Healthcare Reform and Changing Fiscal and Management Structures and What About PennsylvaniaDale Jarvis

2

Movie: Turning Oranges into Orange Juice

Key Fiscal and Management Structure Issues• New $ and Consumers from

Expansion & Parity

• Changes in Payor Mix

3

New Behavioral Health Consumers and Funding

Uninsured to

Insured

Insured Covered by

MH/SU Parity

Current “Payor” Categories

UninsuredMedicaid and

Medi-MediMedicare Private Insured

New “Payor” Categories

Unin-sured

MedicarePublic Option?Dual Eligible

Plans (Medi-Medi)

MedicaidState

ExchangePrivate Insured

Federal Incubators for

Reforms

StateManaged

• Provider-Level Changes

Reconfiguration to Support Person-Centered Healthcare Homes

Federally Qualified Behavioral Health Centers (FQBHCs)

New Payment Structures and Reimbursement Models

• So What About Pennsylvania

Coverage Expansion and Parity

• 31 to 36 million additional insured

• $16 - $25 billion new BH funding for this group

• To address needs of the 5.2 million indigent, uninsured in need of MH

• Parity and need to “bend curve” will result in increased demand for those already insured

Page 4

Coverage Expansion and Parity• Two layers of funding: Mild & Moderate and Serious & Severe (SMI/SED)• Meeting ½ of the demand for specialty care will require 33,000 FTEs

5

25% 50% 75% 100%Est Hours per Case 26.60 26.60 26.60 26.60 Estimated Hours of Svc 18,868,910 37,737,819 56,606,729 75,475,638 Hours per FTE @ 55% of 2,080 1,144 1,144 1,144 1,144 FTE Gap 16,494 32,988 49,481 65,975

Added Number to Serve to Close Gap by

Changes in Payor Mix• Important changes will be unfolding in the payor

landscape that will impact how states, health plans and providers operate

6

Current “Payor” Categories

UninsuredMedicaid and

Medi-MediMedicare Private Insured

New “Payor” Categories

Unin-sured

MedicarePublic Option?Dual Eligible

Plans (Medi-Medi)

MedicaidState

ExchangePrivate Insured

Federal Incubators for

Reforms

StateManaged

Provider Level Changes• There are three changes unfolding that will impact the

behavioral health service delivery system

7

Reconfiguration to Support Person-Centered Healthcare Homes

Federally Qualified Behavioral Health Centers (FQBHCs)

New Payment Structures and Reimbursement Models

Person-Centered Healthcare Homes• Community Behavioral Healthcare Organizations need to engage with

Medical/Healthcare Homes in one or more of three ways and there is not a “fourth door” for CBHOs

8

Fully Integrated Healthcare Home

Person-Centered Healthcare Home Options

Primary Care Case Rate for:- Screening/Registry Tracking

- Care Mgmt/BH Clinicians- Psychiatric Consultations

- Non-BH Prevent/Mgmt Work

Healthcare Funding

Streams for Primary Care

Services

Behavioral Health

Funding Streams for

Mental Health & Substance Use Services

Focused PartnershipHealthcare Home

Primary Care Case Rate with:- Screening/Registry Tracking

- Care Mgmt/BH Clinicians- Psychiatric Consultations

- Non-BH Prevent/Mgmt Work

Healthcare Funding

Streams for Primary Care

Services

Behavioral Health

Funding Streams for

Mental Health & Substance Use Services

CBHO with Linkage to Multiple Medical Homes

Behavioral Health Case Rate for Svcs

in CBHO

Healthcare Funding

Streams for Primary Care

Services

Behavioral Health

Funding Streams for

Mental Health & Substance Use Services

Food MartCBHO

Primary Care Case Rate for

Svcs in Medical Clinic

Food MartCBHO

9

Federally Qualified Behavioral Health Centers

Federally Qualified Behavioral Health Centers• 2007 Revenues by payor for the 1,067 Federally

Qualified Health Centers that have Section 330 Grants• Note that revenue from the 330 Grants and Indigent

Care programs are not available to CBHOs• FQHCs also have higher Medicaid and Medicare

revenue due to favorable Federal legislation

11

2007 Revenue RatiosGrant Revenue

Section 330 FQHC Grants $1,683,908,963 18.5%Other Federal Grants $200,676,524 2.2%State/Local Grants/Contracts $886,402,060 9.8%Foundations/Private Grants/Contracts $378,384,064 4.2%

Total Grant Revenue $3,149,371,611 34.6%

Patient Service RevenueMedicaid $3,320,438,823 36.5%Medicare $548,357,016 6.0%Other Public $238,597,215 2.6%Third Party Insurance $666,521,498 7.3%Patient Self-Pay $597,170,297 6.6%

Total Patient Service Revenue $5,371,084,849 59.1%

Revenue from Indigent Care Programs $335,084,637 3.7%Other Revenue $234,496,445 2.6%Total Revenue $9,090,037,542 100.0%

Number of Grantees 1,067Average Revenue per Grantee $8,519,248

Federally Qualified Behavioral Health Centers

• A parallel structure for CBHOs, Federally Qualified Behavioral Healthcare Centers (FQBHC), based on the FQHC accountability and payment structures

• 10 benefits and the 8 responsibilities come with FQHC status

12

Federally Qualified Behavioral Health Centers• The Community Behavioral Healthcare Organization(CBHO) system will need

to adapt to this new model of service delivery and a high level of expectations from the general healthcare system

• Federally Qualified Behavioral Healthcare Centers (FQBHCs) will become the core of the new specialty system, supplemented by specialized, less comprehensive mental health and substance use provider organizations

13

Organizing the Specialty BH System

MH Provider

Smaller, Specialized MH and SU Providers Supplementing the Service Needs of the Population

SU Provider

MH Provider

SU Provider

MH Provider

SU Provider

MH Provider

SU Provider

FQBHCs: Comprehensive, Quality

CBHOs as Person Centered Healthcare

Homes via Integration or Partnership Model

Federally Qualified Behavioral Health Centers

• FQBHC status will create a single set of national standards that can serve as a blueprint for the types of services and infrastructure that need to be in place to better support the full healthcare needs of persons with serious mental health and substance use disorders

• In addition, the FQBHC designation creates a single, common platform of common assumptions, approaches, and expectations for FQHCs and FQBHCs to partner in providing person-centered healthcare homes

• The ability to achieve FQBHC designation and the accompanying financial benefits are necessary components for Community Behavioral Healthcare Organizations to be able to adapt to the changes that will occur in the general healthcare system

14

New Payment Structures & Reimbursement Models• Funding methods for CBHOs are also going to need to change to

address the imbalances in the current system, reverse existing incentives, and come into alignment with how the rest of healthcare will be funded

15

• Per Service• Per Diem

Fee for Service

• Capitation• Grant-Type

Fixed Fee

• Prevention, Early Intervention• "Back-Porch" ServicesCase Rate

• Fee for Service• Settlement to Cover ShortfallsPPS

• Share in Savings of reduced Total Health ExpendituresBonus

(Note: PPS = Prospective Payment System)

The New FQBHC Payment Model (mirroring the Medical Home model)

New Payment Structures & Reimbursement Models

• Funding is just starting to open up for embedding primary medical care into CBHOs, which is a critical component of meeting the needs of adults serious mental illness

16

Clinical Design for Adults with Low to Moderate and Youth with Low to

High BH Risk and Complexity

Primary Care Clinic with Behavioral

Health Clinicians

embedded, providing

assessment, PCP

consultation, care

management and direct

service

Partnership/Linkage with

Specialty CBHO for persons who need their care stepped up to

address increased risk and complexity with ability to step back to Primary Care

Clinical Design for Adults with Moderate to High BH Risk and

Complexity

Community Behavioral Healthcare Organization with an embedded

Primary Care Medical Clinic with ability to address the full range of

primary healthcare needs of persons with moderate to high

behavioral health risk and complexity

Food Mart

CBHOFood MartCBHO

So, What about Pennsylvania?

17

Page 18

Movie: Ice Fishing, Don’t Be Swallowed by Change

Overview of Pennsylvania’s Safety Net Population• Of the 12.6 million Pennsylvania residents, 2.2 million fall into the Safety Net

because they are indigent and uninsured or have Medicaid coverage (source: Kaiser Family Foundation State Health Facts)

19

Medicaid Youth, 737,856

Medicaid Adult/Elder,

749,138

Indigent/ Uninsured

Youth, 158,879

Indigent/ Uninsured

Adult/Elder, 616,003

Pennsylvania Safety Net Population (2007) 2.2 Million

How does PA MH Funding compare with other states?• Pennsylvania is the most successful state in supporting funding for mental

health services (note: this includes some SU $ but is missing some children’s $)

SMHA-Controlled Mental Health Revenue by StateFiscal Year 2006

State

Total State Mental Health

Revenue

Target # of Persons to Serve/Year

Revenue per Target

Client RankPennsylvania $3,332,904,698 544,949 $6,116 1 Maine $464,300,000 76,362 $6,080 2 District of Columbia $229,400,000 38,093 $6,022 3 Alaska $183,200,000 33,512 $5,467 4 New Hampshire $166,100,000 38,394 $4,326 5 Maryland $810,000,000 233,097 $3,475 6 New Jersey $1,241,600,000 365,082 $3,401 7 Minnesota $721,100,000 213,635 $3,375 8 Vermont $122,500,000 36,426 $3,363 9 New York $3,982,300,000 1,287,434 $3,093 10 Top 10 Average $4,472

20

Analysis of MH Unserved in PennsylvaniaIn a FY2007 NCCBH Mental Health Gap Analysis, Pennsylvania:

– Ranked #2 in Medicaid Gap (low # = low gap)

– Ranked #50 in Indigent/Uninsured Gap (out of 51)

(based on Kaiser Population data, national prevalence estimates, and Pennsylvania data submitted to SAMHSA on number served)

Question: Where are the uninsured counts? In the County Allocations?

21

Pennsylvania Gap Analysis FY2007

MedicaidIndigent/

Uninsured TotalMild Need 148,617 80,109 228,726SMI/ SED Need 201,794 114,429 316,223Total Need 350,411 194,538 544,949

Mild Served 132,493 2,097 134,590SMI/ SED Served 161,884 2,563 164,447Total Served 294,377 4,660 299,037

Mild Gap 16,124 78,012 94,136SMI/ SED Gap 39,910 111,866 151,776Total Gap 56,034 189,878 245,912

Mild Gap % 11% 97% 41%SMI/ SED Gap % 20% 98% 48%Total Gap % 16% 98% 45%

U.S. Median Gap 60% 65%

Pennsylvania Needs a Comprehensive Integration Plan

PA stakeholders need to develop a Blueprints document that describes how we got her, where we need to go (clinical, structural, and financial designs) and a comprehensive demand, capacity, revenue and expense model

22

Pennsylvania Needs a Comprehensive Integration Plan

23

Stop Whining and Do Something

1. Complete aPopulation-Based

Planning Project (Howmany people, how

much service?)

2. Identify the ServiceDelivery &

Infrastructure Gaps

3. Project the Cost ofMeeting the Need(Service, Admin,

Infrastructure)

4. Redesign theService Delivery

System to Align withthe Clinical Design

5. Redesign theRegulatory System toAlign with the Clinical

Design

6. Redesign theFinancing System toAlign with the Clinical

Design

7. Develop a RealisticProposal for Closingthe Gaps based onMoney, Political &

Workforce Realities

8. Begin the Changeprocess as progress

is being made onturning support intoLegislative Action

This diagram lists eight steps in a process for transforming the public behavioral health system at the region, state and federal level.

This diagram lists eight steps in a process for transforming the public behavioral health system at the region, state and federal level.

Demand-Capacity, Revenue-Expense Planning

C onsum ersS ervice M ix

U nits o f S erv ice

S ervice S ta ffP roductiv ity H ours

A va ilab le H ours

D irect S ta ff C ostsO ther D irect

O verheadR isk R eserve

E nro lleesC onsum ers

S ervice U n itsC ap ita tion /C ase/

FFS R ates

D em and C apacity R evenue E xpense

How Many People…North Central Washington RSNPrevalence Analysis

Adams Grant Okanogan Total

A. Total PopulationChild & Adolescent (0 through 17) 5,469 24,053 10,444 39,966 Adults (18 through 59) 8,762 41,845 21,337 71,944 Older Adults (60 and Over) 2,452 12,402 7,820 22,674 Total Population 16,683 78,300 39,601 134,584 Ratios 12% 58% 29%

B. Child/SED Prevalence Estimate DetailChildren At or Below 250% of Poverty 2,599 11,429 4,963 18,991

Estimated Prevalence Rate 9.0% 9.0% 9.0%

Est. SED Prevalence needing Public MH 234 1,029 447 1,709

C. Adult/Older Adult SMI Prevalence Estimate DetailPEMINS SMI Estimate < 200% Poverty 226 1,095 589 1,910SMI in Residential (@ 90% occupancy) 30 144 77 251Jails, Prisons 11 54 29 94Homeless 15 74 40 129Hospitals 5 23 12 40# Needing Public MH 287 1,390 747 2,424

D. SED/SMI Prevalence Estimate TotalsYouth and Adults Needing Public MH 521 2,419 1,194 4,133 Ratios 13% 59% 29% 100%

Mental Health prevalence for a 3-County Region in rural Washington State.

How Much Service…Multnomah County: Adult System of Care ProjectionsJan-Dec 2006 - Oregon Health Plan Enrollees

Screening & Triage Only Basic Services

Recovery Mainten-ance

Low Intensity Community

Based Services

Locus Level N/A Locus 0 Locus 1 Locus 2

Locus Score Available to all Clients

< 10 10 to 13 14 to 16

Clients & Case MixCase Mix 7.2% 19.9% 21.4% 8.8%Clients Served 479 1,331 1,433 590

Average Length of Stay and Treatment SlotsALOS 1 3 6 8 Slots 40 333 717 393

Units of ServiceAvg. Units/Case 1 4 10 15 Unit of Measure Std Hr Std Hr Std Hr Std Hr

Completion Rate 70% 70% 70% 70%Paid Units/Case 0.70 2.80 7.00 10.50 Services 335 3,727 10,031 6,195

Category IV: General Outpatient Mental Health Services

The mental health system in Portland Oregon completed a clinical design, identified what services should be available to persons with SMI/SED as well as other Medicaid enrollees needing mental health treatment, and projected demand based on historical use, research, and projected utilization at each level. This slide projects use for non-SMI/SED persons.

How Much Service…Multnomah County: Adult System of Care ProjectionsJan-Dec 2006 - Oregon Health Plan Enrollees

Category I: ACT

Category II: DBT

Assertive Community Treatment

Dialectical Behavioral

TherapyScreening & Triage Only

Low Intensity Community

Based Services

High Intensity Community

Based Services

Medically Monitored Non-

Residential Services

Locus Level Locus 4 Locus 4 N/A Locus 2 Locus 3 Locus 4

Locus Score20+

generally 3 to 4 on all scale

20+generally 3 to 4 on all scale

Available to all Clients

14 to 16 17 to 19 20+

Clients & Case MixCase Mix 3.0% 0.4% 4.3% 5.6% 16.6% 12.8%Clients Served 200 26 286 373 1,113 855

Average Length of Stay and Treatment Slots (the number of persons who will be served at one time)ALOS 12 12 1 8 11 12 Slots 200 26 24 249 1,020 855

Units of ServiceAvg. Units/Case 100 72 1 15 32 72 Unit of Measure Std Hr Std Hr Std Hr Std Hr Std Hr Std Hr

Completion Rate 95% 95% 70% 70% 70% 70%Paid Units/Case 95.00 68.40 0.70 10.50 22.00 50.40 Services 19,000 1,778 200 3,917 24,486 43,092

Category III: Services for Severely Mentally Ill

This slide projects need for persons with SMI/ SED in Portland Oregon.

Pennsylvania Needs a Comprehensive Integration Plan• Integration Policy Initiative:

Collaboration of California’s public Mental Health and Primary Care community

• Grew out of acknowledgement that BH and PC have not adequately addressed whole health needs of persons with MH/SU conditions

• Addresses integration vision, values, principles, clinical models, implementation issues, and specific recommendations (delivery system, financing, and regulatory)

29

Federal Health Reform Timeline (based on Senate Finance Committee Bill)

Eight key activities begin between 2010 and 2014

Requiring a great deal of implementation effort at the State and Federal levels

30

U.S. Health Reform Legislation TimelineSenate Finance Committee

2010 2011 2012 2013 2014 2015 2016 2017

Implementation Planning Begins

Hi Risk Pools for People with Pre-existing Conditions

State Health Insurance Exchanges Begin

New Payment Methods & Delivery System Redesign Begins

Expand Medicaid to 133% Federal Poverty Level

Optional Mandatory

Employer Tax Credits Begin

Individual/Family Premium Subsidies Begin

Individual Mandates Begin; Penalties Start in 2014

$0 $200 $400 $600 $750

California’s 1115 Waiver Renewal

• Promote Organized Delivery Systems of Care– Enrollment in organized delivery systems for seniors and persons with

disabilities and children and families in rural counties– Children with special health care needs– Dual-eligible beneficiaries– Adults with severe mental illness

• Strengthen and Expand the Health Care Safety Net• Implement Value-Based Purchasing Strategies

– Standardized reporting; risk sharing; pay-for-performance (P4P); healthy rewards and incentives for beneficiaries; and nonpayment for healthcare acquired conditions

• Enhance the Delivery System for the Uninsured to Prepare for National Reform

31

Pennsylvania Behavioral Health Key Issues• What is Pennsylvania’s plan for addressing Medicaid expansion

and development of Health Insurance Exchanges? • What will be Pennsylvania’s stages of Health Plan evolution?• How will Behavioral Health be managed inside the Exchanges – carve-in or

carve-out?• How ready are the state, plans, counties, and providers for wide and rapid

deployment of person-centered healthcare homes?• Is the concept of an Outpatient Behavioral Health System outdated and out of

sync with the delivery system models of the near future?• How many Pennsylvania providers are ready to become FQBHCs?• How does Pennsylvania financially support embedding primary care clinics

inside CBHOs/FQBHCs?• What state regulations need to be re-written to align with needed clinical,

structural and financing changes?• Who will develop Pennsylvania’s comprehensive integration plan and when? • How will attachment to the status quo systems and structures impact the ability

of Pennsylvania to better align with national healthcare reform opportunities?Page 32