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Mission Statement Operating Budget Summary

	General Fund	Nongeneral Fund	Personnel Cost
2009 Appropriation	$ 2,338,073,401	$ 3,654,454,288	$ 29,227,820
2010 Appropriation	$ 2,416,937,883	$ 4,351,872,172	$ 28,755,679
2011 Appropriation	$ 2,822,298,324	$ 4,710,248,288	$ 32,648,156
2012 Appropriation	$ 3,367,186,774	$ 4,045,504,873	$ 35,592,984
2013 Addenda	$ 3,665,989,276	$ 4,317,966,714	$ 35,338,856
2013 Addenda	$ (92,759,496)	$ 180,888,368	$ 0
2013 Total	$ 3,573,229,780	$ 4,498,855,082	$ 35,338,856
2014 Addenda	$ 3,814,571,616	$ 5,660,770,662	$ 35,445,058
2014 Addenda	$ 34,390,848	$ (961,020,333)	$ (534,540)
2014 Total	$ 3,848,962,464	$ 4,699,750,329	$ 34,910,518

Authorized Position Summary

	General Fund	Nongeneral Fund	Total Positions
2009 Appropriation	165.02	187.98	353.00
2010 Appropriation	169.02	190.98	360.00
2011 Appropriation	169.82	194.18	364.00
2012 Appropriation	176.32	204.68	381.00
2013 Addenda	183.82	212.18	396.00
2013 Addenda	0.00	0.00	0.00
2013 Total	183.82	212.18	396.00
2014 Addenda	183.82	212.18	396.00
2014 Addenda	8.50	8.50	17.00
2014 Total	192.32	220.68	413.00

• Provide authority to modify the eligibility determination process to comply with federal law
  Allows the agency to modify aspects of the eligibility determination process to be in compliance with mandated provisions of the federal Patient Protection and Affordable Care Act (PPACA).  These changes include include all aspects of the Modified Adjusted Gross Income (MAGI) methodology, the ability to accept telephonic applications, real-time application assistance, and customer service.  This action is contained in budget bill language.

• Capture savings from lower cost of eligibility review contract
  Captures savings from lower costs for the vendor to conduct the Payment Error Rate Measurement (PERM) eligibility review and to establish a permanent quality assurance eligibility project.  Funding was provided in the 2012 Appropriation Act for the PERM program.  Using the competitive procurement process, the agency has negotiated a contract for this project that will result in lower costs than originally budgeted.  

  		FY 2013		FY 2014
  General Fund		$ 0		$ (1,110,987)
  Nongeneral Fund		$ 0		$ (1,110,987)

• Provide exceptional rates for qualifying community placements
  Authorizes higher congregate care rates in the Medicaid Intellectual Disability waiver for individuals with high needs coming out of state facilities or at imminent risk of institutionalization. This rate increase will be narrowly targeted to include individuals who are at the highest level of intensity, are moving to a home with no more than four individuals and have intensive behavioral or medical needs.   This action is in response to the U.S. Department of Justice settlement requirement to discharge individuals into integrated community settings.  This action is contained in budget bill language.

• Fund Medicaid utilization and inflation
  Provides additional funding for the increase in costs as reflected in the forecast of Medicaid expenditures.  Medicaid expenditures are projected to increase 10 percent in FY 2013 and 6.5 percent in FY 2014. The federal funding in FY 2014 reflects the removal of $1.1 billion that was added last year for the new population eligible for Medicaid on January 1, 2014, as a result of the Affordable Care Act.  The Supreme Court decision made the Medicaid expansion optional, so the official forecast excludes this funding which is now a separate policy issue for the Commonwealth.  The primary reason for the increase in general fund need is hospital rebasing in fiscal year 2014, hospital payments delayed from fiscal year 2012 to 2013, and the accounting of pharmacy rebates as expenditures versus revenue.

  		FY 2013		FY 2014
  General Fund		$ 46,203,262		$ 68,388,350
  Nongeneral Fund		$ 27,635,799		$ (1,101,113,998)

• Fund Family Access to Medical Insurance Security program utilization and inflation
  Increases funding for the program to reflect the latest forecast of expenditures. The increase in costs is primarily a result of the managed care rate increase in FY 2013.  Last year’s forecast projected a much smaller increase than the 15.6 percent increase that took effect on July 1, 2012.

  		FY 2013		FY 2014
  General Fund		$ 5,109,699		$ 15,117,916
  Nongeneral Fund		$ 9,361,845		$ 27,799,286

• Maintain disproportionate share hospital payments at FY 2013 funding level
  Maintains disproportionate share hospital (DSH) payments at the FY 2013 level.  As required by law, DSH funding is rebased every three years as part of rebasing for hospital payments.  Estimates of the DSH rebasing include a significant increase in qualifying hospitals and high Medicaid utilization, that combined, result in a considerable increase in DSH payments to hospitals.  Considering the state has a federal allotment that is fully utilized, the impact of the DSH rebasing must be budget neutral until the DSH methodology is modifed to reflect the current situation.

  		FY 2013		FY 2014
  General Fund		$ 0		$ (21,746,159)
  Nongeneral Fund		$ 0		$ (21,746,159)

• Fund dual eligible financial alignment demonstration
  Provides administrative funding to implement the dual eligible financial alignment demonstration. This demonstration is a three-year integrated managed care model scheduled to be implemented by January 2014.  Individuals who are eligible for Medicare and Medicaid (dual eligible) have complex health care needs and this demonstration will use a fully integrated managed care model through which dual eligible individuals will receive all Medicare and Medicaid covered benefits from one managed care plan.  It will be implemented in the Central Virginia, Northern Virginia, Tidewater, and Western/Charlottesville regions starting in 2014.  The program is voluntary and it is estimated that up to 70,000 dual eligible individuals may be impacted in the first year.

  		FY 2013		FY 2014
  General Fund		$ 0		$ 650,784
  Nongeneral Fund		$ 0		$ 1,850,891
  Authorized Positions		0.00		4.00

• Reduce personnel costs
  Reduces salary and wage personnel costs by managing vacancies.  Positions will be filled permanently as funds are available with critical work shifted to existing staff during any times of delay.

  		FY 2013		FY 2014
  General Fund		$ 0		$ (356,481)
  Nongeneral Fund		$ 0		$ (356,481)

• Add positions associated with Department of Justice settlement
  Increases the employment level of the agency to reflect the additional administrative responsibilities from implementation of the settlement with the U.S. Department of Justice to discharge individuals into integrated community settings.  The costs of these positions have already been accounted for in the appropriation of the Department of Behavioral Health and Developmental Services.

  		FY 2013		FY 2014
  Authorized Positions		0.00		13.00

• Allow electronic notices of program reimbursement to providers
  Provides authority for the agency to deliver notices of program reimbursement (NPR) by electronic means. NPRs notify providers of any rate changes or cost settlements, and provides information regarding provider appeal rights. Currently, NPRs are required to be mailed to providers.  The agency would continue to mail NPRs to providers who prefer to receive notices by mail.  This action is contained in budget bill language.

• Fund medical assistance services for low-income children inflation and utilization
  Adjusts funding for the Commonwealth's Medicaid Children's Health Insurance program. This program applies to children between the ages of 6 through 19 with family income from 100 to 133 percent of the federal poverty level.  The increase in fiscal year 2014 is primarily due to expenditures being moved from Medicaid.  Last year, as a result of federal health care reform, the matching rate for this population was supposed to change from 65 percent to 50 percent (Medicaid rate) and thus a portion of the program was moved over to Medicaid.  The federal government has since changed their guidance and this population will still be covered at a 65 percent federal match and the expenditures are being transferred back, which reflects the increase.

  		FY 2013		FY 2014
  General Fund		$ (240,471)		$ 20,913,558
  Nongeneral Fund		$ 960,290		$ 41,770,479

• Adjust funding for Health Care Fund
  Increases the appropriation for the Health Care Fund to reflect the latest revenue estimates. Revenue from the Master Settlement Agreement with tobacco manufacturers is slightly higher than previously estimated. Tobacco taxes are projected to be higher and Medicaid recoveries are also projected to be higher primarily due to pharmacy rebates.  The 2013 amount includes the yearend cash balance from the prior year.  Since it used as state match for Medicaid, the increased revenues result in a reduction in general fund support for Medicaid.

  		FY 2013		FY 2014
  General Fund		$ (142,530,434)		$ (59,966,365)
  Nongeneral Fund		$ 142,530,434		$ 59,966,365

• Modify residential treatment center reimbursement methodology for institutions for mental disease
  Changes the reimbursement methodology for residential treatment centers and freestanding psychiatric facilities, which are Institutions for Mental Disease (IMDs), in order to implement the necessary changes resulting from the agency’s loss of an IMD audit appeal.  These changes are a result of special limitations that are being imposed as a result of a court case.  This action is contained in budget bill language.

• Modify minimum occupancy requirement for nursing facility reimbursement
  Reduces the minimum occupancy requirement, from 90 to 88 percent, that is used in the reimbursement methodology.  The minimum occupancy requirement is a cost control strategy that encourages nursing facilities to maintain high occupancy and therefore have lower costs per patient day.  Currently, 35 percent of nursing facilities in the state have an average occupancy below 90 percent.  This action changes the minimum to the statewide average occupancy in order to reflect the state's actions over the last decade to limit institutional care by providing more services to individuals in their home or community.

  		FY 2013		FY 2014
  General Fund		$ 0		$ 916,624
  Nongeneral Fund		$ 0		$ 916,624

• Increase special fund appropriation for third party liability contractor
  Provides nongeneral fund appropriation for the administrative costs of the third party liability (TPL) contractor.  The Department of Medical Assistance Services (DMAS) uses a contractor to recover payments from third parties (i.e. private insurance) that should have paid for medical care provided by Medicaid.  DMAS uses a contingency contract for TPL, so increased revenue recovered results in higher payments to the contractor.

  		FY 2013		FY 2014
  Nongeneral Fund		$ 400,000		$ 500,000

• Authorize elimination of state-funded health care that duplicates coverage provided through the health benefits exchange
  Authorizes the agency to eliminate duplicative coverage for certain health care programs for populations that will now be able to access that coverage through private insurance offered through the health benefits exchange established by the Affordable Care Act.  This action is contained in budget bill language.

• Adjust funding for changes in methodology for Oracle related charges
  Adjusts the agency's budget for the general fund share of the impact of VITA charges resulting from a planned change in the rates methodology as applied to Oracle specific costs effective July 1, 2013.  Under the new methodology, Oracle costs will be charged directly to those few agencies with Oracle licenses rather than sharing the costs via standard server rates among the many agencies using the servers on which the Oracle software resides as is currently done.

  		FY 2013		FY 2014
  General Fund		$ 0		$ (1,694)

• Fund medical services for involuntary mental commitments
  Adjusts funding for the costs of hospital and physician services for persons subject to an involuntary mental commitment. The most recent forecast of expenditures projects lower growth than last year's estimates.

  		FY 2013		FY 2014
  General Fund		$ (1,301,552)		$ (754,777)

• Maximize cost allocation
  Captures savings by supplanting general fund with federal funds based on an updated submission of the agency's federally approved cost allocation plan.

  		FY 2013		FY 2014
  General Fund		$ 0		$ (304,817)
  Nongeneral Fund		$ 0		$ 304,817

• Develop new nursing facility reimbursement methodology
  Authorizes the agency to develop a new methodology for nursing facility reimbursement.  The current system is based on the traditional cost-based model and this  amendment creates a modern reimbursement system that will provide for better incentives for cost effectiveness.  The budget language requires the new methodology to be budget neutral.  This action is contained in budget bill language.

• Expand web-based provider enrollment
  Directs the agency to require a web-based enrollment process, to the extent possible, for providers requesting to enroll and participate in Virginia Medicaid’s fee-for-service program. This is consisent with the agency's actions to move all provider processes towards electronic web-based means.  This action is contained in budget bill language.

• Correct funding error for state teaching hospitals
  Provides funding for the teaching hospitals to correct an error in their payments for fiscal year 2014.  The appropriation act includes the elimination of hospital inflation and continued prior year reductions in indigent care funding that are higher than intended due to an incorrect calculation.  This amendment corrects that error and funds the two state teaching hospitals at the appropriate level.

  		FY 2013		FY 2014
  General Fund		$ 0		$ 11,257,011

• Modify allowable deductions for dental expenses
  Provides authority for the agency to limit deductions for incurred dental expenses in the long-term care patient pay calculation to limits generally allowed under private dental insurance coverage plans.  Medicaid allows deductions for incurred medical and dental expenses as part of the calculation of recipient responsibility for payment toward the cost of their long-term care. This amendment allows for reasonable limits similar to standard dental isurance plans to reduce unncessary cost-shifting to the Medicaid program.  This action is contained in budget bill language.

• Increase federal appropriation for electronic health record incentive payments
  Provides federal appropriation for incentive payments to hospitals and physicians for the development of electronic health records.  This program is fully funded by the federal government. For FY 2014, the payments are estimated at $48.8 million, which is $28.8 million higher than the current appropriation.  This is a technical adjustment to ensure adequate appropriation is available to make payments to providers.

  		FY 2013		FY 2014
  Nongeneral Fund		$ 0		$ 28,810,945

• Reflect Medicaid impact of state inmate inpatient hospital costs
  Reflects the impact on Medicaid from coverage of inpatient hospital services for Department of Corrections inmates that are 65 and over, disabled or pregnant that otherwise qualify for Medicaid.  In accordance with federal policy, Medicaid is only allowed to cover an inmate's medical care while they are a "patient" in a medical institution.

  		FY 2013		FY 2014
  General Fund		$ 0		$ 1,387,885
  Nongeneral Fund		$ 0		$ 1,387,885