2018 hospital fee webinar final.ppt · summaries, by plan • june volume summaries cover 7/1/17...

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Hospital Fee Program Update: New Supplemental Fee Payment Structure

June 5, 2018

Welcome

Jaime WelcherCalifornia Hospital Association

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Amber Ott is CHA’s vice president of strategic financing initiatives. Ms. Ott manages the implementation and development of the hospital fee program. She is responsible for providing advocacy and support on financial issues affecting California hospitals and health systems, and represents CHA with state agencies and other stakeholders where strategic hospital finance and technical knowledge is needed.

Faculty

2017-19 Hospital Fee Program

Amber OttVP, Strategic Financing Initiatives

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Agenda

• Background

• Medicaid Managed Care Final Rules

• Implementation Timeline

• Encounter Data Files

• Network Providers

Background

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• The state Department of Health Care Services (DHCS) administers the Medi-Cal program and pays hospitals directly for fee-for-service enrollees. DHCS also makes monthly capitation payments to Medi-Cal managed care plans based on how many members they enroll.

• A number of supplemental payment programs also exist: Disproportionate Share

Hospital Fund Private Hospital Supplemental

Fund Trauma Fund Other

Despite the array of payments from multiple sources, hospitals are left with massive losses from treating Medi-Cal patients.

Losses for Private Hospitals total about $8

billion a year

Why did CHA Develop the Hospital Fee?

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Losses incurred by Private Hospitals

$4 billion Hospitals

pay to DHCS

TO FILL THE $8 BILLION GAP

Hospitals Pay $4 billion

The State Keeps -$1 billion (24%) of net benefit

Remaining Funds $3 billion+

Federal Funds $5 billion

Total Funds $8 billion

This fills the $8 billion gap and maximizes the federal contribution…

Amounts are rounded and estimated to simplify equation – actual funding varies.

Basic Funding of the Hospital Fee

$5 billion Federal

govt. (CMS) sends a

matching contribution

to DHCS

$8 billion a year

Reimbursement Shortfall For

Medi-Cal Services

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SB 239 Protects Hospitals:• State share cannot exceed 24% of net benefit• DHCS fee-for-service Medi-Cal payments to hospitals

cannot be reduced!• Program has to “right size”• Construct is preserved for the future• Creates “program periods” (period one: 1/1/14 thru

12/31/16, period 2: 1/1/17 thru 6/30/19)• A halt of federal funds shuts the program down• 100% of supplemental managed care funds must go

to hospital services• The program “sunsets” 12-31-17

SB 239: Hospital Fee Program Statute

Prop 52 was developed to “protect the protections” by repealing the sunset date – leaves all other protections in place with further protection by the California Constitution

Proposition 52: Medi-Cal Funding and Accountability Act

A Legislature cannot tie the hands of a future Legislature

These “protections” were only good until the next Legislative Session

This puts hospitals and patients at risk for shenanigans!

Prop 52 was passed by a vote of the people in November 2016. Makes the current construct of the hospital fee program “permanent”

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$4 billion in supplemental Medi-Cal fee-for-service payments are increased to hospitals for:

• Inpatient Services• Including General Acute, Subacute, High

Acuity and Psychiatric Days• Outpatient Services

$4 billion in increased capitation payments to managed care plans for supplemental “pass-through” payments to hospitals in lump sums based on prior known inpatient and outpatient utilization.

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New federal rules require changes to these payments to

hospitals

Hospital Fee Program Payments

Medicaid Managed Care Final Rules

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• Pass-through payments must be phased out over 10 years beginning on July 1, 2017

• Imposes an annual cap on pass-through payments equal to the aggregate pass-through payment amount submitted to CMS as of July 5, 2016 Approximately $2 billion in California

• Remaining supplemental Medi-Cal managed care payments must be made through a new permissible methodology (e.g. Directed Payments)

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$2 billion new “directed payment”

method

$2 billion current “pass-through”

method

$4 Billion Managed Care Payments

Directed Payments

• Uniform add-on per inpatient day and outpatient visit

• Network Providers for Contracted Services

• Current Utilization Data• Only Paid/Partially Paid

Claims

Pass-Through Payments

• Uniform add-on per inpatient day and outpatient visit

• No requirement to be a Network Provider

• Historic Utilization Data• All Claims

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Medicaid Managed Care Final Rules(cont.)

$2 billion new “directed payment”

method

$2 billion current “pass-through”

method

$4 Billion Managed Care Payments

Pass-through payments must be phased out over 10

years

Directed payments will grow over 10

years

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Medicaid Managed Care Final Rules(cont.)

• Per SB 239, 100% of supplemental Medi-Cal managed care payments must be spent on hospital services

• Risk losing $2 billion in supplemental directed payments if cannot guarantee all $2 billion goes toward hospital service

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Implementation Timeline

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Two Year Federal Claiming Limit

• Per Section 1132 of the Social Security Act, states must file for federal matching funds within 2 years of the calendar quarter in which the expenditure was made

• Supplemental Medi-Cal managed care payments for SFY 17/18 must be paid to the health plans by September 30, 2019

• Failure to comply results in forfeiture

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Pass-Through Payments

1/1/17 – 6/30/17 Rate Package

• DHCS plans to submit to CMS by end of June 2018• Supplemental capitation payments to plans scheduled by

March 31, 2019• Supplemental Medi-Cal Managed Care payments made to

hospitals in May 2019

7/1/17 – 6/30/18 Rate Package

• DHCS plans to submit to CMS by end of June 2018• Supplemental capitation payments to plans scheduled by

September 30, 2019• Supplemental Medi-Cal Managed Care payments made to

hospitals in November 2019

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Directed Payments

ACTIVITY Q1 CY2018 Q2 CY2018 Q3 CY2018 Q4 CY2018 Q1 CY2019 Q2 CY2019 Q3 CY2019 Q4 CY2019

Volume Charts - 1st Release(Time Period Jul’17-Dec’17) June 2018

Submit Initial SFY 17/18 Managed Care Rates to CMS July 2018

Volume Charts - 2nd Release(Time Period Jul’17-Mar’18) September 2018

Deadline for SFY 17/18 Claim Submission to Health Plans

Exact Due Dates are Plan Specific

Deadline for Health Plans to Submit SFY 17/18 Encounter

Data to DHCS

December 31, 2018

Final Encounter Data Pull for Payment Calculation March 2019

Submit Updated SFY 17/18 Managed Care Rates to CMS June 2019

CMS Approves Updated SFY 17/18 Managed Care Rates August 2019

Health Plans Receive Supplemental Capitation

PaymentsSeptember 2019

Hospitals Receive Supplemental Medi-Cal

Managed Care PaymentsNovember 2019

* Estimates and subject to change. All activity estimated to occur by end of month.

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Encounter Data Files

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• Hospitals submit claim data to health plans and other payers using the 837 transaction format

• Medi-Cal managed care plans transmit the 837 encounter data for paid claims to DHCS on a daily, weekly or monthly basis

• DHCS accepts or rejects each claim based on Medi-Cal eligibility and data completeness

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DHCS Encounter Data Flow

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• CMS requires encounter data files be used to calculate directed payment amounts

• DHCS will distribute hospital-specific volume summaries, by plan• June volume summaries cover 7/1/17 –

12/31/17• September volume summaries cover 7/1/17 –

3/30/18

• Hospitals are encouraged to compare volume summaries with internal utilization data

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Encounter Data Files (cont.)

Volume summaries created using hospital reported National Provider Identifiers (NPIs)https://app.smartsheet.com/b/publish?EQBCT=425fbe695a4749c2a883616707292acd

Inpatient • General Acute Care• Acute Rehab Units• Acute Psych Units

Outpatient• Outpatient Department• Hospital Based Outpatient Clinics

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Counting Logic

Inpatient

• Days = Discharge Date - Admit Date

• If Discharge Date = Admit Date, 1 day counted

• Excludes Long Term Care Days

Emergency Room

• Not resulting in an inpatient admission

• 1 visit = Unique Client Index Number (CIN), Date of Service, (NPI)

Outpatient

• 1 visit = Unique CIN, Date of Service, NPI

• Excludes Rural Health Clinics, Federally Qualified Health Centers and Cost- Based Reimbursement Clinics

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Row Labels S01_IP S02_ER S03_OP S04_OT Grand TotalHospital A 848 787 209 566 2410

1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38

1895123456 11 6 17304 11 6 17

1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128

Grand Total 848 787 209 566 2410

Hospital A Volume (7/1/17 - 12/31/17)

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Volume Summaries

Unique NPI’s


1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38

1895123456 11 6 17304 11 6 17

1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128

Grand Total 848 787 209 566 2410


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Volume Summaries (cont.)

Plan Codes(crosswalk included)

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1639123456 812 475 189 560 2036304 615 272 119 421 1427305 3 1 24 28306 2 7 20 29352 174 187 59 94 514360 23 11 3 1 38

1895123456 11 6 17304 11 6 17

1942123456 36 312 9 357304 30 189 6 225306 4 0 4352 6 119 3 128

Grand Total 848 787 209 566 2410


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Inpatient, Emergency Room

And Outpatient (Eligible for directed

payments if in-network)

Other(Not eligible for

directed payments)

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• Volume summaries grouped by primary Medi-Cal Managed Care Plan Example: If LA Care delegates a population to

Anthem and the hospital has a contract with Anthem, the utilization will be listed under LA Care as the primary plan in the volume summary, not Anthem

• Volume summaries will be shared using an SFTP site and only the primary contact person listed with DHCS will be sent the log-in details

• Volume summaries will include a tab with claim-level details

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Troubleshooting Volume Summaries

Hospitals are encouraged to work with Medi-Cal managed care plans to address significant variations in volumes summariesExamples leading to variations in volume:

• Missing or Incorrect NPI(s)• Capitated volume not submitted• Pending state eligibility response• Pending as duplicate claim• Fully or partially denied claim• Full dual-eligible claims should be excluded• Third party vendor or clearing house delays in

reporting

Network Providers

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Contracted Service Definitions

A contracted service must meet the following criteria:

• A Medi-Cal covered service• Rendered to a Medi-Cal member actively

enrolled in a Medi-Cal managed care plan• By a “network provider” of the Medi-Cal

managed care plan who is contracted: To provide the rendered service To the member receiving the service For the applicable dates of service

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Network Provider Definitions

• A service qualifies for a directed payment only if there is an unbroken “contracting path” for the dates of service between the Medi-Cal managed care plan and the hospital for the particular service rendered and the member receiving the service

• Services provided under a patient specific Letter of Agreement (LOA) are not considered “contracted”

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Network Provider Database

• DHCS must create a database that captures all network providers

• Medi-Cal managed care plans and hospitals will be required to provide information to DHCS

• Completion goal for final database-February, 2019

• Database to be updated on a monthly basis

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Contracting Scenarios

Direct Contracts• Between hospital and

primary Medi-Cal Managed Care Plan

• Population and Services under contract

• Capitated or Fee-for-Service

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Contracting Scenarios (cont.)

Delegated Contracts• Between hospital and

delegated Medi-Cal Managed Care Plan

• Population and Services under contract

• Capitated or Fee-for-Service

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Contracting Scenarios (cont.)

Hospital to Hospital Contracts• Between hospital and

another hospital• Population and Services

under contract• Capitated or Fee-for-

Service

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Contracting Example #1

Scenario• Hospital A has a full-risk capitation

agreement with a Health Plan to care for a specific population

• Hospital A also has a contract with Hospital B to provide quaternary care to this population when the service is not available at Hospital A

• Hospital B receives payment directly from Hospital A for treating this population

Q: If Hospital B is not contracted with the Health Plan, are they considered to be a network provider when providing quaternary services for this population? A: Yes, for the specific population and for quaternary services.

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Scenario• Hospital A and Hospital B each have

capitation arrangements with a Health Plan for unique populations.

• Hospital A and Hospital B have a reciprocity agreement with each other that outlines how they will pay one another if one of their capitated members is treated by the other hospital.

Q: Would Hospital A be considered a network provider when they treat one of Hospital B's capitated members? A: Yes, a reciprocity agreement constitutes a contract.

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Scenario• Hospital has a contract with an

Independent Physicians Association (IPA) to provide ancillary services.

• A patient from the IPA presents to the hospital's emergency room and is ultimately admitted as an inpatient for treatment

Q: Is the Hospital considered a network provider for the inpatient admission?

A: No for inpatient services; Yes for ancillary services.

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Scenario• Hospital A has a contract with

Delegated Entity A to treat their patient population with a Health Plan.

• Hospital A does not have a contract with Delegated Entity B to treat their population with the Health Plan.

Q: Is Hospital A considered a network provider when they treat members of Delegated Entity B?

A: No, Hospital A is only contracted for Delegated Entity A’s population.

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Upcoming Educational Events

California Hospital AssociationHospital Finance and Reimbursement Seminars

• June 13 – Sacramento• June 20 – Costa Mesa• June 21 – Glendale

Department of Health Care ServicesWebinars

• June 18, 11:00 – 1:00

• June 19, 1:00 – 3:00

Questions?

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Thank You

Amber Ott, Vice President, Strategic Financing Initiatives

California Hospital Association

(916) 552-7669

[email protected]

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Questions

Online questions:Please type your question in the Q & A box, then press enter

Phone questions:To ask a question, dial *1

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Upcoming Programs

Continuity of Care in a Disaster WebinarUnderstanding the CMS 1135 Waiver and CDPH Licensing Program Flex

July 10, 2018

10:30 a.m. – 12 p.m., Pacific TimeRepresentatives from CMS, CDPH and CHA will provide participants with the guidance they need to maintain operations in a disaster and offer business–related considerations for hospitals pre-and post-disaster.

Thank You and Evaluation

Thank you for participating in today’s webinar. An online evaluation will be sent to you shortly.

For education questions, contact Jaime Welcher at (916) 552-7527 or [email protected].

2018 hospital fee webinar final.ppt · summaries, by plan • june volume summaries cover 7/1/17...

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