COMENTERIOS CASO “EL UNIVERSO” (POR INJURIAS)

The LIP program was initially approved on October 19, 2005, as a part of Florida's Medicaid Reform 1115 Research and Demonstration Waiver for a five-year demonstration period. The LIP program has been renewed twice since; once in 2011 and recently awarded a one-year extension in 2014 for SFY 2014/15.

Florida's Medicaid Reform 1115 Research and Demonstration Waiver is primarily intended to shift much of Florida Medicaid service delivery from a FFS model to a capitated managed care model. The final decision and authority to pursue this waiver came from Senate Bill 838 passed during the normal legislative session in the spring of 2005. Once the 1115 waiver was approved by CMS, House Bill 3B was created and passed in a special session in December 2005 to further define AHCA’s direction for reforming Medicaid primarily through migration to managed care. Managed care implementation was planned to be done in phases, the first being implementation in two counties in SFY 2006/07, Broward and Duval; the second being roll-out to three additional counties in SFY 2007/08, Baker, Clay and Nassau. State wide Implementation of managed care was originally planned to occur in state fiscal years 2008/09 and 2009/10 as stated in STC number 27 from CMS’s 2005 Special Terms and Conditions for the 1115 waiver:

“Implementation of Phase III will occur over the course of the following 2 State fiscal years, with near or full geographic implementation of Medicaid Reform expected by June 2010. Phase III geographic expansion is targeted to culminate in Medicaid Reform plans being operational statewide. This will be accomplished in stages, again with mandatory and voluntary populations enrolled on a staggered basis.”47

In reality, implementation of Medicaid managed care to the entire state was not approved until 2013 and was implemented in the summer of 2014. Implementation began on May 1, 2014 and was completed by August 1, 2014.

Although Medicaid managed care was not implemented statewide until eight years after the initial pilot counties were converted, policy makers were considering full state wide implementation when developing Senate Bill 838 and negotiating the Demonstration Waiver approval back in 2005. With this in mind, there was considerable concern over ensuring

47 _{Centers for Medicare and Medicaid Services, Special Terms and Conditions for Florida Medicaid Reform Section 1115} Demonstration, Document number 11-W-00206/4, STC number 51. (2005)

hospitals receive reimbursements at a level similar to what they received under the fee-for- service program. Language from Senate Bill 838, which became part of Florida Statute Section 409.91211(1)(a), states approval to seek a Medicaid managed care Demonstration Waiver pursuant to section 1115 of the Social Security Act is, “… contingent upon federal approval to preserve the upper-payment-limit funding mechanism for hospitals, including a guarantee of a reasonable growth factor … provisions to preserve the state’s ability to use inter-governmental transfers, and provisions to protect the disproportionate share program …”48 _{Reasons for} concern over the DSH program are unclear as this program is independent of the design of the Medicaid program. However, concerns over the UPL program were certainly valid as these payments have traditionally only applied to hospitals’ Medicaid FFS business.

During the negotiation of the 1115 Demonstration Waiver between the State of Florida and CMS, protection of hospital reimbursement levels became a key fiscal issue. “As noted above, SB 838 required that these programs [UPL and DSH] be protected and preserved in any demonstration program approved by waiver. On the other hand, Section 1115 waivers must be ‘budget neutral’ from a federal perspective, meaning that approval could not put the federal government at risk for higher contributions to a state’s Medicaid program than those which would be expected to occur in the absence of the waiver. Protecting Florida’s UPL/DSH financing for safety-net hospitals while implementing the other proposed changes to Medicaid in a manner acceptable to CMS became difficult. The establishment and allocation of funding ($1.0 billion) to a Low-Income Pool (LIP) became the solution.”49

The resulting LIP program is defined in STC 91 for the Demonstration Waiver from 2005 as, “A Low Income Pool (LIP) … established to ensure continued government support for the provision of health care services to Medicaid, underinsured and uninsured populations. The low-income pool consists of a capped annual allotment of $1 billion total computable for each year of the five-year demonstration period.” Text within STC 100 for the Demonstration Waiver from 2005 goes on to say, “The state agrees not to establish any new inpatient or outpatient UPL programs for the duration of the demonstration.”

Although originally conceived as a replacement for the UPL funding mechanism, the definition of the program included payment for services to the uninsured and underinsured which are considered outside the scope of a traditional UPL program. In addition, the LIP program was considered a step above a standard UPL program because it allowed for distribution of funds to providers other than hospitals. Given this broad definition, the LIP program has evolved considerably since its inception.

In DY 1, LIP was strictly a $1 billion annual disbursement to providers that helped fund health care services for the Medicaid, underinsured and uninsured populations, with the amounts

48 _{Florida general laws, Section 409.91211(1)(b), Retrieved August 19, 2014 from http://www.leg.state.fl.us/statutes/}

Chapter 409.

49 _{Department of Health Services Research, Management and Policy – University of Florida, Evaluating Medicaid}

decided by a newly formed LIP Council. Included in the Demonstration Waiver renewal in 2011 were additional provisions regarding the definition of the LIP program. The additional provisions specified:

“The LIP is also designed to establish new, or enhance existing, innovative programs that meaningfully enhance the quality of care and the health of low income populations. Initiatives must broadly drive from the three overarching goals of CMS’ Three-Part Aim as described in paragraph 61(a).”50

In addition, terms and conditions were added defining new opportunities for providers to access funding through the establishment of programs that enhance the quality of care and health of low income populations and fulfill the goals of CMS’s Three-Part Aim:

2. Better care for individuals including safety, effectiveness, patient centeredness, timeliness, efficiency, and equity;

3. Better health for populations by addressing areas such as poor nutrition, physical inactivity, and substance abuse; and,

4. Reducing per-capita costs.

The two main, new funding opportunities are defined as “Tier – One Milestone” and “Tier – Two Milestone.” These milestones tie portions of reimbursement through the LIP to measurable improvements in the delivery of health care, very much like DSRIP programs which have been developed in recent years. Under STC 61 in the 2011 STCs (Tier – One Milestone), CMS mandated that the state develop an initiative requiring an allocation of “$50 million in total LIP funding in Demonstration Years 7 and 8 to establish new, or enhance existing, innovative programs that meaningfully enhance the quality of care and the health of low income populations. These initiatives must broadly drive from the three overarching goals of CMS’ Three- Part Aim.”51 _{Of the $50 million available in Tier – One Milestone funding, $35} million is designated to support primary care initiatives ($20 million dedicated to the start-up of new primary care initiatives and the remaining $15 million designated to enhance existing primary care programs). The projects selected for these funds are based on the program’s capability to achieve the following goals:

 Reduce potentially avoidable emergency room visits by developing initiatives to identify persons inappropriately using hospital emergency rooms or other emergency care services and provide care coordination and referral to primary care providers.

 Reduce potentially avoidable hospitalizations for ambulatory care sensitive conditions, which involve admissions that evidence suggests could have been avoided.

 Expansion of primary care infrastructure to treat patients.

50 _{Centers for Medicare and Medicaid Services, Special Terms and Conditions for Florida Medicaid Reform Section 1115}

Demonstration, Document number 11-W-00206/4, STC number 51. (December 2011)

51 _{Centers for Medicare and Medicaid Services, Special Terms and Conditions for Florida Medicaid Reform Section 1115} Demonstration, Document number 11-W-00206/4, STC number 61. (December 2011)

 Expansion of primary care through expanded service hours (e.g., evening or weekend hours).

 Provide the services most needed by the local community, such as the following:

o Additional physicians

o Dental care

o Nurse practitioners

o Pharmaceutical services

The remaining $15 million in Tier – One Milestone funding falls under the Special LIP Provider Access System category. This $15 million is distributed to hospitals based on the hospitals meeting Quality Measures collected by AHCA and Core Measures collected by CMS.

As defined in STC 62 of the 2011 renewal (Tier – Two Milestone), AHCA required each of the top 15 hospitals (based on the largest allocation of LIP funds) to propose three initiatives that follow the guidelines of the Three-Part Aim. These hospitals had to implement new, or enhance existing health care initiatives, investments, or activities with the goal of meaningfully improving the quality of care and the health of populations served. The three initiatives focused on: infrastructure development; innovation and redesign; and population-focused improvement. The 2011 STCs did not allocate a specific amount of money for Tier – Two Milestones. Instead, the STCs stated that 3.5 percent of the LIP funds allocated to each of these hospitals are at risk pending evidence of progress or completion of each pre-defined milestone. In DY 6 (SFY 2011/12), AHCA received the required proposals and worked with CMS to grant approval for 44 of the 45 initiatives. CMS granted an exemption for the 45th_{, which was the} third initiative for Indian River Memorial Hospital in Vero Beach, Florida. Included with each proposal, also referred to as a “milestone plan,” was a description of the specific health care initiative, investment, and activities, and the applicable standards, measures, and evaluation measures and protocols that will allow for implementation and monitoring. In DY 6, approval by CMS of each milestone plan was required for the participating hospitals to receive associated LIP funds. In DY 7 and DY 8, participating hospitals submitted to AHCA quarterly reports describing and measuring progress on the initiatives.

During DY 7 and DY 8, monitoring of the milestone reports has been relatively light. Hospitals have been given credit for submitting a report. Very little review has been performed to ensure hospitals have reached outcome targets defined in their milestone plans. To date, no hospital has been refused payment of LIP funds for failure to reach targeted milestones.

Collection of the quarterly reports will continue in DY 9 for Tier – One Milestones, but not for Tier – Two Milestones. The Tier – Two Milestones are no longer tied to disbursement of LIP funds as they were not included in the 2014 STCs which provide a one-year extension to the LIP program. According to the 2014 STCs, expenditures were authorized within the LIP program to provide stability for providers for a limited time during Florida’s transition to statewide Medicaid managed care and a significantly reformed Medicaid payment system. The LIP may

be funded only through existing state and local funding arrangements. The total amount of LIP funding may not exceed $2,167,718,341 (total computable).