FY 2017 Budget Briefing Presentation

Helping Families. Supporting Communities. Empowering Individuals.

State of Illinois
Bruce Rauner, Governor

Department of Human Services
James T. Dimas, Secretary-designate

HHS Briefing FY17

February 17, 2016

Welcome

The FY17 Proposed Budget provides two paths:

1. Agree on economic and governmental reforms, to accompany a negotiated balance of spending reductions and revenue that ensures that Illinois can be both compassionate and competitive.

OR

2. Give the executive branch the authority to cut spending to live within our revenues through the Unbalanced Budget Response Act.

We need to change the way we think about the budget. The choice is not simply one of cutting spending or raising revenue/taxes, it's about making smart decisions about reform that will provide the economic growth needed to produce revenue we all want over the long-term to meet the needs of the people of Illinois.

If there is compromise we can come together to fix our long-term challenges - we will re-build the social service safety net.

Every hard working family across this great state deserves this.

Agenda

Welcome

  • Jennifer Hammer, Healthcare and Human Services Policy Adviser, Special Counsel, Office of the Governor

The Transformation

  • Prevention and Population Health: Director Nirav Shah - Department of Public Health
  • Institutional Care to Community Care/Data Analytics and Integration: Director George Sheldon - Department of Children and Family Services/Acting Director Jean Bohnhoff - Department on Aging
  • Paying for Value, Quality & Outcomes: Director Felicia Norwood - Department of Healthcare and Family Services
  • Education and Self-sufficiency: Acting Secretary Jim Dimas - Department of Human Services

Budget Presentations

  • Department of Healthcare and Family Services: Director Felicia Norwood
  • Department on Aging: Acting Director Jean Bohnhoff
  • Department of Human Services: Acting Secretary Jim Dimas
  • Department of Children and Family Services: Director George Sheldon
  • Department of Public Health: Director Nirav Shah

Q&A

THE TRANSFORMATION

Prevention and Population Health: Director Nirav Shah - Department of Public Health

Institutional Care to Community Care/Data Analytics and Integration: Director George Sheldon - Department of Children and Family Services and Acting Director Jean Bohnhoff - Department on Aging

Paying for Value, Quality & Outcomes: Director Felicia Norwood - Department of Healthcare and Family Services

Education and Self-sufficiency: Acting Secretary Jim Dimas - Department of Human Services

"Enhance the common good of the people of Illinois by supporting them in leading healthy, independent and safe lives by offering access to high quality, consumer-centered, community based healthcare, education and human services that effectively steward both public and private resources."

Transformation Partners

  • Governor's Office
  • Department on Aging
  • Department of Children and Family Services
  • Department of Corrections
  • Department of Healthcare and Family Services
  • Department of Human Services
  • Department of Public Health
  • Department of Juvenile Justice
  • Department of Veterans' Affairs
  • State Board of Education
FIVE KEY INITIATIVES CHAIR(S)
Prevention and Population Health Nirav Shah, Director, DPH
Paying for Value, Quality, and Outcomes Felicia Norwood, Director, HFS
Moving from Institutional Care to Community Care

James Dimas, Acting Secretary, DHS

George Sheldon, Director, DCFS

Jean Bohnhoff, Acting Director, Aging

Education and Self Sufficiency

Beth Purvis, Secretary of Education

Bruce Bendix, DHS

Data Integration and Predictive Analytics Hardik Bhatt, Chief Information Officer

IL HHSi2 Demo 360° Consumer View

Consumer (Child) Centric Approach

  • OBJECTIVE: To master core consumer data by mashing ~20 demographic/identification data elements from many sources to establish a consolidated 360° view of the child
360 Consumer View

DCFS Demo Application

DCFS Demo Application 

DCFS Mobile App

DCFS Mobile Application 

DCFS Mobile App - Caseload Display 

DCFS Mobile App - Permanency Case

DCFS Mobile App - Investigation Checklist 

DCFS Mobile App - Investigation - multi-photo upload 

Budget Presentations

Department of Healthcare and Family Services: Director Felicia Norwood

Department on Aging: Acting Director Jean Bohnhoff

Department of Human Services: Acting Secretary Jim Dimas

Department of Children and Family Services: Director George Sheldon

Department of Public Health: Director Nirav Shah

Department of Healthcare and Family Services

FY2017 Budget

Felicia Norwood, Director

Mike Casey, CFO

Ray Marchiori, Chief of Staff

HFS Mission

  • Ensuring quality healthcare coverage at sustainable costs, empowering people to make sound decisions about their well-being and maintaining the highest standards of program integrity on behalf of the citizens of Illinois
  • Ensuring families have the opportunities they deserve by enforcing child support obligations throughout the state
  • Division of Child Support Services (DCSS) serves almost 500,000 families who receive TANF and Medical Assistance or who are not receiving government assistance, but still need child support services
    • In FY 2015, for the tenth straight year, the Department achieved collections of more than $1 billion, with a total of $1.416 billion - most of it passed on to families
  • FY 2017 budget assumes that only 14 cents of every child support services operational dollar comes from the General Revenue Fund

Providing Healthcare Coverage

  • HFS is the largest insurer in Illinois
  • Current Medical Assistance Enrollment (Nov. 2015): 3.17 million*
    • Children: 1.50 million
    • Seniors: 190,800
    • Adults with Disabilities: 235,100
    • Other Adults: 614,400
    • ACA Adults: 632,400

* Excludes enrollees in partial benefit programs

Medical Assistance Average Enrollment

HFS Medical Assistance Enrollment

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Medical Assistance Fiscal Year 2017 Budget Highlights

  • Maintains eligibility and healthcare services for low income residents and individuals enrolled under the Affordable Care Act
  • Assumes over 66% of clients enrolled in risk-based managed care
    • Begins Managed Care in Long Term Supports and Services (MLTSS) for Medicare/Medicaid dual eligibles
  • Continues efforts to rebalance the long term care system

Medical Assistance Program Integrity Efforts

  • Medical Assistance Redeterminations
    • Average of 3.3 million monthly Medical Assistance clients in FY 2017
    • FY 2017 budget includes resources for timely redeterminations
    • Requires cooperation with the Department of Human Services
    • FY 2017 General Revenue Fund estimated savings: $140 million

Inspector General - Fraud & Abuse Prevention

  • In FY 2015, the Inspector General achieved $204 million in savings, cost avoidance and recoveries
  • FY 2017 budget assumes resources for the Inspector General to combat waste, fraud and abuse in the Illinois Medical Assistance program
    • Quality control on Medical Assistance eligibility determinations and provider claims
    • Data analytics to identify outlier provider and client behavior
    • Provider payment audits
    • Client asset discover
    • Provider and client investigations

Affordable Care Act (ACA) Enrollment

  • 622,400 have enrolled under the ACA as of January 2016
  • Costs offset by high federal match rate
    • Federal government will pay 100% for Medicaid clients who are newly eligible through December 31,2016
    • Match rate declines to 95% on January 1, 2017
    • Continues phase down to 90% by January 1, 2020
  • 629,000 estimated average monthly enrollment in FY 2016
  • 641,600 projected average monthly enrollment in FY 2017

Affordable Care Act (ACA) Estimated Cost

  • Fiscal Year 2016: $2.78 billion
    • General Revenue & Related Funds: $2.14 billion
    • Cook County: $0.64 billion
    • $0 net state cost (100% federally-funded)
  • Fiscal Year 2017: $2.94 billion
    • General Revenue & Related Funds: $2.3 billion
    • $57.6 million net state cost
    • Cook County: $0.64 billion
    • $16.0 million net Cook County cost
    • Federal match rate declines to 95% on January 1, 2017

Historical Medical Assistance Liability GRF and Related Funds

Historical Medical Assistance Liability GRF and Related Funds 

Fiscal Year 2016 Medical Assistance Budget Management Actions

  • HFS is limited in Medical Assistance budget reductions it can implement without legislative action - most eligibility, service and reimbursement requirements are in state statute
  • Within these limitations, HFS continues to implement Medical Assistance cost savings measures
  • Improve timeliness of Medical Assistance redeterminations: $53 million savings ($140 million annualized savings in FY17)
  • Eliminate Accountable Care Entity/Coordinated Care Entity fees - transition to risk-based managed care: $30 million savings ($60 million annualized savings in FY17)
  • Reduce managed care capitation rates: $25 million savings
  • Discontinue certain hospital fixed payments: $8 million

Fiscal Year 2017 Medical Assistance Cost Growth Driven By Non-Discretionary Items

  • MLTSS managed care - transfer other agency fee-for-service costs to HFS: $299 million
  • Annualization of Heroin Bill (PA 99-480): $267.0 million ($335.9 million FY 2017 total gross cost)
  • ACA liability growth: $160.5 million
  • Annualization of ACA hospital presumptive eligibility: $95.4 million ($121.1 million FY 2017 total gross cost)

Fiscal Year 2017 Medical Assistance Cost Growth Driven By Non-Discretionary Items

  • Annualization of federal Medicare Part B and Part D cost increases: $72.6 million ($127.7 million FY 2017 total gross cost
  • Other non-discretionary items: $76.6 million
  • GRF and related fund Medical Assistance liability grows 1.9% absent non-discretionary items

Medical Assistance Payment Processing

  • Section 25 statutory caps
  • Require payment of GRF and related fund medical bills received by June 30th from current year appropriations
  • Eliminate long "budgeted" payment cycles - cannot push large amounts of unpaid medical bills into future fiscal years
  • HFS is generally processing GRF-related bills to the Comptroller in less than 30 days in FY 2016
  • FY 2017 introduced budget will allow HFS to continue meeting the Section 25 caps

Transforming Medical Assistance

Paying for quality, value and outcomes

  • Maintaining healthcare coverage for core low income beneficiaries while driving quality care at supportable costs. Actions include:
  • Pay for Performance (P4P) measures for Managed Care Organizations (MCOs) to drive improvements in key quality measures for children and adults
  • Assignment of beneficiaries to MCOs based on quality
  • Ensure beneficiaries receive the right care, at the right place and at the right cost
  • Continued shift to Care Coordination
    • Incorporating populations that are now mainly receiving fee for service care
  • Uniformly administered Long Term Supports and Services (LTSS) assessment instrument
  • Robust nursing home audits to ensure proper alignment of care and costs
  • Expand community-based programs
  • Integrate physical, behavioral and mental health care coordination

Transforming Care Coordination

Saving money while providing better care

  • Collaboration between MCOs, ACEs and CCEs is leading to powerful alignments that mean improved coordination and quality
  • Combining best of both worlds:
  • Managed Care Organizations offer superior risk and quality management, analytics and contracting expertise
  • ACEs/CCEs offer vital clinical, community and frontline experience
  • Transforming approach from paying for quantity to paying for value and outcomes

Transforming Information Technology

Developing a state-of-the-art technology platform

  • Replacing decades old systems that inhibit efficient and effective reporting, analytics and timely decision making
  • New systems increase efficiency and program integrity while reducing costs
  • Major system milestones:
  • Provider Enrollment System (IMPACT - Phase I)
  • Integrated Eligibility System - Phase II
  • Pharmacy Benefit Management System
  • Data Analytics Platform (MedInsight) Implementation
  • Medicaid Management Information System (IMPACT - Phase II)
  • Enterprise Resource Planning (ERP) System

Program Area Appropriations Comparison

(Dollars in Millions)

All Funds

Total by Program

FY2016 Estimated Necessary

Spending Authority

FY2017 Appropriation

Request

$Change
Medical Assistance $20,817.4 $21,600.6 $783.2
Child Support Services 215.4 217.4 2.0
Program Operations 269.9 255.7 (14.3)
Cost Recoveries 29.0 28.9 (0.1)
Inspector General 25.1 25.2 0.1
Total $21,356.8 $22,127.7 $770.9

General Revenue Fund

Total by Program

FY2016 Estimated Necessary

Spending Authority

FY2017 Appropriation

Request

$Change
Medical Assistance $7,409.3 $8,091.9 $682.6
Child Support Services 24.1 27.0 2.9
Program Operations 57.7 49.2 (8.4)
Inspector General 5.2 5.2 0.0
Total $7,496.2 $8,173.3 $677.0

Department on Aging 

FY2017 Budget

Jean Bohnhoff, Acting Director

Jennifer Reif, Deputy Director

 Matt Ryan, Chief of Staff

Illinois Department on Aging 

The FY17 Aging Budget focuses on 3 major points:

  • Program sustainability in preparation for anticipated growth in aging population
  • Commitment to rebalancing - supporting older adults in community-based settings
  • Flexibility in delivery of services and supports
    • The FY17 Introduced Budget will include changes necessary for the Department to focus on those three major points.

FY17 Governor's Introduced

Federal $$85,782,000, GRF $451,179,000,Other State Funds, $450,545,000

Budget Highlights Home Delivered Meals

An additional $3.3 million in GRF over the anticipated current year spending for Home Delivered Meals (HDM) will "maintain" the current meal levels and persons served in the HDM program.

$350K has also been added to the HDM budget for a cost and tracking study to help the Department define new and or innovative methods of tracking costs, clients, inflation effects, and different methods of projecting needs of unique communities.

Home Delivered Meals GRF increase of each fiscal year 

Budget Highlights: Community Care Program

Enrollment in the Department on Aging's Community Care Program (CCP) has significantly grown over the past 10 years, from 40,965 enrollees in 2005 to 83,787 enrollees in 2015, a 105% increase over a decade. Looking forward, the growth in Illinois' aging population will also more than double by 2030, with an expected 57 percent increase in individuals aged 60 plus over the next 15 years. Sustaining CCP as it exists today will cost an additional $93.3 million in the next six years assuming the completion of the managed care transition by FY2018.

CCP Average Monthly Caseload past present and future growth 

Budget Highlights Community Reinvestment Program (CRP)

  • The Community Reinvestment Program is a new initiative targeted to older adults who are not eligible for CCP who need assistance to live independently in the community.
  • The initiative represents a long term strategy to maintain community-based supports for our current aging population as well to address the anticipated growth in the population its first year at a funding level of $225 Million.
  • Transition individuals who are non-Medicaid eligible to a new Community Reinvestment Program ("CRP").
    • -Non-Medicaid eligible clients will have their DON score applied to the new service cost maximum table to derive a new individual spending allocation.
    • -CRP will provide greater flexibility of services. The AAA Network (Area Agency on Aging) will be utilized as the mechanism for the coordination of preventative services.
    • -Similar to other states, Illinois' approach will maintain a service package for individuals that do not meet Medicaid eligibility requirements.
    • -This approach will maintain the Department's commitment to maintaining individuals in their own home and community and delay the number of admissions in nursing facilities, which is currently a large portion of the Medicaid budget at $1,583,008,257 per year out of the total spending for Medicaid Long Term Care.

Caseload Trends

Aging Average Monthly Caseload 

Forecasted Spending

Projected Spending 

Department of Human Services

FY2017 Budget

James Dimas, Secretary-designate

Robert Brock, CFO

Greg Bassi, Chief of Staff 

Budget Request - FY2017

  • General Revenue Fund (Includes 793 fund and 644 fund; Dollars in billions)
  • FY14 Actual Expenditures: $3.587B
  • FY15 Actual Expenditures: $3.841B
  • FY16 Estimated Spending: $3.697B
  • FY17 Appropriation Request: $4.036B
Budget Request - FY2017 

Budget Request Highlights

  • The FY17 proposed budget represents a $338.5M GRF (including 793 and 644 fund) increase from FY16 Agency estimated expenses.
  • The proposed budget for FY17 continues to provide critical services to the most vulnerable in Illinois. The Agency continues its commitment to rebalancing-moving individuals with developmental disabilities, mental illness or physical disabilities out of institutional care and into community settings. In addition, the Agency will continue to provide child care services and critical services to needy families.

Budget Request

  • Division of Alcohol and Substance Abuse (DASA)
  • Division of Developmental Disabilities (DDD)
  • Division of Family and Community Services (DFCS)
  • Division of Mental Health (DMH)
  • Division of Rehabilitation Services (DRS)

Division of Alcoholism and Substance Abuse - FY2017

  • General Revenue Fund (Includes 793 fund; Dollars in millions)
  • FY14 Actual Expenditures: $128.1M
  • FY15 Actual Expenditures: $124.9M
  • FY16 Estimated Spending: $118.8M
  • FY17 Appropriation Request: $98.6M
Division of Alcoholism and Substance Abuse - FY2017 

DASA Budget Request Highlights

  • The FY17 budget request includes an additional investment of $6.0M in Addiction Treatment Services over estimated FY16 spending. The $6.0M will support the growth in Medicaid liability.
  • DASA is working with HFS to capture Federal Financial Participation on state spending for Opioid Maintenance therapy services. Once Opioid Maintenance therapy services are converted to Medicaid services, DHS plans to fund a portion of these services from the Healthcare Provider Relief Fund (793) allowing for a ($9.0M) reduction in GRF spending.
  • The GRF funding for addiction treatment services provided by MCOs has been transferred to HFS budget; a ($17.2M) reduction in the DHS budget request.

Division of Developmental Disabilities - FY2017

  • General Revenue Fund (Includes 793 fund and 644 fund; Dollars in billions)
  • FY14 Actual Expenditures: $1.410B
  • FY15 Actual Expenditures: $1.419B
  • FY16 Estimated Spending: $1.443B
  • FY17 Appropriation Request: $1.463B
Division of Developmental Disabilities - FY2017 

DDD Budget Request Highlights

  • The FY17 proposed budget includes an additional $16.7M to continue the Agency commitment to transitioning individuals with developmental disabilities from long-term care facilities to person-centered, community-integrated services in compliance with the Ligas Consent Decree.
  • The budget request also includes $5.4M for annualization of FY16 transitions from institutional settings and new SODC and DCFS ward transitions planned in FY17.
  • Funding for Respite Services are maintained at the same level as FY16.
  • The FY17 budget request reflects a shift of ($9.0M) off general revenue fund to the DHS Community Services (509 Fund) due to increase in revenues made available to DHS for programs for the developmentally disabled.

Division of Family and Community Services - FY2017

  • General Revenue Fund (Dollars in billions)
  • FY14 Actual Expenditures: $.999B
  • FY15 Actual Expenditures: $1.230B
  • FY16 Estimated Spending: $1.036B
  • FY17 Appropriation Request: $1.338B
Division of Family and Community Services - FY2017 

DFCS Budget Request Highlights

  • The FY17 proposed budget includes $330.6M to support the Child Care estimated liability with eligibility increased to 185% of the federal poverty level.
  • The Child Care funding proposed does include a ($22.4M) savings associated with background checks for family members providing child care.
  • The FY17 request for TANF is down ($25.0M) due to declining caseloads.
  • The FY17 budget request includes an additional $5.0M to support the estimated liability for the Early Intervention Program.

Division of Mental Health - FY2017

  • General Revenue Fund (Dollars in millions)

  • FY14 Actual Expenditures: $487.9M
  • FY15 Actual Expenditures: $507.6M
  • FY16 Estimated Spending: $460.7M
  • FY17 Appropriation Request: $444.2M
Division of Mental Health - FY2017 

DMH Budget Request Highlights

  • The FY17 proposed budget reflects a ($4.5M) reduction for rebalancing due to excess appropriation as compared to estimated liability. Funds to support the implementation of Williams and Colbert Consent Decrees are represented in the request.
  • The FY17 request for the managed care costs for mental health services has been transferred from the DHS budget to the HFS budget. A reduction in the MH funding of ($15.9M).
  • Excess appropriation authority related to the Mental Health BIPP Initiatives concluding results in a proposed reduction of ($2.7M).

Division of Rehabilitation Services - FY2017

  • General Revenue Fund (Dollars in millions)
  • FY14 Actual Expenditures: $392.4M
  • FY15 Actual Expenditures: $407.7M
  • FY16 Estimated Spending: $444.0M
  • FY17 Appropriation Request: $443.0M
Division of Rehabilitation Services - FY2017 

DRS Budget Request Highlights

  • The FY17 budget request includes estimated spending of $7.5M to support the annualization of the federally mandated overtime for individual providers.
  • The DRS proposed budget also reflects a ($12.2M) reduction related to the transfer of the managed care organization Home Services Program payments from the DHS budget to HFS.

Department of Children and Family Services

FY2017 Budget

George Sheldon, Director

Andrew Flach, Chief of Staff

Matthew Grady, CFO

FY17 Budget Highlights

Adoption-normal caseload decrease in subsidized Adoptive and Guardianship homes as the population ages

Foster Care-increased reliance on and investment in community-based foster care

Institution & Group Home-decreased reliance on shelters and congregate care

Personal Services-maintains the current authorized headcount

SACWIS-Primary cost includes the DCFS portion of the new Enterprise Resource Planning (ERP) statewide financial system that will streamline financial processes across the state

Fund Balance-FY17 budget matches Children's Services Fund (CSF) spending with annual revenue; accrued receivables spent-down in FY16

Child Welfare Reform Initiatives

Fewer Youth in Residential Care-step-down focus has yielded 3% drop in residential placements

Fewer Children in Emergency Shelters-current population is half that of calendar year 2014

Fewer Youth Waiting in Cook County Jail-children awaiting release down by 50%

Cook County Child Recovery Unit-ground breaking partnership with Cook County Sheriff to enhance child safety and recovery

Older Youth: Incentives for Independence-increased flexibility, self-determination, and Federal reimbursement

FY16 Federal Reimbursement Increase 

Community-Based Care Investments

Treatment Foster Care Pilots-five-year, evidence-based program to provide community care for youth exiting residential facilities

"Illinois Choices" Expansion-care coordination enhances the effectiveness of existing community care efforts (wraparound, Child & Family Teams)

Pay for Success Pilot-innovative private investment partnership for re-integrating delinquent youth back into their communities

Regenerations Program-expansion of a successful Cook program serving delinquent youth

Intensive Placement Stabilization (IPS) Expansion-50% increase in foster care stability support services

Appropriation Summary

DCFS Appropriation Summary 

FY 17 Budget by Fund

DCFS FY170 Budget by Fund 

The DCFS Budget Briefing Book will be available for review or download tomorrow from the DCFS Website under the "DCFS Features" heading.

www.DCFS.illinois.gov

Department of Public Health

FY2017 Budget

Nirav D. Shah, M.D., J.D., Director

Erik Rayman, Chief of Staff

Vicki Wilson, CFO 

FY2017 IDPH Appropriations

$583.8 Million

DPH FY2017 Appropriations

Budget Comparisons: Requested FY2017 - Proposed FY2016 (millions)

Budget Comparisons: Requested FY2017 - Proposed FY2016 (millions) 

FY2017 Budget Recommendations

GRF Line Reductions

Regional Database System, Adoption Registry, Health Info Systems, Prevention Systems, Center for Rural Health, Assisted Living & Shared Housing - $1.1 million

  • Reflects continued staffing and contractual spending
  • Operations will now be centrally managed through GRF and Other State Funds
  • Consolidation of spending into the larger lump sum allows for management of vacancies and maximum flexibility to meet program needs

Grant Lines - $135,000

  • Eliminates Prostate Cancer Awareness grants

HIV/ADAP - $2.0 million

  • Continued ACA migration and the use of Federal Medicaid rebates will be used to help offset reductions
    • Federal Ryan White match requirements are sufficiently met and the level of coverage is consistent with previous fiscal years

FY2017 Budget Recommendations

GRF Increases

Local Health Protection Grant - $1 million

  • The statewide network of local health departments represents a vital partnership for the Department.
    • -he LHPG helps protect communities by funding disease control, outbreak management, food safety, and sanitation efforts at the local level
  • LHDs have not received a significant increase in many years and have been expected to do more with less
  • The recommended increase provides greater flexibility by allowing LHDs to focus on specific local priorities

Other State Fund Increases

Epilepsy Fund, Autoimmune Disease Fund, Hospice Fund - $50,000

  • Appropriation amounts increased to match cash balances

Death Certificate Surcharge Fund - $450,000

  • Increased for the Coroner Training Board (P.A. 99-0408)