicaid Claims are linked via the Medicaid ID number to Medicaid Eligibility and through that linkage to births. 1
4 MCHERDC uses a 24-step deterministic linkage strategy. Each step removes positively matched records from the pool of available records to link. First and last names are transformed using the New York State Identification and Intelligence System Phonetic Code (commonly known as NYSIIS). Merge variables are first, middle, and last names, NYIIS coded names, date of birth, address, county, zip code, and social security number (SSN). All common patient identity variables are used to link, except for race which adds too many false positives. The following are the first four merge pass strategies: 1. SSN, Mother s First Name, Mother s Last Name 2. SSN, Mother s First Name, Mother s Maiden Last Name 3. SSN, Mother s First Name 4. Mother s Date of Birth, Mother s First Name, Mother s Last Name Through understanding the quality of the variables and trial and error, we explore the results of using different combination of variables. We try mother s and father s first and last names, addresses, SSNs, and other fields to link. Through random sampling of potential links for each step, the appropriateness of that particular step is judged. When too many bad matches are generated, that strategy is dropped. We try to link all birth last name fields (maiden, child, father) to the one last name in the Eligibility file. We also loosely block on date of birth on some weaker merge passes ("fuzzy" matching). There is a separate merge for singletons and a separate merge for multiple births. Our merge strategy is unique in that both singleton and multiple merges are oneto-one. The one-to-one merge strategy is important for error checking and reducing false matches. The first birth of multiples is separated from its siblings and that record is 2
5 linked to Medicaid Eligibility. After a link is made, the siblings of that multiple are linked back together. The mother's Eligibility information from the first sibling is copied to the other sibling records. For each year of data we hand check weak merge passes such as SSN only. Our goal is 100% good matches, so questionable links are dropped. Afterwards, we tag records outside the Medicaid Eligibility period and drop them. A woman's Medicaid eligibility period is specific to her nine months leading up to the delivery date. Overall, the maximum eligibility range is the birth cohort year of interest plus the nine preceding months of the prior year, April through December. We categorize using Eligibility codes, so we can determine who is in SOBRA, non-sobra, Alien, and other groups. A woman is assigned to a category based on the category of longest stay during pregnancy. A great deal of data cleanup is necessary because there are multiple records per person and a woman can change categories, be temporarily eligible, have invalid time spans, and have other errors. We resolve temporary eligibles and clean the data before making final category assignment. Though not every single combination of variables to include as a merge step is attempted, the combinations of variables that are retained produce the highest number of valid linkages. Baseline Fertility Fertility rate at baseline ( ) for women with incomes less than 185 percent of the federal poverty level (FPL) was established by an interpolation of 1990 and 2000 decennial census data. Two 5% probability samples of women in Florida between the ages of 14 and 44 who had family incomes less than 185% of FPL in 1990 and
6 were obtained from the Integrated Public Use Microdata Series at the University of Minnesota. By taking the difference between the two ten-year samples and allocating the increment equally across the 10-year period, the number of women in between 14 and 44 who had a family income of less than 185% FPL was estimated (N = 1,014,180. See Table 1 below). This number served as the denominator. The numerator was the number of births to Medicaid women in FY Baseline fertility rate is the ratio of Medicaid births in over number of women aged in the general population who were financially eligible for Medicaid. Data were stratified into four age groups: 14-19; 20-29; 30-34; and Averted Births Calculating number of averted births is a two step process: first, it is necessary to determine how many women were actively enrolled in the family planning waiver program each fiscal year. Second, it is necessary to determine how many of these women had a birth during the demonstration year. Births prior to women becoming enrolled in the family planning waive program were excluded. Births occurring to women 270 days after they were disenrolled were also excluded. Births to women whose eligibility started less than 270 days before the birth were excluded. Expected births for each year are calculated by multiplying the baseline fertility rate by the actual number of women with family planning eligibility each year. Averted births are the difference between expected births and actual births to women who were enrolled in the family planning program and received at least one paid family planning service. 4
7 Average Expenditures Associated with Pregnant Women and Infants up to Year One Average expenditures for prenatal care and delivery. The average Medicaid expenditure for a pregnant woman is calculated by multiplying the average per member per month (PMPM ) expenditures for SOBRA pregnant women (women only eligible for Medicaid due to pregnancy) times the average length of enrollment in months for a pregnant woman in that fiscal year. Average expenditures for infants. The average Medicaid expenditure for a child up to one year of age is calculated by dividing the total Medicaid expenditures for that group by the total number of infants born to Medicaid-enrolled women in each year. Cost Savings To estimate cost savings associated with the waiver, the number of averted births for each fiscal year is multiplied by the average Medicaid expenditures for pregnant women in that year plus the average Medicaid expenditures for children up to one year of age during that year, minus the cost of implementing the Family Planning Waiver Program for that year. Results The required CMS methodology for estimating cost effectiveness begins with calculating the base year fertility rate of women. A weighted average is used to calculate the base year fertility rate. Such an approach takes into account the fact that women in the age group of are both the largest of the four age groups and also the group with the highest fertility rate. In consultation with CMS, the Agency was allowed to adjust the base year ( ) fertility rate by two factors: 1) proportionally 5
8 weight the average Medicaid fertility rate by the number of participants in each age group; and 2) use the actual number and proportion of participants in each age group in DY 9 ( ) to compute the baseline fertility. Table 1 below gives the baseline fertility rate for each age group. If one were to use the base year births to each age group weighted by their proportion in the total base year population, the weighted average fertility rate would be Instead, the Agency used the number of women in Table 2 who were actual program participants in DY 9. Table 1. Baseline Fertility Rate of Medicaid Eligible Women who gave birth in FY Age Base Year Base Year Base Year Group Population Births Fertility Rates ,460 20, ,540 49, ,540 11, ,640 6, Total 1,014,180 88, Table 2. Number of Family Planning Waiver Participants, Births, and Fertility Rates in Demonstration Year [DY] 9 Age DY 9 DY 9 DY 9 Group Participants Births Fertility Rate Totals To arrive at the fertility rate of 122/1000, the Agency added the proportion of each DY 9 age group that had been multiplied by the base year fertility rate: 6
9 /13955 x /13955 x /13955 x /13955 x = The next step in calculating cost effectiveness is to determine the number of births averted. The required CMS formula for calculating births averted is: Births averted = [(base year fertility rate) (fertility rate of demonstration participants during demonstration year)] x [number of demonstration participants during demonstration year] Plugging in the numbers from Tables 1 and 2 into this formula, we get: Births averted = ( ) x = Now that we have determined that there were around 1650 births averted as a result of a reduction in the fertility rate during DY 9 compared to the base year fertility rate, we are in a position to estimate the cost savings associated with these averted births. The first step in this process is to estimate gross savings. This sum is arrived at by multiplying the number of births averted by the average cost of a birth: (Births averted) x (average cost of a birth) = Gross savings Birth cost consists of payments that Medicaid makes for a pregnant woman s prenatal care and delivery plus payments that Medicaid makes for an infant s birth hospitalization plus any re-hospitalizations during the infant s first year of life. Medicaid 7
10 calculated that the average cost of a birth in DY 9 was $9,714. Plugging this number into the formula above for calculating gross savings, we get: x $9,714 = $16,031,014 The federal financial participation (FFP) match rate for administrative services agreed upon between CMS and Florida for the fiscal year was 57.98%. This administrative match rate covers claims processing, eligibility assistance and determinations, outreach, program development, and program monitoring and reporting. Thus, the federal share of the gross savings is 57.98% of $16,031,014 or $9,294,782. The next step in the process of establishing net cost savings is to tally and then deduct all allowable waiver expenditures associated with delivering family planning services to program participants. To assure that the program does not incur any costs to the federal government, the expenditure target is set at the product of birth averted and birth costs. According to the Special Terms and Conditions between CMS and the Agency, Florida was not allowed to exceed its expenditure target by more than 4% in DY 9. The actual cost of delivering services in DY 9 was $2,767,543. When we subtract program expenditures ($2,767,543) from program gross savings ($16,031,014), we find the net result to be a gain of $13,263,471. To determine just how far under the budget neutrality target this savings represents, it is first necessary to determine the federal share of the waiver expenditure. Using historical utilization of qualifying services in comparison to non-qualified services during the three year extension period, the Agency estimated that on average around 69% of expenditures were eligible at the 90/10 FP FMAP match. Since expenditures for 8
11 DY 9 totaled $2,767,543, the Agency applied a rate of 69.26% to these expenditures ( x $2,767,543 = $1,916,800). This amount, $1,916,800, was eligible for the 90% match rate ($1,916,800 x 0.9 = $1,725,120). For services whose primary purpose is family planning (i.e., contraceptives and sterilizations), the Federal Financial Participation (FFP) match rate is 90-percent. The remainder of the expenditures ($2,767,543 $1,916,800 = $850,743) was eligible to be matched at the federal financial participation (FFP) match rate for administrative services of 57.98%. We then multiply the remainder of the expenditures by the appropriate Non 90% FFP match rate or 57.98% ($850,743 x = $493,261) and add that to the portion of expenditures that was eligible for the 90/10 match ($1,725,120). That sum ($493,261 + $1,725,120 = $2,218,381) is the federal share of the waiver expenditure. The last step is to determine how close the federal share of the waiver expenditures was within the allowable target that CMS had set for DY 9 (104%). Percent federal share of waiver expenditures = [(federal share of waiver expenditures) / (federal share of cost savings)], x (percent of target) Plugging the numbers we have calculated so far into formula above, we get: ($2,218,381 / $9,294,782) x (1.04) = 24.82%. Thus Florida was able to show that the costs of the program to the federal government were less than 1/4 of the allowable program costs. All of the above calculations are summarized in Appendix A. Discussion This report s findings track fairly closely to recent cost effectiveness reports prepared by MCHERDC under contract. Appendix B summarizes the number of FPW 9
12 participants, estimated birth averted, and reported cost savings over the entire nine-year period that Florida has operated a Section 1115 demonstration waiver. The consistency of findings for the most recent two years suggests that, after some discontinuity that occurred between the end of the first and the beginning of the second 3-year extension cycle, the program has now achieved stability in outreach and is able to maintain a positive variance in cost accounting standards. Starting in 2008, Medicaid Services initiated monthly conference calls between the Agency s Office of Research Contracts and Evaluations, the Infant, Maternal & Reproductive Health Unit in the Florida Department of Health, and the University of Florida to foster closer collaboration between all stakeholders in the evaluation of the Family Planning Waiver. Steps have been taken to complete measurement of two important components of the evaluation design 1) distinguishing between Title X Family Planning and Reproductive Health Care program participants (funded by HRSA) from Title XIX family planning waiver participants (funded by CMS); and 2) determining the number of referrals to primary care services for women enrolled in the waiver. Already a data file on individual participants of the Title X program during 2007 has been forwarded to MCHERDC by DOH s Bureau of Community Health Assessment. The process of linking that information to the 2007 Medicaid eligibility and claims files will begin shortly. Also DOH s Director of the Division of Family Health Services Bureau of Family and Community Health has inaugurated a series of discussions about conducting a telephone survey of FPW recipients and providers in order to access the degree to which the program is succeeding in serving as a portal to primary care for low income women. Once this new data collection process has been finalized, MCHERDC 10
13 will work with the Agency and DOH to establish the measures needed to analyze other aspects of the family planning waiver program such as: a) outreach efforts to enroll a greater proportion of eligible women; b) intendedness of pregnancy among adolescents; and c) expansion of services offered by private providers. 11
14 Appendix A. Budget Neutrality Worksheet for Demonstration Year (DY) 9 Prepared by MCHERDC for Florida Medicaid Group Pop Births Fertility Fertility Participants Births Fertility Rates Rate Rate (Adjusted) ,460 20, , ,540 49, , ,540 11, , ,640 6, Totals 1,014,180 88, , Births averted (BA) = ( )*13,955 = Budget expenditures for DY9 should not exceed 104% of BA x BC (average cost of a birth) BA BC Total Federal Share FFP 1, , ,031, ,294, Waiver expenditures 2,767, ,218, Percent of target (104%) % match 1,916, Non 90% match 850, Savings/(loss) 13,263,
15 Appendix B. Number of Family Planning Waiver Participants, Estimated Births Averted, and Reported Savings Prepared by MCHERDC for Florida Medicaid Demonstration Year Number of Participants Estimated Births Averted Reported Savings , $4,711, , $1,991, , $2,972, , $1,012, , $4,046, , $1,080, , $852, ,961 1,447 $12,126, ,955 1,650 $13,263,471 13
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