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MHA Update

Michigan Patient Accounting Association (MPAA)

May 15, 2015

Nathanael Wynia, CPAManager, FinanceMichigan Health & Hospital Association (MHA)

Who is the MHA?

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• Advocacy organization representing all hospitals in Michigan.

• Activities include:– State advocacy and policy on Medicaid funding and

health policy issues– Federal advocacy and policy on Medicare and Medicaid

issues– MHA Keystone Center – Quality Improvement and

Patient Safety Initiatives– BCBSM Contract Administration Process

• Unique to Michigan

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Payer Issues

• The role of the MHA is to assist in resolving systematic payer issues.

• Individual hospital contracts determine terms and conditions and take precedence.

• Communicate issues to Marilyn Litka-Klein (mklein@mha.org) or Vickie Kunz (vkunz@mha.org) at the MHA.

Examples of MHA Involvement

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• Maximize federal funding in state Quality Assurance Assessment Program (QAAP)

• Medical Services Administration Hospital Workgroup

• Hospital Reimbursement Reform Initiative• Provide analysis and input on proposed policies• HFMA/MPAA, etc. outreach • BCBSM DRG validation audits• No-fault insurance payment rates

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Medicare

• Proposed rules released for IPPS, LTCH, Rehab, Psych, SNF

• Comments due to CMS in June• MHA will provide hospital-specific impact analyses

and a draft comment letter.

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SGR Fix

• Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), Pub. L. 114-10 (signed Apr. 16, 2015)– Text available:

https://www.congress.gov/114/bills/hr2/BILLS-114hr2enr.pdf

• MACRA Repeals Sustainable Growth Rate (SGR) cuts with fixed 0.5% Medicare Physician Fee Schedule (MPFS) rate increases through 2019

• Beginning in 2019, CMS will incorporate a performance-based adjustment to individual physician payment rates

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Two-Midnight Rule

• Finalized in FY 2014 IPPS rule• CMS will generally consider hospital admissions spanning two

midnights as appropriate for payment under the IPPS.• MACRA extended the “probe and educate” period six

additional months, through Sept. 30, 2015.• MACRA also prohibits RACs from conducting post-payment

patient status reviews of inpatient claims with dates of admission Oct. 1, 2013 – Sept. 30, 2015.– Extended from March 31, 2015.

• No changes to two-midnight rule proposed in FY 2016 IPPS rule; CMS may address in 2016 OPPS proposed rule.

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FY 2015 Executive Order Reductions

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• $14.5 million cut to Graduate Medical Education (GME)

• $5.8 million cut to Rural Access Pool• Executive order given to legislature on Feb. 11• Approved by the legislature Feb. 12• Given immediate effect• Reductions apply to monthly payments over the

final 6 months of state FY (April - Sept. 2015)

FY 2015 Executive Order Reductions

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• Eliminate state funding for:

• $163 million GME pool

• $35 million Rural Access Pool

• Budget assumes hospitals will increase the hospital provider tax to maintain these payments

• This require all hospitals to pay tax, but only certain hospitals receive payments from these pools.

Executive Budget Recommendation

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• Other reductions:

• $11 million OB Stabilization Pool

• $35 million in hospital capital payments

• Payments based on combined FFS and HMO costs. Proposed by MSA in late 2014; opposition by MHA and hospitals resulted in MSA not implementing for FY 2015.

Executive Budget Recommendation

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Senate and House Budget Proposals

• Senate restores capital, GME, and pool payments, but cuts hospital rate payments and increases provider tax

• House restores OB Stabilization pool and most of Rural Access Pool; otherwise concurs with executive

• Final result unclear

• Goal is to have budget finalized in June

• Continue watching MHA Monday Report for updates

Medicaid Short Stay Rate

• Workgroup efforts completed.• Short stay rate will apply to specific diagnosis codes for non-

surgical cases.• Established short stay rate will be paid to hospitals regardless

of hospital determination of inpatient or observation status.• If patient meets criteria for inpatient admission, patient days

will be counted for Medicare DSH purposes.• Final policy will be released by June 1.• Implementation July 1, 2015.• Will apply to Medicaid FFS and non-contracted HMO cases.

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Medicaid Short Stay Rate

Improvements from the proposed policy include:• Short stay rate will exclude cases where revenue

code 481 cardiac cath lab is billed• Short stay rate will apply only to revenue code 762

(observation room) and will not apply to revenue codes 761 (treatment room) or 769 (other observation/treatment room)

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ICD-10

Medicaid Inpatient Rate Changes

Oct. 1, 2015:• APR-DRG implementation• Statewide rate implementation, with appropriate

hospital adjustors– Updated claims and encounter data will be distributed to hospitals for

review in mid-May– Proposed policy expected by June 1, with final policy issued by Sept. 1

• Transition from ICD-9 to ICD-10– ICD-10 Virtual Training session June 4– Free of charge, but registration required at:

http://mi.gov/mdch/0,1607,7-132-2945_5100-127606--,00.html

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Managed Care RFP

• Request for Proposal (RFP) released May 8.

• Contract awards to be announced in Nov. 1, 2015.

• New contracts will be effective Jan. 1, 2016 for five years with three one-year extensions available.

• Service areas will be Gov. Snyder’s 10 prosperity regions.

• HMOs submitting proposals must provide Medicaid coverage for all counties within a region.– Key change from current process

• HMOs for Northern Lower Michigan must bid for both Regions 2 and 3.

• MDHHS will develop a common pharmacy formulary that will be administered by each HMO.

• MI Child will be folded into regular Medicaid under the HMO rebid.

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Managed Care RFP

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• Integrated care demonstration project for individuals dually-eligible for Medicare and Medicaid.

• Optional enrollment has begun in four regions: the Upper Peninsula, an eight-county region in Southwest MI, Macomb and Wayne Counties.

• Nine plans in Macomb and Wayne counties, two in Southwest counties, one plan in UP.

• Statewide implementation won’t occur until after the demonstration project ends on Dec. 31, 2018.

• More info at: http://michigan.gov/mdch/0,4612,7-132-2945_64077---,00.html.

MI Health Link

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Covering the Uninsured

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• 585,765 individuals enrolled in Healthy Michigan Plan as of May 11.

• Approximately 340,000 individuals obtained coverage on the insurance exchange for 2015

• 87% eligible for subsidies

• About half pay $100/mo. or less

Covering the Uninsured

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• Results based on 27 hospitals that submitted data to the MHA Monthly Financial Survey (MFS) for period – January - March 2015 compared to same months in 2014:

• Medicare – Days in A/R decreased from 32 to 28 days.

• Medicaid – Days in A/R increased from 25 to 33 days.

• BCBSM – Days in A/R were unchanged at 26 days.

• Overall – Days in A/R decreased from 44 to 40 days.

Days in Accounts Receivable

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• As of April 2015, 33 plans in Michigan, with 600,000 or approximately 33% of Michigan’s 1.8 million Medicare beneficiaries enrolled.− Up to 22 plans in some counties.

• Review MA payment rate for all plans.• CAH entitled to Medicare cost reimbursement.• Each MA plan may determine own utilization model and is

not required to maintain electronic transactions.• Many MA have instituted “RAC-like” utilization programs.• Matrix of MA plans by county available at MHA website –

updated quarterly, with MHA Monday Report article. − April 27 MHA Monday Report.

Medicare Advantage Enrollment

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Issues to Watch

• Auto No-Fault• State Budget• King v. Burwell supreme court decision expected in

June• Healthy Michigan Plan waiver for beneficiary cost-

sharing

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• Monday Report is available FREE to anyone and is distributed via email each Monday morning.– Go to website and select “Newsroom”, then Monday Report

• Request password if you don’t have one.– Email Donna Conklin at dconklin@mha.org to obtain MHA

member ID number • Advisory Bulletins – Extensive communications available only to

MHA members, as needed. (Require password to obtain from website).

• Hospital specific mailings as needed for various impact analyses, etc.

• Periodic member forums• See mha.org for other resources.• Monthly Financial Survey (MFS) provides free benchmarking of

financial and utilization statistics.

MHA Resources

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Nathanael WyniaManager of Finance

Michigan Health & Hospital Association110 West Michigan Avenue, Suite 1200

Lansing, MI 48933Phone: (517) 703-8625

Email: nwynia@mha.org

???Questions???

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• New name: Michigan Department of Health & Human Services (MDHHS)

• Will be led by Nick Lyon, who succeeded Jim Haveman as DCH Director and was named interim DHS Director

• Workgroups from both departments continue to meet.

• New department will have 50,000 employees

MDCH/MDHS Merger

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• March 31 Biller “B” Aware update regarding CARCs for Medicare crossover claims.

• As part of the April 24th update within CHAMPS, MDCH will no longer report Claim Adjustment Reason Codes (CARC) with a zero dollar amount on the electronic 835 and Remittance Advice.

• Claims denied for multiple CARC’s will only have one CARC reported at the line level but will have all Remittance Advice Remark Codes (RARC) reported.

• Providers are encouraged to review their internal systems to see if changes are needed for automatic posting of remittance advices.

• http://www.michigan.gov/mdch/0,1607,7-132-2945_42542_42543_42546-101427--,00.html#Biller_B_Aware

CARC’s and RARC’s