Medi-Cal Reimbursement for Prisons and Jails California/Nevada Chapter of the American Correctional Health Services Association: Multidisciplinary Correctional Conference November 3, 2011 Brenda G. Klütz Senior Consultant Health Management Associates

Learning Objectives Understand current Medi-Cal & reimbursement opportunities for inmate inpatient stays Understand the how the key elements of healthcare reform effect payment for inmate, parolee and probationers health now & in 2014

Health Management Associates Public health policy and management consulting firm, 12 offices Focus on Medicaid, uninsured, public health care programs and systems, health care reform, access and quality Clients: County health systems and jails, prison systems Medicaid agencies, managed care, county governments, professional associations, hospitals and health systems, insurers, foundations Establish my credibility – not just making this up Employ at least 10 ex-Medicaid directors and many high –level Medicaid administrators CMS director of Medicaid eligibility = Ohio Medicaid director and HMA principal Conduct Kaiser Medicaid survey every year, relationships with almost all Medicaid agencies Current engagements with CA Prison Health Care Services, Michigan DOC addressing this issue Several engagements under development with county health systems and jails Recently surveyed 12 state DOCs: CA Colorado Louisiana Mass MI Mississippi Missouri Nebraska NY NC OK Washington Wisconsin How many in audience are prisons? How many jails? How many are billing Medicaid now? How many tried and stopped? How many working on starting now? How many not but should be?

Today’s Medicaid The Basics

Medicaid Eligibility Eligibility is based largely on: Income Assets Age (under 21 and over 64) Families with children Disability

Medicaid Eligibility Low-income, childless adults between the ages of 21 through 64 are generally not eligible for Medicaid, unless they have a disability.

Advantages of Medicaid Funding State Medicaid expenditures are matched by Federal funds: amount of match is the Federal Medical Assistance Percentage (FMAP) Now prisons and jails using state general fund or county/city $ for inmate hospital care Using Medicaid where possible reduces cost to state/county/city by providing federal money Any FFP not collected is money left on the table in Washington.

Advantages of Medicaid Funding The FMAP formula is a state’s per capita income relative to U.S. per capita income: higher match to states with lower incomes (with a maximum of 83%) lower match to states with higher incomes (minimum of 50%).

Advantage of Medicaid Funding California’s FMAP is 50% Nevada’s FMAP is 51.63% (2011)

Medicaid and Inmate Health Care What will Medicaid Pay for?

Medicaid and Inmates: The Facts Medicaid does not provide matching funds for services provided to incarcerated persons However, an inmate who spends 24 hours or more in a medical institution is not considered to be incarcerated during that time, even though still in custody “Medical institutions” definition has huge implications for corrections systems contemplating building won hospitals or LTC facilities – extremely important Cannot be inside the walls of a prison system Cannot be owned or operated by corrections Eligible services CAN be a distinct locked unit of a community hospital dedicated to inmates, per recent interpretation

Medicaid and Inmates: The Facts “Medical institution” = hospital or skilled nursing facility not operated by the corrections organization, serves the general public (See Appendix A & B of Handout)

Medicaid and Inmates: The Facts CMS will provide matching funds for inpatient services provided in a hospital that has a locked correctional unit, as long as the overall hospital serves the general public. (See Appendix C)

Medicaid and Inmates: The Facts Federal Medicaid rules allow payment for certain inpatient services provided to inmates who are eligible & enrolled in Medicaid. CMS has made clear, that federal law does not require states to dis-enroll inmates from Medicaid, but the state may only claim federal matching funds for certain services. (See Appendix B)

Medicaid and Inmates: The Facts Many states dis-enroll Medicaid beneficiaries upon incarceration. States may not have a process to enroll inmates in Medicaid if they become eligible while in prison or jail State laws, regulations or policies may prohibit continued enrollment Now back to the REAL agenda There is a great deal of mis-information across corrections and Medicaid agencies Many confusing elements that seem to relate but don’t These are the FACTS Dear Medicaid Director letter: Medicaid allows Medicaid coverage for eligible inmates who stay overnight in a medical institution How many in audience are prisons?

Advantages of Medicaid Eligibility and Enrollment If state laws permit, prisons and jails can claim federal matching funds for some health care services provided to eligible inmates that are now paid for by 100% state general fund Ensuring eligibility prior to release can ensure more seamless health care

What Other States are Doing At least nine other states have been claiming federal matching funds for the cost of inpatient stays for eligible inmates Some started in the late 1990’s At least 5 other states have new laws or are proposing laws to permit

How might it affect inmates? Health Care Reform How might it affect inmates?

Key Provisions of the Patient Protection and Affordable Care Act Insurance Market Reforms in All States Delivery System Redesign Payment models Primary care workforce initiatives Coverage Expansions Health Insurance Exchanges Medicaid Expansions Market reforms are obligatory by 2014, some for children already in effect Extremely important in leveling the playing field and stopping skimming and dumping Medical Loss Ratio important – Medicare 2-3% admin fees, commercial insurance held to 15% Delivery system redesign extremely important – incentivizing effective care delivery, patient-centered. Corrections has a lot to learn here. Another topic = primary care medical home in corrections, esp for chronic illness. Integration of BH too

Health Care Reform Effective 1/1/2014: Asset, age and disability criteria for Medicaid eligibility will be eliminated Individuals with incomes of up to 133% FPL will be eligible for Medi-Cal

Health Care Reform Individuals with income from 134% up to 200% FPL will be eligible for coverage through CA Health Benefit Exchange Low income (up to 133% FPL), childless adults between the ages of 21 through 64 will be eligible for some Medicaid coverage. (majority of prison and jail population)

Health Care Reform In 2014, federal match for new enrollees will be 100% Year Two the match will be 90% federal funds

California’s Approach Planning for 2014 California’s Approach

California’s Bridge to Reform By 1/1/2014, approximately 851,000 currently-uninsured Californians will be eligible for Medi-Cal.

California’s Bridge to Reform Created a Medicaid waiver option for counties to participate in a Medicaid expansion program: Low Income Health Program (LIHP) Covers childless adults age 21 through 64, with income levels of up to 133% FPL and 200% FPL

California’s Bridge to Reform Starts to provide Medi-Cal-like coverage for low-income childless adults prior to health care reform’s full implementation Builds the provider network capacity to prepare for 1/1/2014

California Law Change in 2010 California regulations previously required counties to dis-enroll Medi-Cal beneficiaries upon incarceration

California Law Change in 2010 California law now mandates counties to enroll state prison inmates in LIHP Gives counties the option to enroll inmates county jails to enroll in the LIHP or in the Medi-Cal program Law is silent about city jails. (See Appendix D of Handout)

Which Inmates TODAY are eligible (CA)? State Medicaid income & asset guidelines AND Categorical Eligibility Pregnant women Inmates< age 21 Inmates age 65> Disabled for at least 12 months Most relevant to prisons, but jails often have isolated very costly cases

Will it Last? According the Centers for Medicare and Medicaid, Medicaid Disabled and Elderly Programs: There is no plan to rescind FFP for inmate inpatient care Medicaid eligibility for inmates offers important opportunities for continuity of care for chronic conditions, mental illness

Challenges and Opportunities

Medicaid as Payment in Full Federal rule prohibit providers participating in Medicaid to balance-bill patients or providers For some prisons and jails, provider payment levels are in statute and exceed Medicaid rates Some prisons and jails have negotiated contract rates with providers that exceed Medicaid rates

Medicaid as Payer of Last Resort Hospitals may challenge Medicaid payment because they perceive prison, jail, or vendor as insurance coverage. Key distinction between insurance and a correctional organization’s constitutional obligation as custodian to avoid deliberate indifference and cruel or unusual treatment.

Alternatives Hospital bills Medicaid for admission, accepts payment; prison/jail makes periodic “patch payment” to provider Prison/jail consolidates admissions to specific hospitals to gain volume and cooperation

Implementation Issues: Hospitals Is Medicaid payment acceptable? Enrollment/eligibility process – who does it? (In California, it is the counties) Does hospital bill Medicaid? Is payment significantly delayed? Some jails/prisons fund out-stationed eligibility worker at hospitals

Implementation Issues: Inmates Freedom of Choice issue Inmate doesn’t want to enroll/sign Medicaid application Documents not available Birth certificate Tax statements Bank statements

Implementation Issues: Jails Difficult to change state law individually May require additional resources, or administrative systems changes In California, county jails should be working with the county health or social services department

Prisons May require new resources May require tracking system for claims, high-cost inmates, eligibility status, redetermination dates

Implementation Issues: Medicaid Suspended eligibility Requires new resources (but 50% federal match) How is federal match tracked and traded? Many other competing priorities related to health care reform Michigan DOC pays 50% of salary for eligibility worker outstationed to prison, manages medicaid apps fand re-enrollment for whole system Federal match is 50% for enrollment work Really need CENTRALIZED eligibility because of movem3ent across county lines, may need legislation or regulation

Implementation Extremely complex and varies enormously by state Medicaid program May begin with workgroup that includes Medicaid and the agency that decides eligibility May work on jails and prisons simultaneously Most programs start by manually processing a few high-cost cases

Other Opportunities Create information for inmates under age 26 about coverage on parent’s insurance plan Assist eligible inmates with serious health needs to enroll prior to release

Get Moving Toward 2014 Work with community stakeholders to develop Streamlined discharge planning Common prescription drug formulary Continuity of care Targeted Case Management Programs Develop inmate education materials

Discussion

For more information contact Brenda Klutz, Senior Consultant Health Management Associates 916.446.4601, ext. 424 bklutz@healthmanagement.com