FY12-13 Biennium Budget

Indiana Family & Social

Services Administration

2

Agency Overview

• Overall Budget of $8.6 Billion

• Five Divisions:

– OMPP

– Aging

– DMHA

– DDRS

– DFR

• Current Number of Staff 4,478

3

FSSA Headcount

4,166

4,166

4,478

4,789

3,800 3,900 4,000 4,100 4,200 4,300 4,400 4,500 4,600 4,700 4,800 4,900

FY13 (est)

FY12(est)

FY11 (01/3/11)

FY10

4

Healthy Indiana Plan (HIP)

5

Healthy Indiana Plan (HIP) Update

• Enrollment (as of 12/31/2010)

– Total enrollment: 42,568

– Childless adults: 15,632

– Parental adults: 26,936

• Childless adults wait list continues, but program remains open for parental

adults.

• Number of individuals on waitlist: 55,032 (as of 12/31/2010)

6

HIP Accomplishments

• Member Behavior

– 76% of HIP members completed their required annual physical;

completion of preventive services makes a member eligible for POWER

account rollover in the following year

– HIP members required to make POWER account contributions saw a 9%

decrease in ER utilization during the first 3 months of enrollment, and

15% after 6 months. HIP members not required to make POWER account

contributions only saw an initial 5% decline in ER use after 3 months and

no additional decline in subsequent months.

– 97% of individuals make their required POWER account contributions

• Member Satisfaction -Product Acceptance and Research conducted a survey

of HIP members

– 94% of members were satisfied with the program

– 99% indicated they would reenroll in the program

7

HIP & The Affordable Care Act

• May 17, 2010 – Letter from FSSA Secretary Anne Murphy to CMS Director Cindy Mann

– CMS questions:

• Can HIP be used as the coverage vehicle for the newly eligible population under the

Affordable Care Act?

• Waiver expires in 2012 and ACA provisions come into effect on January 1, 2014 –

What will happen in 2013?

• Will State receive an enhanced match for current HIP participants?

– This will impact fiscal projections on how much the Affordable Care Act will cost

Indiana

• August 30, 2010 – Letter regarding Medicaid Disability included follow-up questions regarding HIP. A

subsequent call with CMS did not lead to any conclusions.

• January 14, 2011– Governor Daniels sent a letter asking Secretary Sebelius for an answer as to whether or not

HIP can continue as the coverage vehicle for the newly eligible adults.

• State will be submitting a State Plan Amendment to seek approval for HIP as the

coverage vehicle in 2014.

8

HIP – Senate Bill 461

• Authored by Senator Pat Miller

• Effective 2014

– Use HIP as the Medicaid ACA expansion vehicle instead of the traditional

Medicaid program.

– Gives Secretary the authority to make benefit modifications to align with ACA

requirements. ACA could increase benefit costs 10-15% depending on final CMS

rules.

– Eligibility alignment to reduce of duplication of federal program.

• Effective upon passage

– Amend code to require individuals to make a minimum contribution of not less

than $60 annually.

– State POWER account savings not substantial, but could drive down premium

costs.

– Allow nonprofit organizations to contribute no more than 50% of the individual’s

required payment.

– Health plans may contribute if related to health improvement.

9

December 2013 Projected Enrollment

Scenario Parents

Childless

Adults Total

Status Quo 55,000 10,000 65,000

Scenario 1 55,000 17,000 72,000

Scenario 2 55,000 26,000 81,000

Full Enrollment 55,000 36,500 91,500

Enrollment Scenarios

Notes:

•Data provided through September 30, 2010.

•CY 2008 beginning balance of approximately $73.9M.

•Scenarios above assume that HIP would be extended until December 31, 2013.

10

CY 2013 Projection

ScenarioState

Expenditures

Tax

Revenue Surplus/(Deficit)

Remaining

Tax Revenue

12/31/2013

Status Quo $157.3M $127.7M $(29.6M) $206.5M

Scenario 1 $177.6M $127.7M $(49.9M) $170.2M

Scenario 2 $205.2M $127.7M $(77.5M) $106.9M

Full Enrollment $235.0M $127.7M $(107.3M) $23.0M

Revenue Projection

Notes:

•Data provided through September 30, 2010.

•Scenarios above assume that HIP would be extended until December 31, 2013.

11

12

13

Non-Medicaid Base Budget($’s in millions)

$803.7

$744.2

$262.7$240.8

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

FY11 Approp FY12-13 Request

General Fund

Dedicated Funds

$80.9 M DECREASE

14

Summary of Base Changes

• $9.4M reduction in appropriation request for CHOICE

• Implementation of transition from Care Select to Chronic Disease

Management that will reduce costs by over $11M.

• Reductions of almost $18M in administrative costs due to attrition,

efficiencies and contract reductions.

• Over $11M in savings from maximizing federal dollars.

• Continuation of RCAP moratorium for a savings of $3M.

• Reduction of approximately $7M in DD state line funding as a result of

transitioning individuals to waiver funded services.

• Elimination of DDRS Crisis and Outreach contracts that will save

approximately $6M

• $15M in annualized savings due to the SOF Transition plan

15

Division of Family Resources

(DFR)

16

DFR Regions

Hybrid Conversion:

Vanderburgh – January

Vigo – June

Clark – September

Grant & Allen– Scheduled for

February 2011.

Indiana has been working closely

with the Federal government. FNS

requires two months of data prior

to giving the State approval to

expand to another region.

17

FY11 Timeliness Performance

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

July August September October November December

As-Is

Modernized

Hybrid

18

Applications Pending Beyond Time Standard as a % Total Pending Applications

Statewide

31%32% 32%

28%

32%

23% 23%

39%

44%

25%24%

16%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Ju

n 2

001

Ju

n 2

002

Ju

n 2

003

Ju

n 2

004

Ju

n 2

005

Ju

n 2

006

Ju

n 2

007

Ju

n 2

008

Ju

n 2

009

Ju

n 2

010

Ju

ly 2

010

De

c 2

010

To

tal

Pe

nd

ing

Pending Beyond Time Standard as a % Total Pending

19

Regional Application Backlog 12/5/09 – 1/14/11

Source: Cognos Application Tracking Dashboard

Note: The change shown is relative to the 12/5/09 backlog

Applications Pending and Late Excluding HIP

Lake St.Joseph Allen Grant Marion Vigo Vanderburgh Clark State

Thru Region 1 Region 2 Region 3 Region 4 Region 5 Region 6 Region 7 Region 8 Total

12/05/09 1,309 830 3,941 3,468 8,653 2,338 2,427 3,053 26,019

01/14/11 273 236 860 1,318 3,547 219 265 563 7,281

Increase/

Decrease -79% -72% -78% -62% -59% -91% -89% -82% -72%

20

Hybrid Performance: Key Metrics

State Reported, Cumulative Food Stamp Error Rates*

Positive July 2009 8.21%

Positive July 2010 2.76%

Positive July National Average 2010 3.70%

Negative July 2009 15.10%

Negative July 2010 2.48%

Negative July National Average 2010 7.55%

*The most recently available SNAP error rates as reported by FNS are for the month of July

21

Enrollees by Program (as of June 30 annually)

2002 2003 2004 2005 2006 2007 2008 2009 2010 Current***

Medicaid* 756,904 777,170 822,344 847,625 857,599 877,933 920,332 1,017,571 1,088,637 1,099,103

Food Stamp

Recipients428,089 487,197 532,402 557,206 575,602 586,156 639,470 721,155 828,604 872,898

Food Stamp

Households180,457 205,208 228,218 241,177 249,914 253,443 273,876 306,562 355,626 378,210

TANF 151,269 146,783 148,788 141,055 135,206 117,311 122,743 119,912 104,004 92,439

Number of

Hoosiers

enrolled in at

least one

program**

776,121 810,694 866,103 899,701 922,434 943,343 1,013,429 1,114,950 1,250,774 1,279,483

* Medicaid increase in 2008 & 2009 affected by addition of HIP program (18,903 members in 2008 & 50,115 members in 2009). Medicaid numbers are from ICES and do not include retroactive coverage; numbers are slightly higher in actuality.

** Program totals are comprised of only unique cases, and not a sum of individual program data.

***Current enrollment through Dec 31, 2010. Source: ICES

With the economic downturn, FSSA program enrollment has increased by

42% since 2005.

Number of Hoosiers Receiving Benefits Increases Since 2002

22

New Applications for Assistance Groups Received in ICES

Statewide

430,264

491,076

608,793641,687

695,720

760,173788,390

856,812

994,471

1,195,305

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Ap

pli

cati

on

s

2001 - Annualized based on 6 months of available data

Change Package –

DFR County Admin $32.6M

23

FY08 FY11 Estimate

$71.7M appropriation $56.5M appropriation

765,419 applications processed 1,213,382 applications processed

1,632 Contract Staff

676 State Employees

2,044 Contract Staff

767 State Employees

24

Division of Disability and

Rehabilitative Services (DDRS)

25

Waiver counts: Total participants

9,591 10,128 10,43711,383

12,144

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

FY06 FY07 FY08 FY09 FY10

26

Waiver counts: New consumers

631

858

1,0601,108

1,189

0

200

400

600

800

1,000

1,200

1,400

FY06 FY07 FY08 FY09 FY10

27

24,133

22,567

22,872

24,258

25,198

21,000

22,000

23,000

24,000

25,000

26,000

SFY06 SFY07 SFY08 SFY09 SFY10

BCDS – First Steps – Children served

28

Division of Aging (DA)

29

Average Nursing Facility Report Card Score

194

188

171

160

165

170

175

180

185

190

195

200

December 2007 December 2010December 2009

Phase 2

01/01/10

30

DA – Medicaid Waiver Clients

3,180

9,361

-

2,000

4,000

6,000

8,000

10,000

January 2005 November 2010

31

Nursing Facility Clients vs. Medicaid Waivers Clients

3,180

9,361

28,333 28,636

-

5,000

10,000

15,000

20,000

25,000

30,000

January 2005 November 2010

Medicaid Waivers

Nursing Facilities

Waiver % Increase 295%

NF % Increase 1%

32

Fy10 Average state cost per client

$3,359

$7,102

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

A&D Waiver CHOICE

33

Choice and A&D Waiver Comparison

A&D Waiver CHOICE

Annual State

Expenditures

$30.9M $29.4M

Avg. Clients

Served Per

Month

9,167 4,399

Avg. Cost Per

Client

$3,359 $7,102

Eligibility •3+ ADLs and/or

1 Skilled Nursing Need

• 300% of Poverty Level

• Meets NF LOC

• Medicaid Eligible

• 2+ ADLs

• 150% of Poverty Level

• Assets cannot exceed $500,000

• Does not have to meet NF LOC

• Does not have to be Medicaid Eligible

Waitlist as of

11/ 2010

4,957 5,490

34

Division of Mental Health and

Addictions (DMHA)

35

Proposal Details

Logansport:

• Close civil beds (222

beds)

Evansville:

• Close 30 bed MRDD unit

& transition to community

•Utilize 30 bed unit for

SMI patients

Larue Carter:

Youth services from

Richmond moved to LC

(utilization of 20 Existing

Beds)

Madison:

• Close two

MRDD units (30

beds)

•Utilize 30 beds

for SMI patients

Richmond:

• Close substance

abuse unit (101

beds)

•Close youth

services unit (20

beds)

• Close MRDD

unit (30 beds)

•Use 50 beds for

SMI patients

36

SOF Transition Plan Status

– SOF Transition as of 1/11/11

• Appropriate patients with intellectual disabilities

have been identified for discharge to community

placements by April 2011.

• Overall Discharges to Occur:

– 110 patients to other State Hospitals

– 116 MR/DD patients to Community

• 38 patients with mental illness have been transferred

from Logansport to other State hospitals.

• 22 patients with MR/DD have been transferred to

the community.

37

SOF Transition Plan Status (Cont’d)

• Logansport has closed 4 patient units (98 beds)

• No staff layoffs have occurred. Staffing reduction at

Logansport (112) and Richmond (36) has been due to

attrition.

• LSH

– currently 682 employees; target is 492

– Currently 246 patients; target is 166

• RSH

– Currently 509 employees; target is 498

– Currently 234 patients; target is 211

38

Logansport Transition Plan Change

• Capacity increased from 134 patients to166 patients

• Change made based on clinical review of patients and

determination that certain patients still needed the structure

and security provided by the hospital

• Revised plan announced to staff 1/6/11

• Staffing increased to 492 (up from 482)

• Focus on forensic, sexual responsibility unit, IRTC step down,

women, MR/DD

39

Fy10 SOF Occupancy Rates

42.04%

95.85%

87.04%

82.85%

88.67%91.77%

20.00%

40.00%

60.00%

80.00%

100.00%

EPCC Evansville Madison Logansport Richmond Larue Carter

40

FY10 SOF Operating Cost - PPD

$917.54

$486.58

$606.27

$457.13

$407.40

$557.63

$- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

EPCC

Evansville

Madison

Logansport

Richmond

Larue Carter

41

MRO Update

• Changes to MRO program became effective 7/1/10

• Impetus for the change was to bring the program into

compliance with federal guidelines. Audit findings

resulted in payback to the federal government.

• System changes created mutually with impacted

providers.

• Service packages and allotted service units defined to

support recovery and community living.

42

MRO Update (Cont’d)

• Significant start up efforts lead to successful kick

off.

• Providers are adjusting service arrays to meet

consumer needs and program guidelines.

• Consumers are receiving the amount and intensity

of services identified through a standardized

assessment.

43

FSSA Capital Request

• Capital request for State Hospitals include both Preventive

Maintenance and Capital projects needed to maintain the current

facilities.

• Capital project request for the State hospitals is being maintained at the

same level as the last biennium budget.

– Preventive Maintenance - $5,553,395

– Capital Projects - $8,479,768

• Request have been limited to those projects that are needed to maintain

the infrastructure of the facilities and life safety issues.

44

FSSA Capital Request

• Capital projects have been prioritized over the SOF system as a whole and not by each individual hospital.

• Major capital projects:

– Replacement of current SOF Pharmacy System-current system is no longer going to be supported by the current vendor during the next biennium therefore this system will need to be replaced (Project request $1.8 million).

– Remainder of projects are various projects among the hospitals for infrastructure and life safety (Project request $6.9 million).

45

Office of Medicaid Policy and

Planning (OMPP)

46

Medicaid General Fund Appropriations

$303M $303M

$269M

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

FY05 FY06 FY07 FY08 FY09 FY10 FY11

(est)

FY12

(est)

FY13

(est)

GROWTH

SHORTFALL

ARRA

GF APPROP

$111M

47

Projected Medicaid Assistance Need and

Increase Requested Relative to SFY 2011 Appropriation

(in $millions)SFY12 SFY13

December 2010 Projection $1,843 $2,001

– Administrative Savings Target (100) (112)

– Legislative Initiatives in Budget Bill (20) (22)

December 2010 Adjusted Projection $1,723 $1,867

SFY 2011 Appropriation $1,429 $1,429

– SFY 2011 ARRA adj 303 303

Total SFY 2011 with ARRA $1,732 $1,732

– Growth Compared to SFY 2011 (9) 135

Total Increase From SFY 2011 Appropriation $294 $438

48

December 2010 Medicaid Assistance Adjusted Projection

EXPENDITURES FY 2010 Growth FY 2011 Growth FY 2012 Growth FY 2013

Fee for Service $1,811.7 15.8% $2,097.5 6.3% $2,229.2 10.7% $2,467.1

Capitation Payments and PCCM Fees 1,194.2 (10.6%) 1,067.3 9.5% 1,168.3 8.6% 1,268.8

Healthy Indiana Plan 243.1 (4.0%) 233.4 12.2% 261.9 15.9% 303.4

Long Term Care Institutional Care 1,482.1 2.7% 1,521.4 (0.8%) 1,509.7 3.5% 1,562.6

Long Term Care Community Care 646.3 3.1% 666.5 10.4% 736.1 5.4% 775.7

Medicare Buy-In, Clawback 258.2 2.3% 264.1 20.6% 318.5 8.2% 344.7

Medicaid Rehabilitation Option 256.9 (29.0%) 182.4 10.0% 200.8 8.2% 217.3

Rebates and Collections (174.9) 52.5% (266.8) 15.3% (307.7) 9.2% (336.1)

Remove CHIP Program, Provider Tax Receipts (247.7) 5.4% (261.0) 7.6% (280.8) 4.4% (293.1)

Other Expenditures (DSH, UPL, etc.) 674.2 58.0% 1,065.4 (8.2%) 977.7 (1.1%) 967.3

Medicaid Expenditures (State and Federal) $6,144.1 6.9% $6,570.3 3.7% $6,813.6 6.8% $7,277.7

FUNDING

Federal Funds 4,012.8 7.0% 4,293.5 3.8% 4,456.8 6.7% 4,757.0

DSH 30.0 61.7% 48.4 (19.3%) 39.1 (0.3%) 39.0

Non-State IGTs 25.3 827.2% 234.4 33.4% 312.7 1.8% 318.2

Cigarette Tax Revenues 71.6 18.1% 84.6 30.7% 110.6 10.5% 122.2

QAF Transfer to SBA (33.3) 19.1% (39.6) (49.7%) (19.9) 0.5% (20.0)

GF Directed IGTs 288.3 (91.9%) 23.5 714.7% 191.4 1.3% 193.9

Non-Medicaid Assistance Funds $4,394.7 5.7% $4,644.8 9.6% $5,090.7 6.3% $5,410.3

Forecasted Medicaid GF Assistance Need $1,749.5 10.1% $1,925.5 (10.5%) $1,723.0 8.4% $1,867.4

Less ARRA FMAP Stimulus Funding $573.4 (18.8%) $465.3

Required Medicaid General Fund Assistance $1,176.1 24.2% $1,460.2 18.0% $1,723.0 8.4% $1,867.4

General Fund Medicaid Assistance Appropriation $1,116.0 28.0% $1,428.8

Contingency Fund Contribution $57.6

Sub-total (Shortfall)/Surplus ($2.5) ($31.4)

49

Average Monthly Enrollment FY 2010 Growth FY 2011 Growth FY 2012 Growth FY 2013

ADULTS AND CHILDREN

Adults 112,210 6.2% 119,133 7.5% 128,045 4.4% 133,632

Children 539,095 5.5% 568,727 6.8% 607,213 5.0% 637,735

Mothers 30,383 1.8% 30,931 2.4% 31,661 2.2% 32,366

CHIP 79,687 8.1% 86,122 9.0% 93,845 5.9% 99,420

Healthy Indiana Plan 46,082 (0.3%) 45,949 13.8% 52,289 13.7% 59,463

Total Adults and Children 807,458 5.4% 850,863 7.3% 913,052 5.4% 962,617

AGED, BLIND AND DISABLED

Institutionalized 34,375 1.2% 34,787 1.0% 35,128 1.4% 35,617

Waiver 21,033 3.9% 21,859 5.1% 22,964 1.9% 23,408

No Level of Care

Dual 76,214 11.2% 84,785 6.5% 90,268 3.6% 93,554

Non-Dual 78,815 12.2% 88,461 7.3% 94,881 3.9% 98,568

Partial 28,767 6.9% 30,756 4.7% 32,192 3.5% 33,304

Total Aged, Blind, and Disabled 239,205 9.0% 260,648 5.7% 275,433 3.3% 284,451

OVERALL TOTAL 1,046,663 6.2% 1,111,510 6.9% 1,188,485 4.9% 1,247,068

State of Indiana, Family and Social Services Administration

Average Monthly Enrollment Forecast: SFY 2010 - SFY 2013

Using Data through October 31, 2010

Total Medicaid

50

Medicaid General Fund Appropriations

$303M $303M

$135M

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

$1,800,000,000

$2,000,000,000

FY05 FY06 FY07 FY08 FY09 FY10 FY11

(est)

FY12

(est)

FY13

(est)

GROWTH

SHORTFALL

ARRA

GF APPROP

51

Medicaid Cost Components

• Eligibility

– No Reductions Allowed Due to ARRA through June 30, 2011

– No Reductions Allowed Due to ACA through December 31, 2013

• Benefits

– Mandatory Benefits must be provided to receive Federal matching funds

– Changes to any current Optional Benefits not required under ACA will

require Legislative Action

• Provider Reimbursement

52

Medicaid Optional Services

Services Indiana Code or Indiana Adminstrative Code Citation

State &

Federal

SFY2010

State Only

SFY2010

# of

Recipients

SFY2010

Potential

Savings

SFY2012

Targeted Case Management IAC/Federal waivers $1.0 $0.2 4,000 $0.3

Prosthetic/Orthotic Services 405 IAC 5-19-3(5), 5-19-11, 5-26-6 $0.2 $0.05 2,500 $0.1

ICF/MR IC 12-15-2-8 (ICF/MRs); 12-15-5-1(19); IC 12-15-32

(CRFs/DD); 12-15-5-1(20) $311.4 $76.9 4,200 $0.0

Clinics (NP, Title V or Therapy)

IC 12-15-5-1(4) gives authority for outpatient and clinic

services, however these include many services beyond

these particular clinic services $0.1 $0.02 600 $0.03

Hospice Services Dual Eligible IC 12-15-5-1(15) and 12-15-40 $50.8 $12.5 5,500 $0.0

Hospice Services Non-Dual Eligible IC 12-15-5-1(15) and 12-15-40 $7.8 $1.9 600 $2.6

Ambulatory Surgical See note for clinics $5.1 $1.3 14,100 $1.7

Rehabilitation Facility Care IAC $11.1 $2.7 1,000 $3.7

MRO IAC $160.1 $39.5 35,800 $0.0

Dental IC 12-15-5-1(8) $58.5 $14.4 116,500 $11.6

Chiropractic Services IC 12-15-5-1(3) $3.0 $0.7 1,000 $0.8

Podiatrist Services IC 12-15-5-1(14) $2.1 $0.5 28,700 $0.5

Eye Care & Eyewear IC 12-15-5-1(12) & IC 12-15-5-1(11) $11.9 $2.9 148,300 $3.9

Waiver $645.8 $159.4 26,250 $0.0

Total $1,268.9 $313.2 $25.2

53

FY12-13 Budget Challenges

• Health care reform –No funding included in budget request

• Legislative opportunities:

– State Operated Facilities

– Medicaid Optional Services

– First Steps capitation requirement

– TANF

– QAF Maximization

54

QUESTIONS?

54