Assembly Bill (AB) 85 Redirection of 1991 Realignment Designated Public Hospital Counties
Transcript
Slide 1
Redirection of 1991 Realignment Designated Public Hospital
Counties
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Background California elected to implement a state-run Medicaid
Expansion starting in 2014. With the state taking on the obligation
for the county indigent population currently served by counties, it
is assumed that counties costs associated with the indigent
population will decrease. Assembly Bill (AB) 85 lays out a process
by which a portion of the 1991 County Health Realignment Funds
would be redirected to support Social Services programs.
2Designated Public Hospital Counties
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Background DPH Counties formula should they not choose to
redirect 60% of health realignment is addressed in Section 17612.
Formula components that differ for LA County are specified under
Section 17612.5. Redirection to begin effective January 2014.
3Designated Public Hospital Counties
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List of 11 DPH Counties Alameda Contra Costa Kern Monterey
Riverside San Bernardino San Francisco San Mateo San Joaquin Santa
Clara Ventura *Los Angeles County formula specified in Section
17612.5 and addressed in a separate presentation 4Designated Public
Hospital Counties
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Overview DPH Counties have 2 options for determining the
redirected amount. Each county must inform DHCS of tentative
decision by 11/1/13 Must adopt a resolution by 1/22/14 60% of 1991
Health Realignment Funds + 60% of Maintenance of Effort MOE is
capped at 25.9% of the total value of counties 2010-11 health
realignment allocation County Savings Determination Process
(Formula) Lesser of: (Revenues Costs) x.80 (.70 in 13/14) Or County
Indigent Care Realignment (Health realignment amount x health
realignment indigent care percentage) If DPH counties do not adopt
a resolution or fail to inform DHCS of their chosen option, then
the calculation is 62.5% of County Realignment funds and 62.5% of
the MOE. Counties that select the 60%/40% option may later petition
the Health Care Funding Resolution Committee to elect the formula
option. 5Designated Public Hospital Counties
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County Savings Determination Process The purpose of the formula
is to calculate the health care savings the county is experiencing
as a result of health care reform. This is achieved by determining
if the overall available revenues exceed the costs the county is
incurring (subject to a cost containment limit) Revenues 1.
Medi-Cal revenues 2. Uninsured revenues 3. Medicaid Waiver
demonstration revenues 4. Hospital fee direct grants 5. Special
local health funds* 6. County indigent care health realignment
amount 7. Imputed county low income health amount (county subsidy)*
8. Imputed gains from other payers (profits)* *calculated based on
historical allocation 6Designated Public Hospital Counties
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County Savings Determination Process ( continued) Costs (not to
exceed the cost containment limit) 9. Medi-Cal Costs 10. Uninsured
Costs 11. Lesser of: actual other entity IGT amount in FY or
imputed other entity IGT amount based on historical period 12. New
mandatory other entity IGT amounts required by the state County
Indigent Care Health Realignment Amount Health Realignment Amount x
Health Realignment Indigent Care Percentage = MIN((SUM(items
1+2+3+4+5+6+7+8) SUM(9+10+11+12)) x.80* [or] County Indigent Care
Health Realignment Amount) *In 2013/14, the savings percentage will
be.70 7Designated Public Hospital Counties
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REVENUES 8Designated Public Hospital Counties
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Definitions Medi-Cal Revenue Total amount paid to the county
public hospital health system for services provided to Medi-Cal
beneficiaries. Includes: Medi-Cal FFS, payments from Medi-Cal
managed care plans; supplemental payments; DSH payments Excludes:
Nonfederal share (CPEs and IGTs) Payments to Medi-Cal managed care
plans Fees imposed on transfers Administrative or processing fees
Nursing facility, mental health and substance use disorder services
revenues 9Designated Public Hospital Counties
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Definitions Uninsured Revenues Self-pay payments made by or on
behalf of uninsured patients to the county public hospital system.
Excludes: Health realignment amount Imputed low-income health
amount Nursing facility, mental health and substance use disorder
services revenues 10Designated Public Hospital Counties
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Definitions Medicaid Demonstration Revenues Payments under the
Bridge to Health Care Reform section 1115 Waiver, including: Safety
Net Care Pool Uncompensated Care Delivery System Reform Incentive
Pool Excludes: Nonfederal share (CPEs and IGTs) Payments to
Medi-Cal managed care plans Fees imposed on transfers
Administrative or processing fees Nursing facility, mental health
and substance use disorder services revenues 11Designated Public
Hospital Counties
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Definitions Hospital Fee Direct Grants Direct grants, if any,
funded by the current or future Hospital Quality Assurance Fee
(QAF) program 12Designated Public Hospital Counties
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Definitions - Special Local Health Funds Assessments and fees
used for health-related purposes Calculated as the greater of: 1.
The actual amount expended by a county for the provision of health
services to Medi-Cal and uninsured beneficiaries during the fiscal
year OR 2. The amount that a county receives x the average of the
historical percentages (FY08/09-FY11/12) for the provision of
health services to Medi-Cal and uninsured beneficiaries
13Designated Public Hospital Counties
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Definitions - Special Local Health Funds (continued) Tobacco
Settlement Funds The amount of tobacco settlement funds used in the
revenue calculation will be the greater of: A. The actual amount of
tobacco settlement funds expended by the county during the fiscal
year OR B. The tobacco settlement funds that the counties receive x
the average of the historical percentages expended. 14Designated
Public Hospital Counties
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Definitions County Indigent Care Health Realignment Amount =
Health Realignment amount for that fiscal year X Historical health
realignment indigent care percentage 15Designated Public Hospital
Counties
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Health Realignment Indigent Care Percentage County-specific
percentage determined as follows: The average of the percentages
for each historical fiscal year of the percentage of county health
realignment that was used to provide health services to the
indigent. If the county does not provide the required information
or insufficient data, the percentage shall be set at 85%.
16Designated Public Hospital Counties
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Definitions Imputed County Low Income Health Amount
Predetermined county general fund subsidy used for services to
Medi-Cal and uninsured patients Calculated as follows: 1. Take the
historical amount for each historical fiscal year (FY08/09-FY11/12)
2. Find the average percentage increase 3. Average the historical
amounts in (1.) and multiply it by the lessor of the average
percentage increase in (2.) or the applicable blended CPI
17Designated Public Hospital Counties
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Definitions - Imputed Gains from Other Payers (Profits)
Predetermined county revenues in excess of costs generated from all
other payers available for services to Medi-Cal and uninsured
patients Calculated as: The average of gains from other payers used
to offset the low-income shortfall for each of the historical years
(FY 08/0911/12) 18Designated Public Hospital Counties
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Historical Allocation of Revenues to the Low Income Shortfall
AB 85 requires the DHCS to submit to the Legislature by August 1,
2013 a fair and reasonable methodology to allocate three specific
funding amounts for the purposes of determining the historical
amounts and percentages necessary for the county public hospital
health system formula. Section 17612.2(ab)(2)(C) identifies the
three funding amounts: Unrestricted special local health funds One
time and carry-forward revenues County general purpose funds A
reasonable allocation methodology for these amounts was necessary
given the nature of these funding sources as they are available to
fund the entire health system costs and are not specified for use
for any specific populations. 19Designated Public Hospital
Counties
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COSTS 20Designated Public Hospital Counties
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Definitions - Medi-Cal Costs Costs incurred for providing
Medi-Cal services to Medi-Cal beneficiaries Includes:
Fee-for-service costs Managed care hospital and non-hospital costs
Managed care out-of-network costs Related administrative costs
21Designated Public Hospital Counties
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Definitions - Uninsured Costs Costs incurred purchasing,
providing or ensuring the availability of services to uninsured
patients during the fiscal year Determined pursuant to Bridge to
Health Care Reform Section 1115 Waiver protocols and WIC 14166.8 No
reduction factor applied for undocumented persons Excludes nursing
facility, mental health and substance use disorder services costs
22Designated Public Hospital Counties
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Definitions Other Entity Intergovernmental Transfers (IGTs)
IGTs and related state imposed fees by a county public hospital
health system used to fund the nonfederal share of Medi-Cal
payments and Demonstration payments to an entity other than the
county public hospital health system or to a Medi-Cal managed care
plan 23Designated Public Hospital Counties
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Definitions - Imputed Other Entity Intergovernmental Transfers
(IGTs) Average of the predetermined historical other entity IGT
amounts (FY08/09- FY11/12) Each historical year amount is
determined based on the public hospital health system countys
records. 24Designated Public Hospital Counties
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Definitions - New Mandatory Intergovernmental Transfers (IGTs)
Other entity IGTs required by the state after July 1, 2013
25Designated Public Hospital Counties
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Blended Consumer Price Index (CPI) Bureau of Labor Statistics
data Non-seasonally adjusted CPI for All Urban Consumers US city
average Hospital and Related Services weighted at 75% Medical Care
Services Weighted at 25% 26Designated Public Hospital Counties
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Cost Containment Limit (Formula) Base Year Total Costs X
Blended CPI *base year = FY ending 3 years prior to subject FY.
27Designated Public Hospital Counties
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Cost Containment Limit IF the subject years actual costs exceed
the calculated cost containment limit for the year THEN the cost
containment limit is used for the calculation OR adjustments to the
cost containment limit can be sought If the cost containment limit
is applied, a reduction to the revenues in the formula is also
applied. The reduction to revenues is calculated as 50% of the
amount that actual costs exceed the cost containment limit.
28Designated Public Hospital Counties
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Adjustments to the Cost Containment Limit If adjusted patient
days of service in subject FY is in excess of 10% of those in the
base year, the excess days will be multiplied by the cost per
adjusted patient day for the base year and added to the trended
base year amount. Electronic health records and related
implementation and infrastructure Costs related to state or
federally mandated activities, requirements, or benefit changes
Costs resulting from a court order settlement 29Designated Public
Hospital Counties
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Adjustments to the Cost Containment Limit ( Continued) Costs
incurred in response to seismic concerns, including costs to meet
facility standards Costs incurred as a result of a natural disaster
or acts of terrorism Other costs as approved by DHCS 30Designated
Public Hospital Counties
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Timeline FY 2013/14 10/31/13 County calculates and provides the
predetermined amounts and historical percentages and submits
calculations, supporting documentation to DHCS for: Imputed County
Low-Income Health Amount Imputed gains from other payers Imputed
other entity IGT amount Special local health funds 12/15/13 State
notifies counties if we disagree with data listed above 1/13/14 If
no agreement has been reached regarding data, DHCS shall use
countys data until a decision is made. The County Health Care
Funding Resolution Committee shall decide whether the data is
accurate/sufficient within 45 days. By 6/30/15 Counties submit
final data to state By 12/31/15 State provides final FY 2013/14
calculations to counties 31Designated Public Hospital Counties
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Timeline (continued) FY 2014/15 and future years November - 5
months after the end of each fiscal year, counties using the
formula submit reports on all revenue and cost data to DHCS.
January - DHCS completes the interim calculation the January prior
to the starting fiscal year, using the most current/accurate data
available. May DHCS updates the interim calculation in May before
the start of the fiscal year. June - 12 months/by June 30th of the
year after subject fiscal year, counties submit final data to DHCS.
July - December DHCS completes the final calculation and submits to
counties by December 31 st of the fiscal year following the receipt
of the final data one and a half years after the subject fiscal
year. 32Designated Public Hospital Counties