Health Care Reform: What We Know

CEN-PANPHAApril 27, 2010

Marsha R. Greenfield, VP Legislative AffairsAAHSA

mgreenfield@aahsa.orgwww.aahsa.org

[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