July 1, 2010Emergency Board Meeting

Report on Medicaid for Fiscal Year 2010

32 V.S.A. § 305a(c) requires a year end report on Medicaid and Medicaid related expendituresand caseload. In January the Emergency Board is required to adopt specific caseload andexpenditure for Medicaid and Medicaid -related programs. Action is not required at the Julymeeting of the board unless the Board determines a new forecast is needed as result of the year-end report. Staff does not recommend a new forecast as the year-end expenditure informationdoes not at this time indicate a revision to the forecast. However issues related to the FederalMedical Assistance Percentage (FMAP) may significantly impact the FYII budget.

This report contains the following:

Year End Summaries:

Summary of EnrollmentSummary of Total ExpendituresGlobal Commitment Fund SummaryCatamount and State Health Care Resources Fund SummariesCatamount Fund DetailState Health Care Resources Fund Detail

Key IssuesThe data in this report reflects current estimates to date. There may be changes as the financialclose out for fiscal year is completed and finalized. If necessary, significant changes will beincluded in a subsequent revised report.

Enrollment: Actual FY10 enrollment appears to have ended mostly on tareligibility groups. Overall total enrollment was 0.35% above the target aJanuary of this year. New enrollment estimates for Federal FY11 will Iconsensus process for that is underway. The trend analysis thus far isgrowth in the adult category, particularly the VHAP program the progrgreatest volatility in as a result of economic factors. At this point, littlehealth care reform is anticipated in the current FYI I enrollment estimates, but assuch impacts will continue to be analyzed.

Expenditures: Final close out is not complete in all departments but we appear to beon target overall for FY10 expenditures. Areas where spending is below expectationlong term care, will carryforward funds for FYI 1 needs. The FYI 1 budget reflecincluded in the budget as passed. Approximately $17m (gross) of funding reduestimated with the passage of the Challenge for Change implemany other challenge funding reductions, will be reflected in the totaladjustments are made as authorized in the Challenge bills. All of the Oatamounbetween 200%-300% of the Federal Poverty Limit (FPL) are now included in theCommitment Waiver.

most allFY10 ineptember, the

Led

Global Commitment Fund: The Global Commitment Fund (GCF) is on target to close FY10with the $43 million (gross) balance expected in building the FY11 budget. We may modestlyexceed this target once all departments are closed out. Under the GC waiver the state drawsfederal funds by payment of set actuarially determined rates to the managed care organization(MCO). FY10 cash capitated payments reflect the full current-year per-member per-monthpayment obligation. As a result, the FY11 capitation payments do not assume any payments forprior years (as was the case in FY09 and FY10) other than technical adjustments associated withretroactive enrollment. Over July and August, the actuary will be analyzing the most recentexpenditure information. The Agency of Human Services, in consultation with the Agency ofAdministration and the Joint Fiscal Office, will be setting the Global Commitment actuarial ratesfor federal fiscal year 2011 in August; the rates are due to CMS on or before September 1. Thisanalysis will further inform any revisions that may be required for the FY11 estimates anddeveloping the initial FY12 estimates in January.

Catamount Fund: FY10 revenues in the Catamount Fund were below expectations primarily tolower than expected premium revenue being collected. The cause of this is not yet understoodwill continue to be analyzed. Instead of ending FY10 with $730k balance, FY10 has a $1 l0kdeficit. This results in an $800k+ deficit in FY11 which may increase if the premium issuedescribed herein reflects a new baseline versus a one-off timing event.

State Health Care Resources Fund: The FY10 balance is estimated to be $3.9m which is$2.6m higher than the amount anticipated in the budget. This is mainly because cigarette taxrevenues and legal settlement revenues came in higher than expected. This $2.6m will beavailable in FYI I. The main reason FYI 1 revenues in total are estimated to be significantlyhigher than in FY10 is the change in the base year for the hospital provider tax that was includedin the budget this year.

Federal Medical Assistance Percentage (FMAP): The budget assumed an extension to theenhanced FMAP until the end of state fiscal year 2011. The total estimated value of theenhancement was $62.264 million. These funds were removed from the budget and placed intothe human services caseload reserve and will be allocated from the reserve if a federal extensionis enacted. Without an extension the funds will be restored to the Medicaid programs and theallocations will not go forward from the reserve.

In addition to the allocations not being funded, one other issue that we are facing as a result ofnot having an extension is the base estimate

AP for FYI 1 and the impact of the our actualunemployment rate. The assumption for the FY11 base FMAP assumed we would remain in thehighest adjustment tier under ARRA for the first two quarters of this year. The good news is ourunemployment rate did not stay at the level that would have allowed us remain in this tier. Thebad news is we are facing a 0.56 % increase in the state share from 35.67% to 36.23% which is a$6.8 million increase in state fund need. Extension of the enhanced AP would eliminate thisproblem, if an ARRA extension includes language continuing the unemployment hold harmlessprovision which expired effective July 1, 2010.

VT LEG 248543.1

Aged, B

lind, or Disabled (A

BD

)/Medically N

eedyD

uril EligiblesG

cncra!

w L

MF

NT

v^r

FY

08 ' c'ual

FY

09 Aca,,

11,804

12.54,,'14,197

14.770

9,258

9,858

24,763

28,2

62,767

7-1.556

t^

f

3,491

3,608

50,6741

52,242

1,147

1,212

3,2 80

3,414

Su

btotal C

hild

ren

58,591

60,476

12,727

12,453

Ch

o -:es fo

r Care

Nursing H

ome, H

ome &

Com

munity B

ased, ER

C

3.3

37

j3 8

66

15.'9

2

?

36

10 3

58

i v 8

6

33,2

,3

36.8

62

9F 3

156Q

f

"985

1,862

677

,J 3 .

11-

r,

82,746

9' 4

06

3,6103,7716

54.232

55,631

1.176

1,2823,510

^

3,966

---"12

- ,550 'I

3 929

rv4v01

- ----------- -

Ch

ildren

\1; !AP

VH

AP

ESI

Catam

ountE

SIA

h,S

ub

total AN

329

6,3

53

476

274

Blind or D

isabled (BD

)/Medically N

eedyG

eneralU

nderinsuredS

CH

IP(U

ninsured)

•har acy O

nly P

rograms

4,0621

4,016

To

tal Direct S

ervices138,1

47'

149,501 j161,754

172,646

VT

LE

G 2

48

55

3.v

1

Su

mm

ary of

Tota

lE

xpen

ditu

res

FY08

FY09

Actual

Actual

Non C

apitated Adm

inistration5,764,748

6,116,390

Global C

omm

itment W

aiverG

C - A

dministration

GC

- Program

GC

- Investments (C

NO

M)

GC

- Certified (non -cash program

& cnom

)

70,078,963

74,349,470

688,768,873

779,104,938

50,961,849

53,463,741

23,989,739

28,079,069

833,799,424

934,997,218

Challege

FY10

FY11

Budget A

sE

stimate A

sF

inal Est.

Passed

Passed

6,128,458

6,033,133

78,470,772

82,244,844

856,585,269

969,668,432

55,667,759

54,712,118

28,984,660

25,674,647

1,019,708,459

1,136,536,461

(12,382,669)

Choices For C

are Waiver

(LTC)

189,742,595

197,954,288

Pharm

acy - State O

nly

7,055,010

6,534,312

Catam

ount - State O

nly >200%

-Adm

inistration

1,270,333

905,626C

atamount - S

tate Only >

200% -P

rogram

3,981,434

8,682,014

DS

H

49,003,898

35,648,781

Claw

back

20,339,254

20,779,093

SCH

I P

6,193,009

7,231,315

Total

1,117,149,705

1,218,849,037

194,600,000

206,544,910

(5,000,000)

1,700,000

3,183,320

628,951*

100% incl in G

C

6,6

75,8

25 *

100% incl in G

C

37,448,781

37,448,781

13,300,000

17, 614,748

7,200,000

8,452,339

1,287,390,474

1,415,813,692

*F

Y10 >

200% C

atamount is 1/2 year - these expenses are m

oved into GC

after Jan 1, 2010.M

ost of the Buy-In program

is included in the GC

waiver and a sm

all portion is in the CF

C w

aiver

VT

LE

G 2

48553.0

Glo

bal C

om

mitm

ent ®

Cash

la c

r®

toY

11 (A

:-

FY

08 Actual

FY

09 Actual

38,913,512

42,285,554

25,026,759

43,167,252

813,181,969

889,659,354

1,008,864,292

1,063,528,627

Exp

enses - C

ash C

apitated

'-nr`i8

-tion

70,078,963

74,349,470

78,470,772

82,244,844P

ry;

688,768,873

779,104,938

856,585,269

969,668,432Inved

ent

50,961,849

53,463,741

55,667,759

54,712,118T

otal Cash

Exp

enses

809,809,685

906,918,149

990,723,799

1,106,625,394

End-of-Y

ear Cash B

alance42,285,798

25,026,759

43,167,25270,485

Non

-capitated

adm

inistrative exp

enses

(1)

5,764,748

6,116,390

6,128,458

6,033,133N

on-cash

expen

ses (2)

23,989,739

28,079,069

28,984,660

29,911,067

Non

-cash reven

ues

(3)

32,448,537

31,170,027

29,758,594

30,608,548

Notes:

(1)N

on-cap

itated exp

enses are cash

expen

ses bu

t are paid

outsid

e of capitation

pm

t and

do n

ot affect fun

d b

alance.

(2)N

on-cash

expen

ses inclu

de 3 certified

program

s in w

hich

non

-federal exp

enses are n

ot State cash

expen

ses.(3)

Non-cash revenues include 4 certified program

s in which non-federal revenues are not State cash revenues.

4)FY

10reven

ues an

d exp

enses are E

ST

I MA

TE

D O

NL

Y -

actual reven

ues an

d exp

enses m

ay be d

ifferent b

ased on

final closeou

t, and

(m

ayvary

between adm

inistration, program, and IM

O investm

ent.

(5)F

Y10 cash capitated paym

ents reflect the full current-year per-mem

ber per-month paym

ent obligation. As a result, the F

Y11

capitation payments do not assum

e any payments for prior years other than technical adjustm

ents associated with retroactive

enrollment. F

Y09 and F

Y10 capitation paym

ents included payments for prior-year shortfalls of $21,379,986 and $25,972,014.

FY

10E

ST

IMA

TE

D

F°11

Fin

al 4

r- a

ted

Cash

Carryfo

rward

from

Prio

r Year

Rev

enu

es - Cash

Cap

itated P

aym

ents (5

)

VT

LE

G259687.v

i

Cat a

mount

FY09

FY10

FY11

FY

08 Actu

al

Actual

Final E

st

Budgeted

Beg. B

alance

4,644,780

9,775,791

7,311,891

(109,156)estim

ate was +$732k

Total C

atamount R

evenue

15,742,568

20,216,600

18,169,364

21,689,254R

evenue from G

F

3,500,000

0

0

0

Total C

atamount E

xpenses14,111,558

22,680,501

25,590,411

30,243,322

approp=

21,980,856E

xpense moved to G

F

0

0

0

(7,822,019)

22 421,303

(440,4

47)

End. B

alance

9,775,791

7,311,891

(109,156)

(841,205)

Sta

te H

ealth

care

Reso

urce

s Fund

FY09

FY10

FY11

FY08

Actual

Actual

Actual E

st

Budgeted

Beg. B

alance

8,766,595

(582,703)

(1,432,526)

3,904,842

Total R

evenue

138,976,113

146,828,492

158,188,830

175,109,034

Total E

xpenses

148,325,411

147,678,315

152,851,462

176,395,700

End. B

alance

(582,703)

(1,432,526)

3,904,842

2,618,176

VT

LE

G 2

48

55

3.v

l

CA

TA

MO

UN

T B

AL

AN

CE

SH

EE

T

7,4

38,3

32 IF

---Y

327

30,293,232258,308

7,696,63922,686,673

720,889

364,566

1,075 4568,682,014

31,368,667

SF

YW

Actuals

<a200%

> 200%

TotalTotal

4800%C

atamountHealth

3,593,323C

atamount E

ligible Em

ployer-Sponsored

Insurance

121,683btotal N

ow Program

Spending

3,715,206

OS

s

>200%_3,845,009

136,4253,981,434

SF

Y' 10

Estimate

11p

p

>200%n

aa

x=200%

1 /1110

1/1/10

Total

<200%

FPL>200

%FP

L

TOTA

L31 140.504

6,436,111

7,368,621

44,846,136

45,097,811

16,621,443

61,713,26411048,781

239,713

278,261

1,566,7{

2,076,880

883,710

2,46,511,892

47,165,701

_ 17485 153

64 85385432,189,285

6,675,8257,646,782

Catam

ount end ES

I Adm

inistrative Costs

1,688,833

1,270,333

2,959,166

1,278,217905,626

2 183,8431,264,021

628,95.1.[-

314,478

2197,448

1,554.7491,142,276

2,697 025T

OT

AL G

OS

S P

OG

RS

PE

ND

NG

5,404,03923

,8909,587,640

33,5525301

33,443.306 1

7,304,7767,961,258

1

48 709,340.1462723,450

18,627,42967,350,879

6,105,179

2254,334

384_046.

Z092,381

4,730,761

1,316,167

1316,167

4 000,000250,4661

318167

1,848,7137,421 346

2254,334y

384,046500,000

2 5T7 000394,072

2,092,381

6,230,7615,317,785

500,0001,846,713

500,000

500,000

1,327,000

1,250,000

500,000197036

258,466-

1,846,713

923.357

923.357500,0001

2,447,393 1

___197,0

36

2,370,393

Imm

unizations Program

VT

Dept o

f labor A

dm

m C

osts A

ssoc. W

ith E

mpto

oer,A

ssess

Marketing

and Outreach

Blu

eprint

TOTALOTHER SPENDING

2,500 000

2500 000394072

394 07_2-500 000

500,0D079

1846

7131

-

,

1,846,

500.000

4,740,785

5240,785

399,085

1,028,066

30,664

67.134

429,949

1095,200

263,713

-

176,236

1,095,200

3,533,837225,965 1,

3,759,801(2,474,701)1,285,100

4,748,770315,618

5,064,3883,543,0461,521,342

1,704,249115,175

1,819,424

1,819.424

Catam

ount Health P

remium

sC

atamount E

ligible Em

ployer-Sponsored Insurance P

remium

sSubtotal Prem

iums

Federal Share of P

remium

sT

OT

AL

ST

AT

EP

RE

MIU

MS

HA

RE

Cl^re^tto Tax Irraease($. 60$.80)

Floor Stock

_Em

ployer Assessment

Interest_g

eneral Fund - Gov. R

Rec.

Gen

eral Fu

nd

- Leg

islature

State F

un

d T

ransfer d

ue to

En

han

ced A

RR

AT

O A

L T

H R

R h

U

1,427,15197 998

525 149263,713

1271 436

8Y

688^

29,32995,421,491

333,887

14

2,656,836

6,090,675386

2,717,736

[

6,477 ,863538

160 ,898

9361,695348,117

6,378,000125,951

16,213764

2,216,648

8,6 69,667150,941

1

561,7342,367,588

9,251,401(1,394747)(

(4,937,793)972.842

9,762,0041370_2

6,909,00015,021

3(.200,536)1%

655,756

6,230,445

5,009,960

11,240,405

9,408,500

7,600,000

3,858,3613,963,8580

2.717.736(2,474,701)4,002.836

4,313 609

617,094

447,771

864,8656_457,732

12205,27016,747,5394320029

(3,204,487)1

(7,524,616)2,253,245

4.680,7542,427,510

(2,463,900f9.776711

I.

e Account Fund'n

Sta

te H

ealth

Care

Reso

urc

es F

un

d

FY

08 Actu

al

FY

09 Actu

al

FY

10A

ctuals

FY

11A

s Passed

(pro

jected)

State H

ealth C

are Reso

urces F

un

dB

eg. B

alance

8,766,595

(582,703)

(1,432,526)

1,286,665O

netim

e'0

6 G

F W

ate

rfall

8,766,595

(582,703)

(1,432,526)

1,286,665R

evenu

eC

ig Tax @

84.5%('0

7w

as 9

1.1 %

)

47,350,202

51,036,337T

obacco

Pro

ducts T

ax - 1

00%

3,180,785

3,398,280P

rov Tax - H

ospital

62,563,216

67,299,073P

rov Tax - N

H

14,559,205

13,004,774P

rov Tax - H

H

4,426,736

3,864,347P

rov Tax - IC

F-M

R

61,104

62,059P

harm

acy $

0.1

0/scrip

t

603,986

835,186B

eneP

rems - V

HA

P(m

gd care)

2,005,226

1,883,041

Bene

Prem

s - Dr. D

(medicaid)

189,559

170,189B

ene

Prem

s - SC

HIP

291,108

442,231B

eneP

rems - V

PH

1

1,259,642

1,391,274

Ben

eP

rems - V

PH

2

614,967

680,716B

ene P

rems -

add'l F

ed g

iveback (W

aive

r Am

endm

ent)

Enhanced

AR

RA

FM

AP

extensionB

eneP

rems - V

PH

3

1,306,084

1,512,963B

ene P

rems

-VH

AP

Rx

704

230B

ene P

rems

-Vscrip

t

4,935

434B

eneP

rems -V

script Exp

11,385

2,340P

remium

Fees - fu

ture

99,762

45,900A

bandoned P

roperty

(4,091)

1,287

Recoveries

204,092

1,251,168

InterestIncom

e

247,506

(53,337)T

ota

l Fund R

eve

nue

138,976,113

146,828,492

Tota

l Ava

ilable

147,742,708

146,245,789

Exp

end

itures

AH

S G

C a

ppro

pria

tion

148,325,411

147,678,315

Rescission

BA

A E

stimate

BA

A E

stimate

148,325,411

147,678,315

152,851,462

176,395,700

En

d. B

alance

(582,703)

(1,432,526)3,904,842

(1)

54,476,275

52,346,132

5,244,840

5,000,000

73,163,741

94, 997, 944

13,445,884

13,060,927

3,994,644

4,088,575

66,002

66,002

802,905

800,000

1,935,145

2,931,829

147,920

409,855

459,898

838,979

1,231,353

1,129,756

613,706

536,336(2,022,631)

(545,451)

1,518,711

1,470,781

255

-

20

-

200

-

129,352

-

(177)

-

979,964

-

(21,808)

-

158,188,830

175,109,034

156, 756, 304

176, 395, 699

152,851,462

176,395,700

7/1

2/2

010 1

1:4

1 A

M

VT

LE

G 259737.vl