The 2011 Executive Budget Document
|General Fund||Nongeneral Fund||Personnel Cost|
|2007 Appropriation||$ 2,408,455,441||$ 2,912,055,424||$ 25,396,531|
|2008 Appropriation||$ 2,567,180,009||$ 3,095,483,568||$ 25,505,817|
|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 Base Budget||$ 2,821,482,130||$ 4,188,407,318||$ 32,552,196|
|2011 Addenda||$ (112,386,384)||$ 372,724,866||$ 95,960|
|2011 Total||$ 2,709,095,746||$ 4,561,132,184||$ 32,648,156|
|2012 Base Budget||$ 3,390,184,569||$ 3,955,031,271||$ 32,552,196|
|2012 Addenda||$ 145,351,115||$ 185,758,160||$ 2,623,850|
|2012 Total||$ 3,535,535,684||$ 4,140,789,431||$ 35,176,046|
|General Fund||Nongeneral Fund||Total Positions|
|2011 Base Budget||169.02||190.98||360.00|
|2012 Base Budget||169.02||190.98||360.00|
Add intellectual disability waiver slotsAddresses the intellectual disability waiver waiting list by adding 275 slots in the second year.
FY 2011 FY 2012 General Fund $ 0 $ 9,800,000 Nongeneral Fund $ 0 $ 9,800,000
Adjust funding for medical assistance services for low-income children utilization and inflationReduces funding for the Commonwealth's Medicaid Children's Health Insurance Program. The projected expenditures are lower than last year's estimates. Program costs are expected to drop due to slower enrollment growth and smaller increases in managed care rates. This program applies to children between the ages of 6 through 19 who fall within the income limit of 100 to 133 percent of the federal poverty level.
FY 2011 FY 2012 General Fund $ (3,190,620) $ (4,707,903) Nongeneral Fund $ (6,826,585) $ (9,644,395)
Adjust funding for medical services for involuntary mental commitmentsAdjusts funding for the costs of hospital and physician services for persons subject to an involuntary mental commitment. The forecast of expenditures is projected to be slightly less than last year's estimates.
FY 2011 FY 2012 General Fund $ (882,450) $ (825,416)
Adjust funding for the Health Care FundAdjusts the appropriation for the Health Care Fund to reflect the latest revenue estimates. The payment from tobacco manufacturers, as part of their Master Settlement Agreement with states, is expected to be lower than previously estimated. In addition, tobacco taxes and Medicaid recoveries are also expected to be less than projected last year. In FY 2012, funding is needed to offset the loss of revenue from the restoration of the dealer discount on other tobacco products. The Health Care Fund is used as state match for Medicaid so a decrease in revenue requires additional general fund support to offset the impact.
FY 2011 FY 2012 General Fund $ 9,958,176 $ 345,982 Nongeneral Fund $ (9,958,176) $ (345,982)
Amend stimulus-related provisionsEliminates or modifies various budget language items to conform with the Governor's plan for allocation of the six-month extension of federal Medicaid stimulus funding. The Commonwealth received less funding than the General Assembly assumed in their contingent restorations of various budget actions. Some language is eliminated for those actions the state was legally required to restore. The Governor's plan was only able to allocate funding in the first year for the remaining items, so they are modified to reflect this action. This action is embedded in budget language.
Apply pharmacy drug rebates to managed careCaptures savings by extending the Medicaid mandatory drug rebate program to drugs dispensed under contract with managed care organizations (MCOs), as required by the federal Patient Protection and Affordable Care Act (PPACA). Prior to passage of federal health care reform, the drugs administered through the MCOs were not subject to the rebate program. Effective March 23, 2010, relevant drugs are now eligible for the mandatory rebate, which generates savings for the Medicaid program.
FY 2011 FY 2012 General Fund $ (12,545,531) $ (5,604,699) Nongeneral Fund $ (17,298,708) $ (5,604,699)
Authorize emergency regulations to change service documentation requirementsProvides emergency regulatory authority for the agency to modify regulations to require service documentation be appropriately signed and dated at the time a service is rendered. These requirements currently exist in agency policy but need to be reflected in regulations as well. This action is embedded in budget language.
Authorize emergency regulatory authority to modify Client Medical Management programModifies the criteria set out in regulations to allow for programmatic changes to the recipient utilization (Client Medical Management) program in order ensure appropriate utilization, prevent abuse, and promote improved and cost efficient medical management of essential Medicaid client health care. This action is embedded in budget language.
Authorize regulatory revisions regarding payment rate for pre-authorized or emergency care provided by out-of-network providersProvides emergency regulatory authority for the agency to amend regulations regarding the payment rate for authorized or emergency care provided by out-of-network providers. This change is needed to bring the regulation in line with current operational practice. This action is embedded in budget language.
Change frequency of pharmacy committee meetings and reporting requirementsModifies the frequency of the pharmacy and therapeutics committee meeting schedule from quarterly to semi-annually and removes an out-dated reporting requirement on the Preferred Drug List program. This action is embedded in budget language.
Eliminate the pharmacy dose fee for enrollees residing in a nursing homeEliminates the five dollar per month/per patient unit dose fee paid for enrollees residing in a nursing home. This fee was established to address costs incurred by long-term care pharmacies providing single dose drug services to Medicaid recipients in long-term care facilities. Since most of these recipients are dual-eligible for Medicare and Medicaid and now receive their drugs through the federal Medicare prescription drug program, this fee is no longer necessary.
FY 2011 FY 2012 General Fund $ 0 $ (323,708) Nongeneral Fund $ 0 $ (323,708)
Enhance funding for freestanding children's hospitalsProvides funding for freestanding children's hospitals, with a high Medicaid utilization greater than 50 percent, by paying physician supplemental payments and increasing funding for indirect medical education payments. Only one hospital meets this criteria.
FY 2011 FY 2012 General Fund $ 0 $ 1,000,000 Nongeneral Fund $ 0 $ 1,000,000
Establish a new targeted case management service for children enrolled in early intervention programEstablishes a new targeted case management service under Medicaid and FAMIS for children enrolled in the Part C early intervention program. The existing case management service is not the most appropriate model for case management of this population. The new case management service will reimburse for the services that are already federally required by the early intervention program to support the enrolled families and children. Quality measures to improve health outcomes are being added to the requirements for this new case management. New rates will be established based on the actual requirements of the service. The impact of this action is expected to be budget neutral and is embedded in budget language.
Expand care coordination to additional services and populationsExpands care coordination to additional services, populations, and regions in both the Medicaid and FAMIS programs. Currently, care coordination is limited by geography and service types, thereby excluding large portions of the Medicaid population, particularly those with more complex conditions and significant long-term service needs which require higher expenditures by the Commonwealth for their care. An expansion of care coordination will ensure that necessary services are provided at the most appropriate level and setting, resulting in quality improvement and optimizing the use of public resources.
FY 2011 FY 2012 General Fund $ 0 $ (3,445,414) Nongeneral Fund $ 0 $ (3,445,414) Authorized Positions $ 0 $ 8
Fund administrative costs of the Virginia Health Reform InitiativeFunds the administrative costs associated with the Virginia Health Reform Initiative, which is coordinating the planning and implementation of federal health care reform. The Commonwealth has received a federal planning grant that will cover partial costs from September 30, 2010 through September 29, 2011. This funding will cover the costs of the office for portions of FY 2011 and FY 2012.
FY 2011 FY 2012 General Fund $ 62,500 $ 187,500 Nongeneral Fund $ 62,500 $ 187,500
Fund cost of implementing and administering the Medicaid Provider Incentive ProgramFunds implementation and administration of a new program that will allow health care providers in Virginia to receive 100 percent federal funding to assist them with the adoption of electronic health records. Federal law requires that the states implement this program. The federal government is providing a 90 percent federal match rate for state costs. The state must determine the eligibility of providers, process payments, conduct outreach and provide technical support. If the state does not implement this program, then Virginia providers will not be able to access as much as $300 million in federal funding.
FY 2011 FY 2012 General Fund $ 442,350 $ 821,343 Nongeneral Fund $ 3,981,150 $ 7,392,091 Authorized Positions $ 0 $ 2
Fund costs to handle increased appealsProvides funds to handle an 89 percent increase in appeals cases over the last five years. The appeals staff has seen an increase in their workload from 157 appeals per position in FY 2005 to 289 a person in FY 2010. This amendment adds nine hearing officers to handle the increased workload.
FY 2011 FY 2012 General Fund $ 0 $ 614,538 Nongeneral Fund $ 0 $ 614,538 Authorized Positions $ 0 $ 9
Fund costs to outsource call centerOutsources the agency's call center for providers and clients. The agency's current technology is outdated and needs to be replaced. In addition, the cost and ongoing support of purchasing new technology is not cost effective since existing contractors already provide similar services for the agency.
FY 2011 FY 2012 General Fund $ 224,072 $ 470,728 Nongeneral Fund $ 224,072 $ 470,728 Authorized Positions $ 0 $ (16)
Fund Family Access to Medical Insurance Security (FAMIS) program utilization and inflationAdjusts funding for the program to reflect the latest estimate of expenditures. Less funding is needed in FY 2011 because enrollment has trended below previous projections. In FY 2012, additional funding is required because the planned eligibility reduction from 200 to 175 percent of the federal poverty level can no longer be implemented. Federal health care reform prohibits any reduction in eligibility for children until 2019.
FY 2011 FY 2012 General Fund $ (9,442,338) $ 9,679,852 Nongeneral Fund $ (17,535,269) $ 18,067,368
Fund health information technology initiativeProvides funding for the Health Information Technology/Medicaid Information Technology Architecture program. It is a coordinated effort to move Virginia's Health and Human Resources' (HHR) agencies towards integrated health care technology and health information exchange. This funding will allow the Virginia Health Information Exchange (HIE) to inter-operate with state health systems. Creation of an HIE is necessary for implementation of electronic health records, a major federal initiative and a critical step in improving health outcomes and making health care more cost-effective. In addition, the funding will establish a real-time eligibility determination website for all HHR programs. This centralized web-based portal will allow citizens a self-directed method to apply for various state-sponsored programs, including Medicaid. Implementation of the portal is intended to address the enrollment expansion of Medicaid in 2014 as mandated by the federal health reform law. This automation of routine applications is expected to handle the majority of new caseload volume, allowing current eligibility workers to focus efforts on complex cases, and avoiding increases in eligibility staffing levels and administrative expenses.
FY 2011 FY 2012 General Fund $ 1,140,895 $ 3,490,580 Nongeneral Fund $ 3,955,398 $ 23,828,496 Authorized Positions $ 2 $ 4
Fund increased audits and data mining activitiesExpands audits of community mental health services and allows the agency to contract for data mining services. Community mental health is the fastest growing service in the Medicaid program and additional audits are necessary to ensure proper utilization of these services. Data mining services are also needed to ensure the agency is focusing its audit and utilization review resources in the most appropriate ways to reduce fraud, waste and abuse in Medicaid. The audit and data mining costs are more than offset by the expected savings.
FY 2011 FY 2012 General Fund $ 0 $ (692,684) Nongeneral Fund $ 0 $ (692,684) Authorized Positions $ 0 $ 1
Fund mandatory electronic transaction and code set upgradesFunds the cost of updating the Medicaid Management Information System by upgrading electronic data interchange transactions to the latest version (by January 2012) and upgrading the diagnosis and inpatient hospital code sets by October 2013. This funding will cover the costs for system changes, training and staffing. These updates are major changes for Medicaid programs and are required by federal law. If the changes are not made, the state will not be able to process Medicaid claims after the federally required date. The federal match rate is 90 percent for costs associated with complying to these mandates.
FY 2011 FY 2012 General Fund $ 501,624 $ 618,904 Nongeneral Fund $ 4,514,611 $ 5,570,140 Authorized Positions $ 1 $ 2
Fund Medicaid utilization and inflationProvides additional funding for the increase in the use of Medicaid services and the higher costs of those services. This amendment reflects $265 million in additional federal funding that will be received in FY 2011 from the six-month extension of the increased federal match that is part of federal stimulus efforts. This federal funding frees up state funding in FY 2011 that offsets increased Medicaid need. In FY 2012, the additional funding is primarily associated with restorations of eligibility reductions that were planned to take effect, but are prohibited under federal health care reform. Medicaid expenditures are projected to increase 8.1 percent in FY 2011 and 4.7 percent in FY 2012.
FY 2011 FY 2012 General Fund $ (87,589,667) $ 157,125,589 Nongeneral Fund $ 376,592,668 $ 135,211,809
Fund new enrollment initiatives to qualify for a federal bonus paymentProvides funding for two new enrollment retention initiatives that are necessary to obtain a federal performance bonus. The Children's Health Insurance Program Reauthorization Act (CHIPRA) of 2009 authorizes an annual financial bonus to states that implement certain enrollment and retention provisions in their Medicaid and Children's Health Insurance Program (CHIP) programs. In addition the state must exceed enrollment goals for children in their Medicaid program. Virginia's enrollment has already grown enough to meet the federal FY 2011 enrollment target. The two new enrollment and retention strategies that were implemented October 1, 2010 are administrative renewals for FAMIS applicants and a premium assistance program. The current projection for Virginia's potential CHIPRA performance bonus is $9.8 million for federal FY 2011, which would be received in FY 2012.
FY 2011 FY 2012 General Fund $ 321,563 $ (9,363,446) Nongeneral Fund $ 488,128 $ 534,902 Authorized Positions $ 1 $ 1
Fund the Recovery Audit Contractor programFunds the administrative costs associated with the implementation of the federally mandated Recovery Audit Contractor (RAC) program. The RAC program's mission is to reduce improper payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments. All contractors will be paid on a contingency fee basis on both the overpayments and underpayments. The program is expected to generate savings starting in FY 2013.
FY 2011 FY 2012 General Fund $ 0 $ 124,302 Nongeneral Fund $ 0 $ 124,302 Authorized Positions $ 0 $ 2
Implement a provider assessment for Intermediate Care Facilities for the Mentally RetardedImplements a provider assessment that generates additional state dollars used as match to draw down federal Medicaid funds. This amendment imposes an assessment on the revenues of private and state intermediate care facilities for the mentally retarded (ICF-MRs). This assessment increases the costs of ICF-MRs which can then be reimbursed by Medicaid. This action will have minimal financial impact on these providers.
FY 2011 FY 2012 General Fund $ 0 $ (8,486,183) Nongeneral Fund $ 0 $ 8,391,918
Implement new quality models for certain mental health servicesEnsures appropriate utilization and cost effectiveness of mental health services. This action allows the agency to amend regulations for residential treatment facility (level C) and levels A and B residential services (group homes) for children with serious emotional disturbances. In addition, the agency is authorized to implement new quality service models for intensive in-home and therapeutic day treatment services. This action is embedded in budget language.
Increase the pharmacy network discountIncreases the pharmacy network discount from 13.1 percent to 17.43 percent below average wholsale price (AWP). This action reduces the amount Medicaid reimburses pharmacies for pharmaceutical drugs.
FY 2011 FY 2012 General Fund $ 0 $ (1,356,585) Nongeneral Fund $ 0 $ (1,356,585)
Mandate electronic claims submission and paymentRequires claims submissions and provider payments be processed electronically as a condition of participation in Medicaid and FAMIS. This requirement will improve effcicieny and reduce administrative costs at the department. New providers will be required to follow these new provisions beginning October 1, 2011, followed by an expansion to all existing providers by July 1, 2012. The agency will establish a process to exempt providers from this mandate if necessary. This action is embedded in budget language.
Mitigate nursing facility operating rate reductionModifies the three percent reduction in nursing facility operating rates scheduled to take effect in FY 2012. This amendment changes the reduction to two percent.
FY 2011 FY 2012 General Fund $ 0 $ 5,000,000 Nongeneral Fund $ 0 $ 5,000,000
Modify waiver to include residential settings as a provider of respite careModifies the Elderly and Disabled with Consumer Direction Medicaid waiver to allow a residential facility for children to provide respite services. Currently, the waiver regulations do not permit this type of facility to provide respite care. This waiver change is subject to federal approval. This action is embedded in budget language.
Provide emergency regulatory authority to authorize a new basis for pharmacy pricingAuthorizes the agency to determine a new basis for pricing of pharmacy services. Existing regulations require that pharmacy services be paid based on "Average Wholesale Price" (AWP). As of September 2011 the only existing vendor providing the information will cease the publication of AWP. This action is embedded in budget language.
Reduce nursing home capital reimbursementReduces the nursing home capital rental rate floor. Currently, the rental rate floor is scheduled to be reduced from 9.0 percent to 8.5 percent in FY 2012. This action reduces the floor to 8.0 percent.
FY 2011 FY 2012 General Fund $ 0 $ (2,424,310) Nongeneral Fund $ 0 $ (2,424,310)
Reduce rates for community-based residential behavioral services for childrenReduces rates for residential level A and B services by six percent below the rates in effect on January 31, 2010. The reduced rates shall take effect on July 1, 2011.
FY 2011 FY 2012 General Fund $ 0 $ (357,406) Nongeneral Fund $ 0 $ (357,406)
Require independent assessments for selected community mental health services to avoid conflicts of interestRequires an independent assessment of the need for certain community mental health services. Currently, providers can identify children under age 21, deem them at risk of out-of-home placement, and refer the children to themselves for services. This change will correct the inherent conflict of interest in the current system and ensure the appropriate utilization of these services.
FY 2011 FY 2012 General Fund $ 0 $ (6,340,449) Nongeneral Fund $ 0 $ (6,240,449) Authorized Positions $ 0 $ 2
Adjust appropriation to reflect enhanced federal Medicaid match for state facilities and the Comprehensive Services ActAdjusts appropriation for payments to state mental health and intellectual disability facilities and for Comprehensive Services Act (CSA) expenditures. The six-month extension of increased federal match for Medicaid in FY 2011, reduces the state match for these expenditures. This amendment captures those savings and reflects the increased federal appropriation.
FY 2011 FY 2012 General Fund $ (11,386,958) $ 0 Nongeneral Fund $ 34,525,077 $ 0