april 29, 2010 michael scandrett, jd halleland habicht pa and lpac alliance federal and state health...

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April 29, 2010 Michael Scandrett, JD Halleland Habicht PA and LPaC alliance Federal and State Health Care Reform: What Does it Mean for CPM’s Members?

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Apr i l 29 , 2010

Michae l Scandret t , JDHal le land Habicht PA and LPaC a l l i ance

Federal and State Health Care Reform: What Does it Mean

for CPM’s Members?

Overview of Federal Reform

Temporary national high risk pool

Insurance market changes (6 mos. post-effective date) Prohibit annual and lifetime limits Prohibit rescissions, except for fraud Extend dependent coverage to age 26, even if

married Cover pre-ex conditions for kids (under age 19)

Individual mandates and employer requirements to offer coverage (2014)

Overview, cont.

Insurance exchanges (fully operational in 2014) States may begin establishing exchanges sooner

Medicaid/Medicare reform Expand Medicaid coverage – effective April 1,

2010 for some states including Minnesota Extensive Medicare changes – parts A,B,D,

Medicare Advantage

Payment reform and care coordination Medical homes, Payment bundling, ACOs, CMS

Innovation Center

Provisions Impacting LTC: CLASS Act

CLASS Act: National Voluntary Insurance Program for Purchasing Community Living Assistance Services and Support Voluntary*, self-funded public long-term care insurance

program for individuals with “functional limitations” Secretary develops actuarially sound benefit plan 5-year vesting period Provides cash benefit – not < avg. of $50/day to purchase

non-medical services and supports needed to live in community

* Working adults will be automatically enrolled and must opt-out (effective Jan. 1, 2011)

Provisions Impacting LTC: Medicaid

Community First Choice Option Optional Medicaid benefit to provide community-

based supports for beneficiaries with disabilities who would otherwise require an institutional level of care

Enhanced federal matching rate – additional six percentage points

Effective Oct. 1, 2011, sunsets after 5 years

State Balancing Incentive Program FMAP increases for Medicaid expenditures for non-

institutionally based LTC services and supports Oct. 1, 2011 – Sept. 30, 2015

Medicaid, cont.

Removal of Barriers to Providing Home and Community Based Services (HCBS) State option to provide more types of HCBS through a

State plan amendment, rather than through a waiver For individuals with incomes up to 300% max SSI

payment and w/higher level need States may extend full Medicaid benefits to

individuals receiving HCBS under a State plan amendment

Money Follows the Person Rebalancing Demo Extends through Sept. 2016 Allocates $10 mil/yr. for 5 yrs. to continue the Aging

and Disability Resource Center initiatives

Provisions Impacting LTC: Medicare

Many Changes Restructure Medicare Advantage Payments Therapy Caps Reduce annual market basket updates for inpatient, home health,

SNF, hospice, etc. Freeze threshold income for Part B premiums (2011 through

2019) Reduce Part D premium subsidy for incomes over $85k(single),

$170k(couple) Assisted Living Part D Copay Partial Elimination Reduce wasteful dispensing of outpatient Rx in LTC settings Establish 15-member Independent Payment Advisory Board Eliminate Medicare Improvement Fund Medicare Shared Savings Programs (ACOs) Community-based Care Transitions Program Innovation Center w/in CMS

Provisions Impacting LTC: SNF Requirements

New Transparency Requirements Disclose info re ownership, accountability req’s,

expenditures; publish standardized info on nursing facilities to a website so Medicare enrollees can compare facilities

Compliance and Ethics Programs Requires compliance and ethics program SNF/NH; effective

in preventing and detecting criminal, civil, and administrative violations and in promoting quality of care

SNF Market Basket Productivity Adjustment Begins FY 2012 – reduced by productivity adjustment equal

to the 10-yr. moving average of changes in annual economy-wide private non-farm business multifactor productivity as projected by the Secretary

SNF Requirements, cont.

Many Changes Delays certain SNF “RUGs-IV” payment system changes to Oct.

1, 2011 Medicare value-based purchasing implementation plan for SNF Reporting of expenditures – wages and benefits for direct care

staff, breaking out RN, LPN, CNA, other med. and therapy staff Standardized complaint form Staffing accountability requirements GAO study and report on Five-Star Quality Rating System Permissive reductions in civil money penalties for facilities that

self-report deficiencies Notification of facility closure requirements Dementia and abuse prevention training requirements New screening requirements for Medicare/Medicaid certification Additional Fraud and Abuse prevention meausres

LTC Organizations as Employers

Many considerations: Reporting of employee health coverage on W-2 Forms CLASS Act – whether to participate Higher Medicare payroll tax on incomes over

$200k/$250k Notice to employees of coverage through exchange Shared Responsibility provisions – offer affordable

coverage to employees working 30+ hrs/wk Add’l background check requirements for SNF/NH

employees with “direct patient access”How to pay for the higher costs?

Strategic Considerations for CPM

1. Understand the currents2. Mind the gap3. Design the mousetrap

Currents: Global Accountability

1. Provider accountability Payment reform: ACOs, bundled payment, shared

savings, total cost of care Care management: Health care homes, chronic care

management, disease management Public reporting: baskets of care, peer grouping

2. Methods of managing care Care manager and health coach IT tools Reduce use of hospital, ER and other expensive Care model redesign Outside the medical model: social services, housing,

etc.

Currents: Demographic Changes

Long-term Care ImperativeDemographics of consumersWorkforce changesFinancing and revenue sources

Currents: Population Health

Increasing attention to population-wide health status (obesity, smoking, addiction, mental illness)

Funding and incentives for upstream primary and secondary prevention

Acknowledgement of need for greater community-wide (and employer-wide) cooperation to improve the health of entire communities (and employers)

Currents: Long-term Care Trends

1. Home and community-based services2. Fewer traditional long-term SNF services3. More sub-acute transitional care services4. Changing consumer and family preferences

Currents: Employer Health Coverage

Too early, too complex to predict the impactAnticipate health insurance costs may go up

in the short-termPublic program program reimbursement

questions need to be answered2011 Legislative Session will be significant!

Mind the Gap

1. Embrace (or at least accept) the demise of the distinction between acute and long-term care

2. Understand the new payers – who are the customers? Federal government (Medicare, etc) State government (MA, MNCare, etc.) Managed care plans Providers (ACO’s, bundled payments, health care homes)

3. Anticipate and market to the new consumer preferences and incentives

Design the Mousetrap

1. Continuously redefine your organization and your industry New role in the newly integrated continuum of care New relationships with payers and consumers New accountability New terminology

2. Design, negotiate new approaches to care delivery, payment and financing

3. Join with, learn from, other employers about strategies for controlling health benefit costs

4. Be proactive in proposing reimbursement changes related to LTC organizations as employers

Case Study: GAMC & ACOs

1. Hospitals: GAMC Coordinated Care Delivery Systems Dramatic decrease in revenues Increased provider-level accountability for total cost of care “Payment reform” – the demise of fee-for-service incentives Opportunities to improve coordination of services Opportunities to improve the care model

2. Strategies: New members of the care team Better IT tools to track utilization, costs, quality New external partners Patient engagement

Case Study: GAMC & ACOs

3. Implications Buy vs build Control costs vs. maximize revenues Manage capacity Predict future costs and measure impact of new

strategies Improve risk adjustment tools Address non-clinical factors (and services and

providers) affecting health status and care plan compliance

Final Thoughts: Cost Shifting (‘05)

Social Services

Long-Term Care

Acute Care

Public Health and Prevention

Final Thoughts: Continuum (’06)

Final Thoughts: Paradigm Shift (‘06)

Private sector marketplace and payersPart of a continuum of care and a network

of providersCompeting for businessData-driven, outcomes-based report cardsShift to lower cost services and settingsMultiple payors, drug formularies,

suppliers, care management protocolsElectronic medical records &

communication

Questions?