The State of Home Health & Care at Home Visiting Nurse Association of Central Jersey

1. The State of Home Health & Care at Home Visiting Nurse Association of Central Jersey William A. Dombi National Association for Home Care & Hospice wad@nahc.org June 10, 2011

2. CHALLENGES or OPPORTUNITIES Are you surprised?---It’s both! Changes are sudden, gradual, and distant Political environment subject to change that could trigger more change Care delivery changes accelerating Medicare regulation is somewhat of a wild card Republican health care reform repeal efforts underway Overall environment favors home care Value proposition Shift from fee for service utilization incentives in other care sectors

3. Present Challenges Providers need time to adjust as payment rates are reduced and new administrative responsibilities begin 2011-2014 are crucial years HHAs still best positioned to take on new opportunities inside and outside of Medicare home health Hospices face reduced rates, increased scrutiny, and greater competition Must deal with the “today” while moving forward on “tomorrow”

4. New Congress and Health Care Reform House Republican-led repeal efforts underway Policy driven or politics centered? Alternative reforms? Symbolic or successful?

5. New Congress and Health Care Reform • Course of Action • Repeal fails—no vote in Senate • House majority attempting to defund implementation • Will WH and House come up with some compromises around the edges? • Currently implemented reforms generally viewed positively • 2012 changes the dialogue depending on election results (TBD)

6. Health Care Reform Litigation • Constitutional challenges ongoing • Several courts uphold individual mandate; Other courts overturn it based on Commerce Clause • Florida decision finds whole law unconstitutional • Many other issues in litigation • Employer penalty/mandate • Medicaid obligations on states • Supreme Court review likely in 2012

7. New Congress and Health Care Reform • House budget proposal • Repeal Affordable Care Act expansion of insured • No funding for implementation • Medicaid block grants • Medicare vouchers/premium supports replace existing “insurance” program • Defined contribution vs, defined benefit • Beginning for under 55 (2011) population • Raise eligibility to 67 (2033) • Means tested supports

8. The Third Rail: Is this the time? • Will Medicare get bipartisan attention in 2011? • House Republicans open the door with budget proposal • “Gang of Six” developing proposal based on Deficit Commission—cost sharing • President Obama unveils Medicare reform ideas • IPAB on steroids = across the board rate cuts

9. Outlook: Block Granting Medicaid • Significant support • Mostly Republican governors • Significant opposition • Provides states with full flexibility • Benefit package would change at state’s discretion • Limits Federal liability in future • May increase state financial responsibilities • Likely CMS will increase state flexibility in short term

10. Outlook: Medicare premium support • Proposal puts off change for 10 years • High level of opposition from seniors • Not with this Congress or Administration • 2012 is the year to assess chances

11. Outlook: IPAB strengthened • Congressional bipartisan opposition • Provider and beneficiary opposition • Considered as either expert-driven reform or safe politics or “punting” • More likely that IPAB will dissolve rather than strengthened

12. Sum Total??? • Entitlements on the agenda • Real talk not rhetoric • Been there before? • Need to reform is obvious • Crisis breeds environment for radical change • Eligibility age • Cost sharing • Means tested contributions • Raising the tax level for workers

13. What Happened to ACA Reform? • Some improvements in insurance in place • Health exchanges developing • Employer waivers under review/granted by DoL • Employer responsibility rules in development • Individual mandate rules in development • Full state waivers under consideration

14. 2011: The Health Care Delivery Reforms Begin! Significant care delivery system reforms Chronic care management Transitions in care Accountable Care Organizations Post-acute care bundling Performance-based payment Hospice concurrent care demo

15. CHRONIC CARE MANAGEMENT Independence at Home Pilot Focus on certain diagnoses Interdisciplinary team Physician/NP directed Shared savings RFP in process HHA-based CCM demo Monitoring, teaching, coaching, and telehealth HH coverage criteria Not Applicable Shared savings

16. TRANSITIONS in CARE Re-hospitalization prevention and avoidance Commercial opportunity Hospital is the customer (penalty avoidance) Select discharge monitoring and oversight CMS developing standards

17. Accountable Care Organizations Partner, participant, or outsider Value defines role and opportunities Creativity and connections creates opportunities Large physicians groups and/or health systems are likely candidates to establish ACOs Home care/hospice=cost avoidance and cost effectiveness Proposed rule needs more definition and improvement

18. Post-Acute Care Bundling CMS pilots still in draft Who manages the bundle? A community-based model! Coordinates with institutional care PAC bundling Functions include: HHA/hospice manages all discharges to community Responsibilities for short-term inpatient care Physician services in or out? Shares in discharge planning

19. What Else to Watch For • Debt ceiling fight • Physician Medicare SGR fix • Industry changes

20. 2011: The Medicare Rate Changes Begin! • CMS Final Rule • 2.1% MBI • 1 point MBI reduction (Affordable Care Act required) • 2.5% reduction in outlier budget (Affordable Care Act required) • 3.79% case mix weight change adjustment in 2011 (2012 not finalized)

21. Future HH PPS Payment Rates • 2012: reduced MBI; further creep adjustment= ??? (-2.3%) ??? • 2014 rebasing • May result in varied rates • CMS study on vulnerable populations • Case mix weight change adjustment analysis • New MedPAC case mix adjustment model in development: looking to drop therapy threshold element

22. MEDICARE HOSPICE • Rate reductions threaten care • BNAF cuts increase risks • Limited inflation updates add pressure • Annual cap concerns grow • CMS Cap ruling and regulatory proposal allows optional proportionate calculation of patient census • Limited (if any) margins with no alternative payer offsets

23. MEDICARE HOSPICE • New payment model in development • No earlier than 2013 • MedPAC recommends 1 point rate increase in 2012 • MedPAC still supports U-shaped payment model • Oversight increasing as payments grow

24. MedPAC Home Health Recommendations for 2012 • Institute new case mix adjuster • Freeze payment rates • Impose program integrity measures including a moratorium on new HHAs • Accelerate rate rebasing to 2013 with 2 year phase-in • Impose a beneficiary copayment

25. MedPAC Copayment Proposal • Episode based • Possibly set at $150 or 5% • Exclude episodes preceded by inpatient hospital or SNF stay • Apply to Medicare-Medicaid dual eligibles • Permit MediGap supplemental isurance coverage

26. 2011 Regulatory Challenges • Face-to-face physician encounter • Home health • Hospice • Therapy assessments and documentation

27. F2F-Home Health • Repeal and/or reform • Reforms needed • Exceptions for certain patient populations • Inpatient discharges • Medically underserved areas • Vulnerable patients • Documentation requirements • Telehealth use

28. Therapy Clarifications: Assessment/Reassessment Professional (qualified) therapist assessment Functional assessment for therapy provided By qualified therapist from each discipline Documentation Results of therapy Effectiveness of therapy (or lack of)

29. Therapy Clarifications: Assessment/Reassessment • Qualified therapist (not a therapy assistant) visits to functionally assess and treat • At least every 30 days by each discipline, and • On 13th and 19th visit

30. Therapy Clarifications: Assessment/Reassessment • 13th and 19th visit exceptions • Rural areas or when documented circumstances outside control of therapist, reassess • 10th to 13th visit • 16th to 19th visit • Multiple therapy disciplines • On 13th and 19th visits • By corresponding therapist during visit closest to 13th and 19th therapy visit • Flexibility to avoid added visits

31. PECOS ENROLLMENT A mess! Implementation date still TBD HHAs should continue to encourage/assist physicians with enrollment HHAs and Hospices should consider their own PECOS enrollment

32. 36 Months Rule: Ownership Changes Limits sales and acquisitions of HHAs within 36 months of initial Medicare enrollment or within 36 months of certain changes in ownership Medicare billing privileges and provider agreement do not transfer when rule applicable Must reapply to Medicare and pass survey Applies to majority changes in ownership (>50%) Cumulative changes over 36 months Important exceptions

33. Medicaid Home Care Rebalancing of LTC spending continues Risks to home care support with strained budgets PPACA incents home care Major home care expansion through federal money (FMAP) Community Free Choice Option Removal of barriers to HCBS services Money Follows the Person Demo extension Spousal impoverishment protection

34. CLASS Act: Federal LTC Insurance Community Living Assistance Services and Support Payments made to cover individuals with ADL needs in home or nursing facility Premium withholding in wages Opt-out of program authority Participation begins 2010 Eligibility based on ADL needs Benefit payments begin 5 years after implementation (2016-2017 est.) Preset daily payment to insured Boon to Private Pay home care Supplemental support to Medicare/Medicaid home care Proposed rule and CLASS Commission announcement expected soon

35. Advocacy Action Plan • SECURE THE STRATEGIC ROLE CONGRESS INTENDS FOR HOME CARE AND HOSPICE IN ADDRESSING THE NATION’S ACUTE, CHRONIC, AND LONG TERM CARE NEEDS • ENSURE HOME CARE AND HOSPICE PARTICIPATION IN TRANSITIONS IN CARE AND OTHER HEALTH CARE DELIVERY REFORMS • ALLOW NPs AND PAs TO SIGN HOME HEALTH PLANS OF CARE • RECOGNIZE TELEHOMECARE INTERACTIONS AS BONA FIDE MEDICARE AND MEDICAID SERVICES • ENACT A COMPREHENSIVE HOME AND COMMUNITY BASED LONG TERM CARE PROGRAM FOR ALL AGE GROUPS

36. PRIORITIES 2011 • ENSURE APPROPRIATE AND ADEQUATE REIMBURSEMENT FOR AND ACCESS TO MEDICARE HOME HEALTH SERVICES • OPPOSE COST SHARING FOR MEDICARE HOME HEALTH SERVICES • BLOCK CMS REGULATORY “CASE MIX CREEP” CUTS AND REQUIRE A NEW PROCESS FOR CALCULATING CASE MIX ADJUSTMENT • ESTABLISH REASONABLE STANDARDS FOR REBASING MEDICARE HOME HEALTH SERVICES PAYMENT RATES • REPEAL OR REFORM MEDICARE HOME HEALTH FACE-TO-FACE ENCOUNTER REQUIREMENT • ENSURE FULL MARKET BASKET UPDATES TO MEDICARE HOME HEALTH • ENSURE MEDICARE ADVANTAGE AND FEE-FOR-SERVICE ENROLLEES RECEIVE IDENTICAL HOME HEALTH BENEFITS

37. PRIORITIES 2011 • ENSURE APPROPRIATE AND ADEQUATE REIMBURSEMENT FOR AND ACCESS TO HOSPICE SERVICES • REVISE REQUIREMENTS FOR HOSPICE FACE-TO-FACE REQUIREMENT • PRESERVE THE FULL MARKET BASKET UPDATE FOR THE MEDICARE HOSPICE BENEFIT • REJECT ADDITIONAL BENEFICIARY COPAYMENTS FOR MEDICARE HOSPICE SERVICES • ENSURE ACCESS TO HOSPICE CARE FOR RURAL PATIENTS • MONITOR PAYMENT REVISIONS TO MEDICARE HOSPICE BENEFIT

38. PRIORITIES 2011 • PROTECT AND EXPAND ACCESS TO HOME AND COMMUNITY-BASED SERVICES UNDER MEDICAID • ESTABLISH MEDICAID HOME CARE AS A MANDATORY BENEFIT AND SUPPORT REBALANCING OF LONG TERM CARE EXPENDITURES IN MEDICAID PROGRAMS IN FAVOR OF HOME CARE • MANDATE HOSPICE COVERAGE UNDER MEDICAID • ENSURE APPROPRIATE MEDICAID RATES FOR HOME CARE AND HOSPICE • INCREASE FEDERAL MEDICAID PAYMENTS TO STATES

39. PRIORITIES 2011 • PROTECT ACCESS TO HOME CARE AND HOSPICE SERVICES, INCLUDING FOR CARE PAID DIRECTLY BY INDIVIDUALS • MODIFY EMPLOYER RESPONSIBILITIES IN HEALTH REFORM TO ADDRESS HOME CARE SPECIFIC NEEDS • OPPOSE CHANGES TO THE COMPANIONSHIP SERVICES EXEMPTION TO THE FAIR LABOR STANDARDS ACT

40. NAHC MEDICAID ADVOCACY PROJECT • Focus on federal Medicaid • CMS now actively overseeing state compliance • LTC rebalancing a priority at CMS • MACPAC underway • Supportive of state-specific efforts • Use of legislative, regulatory, and legal forums • Significant research projects

41. Preparing for Change • Re-engineering, Restructuring, or Refinement? • Right People • New skills may be needed • Right Partners • Right Tools • Technology • Focused data and information • Right Efficiencies • Value-related cost • Right Plan • Short and long term

42. Meeting Both Challenges and Opportunities • Value proposition • Integrated • Dynamic • Evidenced-based • Outcome driven • Clinical • Financial