The State Home Per Diem Program

1. The State Home Per Diem Program Patty Gheen VHA Deputy Chief Business Officer for Purchased Care

2. Overview of the State HomePer Diem Program 2 Introduction and Program Scope FY 2011: National Workload and Expenditures FY 2012 Basic Per Diem Rates Current and Long Range Initiatives Summary Points of Contact

3. Introduction and Program Scope 3 • VA’s State Home program provides quality care for eligible Veterans in nursing home, domiciliary, and adult day health care programs • VA’s State Home program is an economical alternative to constructing, maintaining and operating VA-owned facilities • The VA pays a portion of the Veteran’s costs • The state homes are owned, staffed, and operated by the States

4. Introduction and Program Scope • VA has  a partnership with the States for 189 state home programs • These are located in each of the 50 states and Puerto Rico  • At present, there are 134 nursing homes; 54 domiciliaries; and one adult day health care program  • FY 2011 program costs were $826.7 million  • Note: Numbers of state home programs and levels of care depicted above are as of the close of FY 2011

5. Introduction and Program Scope

6. Alignment of VHA State Home Program Management Responsibilities

7. Summary of National State Home Workloads and Expenditures for FY 2011 • Program Scope • Eligibility for Payment of State Home Per Diem • State Home Per Diem Rates • Authorized Bed Levels

8. Program Scope: FY 2011 • State Nursing Homes (134): Basic Rate Per Diem Payments: $630,761,213 SC Per Diem Payments (PL 109-461): $144,605,032 State Domiciliaries (54): $50,838,688 • Adult Day Health Care (1): $456,865 --------------------- • Total FY 2011 Per Diem Costs: $826,661,798 8

9. DISTRIBUTION OF FACILITIES

10. Distribution of Expenses by Program

11. Eligibility for Paymentof State Home Per Diem • VA per diem payments to States are only paid for the care of eligible Veterans • The Secretary of the Department of Veterans Affairs may adjust the per diem rates each year • There are two payment methodologies for nursing home care; a higher rate for SC Veterans and a basic rate for NSC Veterans • Non-Veteran residents are not entitled to payment of VA aid 11

12. Eligibility for Payment of SH Per Diem and the Provision of Medications

13. Authorized Bed Levels Level of CareBeds Authorized Nursing Home 24,480 Domiciliary 5,984 Adult Day Health Care 50 (slots) Total: 30,514 Note: Numbers depicted are current as of 12/2011

14. FY 2012 State Home Per Diem Rates • The FY 2012 basic state home per diem rates are:      State Nursing Home:  $95.82      State Domiciliary:  $39.90      State Adult Day Health Care:  $75.40 • These rates are to be used for care that will be provided from October 1, 2011 through September 30, 2012 • The VA Prevailing Rates for service-connected Veterans were released to VAMCs of jurisdiction and the State Homes on Oct. 21, 2011

15. Current and Long Term Initiatives CBO worked to enhance and standardize business processes through: • analyses and discussions to determine viable state home per diem payment methodologies • the development of internal program controls, audit tools, and future-state technology systems • increased communication flow with VA and non-VA stakeholders

16. Current and Long Term Initiatives • CBO re-wrote and updated national policy for the State Home Per Diem Program.   The new VHA Handbook for the State Home Per Diem Program was released to VHA field activities on August 25, 2011 • CBO established monthly state home per diem program conference calls to provide guidance and direction to VISN and VAMC of jurisdiction program managers • CBO developed a comprehensive new VA Intranet web site for the state home per diem program

17. Current and Long Term Initiatives • CBO is developing a plan to standardize and automate the business processes around the initial application process as well as the payment processes • Our intent is to develop new and automated information technology solutions to processes for both VA and the State Home community • A national review is ongoing to define business requirements to automate the process in which State Home Per Diem Program process flow is conducted and to look at options for the future

18. Current and Long Term Initiatives • Areas under review include workload processing, data capture, financial management, and information technology (IT) solutions • As a part of this national review, CBO has solicited NASVH input • Additionally, CBO is exploring a regulatory change to allow State Veteran Homes to hold a bed for a Veteran for up to 30 days when temporarily transferred to an institution for acute care services • Will promote better tracking of Veterans and decrease administrative burden

19. State Home Per Diem Program FY11 Summary of Accomplishments Pursued multiple initiatives to enhance communication with VHA field activities. Revised national policy; began monthly conference calls; launched new VHA intranet State Home per diem web site; conducted regional training forums; met with external VA stakeholders Provided guidance and assistance to numerous VA/VHA audit activities (e.g., OIG, IPERA, MQAS, FQAMs) Surveyed State Veterans Homes to help assess issues associated with SC payment methodologies Transitioned from CITRIX to SQL for workload and expenditure reporting. High acceptance by VHA field activities. Field tested at 20 VAMCs of jurisdiction. User-friendly interface. Artificial Intelligence capabilities to help reduce errors and improper payments

20. Potential Policy Changes • Dom/ADHC Update • 30-Day Residency Requirement • Contracted Rates • Proposed rule to require the use of MDS 3.0 vs 2.0

21. Recent Changes Affecting VA Form 10-10SH Admissions Applications • The new VHA Handbook for the State Home Per Diem Program adopted three of the OIG’s recommendations concerning the state home application forms (VA Forms 10-10EZ and VA Form 10-10SH, State Home Program Application for Veteran Care Medical Certification). New VHA policy requires that: • The medical need for the level of care (nursing home, domiciliary or adult day care) must be verified in writing on the VA Form 10-10SH by the signature of a VA physician or a qualified licensed physician assistant or nurse practitioner currently employed in a VA long term care setting

22. Recent Changes Affecting VA Form 10-10SH Admissions Applications • This represents a change from previous policy where it was restricted to only a VA physician • VA administrative and clinical reviews must be conducted within ten business days after the application forms are received by the VAMC of jurisdiction • Important: Recent VA audit findings indicate that some VAMCs of jurisdiction had not received the 10-10SH at all; they weren’t on hand during the audit. Secondary to that, some forms had been received, but the VA certification and the signatures had not been on the form to verify administrative eligibility or the approval or the disapproval of the clinical eligibility for the level of care

23. Payment Models being ConsideredUnder the Contract Option • VA is considering the use of contracts to allow VA and the States flexibility in multiple payment methodologies to support the highly service connected (70% or greater and those receiving treatment for SC conditions) • The intent of the contracts is to allow VA and the respective State the opportunity to use a payment model that supports their programmatic differences inherent within each State • The models being considered are based on industry standard payment methodologies but also adjusted to meet critical financial concerns for higher cost residents. The models will support State Homes who are Medicare certified as well as those State Homes who currently do not have Medicare certification • The contracts will also include provisions to outline covered services as well as potential high cost outliers

24. Payment Models being ConsideredUnder the Contract Option • The models in review are: • Individual Resource Utilization Groups (RUGs):This model uses the individual RUGs score for each resident (typically calculated quarterly) and applies the Medicare rate for those individual RUG score. This will allow for significant variation in patient acuity and care requirements. With some 66 RUG scores, it may be challenging for non-Medicare certified homes. • Prevailing Rates: This is VA’s current methodology, using an average of prevailing rates under skilled nursing programs. This is likely the preferred option for non-Medicare certified homes.

25. Payment Models being ConsideredUnder the Contract Option • NASVH considered four payment models, individual RUGs, grouped RUGs, Medicaid-plus, and the prevailing rate and narrowed that down to individual RUGs and prevailing rate • Preliminary NASVH feedback, based on information from 6 of the 8 test sites, indicates:  • A general feeling that most State Veterans Homes would likely select the prevailing rate to cover basic nursing care, as most feel it would provide the simplest and most efficient billing  process • NASVH analyses, however, did not account for any “outlier” costs for specialty care or highly skilled nursing services ( e.g., exclusions or exemptions that would be authorized under Medicare rules).  These provisions still need to be worked

26. Summary • VA’s state home program plays a major role in delivering long term care to our nation’s Veterans • The program is expected to have future growth • As VHA’s state home per diem program manager, CBO has developed a number of initiatives that we believe will further enhance the national program • This includes establishing an active and regular dialogue with internal VA stakeholders, state home Administrators and NASVH leadership 26

27. Contacts For additional information, please contact: Joe Enderle joseph.enderle@va.gov (740) 773-1141, ext. 6220 Harold Bailey harold.bailey@va.gov (303) 331-7551 27

28. . Questions/Discussion 28