The Indiana Family & Social Services Administration (FSSA) oversees a $8.6 billion biennial budget across five divisions serving over 4,400 employees. The Healthy Indiana Plan (HIP) provides coverage to over 42,500 individuals with over 55,000 more on the waitlist. HIP members have high rates of preventive care completion and emergency room utilization decreased for members making required payments. The Division of Disability and Rehabilitative Services serves over 25,000 children through waivers and Medicaid waivers now serve over 9,300 individuals, a significant increase over nursing facility clients.

1. Indiana Family & Social
Services Administration
FY12-13 Biennium Budget

2. Agency Overview
• Overall Budget of $8.6 Billion
• Five Divisions:
– OMPP
– Aging
– DMHA
– DDRS
– DFR
• Current Number of Staff 4,478
2

3. FSSA Headcount
FY10 4,789
FY11 (01/3/11) 4,478
FY12(est) 4,166
FY13 (est) 4,166
3,800 3,900 4,000 4,100 4,200 4,300 4,400 4,500 4,600 4,700 4,800 4,900
3

4. Healthy Indiana Plan (HIP)
4

5. Healthy Indiana Plan (HIP) Update
• Enrollment (as of 12/31/2010)
– Total enrollment: 42,568
– Childless adults: 15,632
– Parental adults: 26,936
• Childless adults wait list continues, but program remains open for parental
adults.
• Number of individuals on waitlist: 55,032 (as of 12/31/2010)
5

6. HIP Accomplishments
• Member Behavior
– 76% of HIP members completed their required annual physical;
completion of preventive services makes a member eligible for POWER
account rollover in the following year
– HIP members required to make POWER account contributions saw a 9%
decrease in ER utilization during the first 3 months of enrollment, and
15% after 6 months. HIP members not required to make POWER account
contributions only saw an initial 5% decline in ER use after 3 months and
no additional decline in subsequent months.
– 97% of individuals make their required POWER account contributions
• Member Satisfaction -Product Acceptance and Research conducted a survey
of HIP members
– 94% of members were satisfied with the program
– 99% indicated they would reenroll in the program
6

7. HIP & The Affordable Care Act
• May 17, 2010
– Letter from FSSA Secretary Anne Murphy to CMS Director Cindy Mann
– CMS questions:
• Can HIP be used as the coverage vehicle for the newly eligible population under the
Affordable Care Act?
• Waiver expires in 2012 and ACA provisions come into effect on January 1, 2014 –
What will happen in 2013?
• Will State receive an enhanced match for current HIP participants?
– This will impact fiscal projections on how much the Affordable Care Act will cost
Indiana
• August 30, 2010
– Letter regarding Medicaid Disability included follow-up questions regarding HIP. A
subsequent call with CMS did not lead to any conclusions.
• January 14, 2011
– Governor Daniels sent a letter asking Secretary Sebelius for an answer as to whether or not
HIP can continue as the coverage vehicle for the newly eligible adults.
• State will be submitting a State Plan Amendment to seek approval for HIP as the
coverage vehicle in 2014.
7

8. HIP – Senate Bill 461
• Authored by Senator Pat Miller
• Effective 2014
– Use HIP as the Medicaid ACA expansion vehicle instead of the traditional
Medicaid program.
– Gives Secretary the authority to make benefit modifications to align with ACA
requirements. ACA could increase benefit costs 10-15% depending on final CMS
rules.
– Eligibility alignment to reduce of duplication of federal program.
• Effective upon passage
– Amend code to require individuals to make a minimum contribution of not less
than $60 annually.
– State POWER account savings not substantial, but could drive down premium
costs.
– Allow nonprofit organizations to contribute no more than 50% of the individual’s
required payment.
– Health plans may contribute if related to health improvement.
8

9. Enrollment Scenarios
December 2013 Projected Enrollment
Childless
Scenario Parents Adults Total
Status Quo 55,000 10,000 65,000
Scenario 1 55,000 17,000 72,000
Scenario 2 55,000 26,000 81,000
Full Enrollment 55,000 36,500 91,500
Notes:
•Data provided through September 30, 2010.
•CY 2008 beginning balance of approximately $73.9M.
•Scenarios above assume that HIP would be extended until December 31, 2013.
9

10. Revenue Projection
CY 2013 Projection
Scenario Remaining
State Tax Tax Revenue
Expenditures Revenue Surplus/(Deficit) 12/31/2013
Status Quo $157.3M $127.7M $(29.6M) $206.5M
Scenario 1 $177.6M $127.7M $(49.9M) $170.2M
Scenario 2 $205.2M $127.7M $(77.5M) $106.9M
Full Enrollment $235.0M $127.7M $(107.3M) $23.0M
Notes:
•Data provided through September 30, 2010.
•Scenarios above assume that HIP would be extended until December 31, 2013.
10

11. 11

12. 12

13. Non-Medicaid Base Budget
($’s in millions)
$900
$803.7
$800
$744.2
$700
$600 $80.9 M DECREASE
$500
General Fund
$400 Dedicated Funds
$300 $262.7
$240.8
$200
$100
$0
FY11 Approp FY12-13 Request
13

14. Summary of Base Changes
• $9.4M reduction in appropriation request for CHOICE
• Implementation of transition from Care Select to Chronic Disease
Management that will reduce costs by over $11M.
• Reductions of almost $18M in administrative costs due to attrition,
efficiencies and contract reductions.
• Over $11M in savings from maximizing federal dollars.
• Continuation of RCAP moratorium for a savings of $3M.
• Reduction of approximately $7M in DD state line funding as a result of
transitioning individuals to waiver funded services.
• Elimination of DDRS Crisis and Outreach contracts that will save
approximately $6M
• $15M in annualized savings due to the SOF Transition plan
14

15. Division of Family Resources
(DFR)
15

16. DFR Regions
Hybrid Conversion:
Vanderburgh – January
Vigo – June
Clark – September
Grant & Allen– Scheduled for
February 2011.
Indiana has been working closely
with the Federal government. FNS
requires two months of data prior
to giving the State approval to
expand to another region.
16

17. FY11 Timeliness Performance
100.0%
90.0%
80.0%
70.0% As-Is
Modernized
60.0% Hybrid
50.0%
40.0%
July August September October November December
17

18. Applications Pending Beyond Time Standard as a % Total Pending Applications
Statewide
50%
44%
45%
40% 39%
35% 32%
32% 32%
31%
30% 28%
Total Pending
25%
23% 24%
25% 23%
20%
16%
15%
10%
5%
0%
July 2010
Dec 2010
Jun 2001
Jun 2002
Jun 2003
Jun 2004
Jun 2005
Jun 2006
Jun 2007
Jun 2008
Jun 2009
Jun 2010
Pending Beyond Time Standard as a % Total Pending
18

19. Regional Application Backlog 12/5/09 – 1/14/11
Applications Pending and Late Excluding HIP
Lake St.Joseph Allen Grant Marion Vigo Vanderburgh Clark State
Thru Region 1 Region 2 Region 3 Region 4 Region 5 Region 6 Region 7 Region 8 Total
12/05/09 1,309 830 3,941 3,468 8,653 2,338 2,427 3,053 26,019
01/14/11 273 236 860 1,318 3,547 219 265 563 7,281
Increase/
Decrease -79% -72% -78% -62% -59% -91% -89% -82% -72%
Source: Cognos Application Tracking Dashboard
Note: The change shown is relative to the 12/5/09 backlog
19

20. Hybrid Performance: Key Metrics
State Reported, Cumulative Food Stamp Error Rates*
Positive July 2009 8.21%
Positive July 2010 2.76%
Positive July National Average 2010 3.70%
Negative July 2009 15.10%
Negative July 2010 2.48%
Negative July National Average 2010 7.55%
*The most recently available SNAP error rates as reported by FNS are for the month of July 20

21. Number of Hoosiers Receiving Benefits Increases Since 2002
With the economic downturn, FSSA program enrollment has increased by
42% since 2005.
Enrollees by Program (as of June 30 annually)
2002 2003 2004 2005 2006 2007 2008 2009 2010 Current***
Medicaid* 756,904 777,170 822,344 847,625 857,599 877,933 920,332 1,017,571 1,088,637 1,099,103
Food Stamp
428,089 487,197 532,402 557,206 575,602 586,156 639,470 721,155 828,604 872,898
Recipients
Food Stamp
180,457 205,208 228,218 241,177 249,914 253,443 273,876 306,562 355,626 378,210
Households
TANF 151,269 146,783 148,788 141,055 135,206 117,311 122,743 119,912 104,004 92,439
Number of
Hoosiers
enrolled in at 776,121 810,694 866,103 899,701 922,434 943,343 1,013,429 1,114,950 1,250,774 1,279,483
least one
program**
* Medicaid increase in 2008 & 2009 affected by addition of HIP program (18,903 members in 2008 & 50,115 members in 2009). Medicaid
numbers are from ICES and do not include retroactive coverage; numbers are slightly higher in actuality.
** Program totals are comprised of only unique cases, and not a sum of individual program data.
***Current enrollment through Dec 31, 2010. Source: ICES 21

22. New Applications for Assistance Groups Received in ICES
Statewide
1,400,000
1,195,305
1,200,000
994,471
1,000,000
856,812
788,390
800,000 760,173
Applications
695,720
641,687
608,793
600,000
491,076
430,264
400,000
200,000
2001 - Annualized based on 6 months of available data
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
22

23. Change Package –
DFR County Admin $32.6M
FY08 FY11 Estimate
$71.7M appropriation $56.5M appropriation
765,419 applications processed 1,213,382 applications processed
1,632 Contract Staff 2,044 Contract Staff
676 State Employees 767 State Employees
23

24. Division of Disability and
Rehabilitative Services (DDRS)
24

25. Waiver counts: Total participants
14,000
12,144
12,000 11,383
10,128 10,437
9,591
10,000
8,000
6,000
4,000
2,000
0
FY06 FY07 FY08 FY09 FY10
25

26. Waiver counts: New consumers
1,400
1,189
1,200
1,108
1,060
1,000
858
800
631
600
400
200
0
FY06 FY07 FY08 FY09 FY10
26

27. BCDS – First Steps – Children served
26,000
25,198
25,000
24,133 24,258
24,000
22,872
23,000
22,567
22,000
21,000
SFY06 SFY07 SFY08 SFY09 SFY10
27

28. Division of Aging (DA)
28

29. Average Nursing Facility Report Card Score
200
195 194
188
190
185
180
175 171
Phase 2
01/01/10
170
165
December 2007 December 2009 December 2010
160
29

30. DA – Medicaid Waiver Clients
10,000 9,361
8,000
6,000
4,000
3,180
2,000
-
January 2005 November 2010
30

31. Nursing Facility Clients vs. Medicaid Waivers Clients
30,000
28,333 28,636
25,000
20,000
15,000 Medicaid Waivers
Nursing Facilities
10,000
9,361
5,000
3,180
-
January 2005 November 2010
Waiver % Increase 295%
NF % Increase 1%
31

32. Fy10 Average state cost per client
$8,000
$7,102
$7,000
$6,000
$5,000
$4,000
$3,359
$3,000
$2,000
$1,000
$-
A&D Waiver CHOICE
32

33. Choice and A&D Waiver Comparison
A&D Waiver CHOICE
Annual State $30.9M $29.4M
Expenditures
Avg. Clients 9,167 4,399
Served Per
Month
Avg. Cost Per $3,359 $7,102
Client
Eligibility •3+ ADLs and/or • 2+ ADLs
1 Skilled Nursing Need • 150% of Poverty Level
• 300% of Poverty Level • Assets cannot exceed $500,000
• Meets NF LOC • Does not have to meet NF LOC
• Medicaid Eligible • Does not have to be Medicaid Eligible
Waitlist as of 4,957 5,490
11/ 2010 33

34. Division of Mental Health and
Addictions (DMHA)
34

35. Proposal Details
Richmond:
• Close substance
Logansport:
abuse unit (101
• Close civil beds (222
beds)
beds)
•Close youth
services unit (20
beds)
• Close MRDD
Larue Carter: unit (30 beds)
Youth services from •Use 50 beds for
Richmond moved to LC SMI patients
(utilization of 20 Existing
Beds)
Evansville: Madison:
• Close 30 bed MRDD unit • Close two
& transition to community MRDD units (30
•Utilize 30 bed unit for beds)
SMI patients •Utilize 30 beds
for SMI patients
35

36. SOF Transition Plan Status
– SOF Transition as of 1/11/11
• Appropriate patients with intellectual disabilities
have been identified for discharge to community
placements by April 2011.
• Overall Discharges to Occur:
– 110 patients to other State Hospitals
– 116 MR/DD patients to Community
• 38 patients with mental illness have been transferred
from Logansport to other State hospitals.
• 22 patients with MR/DD have been transferred to
the community.
36

37. SOF Transition Plan Status (Cont’d)
• Logansport has closed 4 patient units (98 beds)
• No staff layoffs have occurred. Staffing reduction at
Logansport (112) and Richmond (36) has been due to
attrition.
• LSH
– currently 682 employees; target is 492
– Currently 246 patients; target is 166
• RSH
– Currently 509 employees; target is 498
– Currently 234 patients; target is 211
37

38. Logansport Transition Plan Change
• Capacity increased from 134 patients to166 patients
• Change made based on clinical review of patients and
determination that certain patients still needed the structure
and security provided by the hospital
• Revised plan announced to staff 1/6/11
• Staffing increased to 492 (up from 482)
• Focus on forensic, sexual responsibility unit, IRTC step down,
women, MR/DD
38

39. Fy10 SOF Occupancy Rates
100.00% 95.85%
91.77%
87.04% 88.67%
82.85%
80.00%
60.00%
42.04%
40.00%
20.00%
EPCC Evansville Madison Logansport Richmond Larue Carter
39

40. FY10 SOF Operating Cost - PPD
Larue Carter $557.63
Richmond $407.40
Logansport $457.13
Madison $606.27
Evansville $486.58
EPCC $917.54
$- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000
40

41. MRO Update
• Changes to MRO program became effective 7/1/10
• Impetus for the change was to bring the program into
compliance with federal guidelines. Audit findings
resulted in payback to the federal government.
• System changes created mutually with impacted
providers.
• Service packages and allotted service units defined to
support recovery and community living.
41

42. MRO Update (Cont’d)
• Significant start up efforts lead to successful kick
off.
• Providers are adjusting service arrays to meet
consumer needs and program guidelines.
• Consumers are receiving the amount and intensity
of services identified through a standardized
assessment.
42

43. FSSA Capital Request
• Capital request for State Hospitals include both Preventive
Maintenance and Capital projects needed to maintain the current
facilities.
• Capital project request for the State hospitals is being maintained at the
same level as the last biennium budget.
– Preventive Maintenance - $5,553,395
– Capital Projects - $8,479,768
• Request have been limited to those projects that are needed to maintain
the infrastructure of the facilities and life safety issues.
43

44. FSSA Capital Request
• Capital projects have been prioritized over the SOF system as a whole
and not by each individual hospital.
• Major capital projects:
– Replacement of current SOF Pharmacy System-current system is
no longer going to be supported by the current vendor during the
next biennium therefore this system will need to be replaced
(Project request $1.8 million).
– Remainder of projects are various projects among the hospitals for
infrastructure and life safety (Project request $6.9 million).
44

45. Office of Medicaid Policy and
Planning (OMPP)
45

46. Medicaid General Fund Appropriations
$2,500,000,000
$269M
$2,000,000,000
$111M
$303M $303M
$1,500,000,000
GROWTH
SHORTFALL
$1,000,000,000
ARRA
GF APPROP
$500,000,000
$0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
(est) (est) (est)
46

47. Projected Medicaid Assistance Need and
Increase Requested Relative to SFY 2011 Appropriation
(in $millions)
SFY12 SFY13
December 2010 Projection $1,843 $2,001
– Administrative Savings Target (100) (112)
– Legislative Initiatives in Budget Bill (20) (22)
December 2010 Adjusted Projection $1,723 $1,867
SFY 2011 Appropriation $1,429 $1,429
– SFY 2011 ARRA adj 303 303
Total SFY 2011 with ARRA $1,732 $1,732
– Growth Compared to SFY 2011 (9) 135
Total Increase From SFY 2011 Appropriation $294 $438
47

48. December 2010 Medicaid Assistance Adjusted Projection
EXPENDITURES FY 2010 Growth FY 2011 Growth FY 2012 Growth FY 2013
Fee for Service $1,811.7 15.8% $2,097.5 6.3% $2,229.2 10.7% $2,467.1
Capitation Payments and PCCM Fees 1,194.2 (10.6%) 1,067.3 9.5% 1,168.3 8.6% 1,268.8
Healthy Indiana Plan 243.1 (4.0%) 233.4 12.2% 261.9 15.9% 303.4
Long Term Care Institutional Care 1,482.1 2.7% 1,521.4 (0.8%) 1,509.7 3.5% 1,562.6
Long Term Care Community Care 646.3 3.1% 666.5 10.4% 736.1 5.4% 775.7
Medicare Buy-In, Clawback 258.2 2.3% 264.1 20.6% 318.5 8.2% 344.7
Medicaid Rehabilitation Option 256.9 (29.0%) 182.4 10.0% 200.8 8.2% 217.3
Rebates and Collections (174.9) 52.5% (266.8) 15.3% (307.7) 9.2% (336.1)
Remove CHIP Program, Provider Tax Receipts (247.7) 5.4% (261.0) 7.6% (280.8) 4.4% (293.1)
Other Expenditures (DSH, UPL, etc.) 674.2 58.0% 1,065.4 (8.2%) 977.7 (1.1%) 967.3
Medicaid Expenditures (State and Federal) $6,144.1 6.9% $6,570.3 3.7% $6,813.6 6.8% $7,277.7
FUNDING
Federal Funds 4,012.8 7.0% 4,293.5 3.8% 4,456.8 6.7% 4,757.0
DSH 30.0 61.7% 48.4 (19.3%) 39.1 (0.3%) 39.0
Non-State IGTs 25.3 827.2% 234.4 33.4% 312.7 1.8% 318.2
Cigarette Tax Revenues 71.6 18.1% 84.6 30.7% 110.6 10.5% 122.2
QAF Transfer to SBA (33.3) 19.1% (39.6) (49.7%) (19.9) 0.5% (20.0)
GF Directed IGTs 288.3 (91.9%) 23.5 714.7% 191.4 1.3% 193.9
Non-Medicaid Assistance Funds $4,394.7 5.7% $4,644.8 9.6% $5,090.7 6.3% $5,410.3
Forecasted Medicaid GF Assistance Need $1,749.5 10.1% $1,925.5 (10.5%) $1,723.0 8.4% $1,867.4
Less ARRA FMAP Stimulus Funding $573.4 (18.8%) $465.3
Required Medicaid General Fund Assistance $1,176.1 24.2% $1,460.2 18.0% $1,723.0 8.4% $1,867.4
General Fund Medicaid Assistance Appropriation $1,116.0 28.0% $1,428.8
Contingency Fund Contribution $57.6
Sub-total (Shortfall)/Surplus ($2.5) ($31.4)
48

49. State of Indiana, Family and Social Services Administration
Average Monthly Enrollment Forecast: SFY 2010 - SFY 2013
Using Data through October 31, 2010
Total Medicaid
Average Monthly Enrollment FY 2010 Growth FY 2011 Growth FY 2012 Growth FY 2013
ADULTS AND CHILDREN
Adults 112,210 6.2% 119,133 7.5% 128,045 4.4% 133,632
Children 539,095 5.5% 568,727 6.8% 607,213 5.0% 637,735
Mothers 30,383 1.8% 30,931 2.4% 31,661 2.2% 32,366
CHIP 79,687 8.1% 86,122 9.0% 93,845 5.9% 99,420
Healthy Indiana Plan 46,082 (0.3%) 45,949 13.8% 52,289 13.7% 59,463
Total Adults and Children 807,458 5.4% 850,863 7.3% 913,052 5.4% 962,617
AGED, BLIND AND DISABLED
Institutionalized 34,375 1.2% 34,787 1.0% 35,128 1.4% 35,617
Waiver 21,033 3.9% 21,859 5.1% 22,964 1.9% 23,408
No Level of Care
Dual 76,214 11.2% 84,785 6.5% 90,268 3.6% 93,554
Non-Dual 78,815 12.2% 88,461 7.3% 94,881 3.9% 98,568
Partial 28,767 6.9% 30,756 4.7% 32,192 3.5% 33,304
Total Aged, Blind, and Disabled 239,205 9.0% 260,648 5.7% 275,433 3.3% 284,451
OVERALL TOTAL 1,046,663 6.2% 1,111,510 6.9% 1,188,485 4.9% 1,247,068
49

50. Medicaid General Fund Appropriations
$2,000,000,000
$135M
$1,800,000,000
$1,600,000,000 $303M $303M
$1,400,000,000
$1,200,000,000
$1,000,000,000 GROWTH
SHORTFALL
$800,000,000
ARRA
$600,000,000 GF APPROP
$400,000,000
$200,000,000
$0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
(est) (est) (est)
50

51. Medicaid Cost Components
• Eligibility
– No Reductions Allowed Due to ARRA through June 30, 2011
– No Reductions Allowed Due to ACA through December 31, 2013
• Benefits
– Mandatory Benefits must be provided to receive Federal matching funds
– Changes to any current Optional Benefits not required under ACA will
require Legislative Action
• Provider Reimbursement
51

52. Medicaid Optional Services
State & # of Potential
Federal State Only Recipients Savings
Services Indiana Code or Indiana Adminstrative Code Citation SFY2010 SFY2010 SFY2010 SFY2012
Targeted Case Management IAC/Federal waivers $1.0 $0.2 4,000 $0.3
Prosthetic/Orthotic Services 405 IAC 5-19-3(5), 5-19-11, 5-26-6 $0.2 $0.05 2,500 $0.1
IC 12-15-2-8 (ICF/MRs); 12-15-5-1(19); IC 12-15-32
ICF/MR
(CRFs/DD); 12-15-5-1(20) $311.4 $76.9 4,200 $0.0
IC 12-15-5-1(4) gives authority for outpatient and clinic
Clinics (NP, Title V or Therapy) services, however these include many services beyond
these particular clinic services $0.1 $0.02 600 $0.03
Hospice Services Dual Eligible IC 12-15-5-1(15) and 12-15-40 $50.8 $12.5 5,500 $0.0
Hospice Services Non-Dual Eligible IC 12-15-5-1(15) and 12-15-40 $7.8 $1.9 600 $2.6
Ambulatory Surgical See note for clinics $5.1 $1.3 14,100 $1.7
Rehabilitation Facility Care IAC $11.1 $2.7 1,000 $3.7
MRO IAC $160.1 $39.5 35,800 $0.0
Dental IC 12-15-5-1(8) $58.5 $14.4 116,500 $11.6
Chiropractic Services IC 12-15-5-1(3) $3.0 $0.7 1,000 $0.8
Podiatrist Services IC 12-15-5-1(14) $2.1 $0.5 28,700 $0.5
Eye Care & Eyewear IC 12-15-5-1(12) & IC 12-15-5-1(11) $11.9 $2.9 148,300 $3.9
Waiver $645.8 $159.4 26,250 $0.0
Total $1,268.9 $313.2 $25.2
52

53. FY12-13 Budget Challenges
• Health care reform –No funding included in budget request
• Legislative opportunities:
– State Operated Facilities
– Medicaid Optional Services
– First Steps capitation requirement
– TANF
– QAF Maximization
53

54. QUESTIONS?
54
54