the current status of the long-term care industry presented to the 2008 tnhfma fall institute park...
TRANSCRIPT
The Current Status of the Long-Term Care Industry
Presented to the 2008 TNhfma Fall Institute
Park Vista, Gatlinburg, TN October 28, 2008
Learning Objectives
Discuss changes affecting Medicare long-term care reimbursement
Discuss the changes in TennCare reimbursement for long-term care providers
Discuss ways to improve reimbursement Discuss the alternatives to institutional care Discuss options for financing care
Changes Affecting Medicare
Changes to the Nursing Home quality measures Change in RUG categories Change in market basket calculation Changes in MDS
Quality Measures
QIO program was established Part B of Title XI of the Social Act and was amended by the Peer Review Act of 1982
The are now in the 9th Scope of Work Mission is to:
..to improve the effectiveness, efficiency, economy, and quality of services delivered to Medicare beneficiaries.
Quality Measures (continued) Requirements of the QIO program:
Improve quality of care Protect the integrity of the Medicare Trust Fund Protect beneficiaries
Address complaints Address provider-issued notices And other QIO responsibilities
Quality Measures (continued) Current proposal for a “Five Star” ratings system.
President Bush wants a system similar to the way hotels and restaurants are rated.
Ratings would be published on CMS website Will encourage providers to improve quality Could be used to tier reimbursement to favor high
quality providers
Change in Market Basket Methodology From inception of SNF PPS have used 1997 data
trended forward using inflation factor For 2008 FFY will use 2004 data Why is this important?
RUG Categories
Increased from 44 to 53 in FFY 2007
New categories deal with increased patient acuity RUX,RUL, RVX, RVL,RHX, RHL, RMX, RML
Look for more changes in the future
MDS 3.0
Currently providers us MDS 2.0 to evaluate patients.
CMS is set to introduce MDS 3.0 Will collect additional data on patient condition
and resource utilization
FFY 09 Payment Changes
Market basket increase of 3.4 % Recalibration of certain payment categories is
delayed 09 Proposed Rule- “changes needed to establish
payment rates that more accurately meet patient needs.” (bureau-o-speak)
What it really means is, “ we botched this in making the refinements budget neutral.”
Changes affecting TennCare
Changes to add-on payments More dependence on Medicare Part D More detailed review of cost reports Schedule H State budget concerns
TennCare Rate Add-onsTennCare Rate Add-ons
• Cost Containment Incentive ( this is Cost Containment Incentive ( this is good)good)
• Sprinkler adjustment (what’s up Sprinkler adjustment (what’s up with this)with this)
• Minimum wage adjustment ( no Minimum wage adjustment ( no longer available)longer available)
• Bed tax pass-through ( hasn’t Bed tax pass-through ( hasn’t changed in years)changed in years)
Medicare Part D
• Previous TennCare Pharmacy program– Seven scripts per month– Advocate lawsuits– Rising cost of prescription drugs
• Federal Prescription Drug plan (MMA)
• TennCare now requires all eligible patients to participate in Medicare Part D
More Detailed Cost Report Review Now require all of the following be filed with cost
report: Working trial balance Depreciation Management contract Leases Detailed analysis of anything “other.”
More Detailed Cost Report Review(continued) Adjustment of free meals “Reasonableness” adjustments Overhead (see Schedule H) Possible future adjustments;
“Excessive” benefits Certain types of benefits Otherwise reasonable expenses Things that the reviewer does not understand
Ways to Improve Reimbursement Careful completion of the MDS Accurate assignment of cost on the cost report Push for a Nursing Home specific wage index Accurate and complete bad debt logs Appropriate charge structure
MDS Completion
Involve an interdisciplinary team Clinical members Financial members
Capture all clinical data about the patient
Make sure all ADL needs are identified
Cost Report assignment
Make sure ancillary charges are captured Assign cost to appropriate cost centers Proper overhead allocations
Assign where overhead departments used Do not assign if no overhead, e.g. Outside pharmacy
Wage Index
SNFs currently use the hospital wage index Rationale is that the nursing home data is not
accurate SNFs do not use the occupational mix portions of
the hospital wage index Wage disparities are not the same
Medicare Bad Debts
Electronic maintenance of logs encouraged by CMS
Complete all required columns Accumulate supporting documentation “as you
go” Apply collection policies consistently Capture non-dual eligibles
Charge Structure
Appropriate routine charge has significant impact on TennCare Level I reimbursement
Allows for a more accurate distribution of cost to various payors
May have a positive bottom line effect Many nursing home providers fail to capture
ancillary charges for TennCare patients.
Alternatives to Traditional Services Home and community based services Assisted living facility Residential housing Adult day care services Facility-based home care and private duty
services
Methods of Financing Care
State budget constraints will limit increases in TennCare
Medicare is eventually curtail “cross subsidization” of TennCare patient cost
More affluent boomers coming into the nursing home age population will be more likely to have long-term care insurance.
Tennessee Long-Term Care Options Plan The legislation is officially titled, “ Long-Term
Care Community Options Act of 2008.” (LTCCOA 08)
Bill’s nickname, “Bubba Caring for Granny Act” Has three key components:
Create consumer-directed options (Friends and Family) Simplified process for access (Single point of entry) “Whole-person” care coordination ????????
What LTCCO 08 Act Addresses Limited access and options
Over reliance on nursing homes More options
Fragmented LTC services and system complexities Opens up Home and Community Based Services Simplifies entry
What LTCCO 08 Act Addresses (continued) Limited available resources
Reduces dependence on costly services Seeks more cost-efficient services providers Work to reduce use of more costly services later Utilize natural support networks (Bubba)
Predicted Outcomes of LTCCOA 08 Existing providers will change their delivery
models Potential for abuse will require specific oversight Patients will have more options The Act will provide more options and if properly
funded will address the real problem, increased demand.
Questions and Contact Information
William C. Matheney FHFMA, CPA, MBA
Matheney Stees & Associates PC
6136 Shallowford Road Ste. 101
Chattanooga, TN 37421
Phone 800-556-1076 ext. 105
Fax 800-556-1075
email [email protected]