Alabama Medicaid 2019 Budget Hearing

January 4, 2018

STEPHANIE MCGEE AZAR

COMMISSIONER

ALABAMA MEDICAID AGENCY

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AGENDA• Overview

• 2019 Budget

•Medicaid Cost Management

•Medicaid Moving Forward

• Federal Healthcare Unknowns

Medicaid Overview

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Who Does Alabama Medicaid Serve?FY 2016 by Date of Service

$10,644Per Member Per Year

$2,556Per Member Per Year

$10,440Per Member Per Year

$3,456Per Member Per Year

Disabled and Blind

Any Age

Determined by the Social Security

Office and have automatic Medicaid

eligibility.

Children

Age 0-18

Children in families below

146% of the Federal Poverty

Rate.

Aged

Age 65 and Over

Adults who are in poverty.

Almost all are also covered by

Medicare

% of Expenditures % of Expenditures % of Expenditures% of Expenditures

Other Categories

Age 19-64

Other adults including pregnant

women, parent caretakers, and

family planning services

% of Members % of Members % of Members% of Members

45%

22%

25%

51%

18%

9%

12%

18%

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Total Expenditures$6.490 Billion

FY 2017 Medicaid Expenditure AnalysisBenefit Payments and Administrative Costs (in millions)

Admin $279

4%

Hospitals $2,236 34%

Nursing Home $946 15%

Pharmacy $718 11%

Physicians $555 9%

Mental Health $479 7%

Alternative Care$365 6%

Operating Costs $169

Non Operating & Major Projects $110

Other $912 14%

Federal Funds$4,544 70%

Other State Share Sources$1,214 19%

General Fund$732 11%

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FY 2017 Medicaid Funding AnalysisState and Federal Funding (in millions)

State Funds$1,946

30%

FY 17 Source of Funds: $6.490 Billion

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Monthly Average Eligibles 2012-2018*

• Fiscal Year to date through October, 2017

800,000

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

2012 2013 2014 2015 2016 2017 2018*

Alabama Medicaid AgencyMonthly Average Eligibles

Overall Total

2019 Budget

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Alabama Medicaid 2019 State Funding Need

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• Total Funding Need $810 million• Less Projected Carryforward $ 53 million • General Fund Request $757 million

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• Carryforward

• Inflationary increases

• Nursing Homes

• Pharmacy

• Medicare Part B Insurance

• FMAP changes – reduces state share requirement

• Impact shared with existing state share funding, such as hospitals;

other state agencies; and teaching hospitals

• Paybacks

• Provider funding

Factors Affecting 2019 Funding Need

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FY 2019 Budget Request Summary In millions

2018 General Fund Need $773

Increase in General Fund Demand:

Inflation, utilization increases, new federal requirements 33

Increase in program costs 20

Decrease in General Fund Demand:

Increase in federal match -10

Reduction in Paybacks -6

2019 State Funding Needed $810

Less carryforward

Actual cash carryover from 2017 operations 20

Projected cash carryover from 2018 33

Total 2019 Net Request $757

Medicaid Cost Management

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• State Recoveries• Automated Asset Verification• Other Initiatives

Medicaid Moving Forward

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Alabama Quality Outcomes • 3rd highest adult obesity rate in the nation

• 2nd highest diabetes rate in the nation

• Newborns

• Infants are significant drivers of Medicaid costs

• Infant mortality rate: 9.1 per 1,000 births (5.9 nationally)

• High rate (10.3%) of low birth weight infants

• Highest opioid prescribing rate in the nation (1.21 prescriptions per person in the entire population of the state)

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Quality Outcomes in Newborns

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100+

Exp

en

dit

ure

s

Age of the Recipient

Alabama Medicaid AgencyExpenditures for Medical and Support Services

Fiscal Year 2016By Age at the Date of Service

Medicaid Moving Forward

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• Care Management Principles• Personal Accountability

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Medicaid Care Management PrinciplesPivot Plan• Case management system to achieve better healthcare outcomes with minimum initial cost

• Provider based structure

• Regionally based, regions based on major population centers

• Replacing 6 current health homes and 14 maternity regions

• Populations may include Patient 1st, Maternity, Plan First and Health Home population, excludes long term care and duals

Integrated Care Networks (ICN)• Statewide focus on managing long term care in the most cost effective manner

Goal of ICN and the Pivot plan is to redirect expenditures to achieve better outcomes

Personal Accountability • Proposed 1115 work requirement waiver on Parent and Other Caretaker and Relative (POCR) group

• Possible increase in copayments

Federal Healthcare Unknowns

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• CHIP reauthorization • Possible changes to federal funding structure • Possible impact on provider taxes

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Questions