SHUTDOWNS &
DEBT CEILINGS
POLICY UPDATE
10
|28|2011
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
3
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).
BUDGET CONTROL ACT
$917 Billion
• Cuts over next 10 years • NO revenue increases $1.2-1.5 Trillion • Cuts AND revenue over next 10 years • “Super Committee” Balanced Budget Amend. • Congress vote on by end of 2011. • Not required to 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)…
5
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 ??
CURRENT FISCAL YEAR | FY12
$1.58 $1.58 $1.58 $2.60 $1.00 $1.20 $1.20 $-$0.50 $1.00 $1.50 $2.00 $2.50 $3.00 FY11 FY12 Base FY12 Senate FY12 House $s in Billions
Chart 2: CHC Funding FY11 Actual & Proposed FY12
Discretionary 330 ACA
7
SUPER COMMITTEE
NATIONAL TAXPAYERS UNION
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% 86% 88% 94% 97%
Sen Pat Toomey (PA)
Sen Rob Portman (OH)
Propose $1.2-$1.5 Trillion in spending cuts and/or revenue increase over next 10 years
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 10.1.12)
Timeline – Complete recommendations by Thanksgiving,
up/down vote in Congress by Christmas.
• September 16th – First Meeting
• October 14th – House and Senate committees submit recommendations
to the Super Committee
• November 23rd – Super Committee votes on recommendations
• December 2nd – Super Committee legislative language (if necessary) • December 23rd – 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
SUPER COMMITTEE
Super Committee $1.2 T in cuts/taxes Congress YES MA “reform” (Cuts) Congress NO SEQUESTRATION MA Exempt
No agreement Congress Cut $1.2 T SEQUESTRATION MA Exempt “Combo Platter” ($500 B cuts) Congress cut $1.2 less SC cuts LESS SEQUESTRATION 9
SUPER COMMITTEE
Sequestration – 50% of cuts to defense & Entitlement Programs are EXEMPT from cuts (Medicare can be cut 2%).
NOTICE A TREND IN MEDICAID?
$-$1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 State MA SpendingMEDICAID ‘VITAL’ FOR CHCS
$23,378,834 $38,484,637 $42,532,724 $48,326,365 $51,336,610 $53,146,201 $-$10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 2005 2006 2007 2008 2009 2010 Chart 3B: MN CHC MHCP Revenue, 2005-2010 MHCP Revenue MHCP, $53.1 , 43% Medicare, $5.6 , 4% Commercial , $8.2 , 7% Self Pay, $6.4 , 5% 330, $17.2 , 14% Other Fed, $10.3 , 8% State/Local , $15.0 , 12% Private, $8.8 , 7%Chart 3A: CHC Revenue ($128.6M) 2010
11
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
THE FUTURE OF
MEDICAID
Chart 4:
MN Medicaid Enrollment, 2021 Current vs. House GOP Plan
881,000 532,000 86,000 263,000 -100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000
2021 Projected Enrollment 2021 Projected Enrollment under House GOP Plan
MA Enrollment Repeal ACA Block Grant
IMPACT OF HOUSE GOP PLAN ON
US & MINNESOTA MEDICAID
349,000 decrease 40% decrease
SOURCE: Kaiser Commission on Medicaid and the Uninsured, “House Republican Budget Plan: State‐by‐State Impact of Changes In Medicaid Financing,” May 2011
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 2011.
•
“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.
MN LEGISLATURE 2011
K-12, $2,018,009 , 43% LGA, $632,633 , Higher Ed, $351,063 , 7% HHS, $965,636 , 21% Tobacco Bonds, $640,000 , 14% All Other, $69,767 , 1%
Chart 5: $4.6 Billion in Cuts versus "Base“
($s in thousands)
SOLVING THE BUDGET DEFICIT IN 2011
CUTS ($1.8B) & SHIFTS ($2.8B)
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). $4,104 $4,472 $6,007 $6,331 $6,735 $6,914 $4,104 $4,472 $5,743 $5,630 $6,017 $5,923 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500 $7,000 $7,500
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 $ I N M I L L I O N S
Chart 6: 2011 Session Impact on HHS Spending
PRE-SESSION POST-SESSION
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
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
WHAT DIDN’T MAKE IT…
IT COULD HAVE BEEN WORSE
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.
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
MEDICAID/MINNESOTACARE
CHANGES
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
MN HEALTHY CONTRIBUTION
PROGRAM
$334.80 $100.00 $90.00 $140.00 $190.00 $240.00 $290.00 $340.00 19-29 30-34 35-39 40-44 45-49 50-54 55-59 60+Chart 7: Monthly Subsidy Under MN Healthy Contribution Program
1.
2011 ‘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
25
HEALTH CARE MARKET REFORM
Finally, the answer: The ACO …. aka HCDS (2011) aka CCDS (2010) aka ISN (1993) aka Managed Care (1980’s)
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
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
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
”
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!)
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“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 2011.
Constitutional Amendment - Tax increase require a “legislative
supermajority” (60% vs. 51%).
31
2012 MINNESOTA
LEGISLATURE
Continue the ongoing
structural deficit.
FY2011 revenues
were 2.3% higher
than anticipated.
State’s
macro-economic consultant
scaling back growth
projections of MN
economy and 40%
chance of recession.
LONG TERM 2013, 2014, 2015
$17,132 $17,323 $18,007 $19,743 $20,790 $21,672 $-$5,000 $10,000 $15,000 $20,000 $25,000Fy13 FY14 Fy15
Chart 8: Projected Spending & Revenue, State of MN ($s in millions)
Revenue Spending*
$-$2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 $ in Millions
Chart 9A: Actual/Projected
Spending/Revenue, FY10-15
STATE SPENDING STATE REVENUE
HHS SPENDING MA SPENDING 33
STATE MEDICAID SPENDING
5.3% 2.4% 8.3% 12.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Total State Spending Total State Revenue Total HHS
Spending Medicaid Total Spending
Chart 9B: % Change, FY10-15
Total State Spending Total State Revenue Total HHS Spending Total Medicaid Spending
2012 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.
HHS POLICY PROPOSALS
TO WATCH FOR IN 2012
2010 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 2010.
GOP controls MN House for first time since 2005.
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 72-62
All of the 67 seats in the Minnesota Senate will be up for election.
Currently GOP holds advantage, 37-27.
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ELECTION 2012
62 72 27 37 Chart 10: Current MN Legislature DFL R MN Senate MN House
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
2012.
www.capwiz.com/mnac hc/mlm/signup
37
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