Health Care Reform: What We Know
CEN-PANPHAApril 27, 2010
Marsha R. Greenfield, VP Legislative AffairsAAHSA
[Some historians hold that history] is just one dam_ed thing after
anotherArnold Toynbee
It’s A History-Making Time
Washington
Where were we one year ago?◦ New Administration◦ Democratic Congress
Filibuster proof Senate◦ Stimulus Package◦ TARP◦ Health Care Reform Agenda◦ Supreme Court nomination
WashingtonWhere are we now?
◦Health Care ReformPassed, but only just beginning
State of Congress◦What’s on Agenda & What Can Get Done?
JobsEnergyFinancial ServicesSupreme Court Nomination
◦November Elections
As tense as it can be Lack of agreement between R’s and D’s and
between House and Senate D’s Senate lost its super majority with
Massachusetts Senate election Senate, especially, has lost its manners American people have lost their patience
Atmosphere: Toxic
This country has come to feel the same
when Congress is in session as when the baby gets hold of a hammer.
~Will Rogers
An elephant put together by 5 Congressional Committees◦ Patient Protection and Affordable Care Act
signed into law- March 23, 2010◦ Health Care and Education Reconciliation Act in
the Senate- March 25, 2010 Two Acts must be read together to get the
whole picture AAHSA health reform hub: www.aahsa.org
Patient Protection and Affordable Care Act (aka Health Care Reform)
Aging Services and Health Reform
General focus: acute care ◦Uninsured/access − Delivery
system◦Cost − Quality
AAHSA’s focus: show that aging services integral to system◦ LTSS financing: CLASS Act◦ HCBS expansion: Community First Choice,
etc.◦ Nursing homes: limiting damage
(transparency, elder justice, potential payment changes);
◦ Home health: Independence at Home; Medicare
◦ Systems integration: at least in the definition…
Health Care Reform:Vehicle for LTC Objectives
Preservation of SNF Medicare 2010 and 2011 market basket updates
Extension of Medicare therapy caps exceptions process through 2010
Reform of long-term care financing (CLASS) Nursing Home Transparency Act GAO study/report on five-star rating system Elder Justice Act
Vehicle for LTC, cont’d.
Medicare Advisory Board to be established; would recommend Medicare cost growth reductions for Congress
Demo projects on culture change and application of technology in nursing homes
Expansion of Medicaid coverage of HCBS Closing of prescription drug doughnut hole Increased funding for nurse training and
geriatric training for health professionals
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Transitions and care coordination, including care management
Home and Community Based Services Need for effective partnerships, including
those to avoid rehospitalization Payment and quality will be linked Transparency in infrastructure Disclosure
Themes for Care ProvidersIn Health Reform
Many Opportunities for Members
5 pilot projects and 30 demonstrations◦ Independence at Home ◦ Accountable Care Organizations◦ Transitional care, reduction of hospital re-
admissions◦ Bundled payments◦ Patient-centered Medical Homes◦ Patient Navigator program◦ Culture change in NHs◦ Use of technology to improve care in NHs
Community Living Assistance and Support (CLASS) Act
National insurance trust◦ Funded by premiums, through payroll
deductions◦ No underwriting for pre-existing conditions◦ Individuals can choose the services that they
need◦ Employees automatically enrolled if employer
participates, but can opt out◦ HHS Infrastructure to ensure consumer-
friendly, actuarially sound
CLASS, Cont’d
Impact at all levels of services ◦ New source of private financing◦ Emphasis on personal services in the home,
assistive technology, transportation, etc.◦ Opportunities for new businesses and
employment, education and training of workers, families, individuals
Keys to success◦ Final program must be affordable and
attractive◦ Mass marketing effort◦ Continued collaboration between aging,
disability communities
• 1115 waiver to improve coordination of dual eligible beneficiaries
• Establishment of the Federal Coordinated Health Care Office
• MACPAC new responsibilities to examine provider payments, barriers to LTSS, coordinate with MEDPAC
• Traditional MEDPAC (must now consult with each other on related issues; MEDPAC new responsibilities to review Medicaid trends)
• IPAC: will develop detailed proposals to reduce per capita growth rate in Medicare spending.
Improved Coordination of Services
Incentives for States to offer HCBS as a LTC option to Nursing Homes
States with less than 50% Medicaid spending for HCBS will receive enhanced federal funding
Must increase HCBS spending and institute changes that promote HCBS in order to receive enhanced funding
Expand Aging and Disability Resource Centers
Major Focus on HCBS
Increase in number of individuals eligible for Medicaid; feds p/u early costs
Increase in Federal Medical Assistance Percentage based on current eligibility criteria
Study/demo re: home health costs Make budget-neutral revisions to hospice
payments; demo re: hospice services Develop plan to recalculate hospital wage
index
Medicaid/Medicare Payment Changes
Nursing Home Payments
Market basket secure for FY 2011, 2012
◦ Productivity Adjustment begins FY 2013 RUGS IV
Partially implemented 10/1/1 All associations working to ensure timely
implem. No opposition
Implement value-based purchasing
Home Health Payments
2.2% market basket increase◦ 1% reduction in market basket each year
from 2011 to 2013 Rebasing over 4 years starting 2014 3% rural HH payment add on Study on impact of cuts
◦ Development of value-based purchasing
• In consultation with affected parties, Secretary must develop a plan for value-based purchasing program for SNFs and HHAs by 2011– SNF model will presumably be based on
demo data being collected now– To extend feasible and practicable, measures
will include all dimensions of quality and efficiency
– An entity under contract to HHS will endorse measures
Value-Based Purchasing
Non-endorsed measures may be used as long as due consideration is given to measures that have been endorsed
Secretary will also consider reporting, collection, and validation of quality data, and public disclosure of the information
Value-Based Purchasing, cont’d.
Hospice Payments
.3% reduction in market basket in 2013. Reduce market basket by 1% for 7 years starting in 2013◦ Additional data collection requirements
Hospice Concurrent Care demo Quality Reporting for Hospice Eligibility – recertification requires
face-to-face meeting by physician or nurse practitioner
PACE carve out from Medicare Advantage Cuts
Extends SNPs through 2013 and allows frailty factor to continue
Allows demo in CCRCs to continue
Programs of All-inclusive Care for the Elderly and Special Needs Plans
Future Workforce development◦Establishes National Health Care Workforce
Commission to look at current supply/demand; make recommendations to Congress and Administration about workforce priorities, goals, policies
◦Grants to states on workforce planning◦ Increase loan amounts for nursing students◦Expand loan forgiveness programs◦3-year training program funded for direct care
workers- LTSS◦Funds Geriatric Education Centers◦ Increases authorized funding levels for Family
Caregiver Support
Workforce
Focus on development and regular review of quality measures, including those for hospitals and physicians
Establish framework for public reporting of measures and make data available to the public
Quality Improvement
• Testing innovative payment/service models to enhance quality and reduce expenditures
• Shared savings program to promote accountability, coordinate Medicare parts A and B
• Invest in infrastructure• Includes pilot on integrated care, hospital
readmissions reduction, Community-Based Care Transitions Program
Development of New Patient Care Models
• On request of Secretary, HHS Inspector General, the states, or LTC ombudsman, SNF/NF must provide description of facility’s governing body and organizational structure, as well as information regarding additional disclosable parties
• SNF/NF must operate a compliance and ethics program effective in preventing/detecting criminal, civil, and administrative violations
• Secretary must establish and implement a QA and performance improvement programs for SNFs/NFs, including chains
Transparency and Compliance
Nursing Home Compare to include staffing data, links to state S/C websites; model standardized complaint form (to be developed by HHS); summary of substantiated complaints; and number of adjudicated instances of criminal violations by a facility or employees
States must establish complaint resolution process
SNFs must report separately on expenditures for wages and benefits at all nursing levels, plus medical and therapy staff (AAHSA priority)
Transparency, cont’d.
Secretary must develop program for facilities to report direct care staffing information on payroll and other verifiable and auditable data in uniform format
Comptroller General must study and report to Congress on 5-star rating system
Transparency, cont’d.
CMPs may be reduced by 50% for NHs that self-report and correct deficiencies; no new penalties
Secretary to develop regulations re: post-penalty dispute resolution and escrow account for CMPs
Demonstration required for oversight of chains Must have 60 day advance notice of NH closure to
residents or representatives, including relocation plan
Pre-employment and on-going training required for CNAs re: dementia management and abuse prevention
Secretary must develop nationwide program for state and national criminal background checks for all NH employees with direct patient contact (implem. current demo)
Nursing Home Enforcement
Grants to be made for prevention of elder abuse, neglect and exploitation
Include grants to protect individuals seeking LTC
Provide incentives for individuals to work in LTC facilities
Facility owners/operators/certain employees to report suspected crimes
Repeats notice requirements for facility closure
Establishes Elder Justice Coordinating Council
Elder Justice provisions
• Requires CMS to develop screenings of health care providers
• Providers must return overpayments within 60 days of the date of payment or by the date that a corresponding cost report was due, whichever is later
• Greater scrutiny of home health• Expands Recovery Audit contractor program
to state Medicaid programs
Waste/Fraud & Abuse:General Provisions
Sense of the Senate◦ Health reform presents an opportunity to address
issues related to medical malpractice and medical liability insurance
◦ States should be encouraged to develop and test alternative models to the existing civil litigation system;
◦ Congress should consider state demonstration projects to evaluate such alternatives
Medical Malpractice Reform
Employer Provisions
Maintains current system – most individuals obtain health insurance through employers
Most significant employer/individual obligations do not begin until 2014
Goal: encourage employers who provide insurance now to continue to do so
Encourages employers w/ 50+ FTE to offer coverage
Opportunity for smaller employers to provide insurance through state Exchanges
Key Dates
2010◦ Small Employer Tax Credit
25 or fewer FTE w/ avg ann wages $50K or less Sliding-scale tax credit up to 25% for NFP
◦ Subsidy for employers who provide insurance to retirees (2010-2014) $1B appropriated 80% subsidized for claims between $15K & $90K
Key Dates
2011◦ Coverage extended to children up to 26 y.o.◦ No lifetime limit on “essential health benefits”◦ No pre-existing condition exclusions <19◦ No rescission unless fraud or material misstatement◦ OTC not reimbursed by FSA, HSA, HRA (exc. insulin)◦ No cost-sharing for preventable care (new plans)◦ Employer disclose aggregate cost of coverage◦ No discrimination based on salary or wages◦ Plans must have appeals processes
Key Dates
2012◦ Final regulations for CLASS
2013◦ FSA limited to $2500◦ Plans must provide uniform explanation of
coverage in simple understandable terms
Key Dates
2014◦ State health insurance exchanges in place
Individuals w/o access to employer insurance, and employers w/100 or fewer employees eligible (states can limit to 50 FTE during first 2 years) Simple cafeteria plan for small employers
Plans must cover “essential health benefits” Employees w/ access to employer-based
insurance but who pay more than 40% of total benefit costs and more than 9.5% of income eligible; if family income <440% of FPL, eligible for subsidy
Key Dates
2014◦ Large employer (50+ FTE) who does not
provide health insurance Employees eligible for exchange If any employee receives a subsidy, the employer
must pay a monthly fee/penalty of $166.67 ($2000/yr) for each FTE (first 30 FTE not counted)
◦ New plans prohibited from discrimination based on pre-existing conditions
Key Dates
2014◦ Employers w/ 50+ FTE who provide health
coverage New plans: employers must pay 60% total cost “Free rider penalty” for new & current plans if less
than 60% subsidy and employee whose share of premium exceeds 9.5% of household income (400% of FPL), opts out and goes into exchange and is subsidized: employer pays $250/mo per FTE receiving subsidy
Free choice voucher: Must provide voucher equivalent to maximum employer would have paid for certain exchange-eligible employees (employee not eligible for subsidy)
Key Dates
2018◦ Excise tax on “Cadillac” plans in effect
40% tax on amount of benefit over $10,200 for individuals and $27,500 for families indexed for inflation
Stand-alone dental and vision excluded Employer contributions to HSA included Tax imposed on group insurance issuer
Will need another bill to correct the mistakes – inevitable in complex legislation
When will health reform “start”? Regulations must be developed
Implementation dates range from early 2011 to 2018
Getting the team in place: ◦ CMS director finally nominated◦ Role of White House?
Next Steps in Health Reform
Bi-partisan commission to look at cutting expenses, raising revenues
Everything on the table, including entitlements: Medicare, Medicaid
Social Security excluded by a vote of 97-0 in the Senate
Obama Fiscal Commission
Employer of choice◦ Incorporate upcoming employer/individual
responsibilities into long-term planning◦ Please visit with your benefits counselor soon!
Provider of choice◦ Consider applying for demonstrations and pilots
as they become available◦ Consider joining with other NFP community
groups to take advantage of integrated demos, etc.
Some Things to Do
More Things to Do
Review corporate compliance plans forall levels of care◦ Nursing home plans now required, based on
guidance issued previously for voluntary compliance plans
◦ Make sure policies are clear, including admission, transfer and discharge
◦ Make sure plans are being implemented. No sitting on the shelf, gathering dust!
◦ Check coming developments for compliance requirements
How to position the field for growth; how will consumers want to be served
What partnerships are possible between providers of senior services
How we become a resource to community agencies
How we harness the advocacy energy of our residents and other consumers for good
Things to Think About
How do we involve residents in CCRC community decisions?
Increasing risk of tax exemption issues Social Accountability: we have to do the
math Fair Housing: What about that guy next door
with the home health aide? When we have challenging times like this,
how do we keep going?
Other Things to Think About
The pessimist complains about
the wind; the optimist expects it to change; the realist
adjusts the sails.
William Arthur Ward