Medicaid and Health Reform in Minnesota

1. Medicaid and Health Reform in Minnesota Scott Leitz Assistant Commissioner Minnesota Department of Human Services April 19th, 2012

2. Overview • Minnesota Context • Medicaid in Minnesota • Structure of our reform activities • Access expansion • Delivery system transformation • Challenges ahead and next steps

3. A brief background on where we start from in Minnesota

4. We start from a reasonably good place in Minnesota… • We rank high in overall population health • Non-profit environment, both plan and provider • High concentration of integrated delivery systems • Both urban and rural • Among nation’s lowest level of uninsured, with a high level of employer-sponsored coverage • History of collaboration • Including between payers and providers • Investment in community assets such as Institute for Clinical Systems Improvement and Minnesota Community Measurement • We generally look pretty good in the Dartmouth Atlas • And Commonwealth (4 local areas ranked in top 10) • But…

5. Sources of Insurance Coverage for Minnesotans, 2001 to 2011 Source: MDH Health Economics Program.

6. Medicaid and the Structure of Health Reform in Minnesota

7. Minnesota’s Goals in Health Reform • Ensure preservation and expansion of coverage and access • Driving payment and care delivery reform • Changing how we pay for health care through rapid development of accountable care models • Building on base of health care homes established since 2008 • Improved integration with hc and non hc services • Transparency of cost and quality information • Create alignment with similar initiatives across payers

8. Minnesota’s Medicaid programs Medical Assistance – Minnesota's Medicaid program – approximately 609,000 enrollees MinnesotaCare – subsidized state program – approximately 131,000 MA is the supplement to Medicare for approximately 106,600 Minnesotans who are dual eligibles

9. Minnesota population by primary source of insurance coverage 2009 Total Population 5.3 Million Private Health Insurance: 64.4% Fully insured 25.8% Self-insured 38.6% Source: MDH Health Economics Program; population estimates from the U.S. Bureau of Census, MA is Medical Assistance, MNCare is MinnesotaCare, GAMC is General Assistance Medical Care

10. Coverage and Access Expansion

11. Coverage expansion • Early adopter in eligibility expansion • MinnesotaCare (pre-SCHIP) in 1990s • Coverage for kids and parents up to 275% of FPG (full Medicaid benefit set) • Single adults and childless couples, coverage up to 250% (some benefit limits) • Expanded Medicaid under ACA • Governor Mark Dayton’s first act as Governor was to sign executive order expanding Medicaid for low income adults

12. Early Medicaid expansion • Under ACA, states are authorized (at their option) to expand Medicaid coverage to certain populations prior to 2014, under existing FMAP rates • Governor Dayton’s executive order used this opportunity to expand coverage to: • Adults below 75% FPG

13. Early Medicaid expansion • Population covered was one previous covered under a state-only program that was eliminated in past years • Expansion estimated to cover approximately 100,000 Minnesotans • Actual enrollment has been about 15% below projected • Examining and implementing care delivery models that meet the needs of this very low income population, as well as for the overall Medicaid population

14. The changing face of public programs: Minnesota coverage continuum in 2014

15. Care Delivery and Payment System Redesign to meet the needs of the expanding Medicaid populations

16. Care Redesign and Payment Reform • Use the opportunity of Medicaid expansions to drive system-wide care redesign • Changes to the role of managed care plans • Health care homes for chronically ill • Medicaid Accountable Care Demonstrations • Safety-Net ACO (Hennepin Health) • Dual eligibles demonstration

17. MCOs in Medicaid in Minnesota:Changes to our approach • Minnesota’s Medicaid program for non-disabled delivered through MCOs since early 1990s (disabled added in 2011) • Rates traditionally rate-set based on past MCO history • 2011 initiative to competitively bid rates in the seven-county metro area • Results: • $175 million in savings to the state for FY 2012 • Evolving role in managing enrollment, while partnering on our direct contracting activities with providers

18. Health care homes • Multi-payer model, pre-ACA initiative • All payers required to participate • Participating in Medicare Multi-payer Advanced Primary Care Practice Demo (MAPCP) • 134 clinic sites and 1,651 providers certified as HCH • 20% of primary clinics, serving 1.8 million patients(includes Medicaid, Medicare and commercial) • Tiered and risk adjusted payments to reflect patient need • Examining section 2703 opportunities, particularly around integration of primary care and behavioral health

19. Health Care Delivery System (HCDS) demo Impact the quality and total cost of care through innovative “ACO-like” models and strategies Allows providers to share in the financial gains of care models that improve care and lower costs Builds off foundation of health care homes New contracting relationship between the state and provider organizations Alignment of payment at the provider system level across public programs, Medicare, and commercial Future models will include additional providers and populations

20. HCDS—the model • Multiple payment models allow participation of both small and large providers • Flexible amounts of risk/gain for providers • First year is gain-sharing only • Risk phased-in during years 2 and 3 • Controls to limit provider risk • Engage and partner with patients and families • Partnerships with community organizations • Financial gains will be contingent on performance in the areas of clinical quality and patient experience

21. HCDS ACO demonstration: approximately 150,000 enrollees in proposals overall

22. Hennepin Health “Safety Net ACO” demonstration • Care model includes integration of medical care with • Behavioral health, • Social services • Other county services unique to Hennepin • Focused on high need populations that are frequent users of county services • Incentives aligned under county-run safety hospital and clinics, HMO, FQHC, behavioral health, and other traditional county services.

23. Integration with Social Services and Behavioral health: Hennepin Health “Safety net ACO” Population focus: adults on Medicaid with incomes below 75% FPG Hennepin county receives capitation rate roughly equivalent to MCO cap rates Opportunity for savings outside the Medicaid program (i.e. corrections and social services Hennepin county: Minnesota’s largest county (Minneapolis)

24. Summary and moving forward Medicaid will continue to play an increasingly important role as a source of coverage and access for Minnesotans Demographic and Budgetary changes will continue to put pressure to evolve the role of Medicaid, as will the role of exchanges Minnesota, like all states, has a number of decisions to make about the Medicaid program moving forward Regardless of what decisions reached, will need to continue to change how we pay for health care to encourage and support innovation and delivery redesign

25. Contact Information Scott Leitz Assistant Commissioner Minnesota Department of Human Services 651-431-2012 Scott.leitz@state.mn.us