Hospital Medicaid Rate Updates HFMA Seminar February 1, 2017

Agenda Hospital Inpatient Medicaid Rate Updates Hospital Quality Pool February 1, 2017 2 Agenda Hospital Inpatient Medicaid Rate Updates January 1, 2016 Rates January 1, 2017 Rates Rebasing of Acute and Exempt Unit/Exempt Hospital Rates Hospital Quality Pool Hospital Sole Community Pool Hospital Outpatient Medicaid Rate Updates Questions

Hospital Inpatient Medicaid Rate Updates February 1, 2017 3 Hospital Inpatient Medicaid Rate Updates January 1, 2016 Inpatient Medicaid Rates Current Updates: 2016 Budgeted Capital Actual Capital Updates – prospectively include retros for 12/1/09 – 12/31/13 Eliminate Potentially Preventable Negative Outcomes (PPNO) cuts from acute rates - prospectively include retro for 4/1/15 – 12/31/15) No changes to the SIWs – continue with July 2014 weights/thresholds with v33 grouper Medicaid Fee-for-Service rates: rate package currently awaits approval from the Division of the Budget Medicaid Managed Care rates: still under discussion due to retroactive rate adjustments Future Updates: Restoration of Inappropriate Use of Services Reduction for Acute Statewide Base Price Calculation (including retro for 4/1/15 – 12/31/15) – SPA pending approval from the Centers for Medicare and Medicaid (CMS) Acute Transition %’s – Update to -2.5% floor on losses and recalculate ceiling on gains

Hospital Inpatient Medicaid Rate Updates (cont’d) February 1, 2017 4 Hospital Inpatient Medicaid Rate Updates (cont’d) January 1, 2017 Inpatient Medicaid Rates Current Updates: 2017 Budgeted Capital Minimum Wage Adjustments Reconciliation Eliminate Potentially Preventable Negative Outcomes (PPNO) cuts from acute rates Continue with July 2014 weights/thresholds with v33 grouper until further notice. 2017 weights/thresholds are in process and anticipated for release in July 2017 (to be implemented prospectively). Medicaid Fee-for-Service rates: transmitted to eMedNY in cycle #2058, rates released to hospitals on 1/20/17 Medicaid Managed Care rates: still under discussion due to retroactive rate adjustments Future Updates: Restoration of Inappropriate Use of Services Reduction for Acute Statewide Base Price Calculation – SPA pending approval from the Centers for Medicare and Medicaid (CMS) Acute Transition %’s – Update to -3.5% floor on losses and recalculate ceiling on gains

Hospital Inpatient Medicaid Rate Updates (cont’d) February 1, 2017 5 Hospital Inpatient Medicaid Rate Updates (cont’d) Rebasing of Acute and Exempt Unit/Exempt Hospital Rates - 2018 Statutory requirement to update the cost base for the acute rates by 2018 Statute allows for exempt unit/exempt hospital rates to be rebased 2014 cost base anticipated for both sets of rates All rates must be budget neutral Minimum wage adjustments to continue through 2021

Hospital Quality Pool Years 1 and 2 (4/1/15 – 3/31/17) February 1, 2017 6 Hospital Quality Pool Years 1 and 2 (4/1/15 – 3/31/17) Distribution Methodology: Year 1: $90.8M, Year 2: $87.8M Pay for Reporting Allocated based on 2014 Medicaid Fee-for-Service and Medicaid Managed Care days $75,000 Minimum Payment: Hospitals to be paid by Medicaid Managed Care Health Plans Payments anticipated for February/March 2017 Dependent upon Division of the Budget approval of the July 2016 premiums Communications to hospitals will follow Year 3 (4/1/17 – 3/31/18) Quality measures and distribution methodology are currently under discussion

Hospital Sole Community Pool February 1, 2017 7 Hospital Sole Community Pool Years 1 and 2 (6/1/15 – 3/31/17) Distribution Methodology: Year 1: $9M, Year 2: $12M Pay for Reporting Allocated based on 2014 Medicaid Fee-for-Service and Medicaid Managed Care days Minimums vary depending upon total number of Medicaid days Payment: Hospitals to be paid by Medicaid Managed Care Health Plans Payments anticipated for February/March 2017 Dependent upon Division of the Budget approval of the July 2016 premiums Communications to hospitals will follow Year 3 (4/1/17 – 3/31/18) Distribution methodology is currently under discussion

Hospital Outpatient Medicaid Rate Updates February 1, 2017 8 Hospital Outpatient Medicaid Rate Updates Ambulatory Patient Group (APG) Rate Updates The following OASAS rates have been fully transitioned into APGs OASAS Opiod Treatment Rates – retroactive to 1/3/11 OASAS Alcohol Clinic – retroactive to 10/1/10 OASAS Alcohol Rehab – retroactive to 1/1/11 Future updates 2016 Capital Updates for all Clinic and Emergency Room rates (2014 cost base) 2017 Capital Updates (2015 cost base) for all Clinic and Emergency Room rates– dependent upon completion of 2015 ICR audit APG Survey (Managed Care Rates) Both Managed Care Plans and Hospitals were surveyed (2009 – 2015 rate years) Inconsistent results between the Plan and Hospital surveys The Department is working with the hospital associations on a resolution

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