FY 2016 Appropriation

About two thirds of Utah Medicaid clients enroll with one of four 100% at risk contracted health plans: Select Access, Molina, Healthy U (University of Utah Hospitals and Clinics), or Health Choice. All four plans receive a per member per month payment for each Medicaid client in their program and assumes the risk of paying for all of the incurred costs. The negotiated care includes funding for administrative costs and profit. The plans are responsible to pay for all medical services except for the following:

  1. Dental services
  2. Targeted case management
  3. Ambulance and other medical transportation
  4. Oxygen concentrators
  5. Apnea monitors
  6. Nursing facility
  7. Waiver Services
  8. Mental health services
  9. Substance abuse services are carved out, except for medical detoxification in a facility.
  10. Mental health and immunosuppressive drugs
  11. Any services performed at an Indian Health Services, tribal facility or an Urban Indian Facility.
  12. Chiropractic services
  13. Services performed at the state hospital.
  14. Services performed at the state developmental center.
Funding History

Funding Issues

Dedicated Credits Increase

(1) An increase of $802,200 in dedicated credits in FY 2016 in the Department of Health's Executive Director's Operations line item for $383,700 for potential sales from five new products from the All Payer Claims Database, $250,000 for contract for implementing the Master Person Index, and $168,500 for increased fees in vital records to offset declines in fee quantities. (2) An increase of $10,002,000 in dedicated credits in FY 2016 in the Department of Health's Medicaid Mandatory Services line item which is just a shift from the Medicaid Optional Services line item, but no overall increases for dedicated credits in Medicaid services. (3) $27,500 in ongoing dedicated credits beginning in FY 2016 for the Department of Health for a new federal surplus resale program where state agencies can receive dedicated credits from the sale of property/equipment. (4) For the Department of Health's Disease and Prevention Control line item as dedicated credits - Health: "Grant from the Association of Public Health Laboratories for $148,100. The purpose of this proposal is to establish molecular testing (Severe Combined Immunodeficiency) within the Utah Public Health Laboratory. Through this mechanism we explore and implement a cross-testing section process to advance Newborn Screening and the Infectious Disease group. The grant finances research and development work to implement a mandated test. All future cost will be covered completely through revenue generated through test fees."

Medicaid Caseload Growth

The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016. How Measure Success? HEDIS measures (https://health.utah.gov/myhealthcare/reports/hedis) for access to care and how much appropriate care was received.

Tax on Medicaid and CHIP Health Plans From Federal Health Care Reform

The contracted Medicaid and CHIP health plans for Utah will have about a $3.3 million ongoing cost to them of new taxes as part of federal health care reform. The State has the option to pay this on their behalf and receive the normal state/federal match rate of 30% state and 70% federal. The cost started in January 2014. How Measure Success? Report on distribution of reimbursement of the provider tax.
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $854,495,100 from all sources for Managed Health Care. This is a 2.1 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $169,799,900 from the General/Education Funds, a reduction of 4.1 percent from revised Fiscal Year 2015 estimates.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Accountable Care Organization Administrative Fee$5,390,800$0
OngoingOne-TimeFinancing Source
$1,600,000$0General Fund
$3,790,800$0Federal Funds
Accountable Care Organization Administrative Fee increase from 8.3% to 9%, which is $2M.
Dedicated Credits Increase$10,002,000$0
OngoingOne-TimeFinancing Source
$10,002,000$0Dedicated Credits Revenue
(1) An increase of $802,200 in dedicated credits in FY 2016 in the Department of Health's Executive Director's Operations line item for $383,700 for potential sales from five new products from the All Payer Claims Database, $250,000 for contract for implementing the Master Person Index, and $168,500 for increased fees in vital records to offset declines in fee quantities. (2) An increase of $10,002,000 in dedicated credits in FY 2016 in the Department of Health's Medicaid Mandatory Services line item which is just a shift from the Medicaid Optional Services line item, but no overall increases for dedicated credits in Medicaid services. (3) $27,500 in ongoing dedicated credits beginning in FY 2016 for the Department of Health for a new federal surplus resale program where state agencies can receive dedicated credits from the sale of property/equipment. (4) For the Department of Health's Disease and Prevention Control line item as dedicated credits - Health: "Grant from the Association of Public Health Laboratories for $148,100. The purpose of this proposal is to establish molecular testing (Severe Combined Immunodeficiency) within the Utah Public Health Laboratory. Through this mechanism we explore and implement a cross-testing section process to advance Newborn Screening and the Infectious Disease group. The grant finances research and development work to implement a mandated test. All future cost will be covered completely through revenue generated through test fees."
Medicaid Accountable Care Organizations Into Rural Counties$0$11,118,600
OngoingOne-TimeFinancing Source
$0$3,300,000General Fund, One-time
$0$7,818,600Federal Funds
This one-time cost would cover the claims would come in for up to 18 months under the old fee-for-service system while the State was also prepaying monthly premiums. This would expand Medicaid accountable care organizations into the following counties: Box Elder, Cache, Iron, Summit, Tooele, and Washington. This would take the percentage of Medicaid clients served via accountable care organizations from 70% to 88%. How Measure Success? Keep the Medicaid cost growth rate below the General Fund growth rate.
Medicaid Caseload Growth$0$2,850,000
OngoingOne-TimeFinancing Source
$0$2,850,000General Fund, One-time
The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016. How Measure Success? HEDIS measures (https://health.utah.gov/myhealthcare/reports/hedis) for access to care and how much appropriate care was received.
Medicaid Caseload Reduction$0$4,100,000
OngoingOne-TimeFinancing Source
$0$4,100,000General Fund, One-time
The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016.
Tax on Medicaid and CHIP Health Plans From Federal Health Care Reform$10,983,800$967,000
OngoingOne-TimeFinancing Source
$3,260,000$0General Fund
$0$287,000General Fund, One-time
$7,723,800$680,000Federal Funds
The contracted Medicaid and CHIP health plans for Utah will have about a $3.3 million ongoing cost to them of new taxes as part of federal health care reform. The State has the option to pay this on their behalf and receive the normal state/federal match rate of 30% state and 70% federal. The cost started in January 2014. How Measure Success? Report on distribution of reimbursement of the provider tax.

Percentage of Medicaid Consumers Satisfied With Their Managed Health Care Plans

Percentage of Medicaid Consumers Satisfied With Their Managed Health Care Plans

Medicaid's aggregate payments to each plan may not exceed what Medicaid would have paid, in aggregate, for the same services via fee-for-service Medicaid claims. The administrative money received by the four plans cover the following: case management, disease management, Healthcare Effectiveness Data and Information Set reporting, quality improvement programs, performance improvement projects, quality committees, health needs assessments, utilization management, prior authorization, provider credentialing and re-credentialing, newsletters, and outreach.

Intent Language

HB0003: Item 81

Under Section 63J-1-603 of the Utah Code, the Legislature intends up to $3,500,000 provided for the Department of Health's Medicaid Management Information System Replacement in Item 72 of Chapter 282, Laws of Utah 2014 shall not lapse at the close of Fiscal Year 2015. The use of any nonlapsing funds is limited to the redesign and replacement of the Medicaid Management Information System.

SB0003: Item 121

The Legislature intends that the Medicaid Accountable Care Organizations receive a scheduled two percent increase effective January 1, 2016 consistent with the intent of S.B. 180, 2011 General Session.

SB0007S01: Item 5

The Legislature intends that the Department of Health report quarterly to the Office of the Legislative Fiscal Analyst on the status of replacing the Medicaid Management Information System replacement beginning September 30, 2015. The reports should include, where applicable, the responses to any requests for proposals. At least one report during FY 2016 should include the first estimate of net ongoing impacts to the State from the new system.

SB0007S01: Item 5

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Mandatory Services line item: (1) percent of adults age 45-64 with ambulatory or preventive care visits (Target = 88% or more), (2) percent of deliveries that had a post partum visit between 21 and 56 days after delivery (Target = 60% or more), and (3) percent of customers satisfied with their managed care plan (Target = 85% or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.

SB0007S01: Item 17

The Legislature intends that the Department of Health report quarterly to the Office of the Legislative Fiscal Analyst on the status of replacing the Medicaid Management Information System replacement beginning September 30, 2015. The reports should include, where applicable, the responses to any requests for proposals. At least one report during FY 2016 should include the first estimate of net ongoing impacts to the State from the new system.

SB0007S01: Item 17

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Mandatory Services line item: (1) percent of adults age 45-64 with ambulatory or preventive care visits (Target = 88% or more), (2) percent of deliveries that had a post partum visit between 21 and 56 days after delivery (Target = 60% or more), and (3) percent of customers satisfied with their managed care plan (Target = 85% or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.

In 2013 all plans serving the counties of Davis, Salt Lake, Utah, and Weber changed to accountable care organization contracts and were 100% at risk. This explains the large increase in funding beginning in FY 2013.

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COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.