ALTCI Actuarial Study

1
ALTCIActuarial Study

• June 22, 2005

2
Actuarial Study Objectives

• Determine key cost drivers
• Identify financing options that promote the goals
  of ALTCI
• Recommend a rate structure that will best match
  payment to the risk of the enrolled population

3
Methodology

• Review historical Medi-Cal and Medicare
  CY1998-2000 FFS data
• Adjust data to include only populations and
  services expected to be covered under ALTCI
• Project data forward to CY2007 by category of
  service
• Adjust data for significant program changes
  including Medicare Part D

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CY2000 DataSan Diego County

• Nursing Home Residents, MSSP, DD, IHSS, and Home
  Care (HC) account for 30 percent of the total
  ALTCI membership in San Diego, but 74 percent of
  the total San Diego Medi-Cal expenditures.

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San Diego CountyCY2000 Dually Eligible vs.
Medi-Cal Only ABD Membership
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San Diego CountyDually Eligible vs. Medi-Cal
Only CY2000 PMPM ALTCI Medi-Cal Costs
7
San Diego CountyElderly vs. Disabled Membership
8
Alameda, Contra Costa, and San Diego
CountiesCY19982000 Medi-Cal CostsHigh Cost
Chronic Conditions
9
San Diego CountyCY2000 Medi-Cal ALTCI PMPM Costs
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Preliminary ResultsKey Cost Drivers

• Setting Nursing Home vs. Community
• Frailty Nursing Home Certifiable/At Risk vs.
  Well
• Medicare Status Dually Eligible vs. Medi-Cal
  Only
• Category of Assistance Aged vs. Disabled
• Chronic High Risk Conditions TBD

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Preliminary Recommendations

• Reimbursement needs to be sufficiently
  sophisticated to promote program goals
• Incentives should be included to promote
  increased community based services
• Savings achievable through more appropriate use
  of hospital, emergency room and nursing home
  services
• Administrative costs should be reflected in rates
  with sufficient consideration of start up costs
• Increased care management should be supported and
  funded

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Preliminary Recommendations (continued)

• Implement early reinsurance or risk sharing
• Capitated model should allow for flexibility of
  both Medi-Cal and Medicare funding sources

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Next Steps

• Complete projections
• Assess adequacy of Medicare reimbursement
• Finalize recommended rating structure
• Submit final report and recommendations