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Bureau for Medical Services

By Troy Rose,2014-06-28 08:44
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Bureau for Medical Services ...

DRAFT

    Exhibit 2

    Bureau for Medical Services

    Proposal for Cost Containment Plan

    For Discussion Purposes Only

    April 5, 2005

    Programs Total PROs CONs Federal & State Dollars

     I. Inpatient Hospital $26.22 M 1. Reduction of DSH (Disproportionate ? Will result in significant savings following SPA ? Requires SPA and approval from CMS; could $22.12 M Share Hospital) Payments to Private approval take between three (3) to six (6) months Hospitals by 50% over the Mandatory State Federal Minimum of $8,620,208 Funds

     $5.97 M

    ? Co-payments provide recipients with sense they ? Requires State Plan Amendment (SPA) & 2. Co-Payments $600 are contributing to their care approval from CMS; takes between three (3) Thous. to six (6) months ? May discourage non-emergency use of the ER for Impose recipient co-payments on non-State routine and/or traditional outpatient usage ? Requires recipient notice emergency use of the ER. Funds ? The only co-pay currently in effect is in Pharmacy ? Requires claims processing system change $162 ? Encourages personal responsibility Thous. Will result in savings following SPA approval

    ? Co-payments provide recipients with sense they ? Requires State Plan Amendment (SPA) & 3. Co-Payments for Medically Needy $1 M are contributing to their care approval from CMS; takes between three (3) State to six (6) months ? May discourage non-emergency use of the ER for Impose recipient co-payments Funds routine and/or traditional outpatient usage ? A 50% co-pay on institutional care will impact institutional services on first day of $270 hospitals ? The only co-pay currently in effect is in Pharmacy hospital stay for the medically needy Thous. ? Requires recipient notice ? Encourages personal responsibility population. ? Requires claims processing system change ? Will result in savings following SPA approval

    ? No longer paid for by PEIA or Workers Comp ? Resistance from teaching hospitals with larger 4. Elimination of administrative clinic $1 M Medicaid population ? Will result in savings payment. State

    Funds

    $270

    Thous. 04/05/05 4.0 Version 1

DRAFT

    Programs Total PROs CONs Federal & State Dollars

    ? This is a “win-win” situation ? Requires recipient notification and education 5. Medicare Primary Payer $1.5 M ? Required as Medicaid cannot pay for medicines (Also impacts “Physicians & Other after January 2006 due to MMA State Practitioners. Reduction spread ? The cost of all the other medical services is Funds across both provider groups.) largely shifted to Medicare $405 ? Reduces medical coverage from 1 year to 6 Thous. Encourage recipients due to MMA months requirements to apply for Medicare.

     $21.75M II. Physicians & Other Practitioners

    ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & 6. J-Codes $5.7 M approval from CMS; takes between three (3) ? Provides consistency for providers across State to six (6) months Medicare & Medicaid reimbursement Implement Medicare pricing for J-Codes Funds ? Requires claims processing system change (injectables). $1.5 M

     ? Will result in savings 7. Anesthesiologists $2 M ? Brings Medicaid reimbursement more in-line with State Medicare rates Reduce conversion factor for Funds anesthesia from 22.17 to 17.76 to get in $540 line with that of Medicare. Thous.

     ? Will result in savings 8. Reimbursement MD & Practitioner $12 M Cuts State Funds 7% reduction applied to Physicians and $3.2 M Practitioners in the RBRVS category.

    ? This is a “win-win” situation ? Requires recipient notification and education 9. Medicare Primary Payer $1.5 M ? Required as Medicaid cannot pay for medicines after January 2006 due to MMA (Also impacts “Inpatient Hospital”. State ? The cost of all the other medical services is Reduction spread across both provider Funds largely shifted to Medicare groups) $405 ? Reduces medical coverage from 1 year to 6 Thous. months Encourage recipients due to MMA requirements to apply for Medicare.

    04/05/05 4.0 Version 2

DRAFT

    Programs Total PROs CONs Federal & State Dollars 10. Equalize the Reimbursement for like Requires State Plan Amendment (SPA) & $550 ? Will result in savings following SPA approval

    Services by different Provider Types approval from CMS; could take between three Thous. ? Pays providers equally for the same service (3) to six (6) months across the Medicaid program (Also impacts “Home Health {DME} & State “Home & Community Waiver A/D”. Funds Reduction spread across three provider $149 groups.) Thous.

    $800

    Thous. III. Labs

     ? Will result in savings 11. Lab Services $800 Thous. 10% reduction in payments. State Funds

    $216

    Thous.

     IV. Pharmacy $44.5 M

    ? Will reduce Medicaid expenditures on generic ? Reduction to what we pay Pharmacies 12. State Mac $10 M drugs State funds Establish state maximum allowable cost $2.7 M for generic drugs. State Plan has been approved. Implementation pending the

    Unisys Pharmacy implementation.

    ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & 13. Average Wholesale Price (AWP) $20 M approval from CMS; takes between three (3) ? Will make reimbursement more in line with to six (6) months commercial payers and PEIA Current AWP -12% + $3.90 dispensing State ? Projected Federal changes could require us to ? Could encourage generic dispensing fee. Reduce AWP to -15% brand and -Funds change to Average Sale Price (ASP) plus % 30% generic. Change dispensing fee to $5.4 M ? Requires claims processing system change $2.50 brand, $5.30 generic.

    04/05/05 4.0 Version 3

DRAFT

    Programs Total PROs CONs Federal & State Dollars

    ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & 14. Implement a 4-Brand Limit in $14.5 M approval from CMS; takes between three (3) ? Reduces expenditures to Pharmacies Pharmacy to six (6) months ? Encourage generic use ? Requires claims processing system change ? Other states have implemented as cost-saving State ? Requires additional administration cost for measure Funds Rational Drug to determine appropriate use $3.9 M ? Requires recipient notice

     $5.5 M V. Nursing Homes

    ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & 15. Nursing Homes $4.3 M approval from CMS; takes between three (3) ? Adjust reimbursement to reflect changes in State to six (6) months market rates of interest Reimbursement changes relating to the Funds long term care nursing facilities capital $1.2 M related expenditures and separate

    administrative cost center.

    16. Freeze Rates for Nursing Homes ? Will result in significant savings following SPA ? Would require State Plan amendment (SPA) $1.2 M ICF/MRs from CMS; could take between three (3) to State six (6) months Funds Pending reimbursement methodology ? Cost reports are not complete at this time $324 review.

    Thous.

     $2.2 M VI. Group Homes

    ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & 17. ICF/MRs $400 approval from CMS; takes between three (3) Thous. to six (6) months Reimbursement changes relating to the State ICF/MR’s capital related expenditures. Funds $108 Thous.

    04/05/05 4.0 Version 4

DRAFT

    Programs Total PROs CONs Federal & State Dollars 18. Freeze Rates for Nursing Homes, ? Will result in significant savings following SPA ? Would require State Plan amendment (SPA) $1.8 M ICF/MRs from CMS; could take between three (3) to State six (6) months Funds Pending reimbursement methodology ? Cost reports are not complete at this time $486 review.

    Thous.

     $600 VII. Other Care

    Thous.

    ? Will stop inappropriate expenditures and abuse ? Requires recipient notice 19 NEMT $600 of practices on the part of providers and Thous. recipients Institute policy changes to reduce ? Will result in savings reimbursement for multi-passenger & multi-patient vans. State Funds

    $162

    Thous.

     $3.55 M VIII. Home Health (DME)

     ? Standardize pricing for unlisted DME codes 20. DME % of Medicare $1 M State Reduction of payment rates for unlisted Funds DME codes to invoice price + 20% vs. $270 Thous the current invoice price +40% .

21. Discontinue Coverage of Disposable $2 M ? Will result in savings Incontinent Supplies or limit amount

     Currently the Bureau expends ? Use of relatively inexpensive re-useable diapers $2,692,809 for incontinent supplies State could minimize adverse effect on member annually. Approximately 5,600 members Funds receive this service. We can discontinue $540 coverage for disposable supplies and Thous. limit clients to reusable items.

    04/05/05 4.0 Version 5

DRAFT

    Programs Total PROs CONs Federal & State Dollars 22. Equalize the Reimbursement for like $550 ? Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & Services by different Provider Types Thous. ? Pays providers equally for the same service approval from CMS; could take between three (Also impacts “Physicians & Other (3) to six (6) months across the Medicaid program Practitioners” and “Home & Comm. State Waiver A/D”. Reduction spread across Funds three provider groups.) $149

    Thous.

     IX. Home & Community Waiver A/D $10.55 M

    ? Will stay within budget appropriation ? Possible legal challenge 23. A/D Waiver Slots $8 M ? Limit program growth to appropriated funding State Expenditures Capped at Lottery Funds Funding. $2.2 M 24. Equalize the Reimbursement for like ?$550 Will result in savings following SPA approval ? Requires State Plan Amendment (SPA) & Services by different Provider Types Thous. ? Pays providers equally for the same service approval from CMS; could take between three (Also impacts “Physicians & Other (3) to six (6) months across the Medicaid program Practitioners” and “Home Health State {DME}”. Reduction spread across three Funds provider groups.) $149

    Thous. 25. Estate Recovery $2 M ? Estates would add revenue to Medicaid program Revert back to original Estate Recovery State plan which recoups at or < $5,000 State ? Recipients’ estates would contribute to cost of Funds care $540

    TOTAL $115.67 MILLION

    STATE FUNDS $31.2 MILLION 04/05/05 4.0 Version 6

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