Travis County Commissioners Court

March 6, 2012 (Agenda)
Item A1

View captioned video.

A1 and then we will go to item 6.
a.1 receive update from health and human services and central health on the 11:15 medicaid waiver and take appropriate action.

>> good afternoon, judge.

>> good afternoon.

>> good afternoon.

>> good afternoon, sherri number with health and human services and veteran services and we have been participating with central health in sort of weaving our way through a new provision, under the 1115 medicaid waiver and I am attempting to get the presentation up as we speak but I will turn the mic over to john stevens, the chief financial officer for central health.

>> thank you.

>> good afternoon.
we are glad to be here to talk to you this afternoon about this, what we think is a really great opportunity for Texas in general and for central health.
as you guys know the state legislature voted last year to extend managed medicare statewide and in doing that one of the problems they encountered at the time they looked at that proposal was the possibility that a number of hospitals here in the state of Texas would lose what is called upper payment limit funding.
it is essentially a federal supplemental payment system under which hospitals are paid for taking care of a disproportionate share of medicaid and indigent patients.
and under the federal government rules, medicaid managed care days, patient days in the hospital are not eligible for that u peel funding and so when the state rolled out the medicare state expansion statewide, at the same time they asked for a wive to change the medicaid program here in the state of Texas so that what was formerly the upper payment limit funding would, in fact, continue and Texas hospitals would not lose the $2.7 billions that they got last year in u-peal funding and so I think the arrangement that hccc has come for center force medicaid and medicare studies in the federal government has really come up with a win win situation, because the federal government has not only guaranteed that that funding will remain in place to offset the cost of treating medicaid and indigent patients for the hospitals but they have also put into place an additional 4 year program under which there will be more federal funds available.
essentially some of the funds that are expected to be saved under medicaid and managed care going forward, over the next -- actually what is a five-year period beginning with this year, and so they have put together that program and I want to walk you through that.
we had our first public meeting with stakeholders last Friday, March the second and we invited in a number of people from, including Travis County employees from the, what we think will be the 8 county are region for a regional health care partnership and with your lead I will walk you through the presentation.
and the one you have is a hard copy there, slightly different from the presentation I will give.
I tried to cut it back a little in the interest of time, but certainly the main points are still there.
the first few sections talk about just some challenges we face here in health care in central Texas.
these challenges aren't necessarily unique to us but I know you guys will be familiar with them.
in a central health connection white paper we put recently, we talked about the problem we have with population growth and these will be growing problems the next several years.
the next slide shows you projected regional growth by percent for each of the counties that you see there.
and so, while the growth may be a good thing for our region economically, it is going to put a tremendous amount of pressure on our health care system.
here you see a quote from our past board chair, thomas coopwood.
we do have a lack of providers in all areas, primary, specialty care, mental health and oral health and this is a problem regardless whether you have insurance or not, whether you have insurance or not.
the data on the next is from health and human services, September 2011 survey that they did of provider shortages, you see the shortages listed there in the counties of central Texas.
certainly another problem we are all familiar with are chronic diseases, heart disease, cancer, diabetes and other long-term health problems and these cause a strain not only on our health care system but it causes us to lose money from productivity in the workplace and things like that.
the next slide, then, shows the specifics.
of some of these chronic disease factors that you see in the Austin Round Rock metropolitan statistical area.
moving on to mental health services.
this is -- when the district was formed back in 2004, this was certainly one of the things that we heard from the stakeholders that helped us to bring the district into creation, and that is the lack of mental health services.
so it is a serious problem.
on the next page, you see the number of diversions by month from Travis County hospitals, diversions from mental health beds to the emergency room, which is not, of course, the place where you want to try to assist people who have mental health difficulties.
so, with that sort of said as the context for the background, the reason we are here today and the reason we invited all of our stakeholders in last Friday was to really talk about how we this think this medicaid waiver can help us transform our health care system.
if you look at the first line there in this schedule, in 2011, Travis County hospitals received 135 million in upper payment limit revenue, upo revenue.
and the state of Texas as a whole received 2.7 billion, under the waiver, we are not sure how much the additional money that is now available is going to come down here to Travis County, but we know that statewide it's going to be 6.2 billion more than a doubling over the five-year period of the waiver and so certainly one of the things that we want to try to do most and try to do best is to maximize the additional amount of supplemental federal funds we can bring down here to central Texas to help us transform our health care system.
if you just look at it on a pro-rata basis, there is a potential that we could bring down 175 million more than that 135 million for a total of 310 million a year, but the problem is that it requires a local match or what is called an intergovernmental transfer, an igt.
this, in fact, is a problem statewide.
it's one that hhsc is concerned about on the state level and centers for medicare and medicaid studies when they granted that also cited that as a real problem, that there just isn't enough -- there may not be enough igt capacity.
that capacity has to be essentially what are called public funds and the easiest definition or the easiest category to cite as public funds is tax revenue.
central health last year, we sent up total of 75 million in intergovernmental transfers, most of which was for this upo program, but we also sent out 29 million for -- upl program and also sent out 29 million for the disproportionate fund program here which is a very valuable program here in Texas and we are trying to determine whether we are trying to increase intergovernmental program with a public fund revenue and tax revenue which is before us so we may have more in 2012 as igt capacity but right now we can only igt about 78 million with certain he and so that is only 3 million more than we were able to igt last year.
and if we were to maximize the amount, again, looking at the pro-rata drawdown here in central Texas based on what the state expects to get, we would need to add 65 million in igt capacity.
now one solution is that other local governments also have this igt capacity, tax revenue, for example, and we can help you guys -- or if you guys can help us with the program, we can use that igt capacity in a way that is budget neutral to the local governments here.
here are the changes in brief to medicaid program.
first, again, expansion of medicaid managed care that went into effect on March 1st last Thursday.
that's in place now.
the focus of this presentation, though, is on the hospital financing component of that.
again, with the objective of preserving the upl hospital funding under a new methodology and creating regional health care partnerships in the meantime for how with we use, hopefully a significant portion of those funds.
so, again, up until this year, that hospital financing was accomplished through the upl program which essentially compensates hospitals for the difference between what they were paid for a medicaid patient, which is a low rate of pay, versus what they would have been paid if the patient had been a medicare patient, which is a higher rate.
the payments do have to include a local match.
the local match usually comprises about 40% of the total at that the hospital then, receives so 40-cents send up and gets matched with 60-cents at the cell level and goes back to the hospital as a dollar.
the local government match can be from a hospital district or another local governmental entity, like a county or the city.
the public hospital match here in Texas normally comes from hospital districts at least in the large metropolitan areas, or central health in our case.
we send up the local government or the public hospital match for university medical center brackenridge.
and then the private hospital match has to come, again, from a hospital district or from a local government.
so the new -- under the new methodology, what were previously the upl funds and some additional new funds that are going to be distributed to the hospitals through two pools will be available.
the first pool is what is called the uncompensated care pool and the easiest way to think about this is that it just replicates what was done under the upper payment limit program and that's going to be essentially about the same amount of money that you saw 2.7 billion.
it goes up actually to a little bit over 3al billion over the life of the waiver, but then there is also significant new money available through what is called the dsrip program, the delivery system reform incentive payment program.
we will call it the incentive payment or the incentive program going forward.
this is the new money and this money is being made available to us to support improvements in our health care system here.
coordinated care and quality improvements done through regional health care partnerships.
and we are really making a pitch.
we would like you to consider getting involved in us with this project of the regional health care partnership.
if you know receive upl funding, if you are a hospital that receives that, if you now provide a local match forum um funds or if you can help us increase our igt capacity, again, in a way that will be budget neutral to you, or if you are other part pating -- interested in participating in this program, we are also going to taken put from people like county medical associations, regional health public directors and so on.
to get their input on the changes that we need to make to the health care system here.
so hoe local entities can participate, if you've got match funds available, you can collaborate in the regions with other local entities and other key stakeholders and through your participation in the regional health care partnership, you can determine which hospitals you want to support with which funds, which projects, and what regional collaboration projects you can support along with the other entities.
this chart is kind of busy but it shows you what the flow of match funds is going to be under the -- under the waiver and these intergovernmental transfers are what hhsc calls direct and what that means is that if you want to participate as a local governmental entity, then you can pick the hospital that you are participating for and you can pick the pool of funds that you want the money to come from.
in other words f you are willing to igt -- in other words, if you are willing to igt a million dollars, you can say I want this million dollars to go for xyz hospital and I want to come from the incentive pool and the hospital, then, has to show how they will meet the metric tricks to earn that money from the incentive pool.
so the way it works if you are a local government and right now you have a cost, let's say, that is related to health care, for example, central health pays about $8 million a year to the Austin Travis County integrated care collaboration and I believe the county also makes a payment to them, let's say, for example, that your annual payment to them is a million dollars.
then you can help us by, instead of paying that money to them, sending it up as an intergovernmental transfer, where it will be matched.
for every dollar you send up, the federal government will match about a dollar 50 -- $2.50 in total will come down to the hospital you designated for and again, this is just for an example.
these numbers aren't hardwired in there but from the hospital, $1.50 will go into what is called a special purpose entity that would then distribute those funds, a dollar of that, the dollar that you sent up would go to atcic on your behalf.
so they are held harmless.
they get the revenue they need.
you are held harmless in your expenditure budget and the result is that this spe is going to end up -- the hospital ends up with a dollar that it otherwise would not have gotten to compensate them for the care of the -- that they provided and the spe ends up with must be that it can use for regional projects to help us through things like expand primary care and stuff like that.

>> but we are still contributing the dollar?
we are just getting another dollar and a half?

>> that's right.

>> for having contribute ared it?

>> that's right.

>> so it's revenue neutral in that we are still making the same expenditure we were before.
we are just leveraging that expenditure?

>> that's right.
it's -- as senator kirk watson said, it is about what we dream about, giving -- having federal money to help compensate to the fact that we are sending taxes up to washington and perhaps not getting back our fair share now.
however you want to look at it, it is a good deal for Texas and it is a good deal for us locally here.

>> what is the estimated turn around time?

>> turn-around time on the --

>> we fill a dollar up in January, we can expect the 2.50 back when?

>> well, the way this will get set up is it will always be transparent to you, in other words, the payment to atcis will happen as it normally would and you will be asked to periodically send up intergovernmental transfer, most likely on a quarterly basis and the can comes to your treasury office from the state controller's office saying --

>> today if we send, say, $100,000 to integral care, we send it to today, they are using it tomorrow.
if we have to send it -- go through the hoops are outlined here, we send it to washington dc, right?

>> no.

>> okay.
where does the money go?

>> the way this will be set up is the special purpose entity will know in advance what your payment schedule is and they will simply take that over and the hospitals will fund it to the point where they will essentially -- you will never be in arrears on that atcis will never be in arrears of receiving it.
they will receive it on the same schedule you have and they will take care of that through the spe.

>> so if we send the money on Tuesday and they they get it on Wednesday, a check will be cut from washington dc and so integral care receives it on Wednesday?

>> but the spe will have a certain amount, my understanding is, we are still in the process of working out these rules and, in fact, we are making it up as we go.
but this is being done right now.
these special purpose entities exist in a number of places right now and including in Williamson county and harris county.

>> so you are saying there is no break in service because the money will be there are there?
it's good.
it is also history making, isn't it for the federal government.

>> it sounds very similar to what we do with childcare money.
we transfer it to work source and they, then, draw down federal money, dollar and a half, I think, you know, they are able to draw down more federal money based on the amount of match that we generate locally.

>> so when you say you send the payment, we really aren't sending it to washington dc?

>> you are sending up -- you are sending up to the state to be certified by the state that these are local government funds.
they are then sending up to washington to be matched.
it goes back down to the state controller's office with the match and then goes to the hospital but the spe set up that has funds in payments when they are due.

>> so if we paid atcis monthly, they will still receive monthly payments, so while your money is going through this imaginary loop here, those payments will still be going as scheduled.

>> so all we are doing is sending certified accounting that we spent that money.

>> right.

>> yeah?

>> you are not even certifying you spent the money, in fact, it is not -- I mean, it has to be -- it has to be an existing obligation that you have and you are going to be alleviated of that obligation.

>> but we have obligated the money.

>> that you have appropriated the money for, right.

>> so do we think that medical expenditures in the Travis County jail are eligible?

>> that is still up for grabs.
we had a meeting last week with the hhsc legal council and he said they are still looking at that and they are not sure yet -- hhsc legal counsel and likewise with ems, for example.

>> when you say he said, you are talking about the federal?

>> no, the hhsc legal counsel, their chief counsel., who is working with is ten fores center for --

>> the state health commission is coordinating this project.

>> great.

>> and so let me -- I will go quickly through the rest of this.

>> good luck on that.

>> I am talking about my part.
you can ask all of the questions you want.

>> [laughter]

>> this is Travis County, mr. Stevens.

>> yes, sir and I have been here before.

>> [laughter]

>> rhps are form around the hospitals that are receiving upl currently.
there will be an anchor designated as single point of contact.
we expect it will be sen health here in what is called region 7 here in central Texas.
your intergovernmental transfer money does not go through us.
it doesn't flow through the anchor and the anchor doesn't make decisions about your money, a about where it goes and what it's used for but we will work collaboratively together as a region to develop plans to improve our local delivery system here and so that end, the regions that are formed should reflect the delivery systems, the logical delivery systems in the region and geographic proximity.
the state does not want to deal on a county by county basis with the entire state.
they want the state to aggregate into regions and so for us, when the state asked us to consider what our preliminary region would be, we said it would be the same as the 8 county medicaid service area that we are -- that our lmosondero is operating on and there are 8 counties.
there could be changes.
we don't have to define the region until June 1st, but the initial look at this was since this area was developed by hhsc, health and human services collision themselves it would reflect logical referral patterns, existing referral patterns here in central Texas.

>> will each of these counties be approached about making the --

>> yes.

>> -- that same?

>> yes.
we had a number of them representatives from them at our meeting last Friday

>> they seem to be supportive?

>> yes, they did, yes.

>> okay.

>> so this will also address the issue about folks coming here for medical care but they couldn't pay?

>> possibly.
we are not sure exactly how that will work out in terms of the hospitals, for example.
but it will -- if they are able to count an out of county resident as indigent care, then, yes, it will help.
as far as stakeholder participation, we are to provide opportunities for public input into this plan.
we began that process again last Friday.
we had -- I think we had about 100 people in total of ten, and it was pretty good event.
hhsc wants us to get broad local input on it, again, from these stakeholders that you see here, county medical associations and so on.
and the anchors to bring the participants together to look at the plans.
participants that want to play in the igt program will help us do that.
identify the hospitals they want to receive payments for, and then the hospitals will report the metrics and will hopefully earn the waiver incentive programs -- or payments if they meet those metrics.
the body of the plan itself includes a regional health assessment, which we are working on now.
the local entities that are going to participate, identify who the hospitals are, and what the incentive projects by category will be and I will show you what those categories are broadly in just a moment.
but they do not include a four-year local funding commitment.
hhsc wants us to put in the plan an estimate of how much we think each local government that agrees to provide igt funds will provide over the remaining four years of the waiver, but they are not going to be held -- you will not be held to anything, nor will we.
and likewise, the rhp will not determine health policy, medicaid program policy or managed care requirements.
here are the four categories in the incentive pool.
the first one being infrastructure development.
for example, expanding primary care access.
our understanding is they do not want the money to go for bricks and mortar, but it could go, for example, for additional salaries for providers and things like that.
the second category is program innovation and design, for example, implementing more behavioral health in the primary care visits.
quality improvements in how specific conditions are managed, like asthma or obesity, and then population focused improvements, liken happening the care coordination.
we are supposed to receive on April 1st the list of measures that hhsc is going to propose.
some of those measures, as I understand it, will be mandatory.
each region in the state will be required to do some of the measures, perhaps two or three, and then maybe a total of 6 or 7 more other measures should be selected as elective there is a group of measures -- electives from a group of pleasures but I am sure there is -- measures -- and I am sure something specific from hhsc if you want.

>> like the jails have made their medical records electronic for some time and the next is access to the database like by the map clinics so we have a better picture -- better medical picture of our inmates.

>> right.
and there might be some way to use some of the costs associated with that, maybe staff time costs or whatever to offset that.

>> okay.
the next slide here is kind of busy but it essentially shows you over the 5-year period of the waiver, we are in the first year right now.
the incentive pleasures don't really kick in until next year because we don't have them in place yet.
and so right now, in the first year, most of the money -- there is an additional amount that is available in the uncompensated care pool, 3.7 billion this year.
actually it is fairly significant increase from last year.
and then there is 500 million available statewide for implementation of the rhp, the 1115 waiver itself.
but as you see there, the uncompensated care pool starts out and either stays fairly constant or actually declines a little bit with the money that's in the insentive pool, dsrip pool increasing by year and until you get to year five of the waiver, they are each 3.1 billion, so 50/50 in terms of total funds available.
there are still a lot of things under development, including the governance structures of the rhp, allowable sources of matches.
I said to you earlier.
we have either 78 million or 105 million this year.
we are trying to get an opinion on whether the additional rent that we received from university medical center brackenridge will qualify as public funds.
and then the determination of statewide requirements for the allocations each year by funding pool and how much can be earned for each of the measures.
the next steps are, as I said, to get a list of the -- what the measures will be from hhsc, and then by June 1st, we have to submit to hhsc what will be our final region, what we are going to propose for region 7 here and then by August 1st, we have to have the final plan available to them.
then the last page just shows you the contacts.
larry wallace our chief service delivery officer will be charged in the incentive measures portion of the rhp.
I will be responsible for the rhp, sort of logistics of it and how the funding streams will work through the spe, special purpose entity.
christy garbe will manage the public process, stakeholder meetings and website content management.
we have up on our website www.centralhealth.org --.net -- central org.net.
we have a section of the 1115 wive to try to keep as many as what he we think are the significant documents that are either coming from hhsc in terms of guidance from the waiver or presentations that we make to stakeholder groups or to our board.
so it's going to be kind of a wild ride and we are hoping to make the best of it here.
we have had meets with the partners here with seton and saint david's and they are on board to trying to make the best out of this.
we think it will fit well and obviously it is a reason why it was designed the way that it is.
it fits well with the expanse of the medicaid population in 2014, under president's president obama's affordable care act, it gives us a chance to try to get ready for the dramatic increase that we know are going to be in people who are covered with some type of insurance to avoid, for example, what happened in massachusetts, where where people got their ticket punched, so to speak but didn't have anyplace to go.

>> this is part of the health care act?

>> well, it's not part of the health care act but it is just an agreement that our health and hew season services commission worked out with the federal government to be able to use the money can that we are sort of save through the per government through the expansion of medicaid managed care in Texas and use that funding the next five years to transform our system and get ready.

>> so that we can put local -- what the locals are already spending towards this stuff is the match rather than state spending money?

>> right.

>> okay.

>> which is, you know, that just is what it is.
with regard to and sherri as both the executive director of health and human services and opt, I am assuming health the and human services and justice planning will have to work what in our expenditures qualify for the match under the 1115 waiver?

>> that would be correct.
yes.

>> and are we already engaged in that?

>> we have not.
we had the meeting on Friday and got this back up together today and we need to know first and foremost, is the court interested in staff time participating in the regional health partnership because that information will be needed by central health in order to meet the deadlines they have upcoming about who comprises the regional health partnership and in the meantime, I understand that some staff work in legal has been done to look at, you know, just based oven our best guess what might be some qualifying expenditures but certainly not as fine tooth comb as we will have to get with the entities that you just described.

>> questions or comments?

>> you know how much staff time will probably be required?

>> sorry.

>> I was just talking about the staff time that may be required.

>> on Travis County's part?

>> I don't think it will be that much.
I don't think it will be more than.

>> more than what?

>> forty, 60, 80 hours.
we need to identify -- well, there may be a little more when we get to actually working on how the intergovernmental transfers work, but I don't think it's going to be that hard to do.

>> I mean, as far as identifying -- just taking them off the top of the head, there is the medical, dental and mental health inside the jail.
there is the infrastructure in the jail for medical records.
there is the medical examiner's office.
there is ems. There is star flight.
there is --

>> I think our hope is -- I am looking at my partners here -- I think our hope is we will begin by identifying everything that we can and then as the rules come out from hhsc, there will be things that we will be able to eliminate from the list because they have said these particular costs don't count.
so then we will be able to zero in, so, for example, if they were -- we even had askings about our wellness expenses.
so, you know, we could later find out that that is not a qualifying expense so we take that off the list and focus on the things that are qualifying expenses.

>> but there is no way to call somebody up front to figure out -- say the wellness clinic that came to mind when I saw obesity and diabetes, I think, in one of these.
a of expenditures there that we pick up as a county as part of the wellness effort.
so if we wanted to find out, okay, does this kind of activity qualify, do we call you or do we call the state?

>> it would probably be easiest if you went through us, and the reason I say that is, again, it really is not an exaggeration to say that we are making this up as we go along.
I mean, we are really -- the state, I know, has been working very, very hard on this.
but there is a lot of stuff -- there is a white paper due out this Friday, for example, from hhsc that may have some of these answers.
we have submitted a whole list of questions to hhsc, but the information that's been coming from them over the last month has gotten more and more specific as we go through it, so ultimately, I the think those answers will be known.
we are also in constant contact with other hospital districts here in the state trying to find out what their experiences are.
we had lunch with a consultant team that we are going to bring on board to help us.
I think within another month or so we will know more than we do and ultimately there should be a list of things to look at and say yes, that will work or not work.

>> so we should put our wish list together and give that to you?

>> that would be good.

>> this is the 1115 medicaid waiver?

>> yes, sir.

>> and that means we are waiving medicaid for medicare, or what are we waiving?

>> we are waiving the structure of the program as it exists right now.
in other words, there is an existing medicaid program here in Texas and we are asking permission from the federal government to waive the requirements of that program and enter into new requirements.

>> so under --

>> new requirements are 1115?

>> yes.

>> but the default is that the state says this is how much we are matching and pulls down the federal money.
under the waiver, the state gets to say, this is how much our locals are matching, right?
essentially?

>> yes.
yes.

>> again, the major change was the change from the upper payment limit funding program to the new uncompensated care incentive pool program.
and so we are asking to waive that -- those parts of the upl and move to this new structure.

>> fascinating.
I am glad to be part of it.

>> I certainly hope you will be.

>> I think we don't know exactly what official action you have to take in order to be a part of the regional regpartnership -- regional health partnership.
we were told it is through one of them but do you know the answer of that.

>> most likely through the intergovernmental agreements.

>> but we need to go through the wish list.
county programs we think should be covered.

>> yes, sir, and we will be happy to help you with that.

>> okay, because if we are working through other elected officials we need to put them on notice and if we are looking at June 1 deadline we need to get the information to you as soon as possible, say, the next 3, 4 weeks?

>> that would be great.

>> s whos putting together the strategy to get the counties listed on the on thehandout to participate?

>> we are, central health, our first official action on the strategy was, we sent out requests or we sent out invitations to the Commissioners courts and the judges in all of those counties and invited them to the meeting last week and we had pretty good representation.

>> knowing how stretched the executive managers are on this, it's -- I mean, I am thinking dan and cindy, as point people for coming up with our wish list, wouldn't they be the appropriate people the make point on this?
I am looking to you.
they are not even in your shop.

>> [laughter]

>> I think we can convene the potential stakeholders and figure out what the best approach is internally, so if the direction I am hearing is that we should convene our stakeholders, health and human services can take that lead.

>> is there like an application that should be completed and submitted?
say we want Travis County jail and certain things, do we have an application for that.

>> we don't have a form.
we will work with you guys to determine the appropriatetations are now, how the payments are working.
one of the concerns is that we may not be able to substitute things that are payments to employees.
they may have to be things that are done strictly on contractual basis, but, again, we are still waiting to get an answer on that but that would include, as I understand it, for you guys, your payment to atcis and perhaps the payment you made to the city of Austin for emergency medical services.

>> what about like lab work in a clinic?

>> it could possibly include that, yes, it would also.

>> should we also contact esds to the extent they provide emergency medical?

>> that is a good question.
possibly.
I am not sure.
they might not be set up to participate in the igt process the way they need to.

>> although they comprise a significant portion of the prehospital care?

>> we will look into that.

>> so if we wanted to brainstorm on specific criteria, in addition to what is in your back-up, is there something else, some is 1115 medicaid waiver document that says here is what we are looking for?
again, when we get the list of incentive projects on April 1st we will be in touch with the stakeholders here in the region, including Travis County, to go through those and go through a public process where y'all have a chance to weigh in on the measures you think we ought to include the for the region and which measures you think you are interested in funding through the incentive pool.

>> okay.
thank you much.

>> thank you.

>> appreciate it.

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