Comparación de resultados con diferentes estudios

5.6.3.1 Introduction

In addition to measuring equity within a Medicaid program by comparing payments for similar services across hospitals, equity can also be measured by comparing overall payment levels across hospitals. A variety of definitions exist as to what is defined as a payment and what is defined as an allowable cost. Because of this, we chose to compare hospital Medicaid pay-to- cost ratios in a variety of ways, including:

a) Services rendered to Medicaid recipients as identified through paid claims – payment and cost include fee-for-service and managed care claims (both inpatient and outpatient) and exclude the provider assessment and IGTs contributed to fund the Medicaid program as a reduction in hospital net revenue.

b) Services rendered to Medicaid, uninsured, and underinsured recipients – payments include claim payments for both fee-for-service and managed care claims (both inpatient and outpatient) as well as LIP and DSH supplemental payments. Costs include claim costs for both fee-for-service and managed care claims (both inpatient and outpatient), and cost of uncompensated care. Hospital contributions to the provider assessment and IGTs contributed to fund the Medicaid program are not considered.

c) Services rendered to Medicaid, uninsured, and underinsured recipients with PMATF and IGTs subtracted from hospital payments – payments include claim payments for both fee-for-service and managed care claims (both inpatient and outpatient) as well as LIP and DSH supplemental payments. Costs include claim costs for both fee-for-service and managed care claims (both inpatient and outpatient), and cost of uncompensated care. Hospital contributions to the provider assessment and IGTs contributed to fund the Medicaid program are subtracted from hospital payments to determine net hospital revenue.

70 _{SFY 2013/14 is the first year of DRG payment, and includes both automatic and self-funded IGTs in inpatient rate} enhancements distributed with claim payments. In SFY 2014/15, only automatic IGTs are used as a rate

enhancement. Self-funded IGTs are included in the LIP program and distributed as quarterly supplemental payments.

Claim payments and costs referenced above may also be referred to as service payments or utilization payments as they are specifically tied to services provided to Medicaid, uninsured and underinsured recipients. We did not include a fourth option of calculating pay-to-cost ratios for claim payments when the provider assessment and IGT contributions are subtracted from payment. This is because there is no clear way to determine how much of a hospital’s IGTs contributed to automatic IGT rate enhancements, which are included in claim payments, versus LIP payments, which are supplemental to claim payments.

Because IGTs play a significant role in funding and payment, we decided to compare pay-to- cost ratios across three categories of hospitals, 1) hospitals that contribute and receive IGTs; 2) hospitals that do not contribute IGTs, but do receive payments from IGT funds; and 3) hospitals that neither contribute nor receive IGT funds. In truth, not all IGTs are contributed by hospitals; many are contributed by local governmental agencies. However, the IGTs contributed for the LIP program, automatic rate enhancements, and self-funded rate enhancements (which were moved into the LIP program in SFY 2014/15) are all donated in the names of specific hospitals. In this section, those IGTs are treated as donated by the named hospitals under the assumption that the local governments would find ways to contribute those funds directly to the named hospitals if they were not contributed as IGTs to the Medicaid agency.

In addition to the three hospital categories mentioned above, pay-to-cost ratios are also compared for public versus private hospitals. This is done because public hospitals generally have access to IGTs while private hospitals generally do not. We wanted to identify any inequities in reimbursement for public versus private hospitals.

In fact, the pay-to-cost ratios we calculated do indicate that hospitals with access to IGTs receive significantly higher levels of reimbursement than hospitals without access to IGTs. This is because individual hospital overall reimbursement in the Florida Medicaid program is heavily tied to the hospital’s access to contribute inter-governmental transfer funds into the Medicaid program.

5.6.3.2 Equitable Pay-to-cost Ratios

Medicaid does not necessarily need a goal of making the pay-to-cost ratios for each hospital equal. Ideally, the reimbursement methodology contains incentives for hospitals to control costs and provide high quality care. In terms of hospital cost, this is often done by basing payments on the average costs for a category of hospitals so that the hospitals are incented to control costs. Those most successful in controlling costs will receive better margins from Medicaid reimbursements, and, thus, will have higher pay-to-cost ratios.

As described in the previous section, Medicaid agencies may choose to define certain categories of hospitals and review payment levels within these categories. This is because certain hospitals are determined to have unique cost structures or because certain hospitals are determined to be critical to the Medicaid program. Critical access hospitals and rural hospitals

are common examples in which payment rates are sometimes increased to ensure viability of these hospitals, thus ensuring local access to care for Medicaid recipients living in rural areas.

5.6.3.3 Pay-to-Cost Ratios by Category of Provider

As mentioned above, we chose to calculate average pay-to-cost ratios for three categories of providers because reimbursements, particularly in the n LIP program, are heavily tied to IGT contributions. The three categories of hospitals we created are: 1) hospitals that contribute and receive IGTs; 2) hospitals that do not contribute IGTs, but do receive payments from IGT funds; and 3) hospitals that neither contribute nor receive IGT funds.

In addition, we chose to calculate the pay-to-cost ratios three different ways, consistent with the way overall program pay-to-cost ratios were calculated in section 5.2 – Methodology. The three methods used vary in terms of what is included in the payments and what is included in the hospital costs. These methods are listed in the following table:

Table 8. Methods used to calculate pay-to-cost ratios when analyzing reimbursement equity across hospitals.

Method

Number Description Included in Payments Included in Cost

1

Medicaid program – hospital services rendered to Medicaid recipients

 Fee-for-service claim payments – both inpatient and outpatient

 Medicaid managed care claim payments – both inpatient and outpatient

 Costs calculated from charges on fee-for-service claim payments – both inpatient and outpatient

 Costs calculated from charges Medicaid managed care claim payments – both inpatient and outpatient

2

Medicaid program and uncompensated care – provider assessment and IGTs excluded from hospital cost

 Fee-for-service claim payments – both inpatient and outpatient

 Medicaid managed care claim payments – both inpatient and outpatient

 LIP supplemental payments

 DSH supplemental payments

 Costs calculated from charges on fee-for-service claim payments – both inpatient and outpatient

 Costs calculated from charges Medicaid managed care claim payments – both inpatient and outpatient

 Costs of uncompensated care

3

Medicaid program and uncompensated care – provider assessment and IGTs included in hospital cost

 Fee-for-service claim payments – both inpatient and outpatient

 Medicaid managed care claim payments – both inpatient and outpatient

 LIP supplemental payments

 DSH supplemental payments

 Net payment calculate by subtracting funds

 Costs calculated from charges on fee-for-service claim payments – both inpatient and outpatient

 Costs calculated from charges Medicaid managed care claim payments – both inpatient and outpatient

Method

Number Description Included in Payments Included in Cost

contributed to the

Medicaid program through provider assessment fees and IGTs from total payments

The results of the pay-to-cost calculations using the three methods and the various provider categories described above are discussed in detail in the following report sections.

5.6.3.3.1 Pay-to-Cost Ratios – Claim Payments and Costs Only

As shown in Figure 16, pay-to-cost ratios are significantly higher for hospitals that contribute IGTs, less for hospitals that receive but do not contribute IGTs and lowest for hospitals that neither contribute nor receive IGTs. In Figure 16, claim payments and estimated costs are reflective of services provided for both fee-for-service and managed care programs. The overall average pay-to-cost ratio for hospitals in all categories combined is 79 percent.

Figure 16. Comparing average pay-to-cost ratios for hospitals based on IGT category – claim data only – IGTs and provider assessment payments and contributions excluded.

Notes for Figure 16:

1) Data is based on claim payments and cost from SFY 2012/13. Both fee-for-service and managed care program claims for hospital inpatient and outpatient services are included. LIP payments, DSH payments, and the cost of uncompensated care are not included.

89% 62% 45% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hospitals Contributing and Receiving IGTs

104 Hospitals

Hospitals Receiving but not Contributing IGTs

29 Hospitals

Non-IGT Hospitals 88 Hospitals

2) Data is limited to in-state hospitals with at least one submitted claim in SFY 2012/13.

Although the 104 hospitals that contributed IGTs and received IGT payments in SFY 2012/13 comprise only 47 percent of the in-state hospitals, they account for 77 percent of the Medicaid business71 _{in SFY 2012/13. Thus, payments are better for providers who do a significant amount} of Medicaid business. This is consistent with the state’s goal stated in the SFY 2005 1115 demonstration waiver, “The state will continue to foster and protect its safety net providers.”72 The percentage of total Medicaid business by these three hospital categories is shown in Figure 17.

Figure 17. Percentage of Medicaid business based on IGT category – claim data only – IGT and provider assessment payments and contributions excluded.

Notes for Figure 17:

1) Data is based on claim payments and cost from SFY 2012/13. Both fee-for-service and managed care claims for both hospital inpatient and outpatient services are included. LIP payments, DSH payments, and the cost of uncompensated care are not included.

2) Data is limited to in-state hospitals with at least one submitted claim in SFY 2012/13.

71 _{Percentage of Medicaid business is determined using hospital cost.}

72 _{Florida Agency for Health Care Administration, Application for 1115 Research and Demonstration Waiver. (August} 2005) 77% 16% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Hospitals Contributing and Receiving IGTs

104 Hospitals

Hospitals Receiving but not Contributing IGTs

29 Hospitals

Non-IGT Hospitals 88 Hospitals

The 88 hospitals that do not contribute IGTs nor receive IGT funds account for only seven percent of the Medicaid business and are paid 45 percent of cost on average (see Figure 16 above). As long as the percentage of Medicaid patients at these hospitals is very low, they presumably can offset their losses from Medicaid reimbursement with payments for non- Medicaid patients. In contrast, hospitals with higher Medicaid utilization, either currently or in a scenario in which Medicaid expansion is implemented, would have difficulty maintaining margin with such a differential between cost and reimbursement.

When comparing public hospitals to private hospitals, the pay-to-cost ratio for the public hospitals is noticeably higher. This is shown in Figure 18 below. This calculation of pay-to-cost is similar to the upper payment limit analyses73_{, except that managed care business is included} in this version. Public hospitals in particular are paid reasonably well when considering only payments for services rendered to Medicaid recipients and when ignoring the contributions hospitals provide to fund the Medicaid program.

Figure 18. Comparing average pay-to-cost ratios for hospitals based on ownership status – claim data only – IGT and provider assessment payments and contributions excluded.

73 _{Upper payment limit (UPL) analyses are performed annually by Medicaid agencies to ensure federal matching} funds are not used to pay hospitals any more than they would be paid by Medicare for the same set of services. This analysis is performed broadly for three categories of hospitals, state-owned, non-state government owned, and privately owned hospitals. In addition, it is only performed for the Medicaid fee-for-service program, not the Medicaid managed care program.

99% 74% 0% 20% 40% 60% 80% 100% 120% Public Private

5.6.3.3.2 Pay-to-cost Ratios – All Payments – Assessment and IGTs Excluded from Net Revenue

The next two figures include consideration of not only Medicaid recipients, but also uncompensated care for the uninsured and underinsured. In these measurements of average pay-to-cost ratios, claim payments and supplemental payments from the LIP program and the DSH program are included. In addition, each hospital’s cost of uncompensated care is included. This version is similar to the way DSH payment limit and Florida LIP payment limit calculations are performed, and provides a picture that includes both the Medicaid program and uncompensated care. However, hospitals would argue it is still not a complete picture as it does not account for hospital funds contributing to the state share through the provider assessment and through contribution of IGTs.

The resulting average pay-to-cost ratios are shown in Figure 19. For each category of hospitals, the ratio has decreased from the values shown in Figure 16. This is an indication that the LIP and DSH programs pay out less than total uncompensated care costs for each of these categories of hospitals. This finding is expected, as the LIP and DSH programs were never intended to cover all uncompensated care costs. In addition, DSH audits ensure federal Medicaid matching funds are not used to pay any individual hospital more than the cost of care for its Medicaid and uninsured patients.

Under this analysis, the overall average pay-to-cost for hospitals in all three categories combined is 66 percent.

Figure 19. Comparing average pay-to-cost ratios for hospitals based on IGT category – all payments and cost, including LIP, DSH and uncompensated care – IGT and provider assessment contributions excluded. 77% 48% 31% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Hospitals Contributing and Receiving IGTs

104 Hospitals

Hospitals Receiving but not Contributing IGTs

29 Hospitals

Non-IGT Hospitals 88 Hospitals

Notes for Figure 19:

1) Data is based on claim payments and cost from SFY 2012/13. Both fee-for-service and managed care program claims for hospital inpatient and outpatient services are included. In addition, LIP payments, DSH payments, and the cost of uncompensated care are included.

2) Data is limited to in-state hospitals with at least one submitted claim in SFY 2012/13.

When uncompensated care costs are included in the cost-based calculation of percentage of Medicaid and uncompensated care business across our three categories of hospitals, the numbers change slightly, but not significantly. Still a great majority of the Medicaid and uncompensated care business occurs at the hospitals that both contribute and receive IGTs, which is depicted in Figure 20 below.

Figure 20. Percentage of Medicaid business based on IGT category – all payments and cost, including LIP, DSH and uncompensated care – IGT and provider assessment contributions excluded.

Notes for Figure 20:

3) Data is based on claim payments and cost from SFY 2012/13. Both fee-for-service and managed care program claims for hospital inpatient and outpatient services are included. In addition, LIP payments, DSH payments, and the cost of uncompensated care are included.

4) Data is limited to in-state hospitals with at least one submitted claim in SFY 2012/13.

When comparing public hospitals to private hospitals, the pay-to-cost ratio for the public hospitals is significantly higher. This is shown in Figure 21 below. Note that the pay-to-cost ratio for the public hospitals is over 100 percent. This suggests that some hospitals may have been paid above their DSH cost limit in SFY 2012/13. By our calculations, seven hospitals were

70% 18% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Hospitals Contributing and Receiving IGTs

104 Hospitals

Hospitals Receiving but not Contributing IGTs

29 Hospitals

Non-IGT Hospitals 88 Hospitals

paid above their DSH cost limit by a total of approximately $115 million. However, our uncompensated care cost calculations use data reported on Medicare cost reports, not data reported in AHCA DSH cost limit reports. AHCA’s calculations may vary from those presented in this document. Note also that our estimates of cost are made using aggregated CCRs. Had we applied a more detailed approach to estimating costs (for example, one that replicated the more detailed cost apportionment methodology used in filing a Medicare cost report), our results may have been different.

Figure 21. Comparing average pay-to-cost ratios for hospitals based on ownership status – all payments and cost, including LIP, DSH and uncompensated care – IGT and provider assessment contributions excluded.

5.6.3.3.3 Pay-to-cost Ratios – All Payments – Including Assessment and IGTs

Our third review of pay-to-cost ratios includes net Medicaid payments, which are claim, LIP, and DSH payments reduced by contributions to help fund the state share of the Medicaid program borne by providers and other governmental agencies. In addition, similar to the second analysis, this third analysis includes all hospital costs including costs of care for Medicaid, uninsured, and underinsured recipients. Funding of the Medicaid program by providers and other governmental agencies is done through the provider assessment, which is referred to in Florida as the Public Medical Assistance Trust Fund (PMATF), and through IGTs. The PMATF is a mandated program and affects all providers in the state, while the contribution of IGTs is a voluntary process only available to publicly owned facilities and facilities able to make agreements with local governmental agencies.

106% 54% 0% 20% 40% 60% 80% 100% 120% Public Private

The pay-to-cost ratios in this section demonstrate a more complete look at hospital payment and cost for Medicaid and uncompensated care in Florida. As stated in the MACPAC report to Congress dated March 2014, “… provider contributed financing, such as health care related taxes, has significant effects on the net amount of Medicaid payments that providers receive.”74 This report also concludes “without data on both health care related taxes and supplemental payments, it is not possible to meaningfully compare Medicaid payments across providers and states.”75

Under this analysis, the overall average pay-to-cost for hospitals in all three categories combined is 49 percent.

Figure 22. Comparing average pay-to-cost ratios for hospitals based on IGT category – all payments and cost, including LIP, DSH and uncompensated care – IGT and provider assessment contributions subtracted from payments.

Notes for Figure 22:

1) Data is based on claim payments and cost from SFY 2012/13. Both fee-for-service and managed care claims for both hospital inpatient and outpatient services are included. In addition, LIP payments, DSH payments, and the cost of uncompensated care are included.

2) Data is limited to in-state hospitals with at least one submitted claim in SFY