Alabama Medicaid 2019 Budget Hearing
January 4, 2018
STEPHANIE MCGEE AZAR
COMMISSIONER
ALABAMA MEDICAID AGENCY
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AGENDA• Overview
• 2019 Budget
•Medicaid Cost Management
•Medicaid Moving Forward
• Federal Healthcare Unknowns
Medicaid Overview
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Who Does Alabama Medicaid Serve?FY 2016 by Date of Service
$10,644Per Member Per Year
$2,556Per Member Per Year
$10,440Per Member Per Year
$3,456Per Member Per Year
Disabled and Blind
Any Age
Determined by the Social Security
Office and have automatic Medicaid
eligibility.
Children
Age 0-18
Children in families below
146% of the Federal Poverty
Rate.
Aged
Age 65 and Over
Adults who are in poverty.
Almost all are also covered by
Medicare
% of Expenditures % of Expenditures % of Expenditures% of Expenditures
Other Categories
Age 19-64
Other adults including pregnant
women, parent caretakers, and
family planning services
% of Members % of Members % of Members% of Members
45%
22%
25%
51%
18%
9%
12%
18%
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Total Expenditures$6.490 Billion
FY 2017 Medicaid Expenditure AnalysisBenefit Payments and Administrative Costs (in millions)
Admin $279
4%
Hospitals $2,236 34%
Nursing Home $946 15%
Pharmacy $718 11%
Physicians $555 9%
Mental Health $479 7%
Alternative Care$365 6%
Operating Costs $169
Non Operating & Major Projects $110
Other $912 14%
Federal Funds$4,544 70%
Other State Share Sources$1,214 19%
General Fund$732 11%
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FY 2017 Medicaid Funding AnalysisState and Federal Funding (in millions)
State Funds$1,946
30%
FY 17 Source of Funds: $6.490 Billion
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Monthly Average Eligibles 2012-2018*
• Fiscal Year to date through October, 2017
800,000
850,000
900,000
950,000
1,000,000
1,050,000
1,100,000
2012 2013 2014 2015 2016 2017 2018*
Alabama Medicaid AgencyMonthly Average Eligibles
Overall Total
2019 Budget
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Alabama Medicaid 2019 State Funding Need
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• Total Funding Need $810 million• Less Projected Carryforward $ 53 million • General Fund Request $757 million
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• Carryforward
• Inflationary increases
• Nursing Homes
• Pharmacy
• Medicare Part B Insurance
• FMAP changes – reduces state share requirement
• Impact shared with existing state share funding, such as hospitals;
other state agencies; and teaching hospitals
• Paybacks
• Provider funding
Factors Affecting 2019 Funding Need
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FY 2019 Budget Request Summary In millions
2018 General Fund Need $773
Increase in General Fund Demand:
Inflation, utilization increases, new federal requirements 33
Increase in program costs 20
Decrease in General Fund Demand:
Increase in federal match -10
Reduction in Paybacks -6
2019 State Funding Needed $810
Less carryforward
Actual cash carryover from 2017 operations 20
Projected cash carryover from 2018 33
Total 2019 Net Request $757
Medicaid Cost Management
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• State Recoveries• Automated Asset Verification• Other Initiatives
Medicaid Moving Forward
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Alabama Quality Outcomes • 3rd highest adult obesity rate in the nation
• 2nd highest diabetes rate in the nation
• Newborns
• Infants are significant drivers of Medicaid costs
• Infant mortality rate: 9.1 per 1,000 births (5.9 nationally)
• High rate (10.3%) of low birth weight infants
• Highest opioid prescribing rate in the nation (1.21 prescriptions per person in the entire population of the state)
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Quality Outcomes in Newborns
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100+
Exp
en
dit
ure
s
Age of the Recipient
Alabama Medicaid AgencyExpenditures for Medical and Support Services
Fiscal Year 2016By Age at the Date of Service
Medicaid Moving Forward
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• Care Management Principles• Personal Accountability
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Medicaid Care Management PrinciplesPivot Plan• Case management system to achieve better healthcare outcomes with minimum initial cost
• Provider based structure
• Regionally based, regions based on major population centers
• Replacing 6 current health homes and 14 maternity regions
• Populations may include Patient 1st, Maternity, Plan First and Health Home population, excludes long term care and duals
Integrated Care Networks (ICN)• Statewide focus on managing long term care in the most cost effective manner
Goal of ICN and the Pivot plan is to redirect expenditures to achieve better outcomes
Personal Accountability • Proposed 1115 work requirement waiver on Parent and Other Caretaker and Relative (POCR) group
• Possible increase in copayments
Federal Healthcare Unknowns
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• CHIP reauthorization • Possible changes to federal funding structure • Possible impact on provider taxes
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Questions