Uncompensated Care Maryland AAHAM December 19, 2014

UCC History Summary of FY 2015 UCC Policy  Prospective reduction FY2015 Experience Changes to financial assistance policies (Discussion) Future Considerations Q&A 2 Overview

By statute, funding uncompensated care is a cornerstone of the Maryland system HSCRC statute requires a “reasonable” amount of UCC rate funding  Staff has wide latitude to determine “reasonable” Hospital rates include an amount for UCC that is pooled in a state fund and redistributed Hospital position relative to the state average determines what they pay into, receive from, the pool. 3 UCC History

4 UCC policy has long included concepts to fund individual hospitals based on their:  Actual UCC from audited financial statements  “Predicted” UCC, as determined by a regression  Incentive to collect from patients who can pay Several policy modifications, particularly on defining the independent variables to be used as predictors of UCC in regression Discussion of the number of years of data to use-- responsiveness vs stability

Revised predictive regression variables Two years of actual UCC Hospital-specific, prospective UCC reductions for the projected expansion of Medicaid 5 Rate Year 2015 Policy

Four regression variables (p. 5) replaced with five variables (still proportion of total charges):  Inpatient Medicaid ED admissions  Inpatient commercial insurance admissions  Inpatient self pay and charity admissions  Outpatient self pay and charity admissions  Inpatient self pay and charity ED admissions from 80 th percentile of Medicaid undocumented zip codes 6 Rate Year 2015 Policy

Inpatient self pay and charity ED admissions from zip codes with 80 th percentile and above of Medicaid undocumented beneficiaries  HSCRC staff used Department of Health and Mental Hygiene data summarizing Medicaid undocumented enrollment by zip code (pregnancy or ED coverage)  Included self pay and charity charges from ED admissions, by hospital, from zip codes with 80 th percentile or higher of Medicaid undocumented enrollment 7 Rate Year 2015 Policy

As part of the 2015 UCC Policy, the HSCRC prospectively reduced UCC provisions to reflect January 1, 2015 Medicaid expansion and the expected associated UCC reduction.  1.08% statewide reduction The prospective reduction was limited to the conversion of the Primary Adult Care (PAC) program to Medicaid. Did not include anticipated reductions in UCC as a result of additional Medicaid expansion (116% - 138% FPL) Did not include anticipated reductions in UCC as a result of private insurance expansion 8 Rate Year 2015 Policy

Since PAC covered only ED services, staff summarized PAC non-ED hospital charges that would be covered under Medicaid Staff reviewed the data and shared with hospitals  Certain cases were determined to have coverage and were excluded Remainder was prospectively reduced from UCC provision 9 Rate Year 2015 Policy

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In FY2015 Staff collected data on individual patient write offs, net of recoveries  Most hospitals have submitted, though many found difficult May be used to reconcile prospective reduction and other purposes 11 FY2015 Experience

HSCRC evaluating a further prospective UCC reduction  CY2014 YTD September data reflect a $252m reduction from CY2013 September data −$328m annualized impact $328m impact is double the original prospective reduction 12 FY2015 Experience

HSCRC Staff has also accumulated the Medicaid expansion dollars by hospital, suggesting this amount is greater than $328m  Assumed to be matched use MPI from CRISP Staff provided data to hospitals on 12/16 to begin reviewing the potential UCC impact Monthly data reflect a lower impact 13 FY2015 Experience

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Expansion of Medicaid has affected financial assistance policies  Coverage eligibility under Medicaid  Plan enrollment, service use and premium non-payment  Other potential scenarios 15 Changes to Financial Assistance Policies

UCC policy issues likely to be addressed in FY 2016:  Treatment of Medicaid-pending patients  Review of undocumented UCC variable FY 2016 UCC policy review process TBD 16 Future Considerations

Q&A 17