SHUTDOWNS & DEBT CEILINGS POLICY UPDATE

Transcription

1 SHUTDOWNS & DEBT CEILINGS POLICY UPDATE

2 LEARNING OBJECTIVES 1. Understand the impact of the Super Committee and the current Congressional session. 2. Review the 2011 Minnesota Legislative Session and the impact on health centers and other safety net providers. 3. Update on Minnesota s payment/health care reform efforts. 4. Preview the 2012 Minnesota legislative session and elections. 5. The role of advocacy Jonathan Watson, Director of Public Policy, MNACHC Michael Scandrett, President, LPaC Consulting Phil Griffin, Griffin Government Consulting 2

3 FEDERAL UPDATE 3

4 BUDGET CONTROL ACT Signed into law on August 2 nd, BCA raises debt ceiling to avert the US from a sovereign default (failure to pay the interest and/or principal of US treasury securities on time). $917 Billion Cuts over next 10 years NO revenue increases In exchange for raising the debt ceiling by up to $2.4 trillion, spending cuts/revenue increases over the next 10 years (starting in FY13) $ Trillion Balanced Budget Amend. Cuts AND revenue over next 10 years Super Committee Congress vote on by end of Not required to pass. 4

5 Chart 1 5

6 CURRENT FISCAL YEAR FY12 Budget Control Act cuts roughly $21 Billion (0.87%) from FY12 Late Again Continuing Resolution funds government through November 18th House and Senate now determining funding levels for FY12 for CHCs Senate funds CHCs at $2.78B (+$200 Million for Base Adjustments & Expanding CHCs) House funds CHCs at $2.6B (+$2 Million) House eliminates $8 billion in funding from the Affordable Care Act New Access Points, Service Expansions?? $s in Billions Chart 2: CHC Funding FY11 Actual & Proposed FY12 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- $2.58 $1.00 $1.20 $1.20 $1.58 $1.58 $1.58 FY11 FY12 Base Discretionary 330 $2.78 $2.78 $2.60 FY12 Senate ACA $2.60 FY12 House 6

7 SUPER COMMITTEE Propose $1.2-$1.5 Trillion in spending cuts and/or revenue increase over next 10 years Rep James Clyburn (SC) Rep Chris Van Hollen (MD) Rep Xavier Bacerra (CA) Sen John Kerry (MA) Sen Patty Murray (WA) Sen Max Baucus (MT) Rep Fred Upton (MI) Rep David Camp (MI) Rep Jeb Hansarling (TX) Sen John Kyl (AZ) 2% 4% 6% 9% NATIONAL TAXPAYERS UNION86% 88% 94% 97% Sen Pat Toomey (PA) Sen Rob Portman (OH) 7

8 SUPER COMMITTEE Can propose up to $1.2-$1.5 TRILLION of spending cuts and revenue increases over the next 10 years. Would not happen until FY13 (starts ) Timeline Complete recommendations by Thanksgiving, up/down vote in Congress by Christmas. September 16 th First Meeting October 14 th House and Senate committees submit recommendations to the Super Committee November 23 rd Super Committee votes on recommendations December 2 nd Super Committee legislative language (if necessary) December 23 rd Congressional Action on Super Committee recommendations. (if necessary) COMPLETE failure of Super Committee unlikely would result in Congress automatically Cut $500 billion from Defense Budget Not be able to cut the Medicaid program Fast growing part of federal budget that is ripe for reform 8

9 SUPER COMMITTEE $1.2 T in cuts/taxes Congress YES Congress NO MA reform (Cuts) SEQUESTRATION MA Exempt Super Committee No agreement Congress Cut $1.2 T SEQUESTRATION MA Exempt Combo Platter ($500 B cuts) Congress cut $1.2 less SC cuts LESS SEQUESTRATION Sequestration 50% of cuts to defense & Entitlement Programs are EXEMPT from cuts (Medicare can be cut 2%). 9

10 NOTICE A TREND IN MEDICAID? State MA Spending $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 10

11 MEDICAID VITAL FOR CHCS State/Local, $15.0, 12% Chart 3A: CHC Revenue ($128.6M) 2010 Private, $8.8, 7% MHCP, $53.1, 43% $60,000,000 $50,000,000 Chart 3B: MN CHC MHCP Revenue, $42,532,724 $53,146,201 $51,336,610 $48,326,365 $40,000,000 $38,484,637 $30,000,000 Other Fed, $10.3, 8% $20,000,000 $23,378,834 $10,000, , $17.2, 14% $ Self Pay, $6.4, 5% Commercial, $8.2, 7% Medicare, $5.6, 4% Source: BPHC UDS Reports, MHCP Revenue 11

12 THE FUTURE OF MEDICAID House GOP looking to Block Grant Medicaid program to states Set amount of funds allocated for each state, inflated annually. Currently, state spend state funds and draw down federal funds (no cap) President Obama looking to modify funding formula on how the federal government contributes to the cost of Medicaid in states. Effectively lower the federal amount of dollars available to states Other: accelerate innovation, hospital payments for low-income, etc. State Governors/Legislatures looking for increased flexibility, in exchange for less federal money Proposing health care payment reform demonstrations. FQHC PPS per encounter rate at risk? Advocates/Trade Associations protect revenue streams 12

13 IMPACT OF HOUSE GOP PLAN ON US & MINNESOTA MEDICAID Chart 4: MN Medicaid Enrollment, 2021 Current vs. House GOP Plan 1,000, , , , , ,000 decrease 600, , , ,000 86,000 40% decrease 300, , , , Projected Enrollment 2021 Projected Enrollment under House GOP Plan MA Enrollment Repeal ACA Block Grant SOURCE: Kaiser Commission on Medicaid and the Uninsured, House Republican Budget Plan: State by State Impact of Changes In Medicaid Financing, May

14 TAKEAWAYS 1. Super Committee looking for $1.2-$1.5 B in spending cuts/increased revenue by Thanksgiving. Congress will vote (or sequester) on the plan by end of Combo platter? Cuts/taxes and sequestration? 2. The future of Medicaid (block grants, funding formulas, etc) will become clearer as a result of the Super Committee s efforts. 3. Community Health Centers and other safety net providers that rely on Medicaid revenue are at risk Eligibility and benefits of existing and post-aca Medicaid patients PPS per encounter rate. 14

15 MN LEGISLATURE

16 SOLVING THE BUDGET DEFICIT IN 2011 CUTS ($1.8B) & SHIFTS ($2.8B) Tobacco Bonds, $640,000, 14% Chart 5: $4.6 Billion in Cuts versus "Base ($s in thousands) All Other, $69,767, 1% HHS, $965,636, 21% K-12, $2,018,009, 43% Higher Ed, $351,063, 7% LGA, $632,633, 14% 16

17 HHS BUDGET TRAJECTORY The $11.3 BILLION HHS Budget for FY12-13 increases spending 11.6% over FY10-11 budget ($8.5B) decreases spending 8.8% compared to FY12-13 FORECASTED budget ($12.3B). $ I N M I L L I O N S $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 Chart 6: 2011 Session Impact on HHS Spending $5,743 $4,104 $4,472 $6,735 $6,914 $6,007 $6,331 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 $5,630 $6,017 $5,923 PRE-SESSION POST-SESSION 17

18 HHS BUDGET $1B IN CUTS BIG TICKET ITEMS MANAGED CARE (roughly $650 million in total) Managed Care Reforms - $277.5 million in savings Managed Care Contracting Reforms - $135.0 million PMAP Waiver Renewal - $154.3 million Managed Care 5% Reduction Targets - $22.9 million Require Certain Disabled to Enroll in Managed Care - $26.3 million PROVIDER RATES (roughly $60 million) Physician/professional services and dentists HOSPITALS (roughly $150 million?) Delay Hospital Inpatient Rebasing - $106.3 million 10% inpatient hospital rate reduction, post 2013, reduced 1:1 ratio for every percent reduction in re-admission - $43 million OTHER Disability Waiver Enrollment Limits - $48.1 million LTC Waivers/Home Care Rate Cut - $43.9 million 18

19 WHAT DIDN T MAKE IT IT COULD HAVE BEEN WORSE Repeal of Early Medicaid Expansion to those below 75% poverty Bring back CCDS program block grants to 4 METRO hospitals in MN to care for 35,000 GAMC patients (income below 75%) Eliminating optional MA/MNCare services Chiropractic, podiatry, therapies, eyeglasses, contacts lenses and prosthetics Eliminate MA Eligibility for Adults without Children End MNCare for Adults Above 200% FPL Change MHCP eligibility reviews to every 6 months 19

20 MNACHC ISSUES CHC Appropriation - $500,000 (10%) cut over biennium $250,000 per year Changes to MHCP (MA & MNCARE) 30-40% of CHC patients No MAJOR changes Vouchers for MNCare single adults w/o children (>200%) to purchase private insurance Legal, non-citizens coverage eliminated No dental benefit changes MDH/DHS Grants. Originally $110 million in cuts ($2M for CHCs in MN) Agreement $11 million (Migrant Grant cut the only CHC cut $200K) Same day MA medical/mental health encounters reimbursed - not included in final agreement Funds to support administration of meaningful use program in MN. 20

21 MEDICAID/MINNESOTACARE CHANGES ELIGIBILITY State-funded Medical Assistance for legal noncitizens is eliminated - 1,925 recipients in February 2011, roughly 70% in 7-county metro BENEFITS NO CHANGES TO MA/MNCARE BENEFIT PACKAGE - Adult dental services remain intact. Acupuncture Services -MA covers acupuncture services Dental Therapists - Expands MA coverage to services provided by dental therapists and advanced dental therapists PROVIDERS 3% rate cut to physician/professional services and dentists Reinstates COST SHARING (and changed from co-payment ) for Medical Assistance that was repealed in 2009 $3 non-preventative visit (10/1/11) Monthly family deductible $2.50 for MA & MNCare (11/1/12) $3 for brand-name Rx ($1 generic) maximum of $12/month & no cost sharing for antipsychotic drugs (10/1/11) Increases copayment for nonemergency visit to an ER from $3.50 to $20 (need federal approval) 21

22 MN HEALTHY CONTRIBUTION PROGRAM 7/1/12: Subsidies provided to MNCare adults without children with incomes between 200%- 250% of poverty to purchase private health insurance. No premiums Must select plan within 3 months, otherwise need to re-apply to MNCare Plans must provide mental health and substance abuse services Persons dis-enrolled for nonpayment/voluntary termination, many not reapply for 4 months. DHS develop plan to referring applicants to professional insurance agents $ $ $ $ $ $90.00 Chart 7: Monthly Subsidy Under MN Healthy Contribution Program $ $ % Poverty 250% Poverty 22

23 TAKEAWAYS balances budget with combination of accounting shifts and spending cuts (no increase in revenue). $1B in cuts to HHS programs 2. Medicaid and MinnesotaCare eligibility and benefits remain in tact (for the most part). Legal non-citizens & MNCare adults without children above 200% of poverty. 3. Managed care and hospitals take brunt of cuts in HHS budget. 23

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25 HEALTH CARE MARKET REFORM Finally, the answer: The ACO. aka HCDS (2011) aka CCDS (2010) aka ISN (1993) aka Managed Care (1980 s) 25

26 PAYMENT REFORM Need now more than ever: Increase funding for primary and preventive care, care coordination, community-based care and population health. Attention to social determinants. Variety of opportunities for payment reform under the ACA Health care homes payments Shared Savings Program for Medicare from ACA Pioneer ACO Pediatric etc 26

27 PAYMENT REFORM, CONT D Minnesota Reforms PMAP Competitive Bidding DHS payer alignment Evolution of health care home models and requirements Provider Peer Groupings: Identifying high quality, low-cost providers Patient incentives and cost-sharing Current Health Care Delivery System RFP Key issues: start-up costs, EMR/HIE technology, service delivery model changes risk adjustment/cherry picking ; adjusting for risk and social determinants benchmarks for cost and quality measurements patient incentives Catching the next wave: people with disabilities, dual eligibles, HCBS, long-term care services 27

28 INSURANCE EXCHANGE Insurance Exchange Function The Travelocity of Health Care a place to comparison shop Implement uniform rules for qualified health plans Administer subsidies, reinsurance and risk adjustment Provide comparative information on costs and quality Navigation assistance Streamlined application and enrollment for public programs Insurance Exchange Politics Politics: Damned if you do. Damned if you don t Governor moving ahead; most Republicans won t touch it 28

29 TAKEAWAYS Technology. Implement EMR and prepare for HIE Performance. Be prepared to meet measurable standards for quality, health, satisfaction and outcomes Care coordination. Beef up health care homes/care coordination capacity to manage Total Cost of Care Alliances. Form alliances and partnerships for care coordination, market place clout, sharing of care coordination technology and services Integration. Prepare to integrate/coordinate primary care with MH, dental, home and community based services, social services, housing Policy and Advocacy. Making sure the rules and incentives encourage serving high-risk, complex, and disadvantaged people. (Pay attention! Identify barriers! Get involved!) 29

30 2012 PREVIEW 30

31 2012 MINNESOTA LEGISLATURE Short session Typically a non-budget year may turn into a budget year depending upon the SIZE of the budget deficit for FY13 (July 1, 2012-June 2013) November Budget Forecast Bonding bill Influence of 2012 Election Desire to hit the campaign trail and shore up base constituency during the 2012 session. MN House GOP facing electorate for first time since wave election of 2010 Conservative activists opposed to budget deal with Dayton in Constitutional Amendment - Tax increase require a legislative supermajority (60% vs. 51%). 31

32 LONG TERM 2013, 2014, 2015 $25,000 $20,000 $15,000 $10,000 $5,000 $- Chart 8: Projected Spending & Revenue, State of MN ($s in millions) $19,743 $17,132 $17,323 $20,790 $18,007 Fy13 FY14 Fy15 Revenue Spending* $21,672 Continue the ongoing structural deficit. FY2011 revenues were 2.3% higher than anticipated. State s macroeconomic consultant scaling back growth projections of MN economy and 40% chance of recession. Includes projected inflation Source: MMB, February 2011 Forecast 32

33 STATE MEDICAID SPENDING $ in Millions Chart 9A: Actual/Projected Spending/Revenue, FY10-15 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- STATE SPENDING HHS SPENDING STATE REVENUE MA SPENDING 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Chart 9B: % Change, FY % Total State Spending Total State Spending Total HHS Spending 2.4% Total State Revenue 8.3% Total HHS Spending Total State Revenue 12.5% Total Medicaid Spending Total Medicaid Spending 33

34 HHS POLICY PROPOSALS TO WATCH FOR IN session will again focus on the budget deficit for FY12-13 Preliminary estimates $500 million to $1 billion Reform 2.0 is designed to seek new, fresh ideas and support for reform initiatives that will make government more accountable, cost-effective and efficient. - Speaker of the House Kurt Zellers Majority of cuts to balance budget may come from the HHS budget lines Balance budget without any cuts to MHCP: Eligibility Benefits Provider Payments 2010 Legislature focused on cuts to managed care, hospitals and provider payments. 34

35 ELECTION Election First time in state history with new Governor and new leadership in both chambers of Legislature GOP controls MN Senate for first time since 1973 with a dramatic 16 seat pick up in GOP controls MN House for first time since DFL wins Governorship for the first time since 1991 REDISTRICTING expected in late winter? All 134 seats in the Minnesota House will be up for election. Currently GOP holds 10 seat advantage All of the 67 seats in the Minnesota Senate will be up for election. Currently GOP holds advantage, Chart 10: Current MN Legislature MN Senate MN House DFL R

36 TAKEAWAYS 2012 Legislature will face a budget deficit projected in the range of $500 million to $1 billion. Continued cuts to HHS budget, yet legislators interested in reform that achieves savings and doesn t cut MHCP eligibility, benefits or provider payments. Entire MN Legislature is up for election in November

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