FSSA / Healthy Indiana Plan
- Transmittal Letter
- Performance Measures
- Operating Budget Request
- DMHA Capital Budget Request
- EPCC Capital Budget Request
- ESH Capital Budget Request
- MSH Capital Budget Request
- LSH Capital Budget Request
- RSH Capital Budget Request
- LCSH Capital Budget Request
Tobacco Master Settlement Fund
Indiana Comprehensive Health Insurance Association (ICHIA)
* NOTE: The “base rate” is the annual appropriation recommended by the State Budget Agency. This year, the base rate reflects cuts made under the governor’s 15% budget reduction target, not the amount last appropriated by the General Assembly.
Family & Social Services Administration (FSSA) – FSSA is a health care and social service funding agency. Ninety-four percent (94%) of the agency’s total budget is paid to thousands of service providers ranging from major medical centers to a physical therapist working with a child or adult with a developmental disability. The FSSA budget of $7 billion is funded by $2.3 billion in state general fund dollars, and $4.7 billion in Federal grants and programs. The five care divisions in FSSA administer services to approximately one million Hoosiers each year. See below for highlights from the budget presentations of various divisions within the FSSA administration.
Division of Aging (DA) – The Division of Aging administers long-term care through Medicaid programs. It supports the development and utilization of alternatives to nursing home care, and coordinates and funds services through the network of Area Agencies on Aging.
The division has been working on moving towards a home and community based services care model to provide more ideal services for clients at lower costs to the state. The division has increased the number of clients who receive home and community based services by approximately 26%. State fiscal year funding allocations are set to administer 74.72% of their funding to nursing facilities and 25.28% to home and community based services.
Division of Disability and Rehabilitative Services (DDRS) – DDRS manages the delivery of services to children and adults with developmental disabilities and oversees the First Steps rehabilitation program for children from birth to age three.
DDRS has also been moving towards utilizing home and community based services. According to FSSA’s budget presentation, more clients are being served with Home and Community Based Services Waivers than ever before in the State’s history. The DDRS has made significant accomplishments in recent months including: increasing their Medicaid Infrastructure Grant from the Office of Medicaid Policy and Planning by $693,000 (based on improved performances) and reducing their contract expenditures by more than $18 million (which translates to $9.0 million in savings to the state). Although the last state operated ICF/MR is scheduled to close in April 2011, DDRS officials argued that transitioning those approximately 150-200 individuals to less restrictive community settings represents a change that is being made based on a recovery oriented care model, not a budget cutting model (though cost savings are also significant).
Division of Family Resources (DFR) – This division receives applications and approves eligibility for Medicaid, Food Stamps, TANF (cash assistance) and childcare. The DFR currently operates in all 92 counties and administers the childcare licensing and inspection program all across the state.
DFR’s “Hybrid Initiative,” an effort designed to mitigate problems from the state’s failed IBM contract to modernize the application process, is still being rolled out across the state. The new structure promises increased numbers of caseworkers and personal, human communication that were successful components of Indiana’s original system and has been rolled in three regions (37 counties). Plans are in place to roll out the “hybrid solution” in Region 2 in February of 2011. Click here to see a map of where Indiana’s hybrid, modernized, and original DFR centers are currently operating.
The “hybrid solution” coupled with increased demands for services prompted FSSA to ask the State Budget Committee to raise the funding for local welfare offices by 58% for the fiscal year that begins July 1, 2011. FSSA asked for $89.1 million for the following year, a 66 percent increase over the current funding level.
The number of Hoosiers enrolling in the FSSA program has increased by 39% since 2005, from 899,701 people receiving at least one service to 1,250,774 people in 2010.
To see more information about DFR’s enrollment rates and performance statistics see slides 17-27 of the FSSA Budget Presentation.
Division of Mental Health and Addiction (DMHA) – The DMHA supports networks of mental health care providers, operates six psychiatric hospitals, and funds addiction prevention and treatment programs. DMHA will complete its transition of services from institutional to community based care in April 2011, which will result in annualized savings of $15 million beginning in SFY 2012. Thanks to a federal grant, DMHA also operates a Child and Adolescent-Psychiatric Residential Treatment Facility (CA-PRTF), while is currently serving approximately 1,000 individuals.
The children served under this CA-PRTF Grant have achieved a 44% improvement in functioning compared to a 33% improvement rate among typical public services. DMHA estimated that the CA-PRTF program saved at least $31,000 per patient as compared to regular Psychiatric Residential Treatment programs. This per patient ratio will translate to annual projected savings of $1.0 million.
Office of Medicaid Policy and Planning (OMPP) – OMPP administers Medicaid programs including the managed care system for Hoosier Healthwise participants, and performs medical reviews of Medicaid disability claims.
OMPP recently redesigned its Care Select Program to target individuals who can best be helped by disease management programs. OMPP officials estimate that this program will help the state achieve savings of $7.5 million in SFY 2011 and potential savings of $11.3 million in subsequent years.
OMPP was also recently awarded a $2.3 million dollar federal grant for the development of Medicaid Health IT systems. The grant will help fund the planning and development of policies that will help identify and fund eligible providers and hospitals who are adopting electronic health record (HER) systems, and who can demonstrate meaningful use of HER such as e-prescribing, electronic exchange of health care information, and transmittal of clinical quality measures.
To read more about OMPP’s accomplishments and Medicaid enrollment statistics see slide 35 and 36 of the FSSA Budget Presentation.
Healthy Indiana Plan (HIP) – HIP is a program for uninsured Hoosier adults between the ages of 19-64. Parents or caretaker relatives of children in the Hoosier Healthwise program are likely candidates for HIP if they are a single adult earning no more than $21,660 a year, or families of four earning approximately $44,000 per year. Individuals who qualify for HIP must not have access to employer sponsored health insurance coverage, whether or not it is utilized by the individual, and they must have been uninsured for the previous six months.
As of September 30, 2010, there were 43,609 total individuals enrolled in the HIP program (17,141 childless adults, 26,468 parental adults). There are currently 51,915 childless adults on the wait list for the HIP program. HIP administrators have plans to use the program as a vehicle for the newly eligible population under the federal Affordable Care Act as implementation details are finalized. In the meantime, HIP officials urged legislators to give the state the authority to begin making changes to the HIP program in preparation for the onset of federal reforms effective in 2014. They urged legislators to require a minimum $60 annual contribution from participants enrolled in the program. Current contributions from participants are determined on a sliding scale based on the participant’s ability to pay. Under the current structure no participant will pay more than 5% of his or her gross family income on the plan.
HIP officials attempted to develop a revenue and expenditure forecast for the HIP using three different scenarios. To see the estimates and projections see slides 45-48 of the FSSA Budget Presentation.
Inspector General, Office (OIG)- The mission of the OIG is to address “fraud, waste, abuse, and wrongdoing” in state government. Over 80 individuals have been criminally charged by Indiana prosecutors in multiple counties since 2005 as a result of OIG investigations, and OIG investigations have helped the state collect millions of dollars in fines and restitution payments.
The savings and collections made by the OIG between 2005-2009 exceeded OIG’s operating expenses by $6,336,534. Captures include the collection of fines imposed by the State Ethics Commission, funds forfeited by a defendant in an OIG-related court proceeding, or restitution payments made by a defendant in an OIG-related court proceeding.
The OIG FY 2011-2013 budget request adhered to the State Budget Agency’s recommendations about what the Executive Branch deemed a reasonable spending amount that is in line with the Governor’s budgetary goals. The amount ($1,232,437/year) is 6.74% less than their actual FY 2009-2010 expenditures. (Note: The OIG’s actual expenditures equal the amount of money the agency received after the Governor’s budget cuts, which was less than the amount appropriated by the General Assembly for that same year.)
Tobacco Master Settlement Fund (TMSF) – In November of 1998, the Attorney Generals of 46 states and the nation’s largest tobacco companies signed a comprehensive agreement that called for tobacco companies to make annual payments in perpetuity to states as reimbursement for past tobacco-related expenses associated with healthcare costs. This agreement did not impose any restrictions on how states spend their settlement payments.
Indiana’s share of the restitutions is set at 2.039% of the total annual payment paid to all 46 states. The total annual settlement payment to all states is adjusted annually based on the participating manufacturers’ cigarette sales, market share, and rate of inflation. Each year, the State Budget Agency and the Office of the Attorney General compile a revenue forecast specifically for this fund to help the legislature estimate how much revenue will be available and how to distribute the available money.
The actual TMSF revenues for a given fiscal year are not known until April 15, when annual settlement distributions are made to the states. Each year, Indiana has spent more than 75% of the estimated revenues prior to receiving the payments; therefore, if the payments come in below estimates (as they often have in the past), then the spending cannot be “undone.” Thus, it is seen as prudent to keep a reserve.
The General Assembly created the Tobacco Master Settlement Fund (TMSF) in 1999, as a way to dedicate the TMSF revenue to funding healthcare related programs, anti-smoking programs, and tobacco control programs implemented by ISDH, FSSA, and ITPC. The FY 2012-2013 biennium budget request was written to dedicate 99% of the TMSF budget to health and human services programs. The only non-health requested appropriations are for the Office of the Attorney General and the Rural Economic Development Fund. To see the agencies and departments that the TMSF is appropriated to, see the TMSF Report.
Indiana Comprehensive Health Insurance Association (ICHIA) – The ICHIA was created by the General Assembly in 1981 as a not-for-profit association to provide health insurance for Indiana citizens who were unable to obtain medical coverage in the open commercial market (largely due to pre-existing conditions). This program was enacted to address the increasing number of uninsured and was designed in accordance with the model recommended by the National Association of Insurance Commissioners. These programs are now referred to as High Risk Programs/Pools by the federal regulatory entities involved in their oversight. They are an alternative to Guaranteed Issue, Assigned Risk, or other mandated health insurance coverage. There are currently approximately 7,300 participants in the ICHIA program.
See the ICHIA report to learn about the causes of the cost increases, what has been done to address the cost increases, and possible legislative actions that could help address the situation.
ICHIA Executive Director Douglas Stratton told the Budget Committee that “the need for an insurance option for those unable to obtain coverage elsewhere is greater now than ever.” He explained that the economic climate has caused many small employers to drop their group insurance and more terminated employees (who have pre-existing conditions) have lost their coverage and been forced to seek individual health insurance that is currently unavailable in the commercial market. Mr. Stratton also explained that with the health insurance exchange (that was created as part of the federal Affordable Care Act) opening up on January 1, 2014, the mission of the ICHIA program will have been met and the association will no longer be necessary. With this in mind, legislators and ICHIA must attempt to develop a strategy that will address the short term needs and expenses that will be required to maintain the program until December 31, 2013, when the Exchange is scheduled to be in place.
The ICHIA FY 2011-2013 budget request adhered to the State Budget Agency’s recommendations about what the Executive Branch deemed a reasonable spending amount that is in line with the Governor’s budgetary goals. The amount ($55,000,000/year) is 64.18% more than their actual FY 2009-2010 expenditures. Note this large increase is partially caused by a $9M decline in federal funding assistance.