Connecting the Dots: Cost Effective Methods for Responding to New Revenue Opportunities While Minimizing Risk

Learning Objectives • Learn how to formulate an organizational risk

appetite to drive the organizational strategic plan

• Explore strategies to maximize financial and clinical results in the changing health care landscape while minimizing cost

• Learn how to manage your five-star rating to leverage the greatest revenue opportunities under the new alternative payment models (e.g., ACOs, bundled payment, preferred provider relationships, etc.)

Ripped from the Headlines

Connecting the Dots

Integrated Risk

Management

5 Star Rating

Managed Care

Payroll-Based

Journal

Quality

Understanding Your Risk Appetite

Risk Appetite - The degree of risk, on a broad-based level, that an organization or other entity is

willing to accept in pursuit of its goals

Importance of Defining a Risk Appetite

• Establishes a common understanding of risk acceptance across the organization (e.g. business units, control functions, risk oversight functions, senior management, the Board)

• Ensure business effectiveness, regardless of the function, risk or regulation being addressed

• Increased alignment with objectives-based approach • Allows the organization to focus on the core set of

practices and resources needed rather than organizational silos / individual agendas

• Focuses management attention on what needs to be done rather than on who reports on it or where it occurs

Integration – Bringing It All Together

Integrated Risk

Management

Risk Management

Clinical Quality

Privacy

Internal Audit

Information Security

Compliance

Understanding and Responding to Risks and Opportunities

• Each organization needs to determine their risk appetite related to identified risks and potential opportunities

• This session will demonstrate how an effective risk management program framework will allow a senior living organization to identify and respond to several emerging risks, while minimizing the cost of implementation:

• Managing Your 5-Star Rating • Managed Care • Payroll-Based Journal Reporting • Quality Metrics

Managing Your 5-Star Rating

Overview • 5 Star Quality Rating system developed in

2008 for Skilled Nursing Facilities • The system has 3 distinct domains that are all

rated separately and then added together to create an overall rating

• The system has undergone a number of changes over the years

• Anticipate more changes, including: • Additional/change to quality measures (QMs) • Staffing calculation/update through PBJ

Nursing Home Compare

• CMS developed • 2008 posted on Nursing Home Compare • Data collection/publication • Data usage

• Peer comparison • Marketing campaigns • ACO participation • Managed care contracting

The 3 Domains - Scoring

• Health Inspection • Annually • Complaints

• Staffing • CMS 671 and CMS 672 • PBJ

• Quality Measures • Claims based • MDS based

All about the 3’s

• The information on NH compare is used to determine participation in things like ACO’s, Bundled Joint programs and becoming a preferred provider.

• You want to be included? You need 3 Stars! • You want the 3 day Medicare waiver? You

need 3 stars! • To even be considered for a bundled payment

program you must be AT LEAST 3 Stars!

The New Currency

• Quality and Value together • What can you do to affect your 5 star rating?

• Education across your workforce • Understand timing of rating changes • Understand your market • Gather data • Track data • Manage data

• Mock Surveys • PBJ • Quality measures through MDS system

Health Inspections • Foundation of rating • Only non-self reported domain • Cut point tables updated monthly • 3 most recent surveys – 50%, 33%, 17% • Percentage based scoring

Health Inspection Distribution Per State

• 5 Stars only top 10% of facilities per state • 4 Stars 23.33% of facilities per state • 3 Stars 23.33% of facilities per state • 2 Stars 23.33% of facilities per state • 1 Star 20% of facilities per state

Staffing • Staffing will become more crucial • Can increase 5 star rating by 1 star if 4 or 5 • Currently hours per patient day of nursing care • Additional metrics likely • Payroll Based Journal Reporting – quarterly

update

Staffing Cut-points - National

Quality Measures • What are they – 13 MDS, 3 Claims • Most change and phasing in more • Includes readmissions and ED visits • Track regularly and monitor changes • Review your MDS process regularly • Updated quarterly – fastest way to change • Increase by 1 star if 5 star rating

Quality Measure Cut-points - National

Managed Care

Making the Transition to Risk-Based Payment Shared Savings/

Total Cost of Care

Fee For Service

• No risk payments • Common payments • Predictable

•New metrics •Best practices •Performance based •Uncertainty •Electronic communications

•Risk based •Collaboration •Predictive modeling •Global budget or sub-capitation

Significant Change

Significant Change

Bundled Payments

•Negotiated Episode Price •Longitudinal Accountability •Risk based

Significant Change

Value Based Reimbursement

Medicare Advantage Enrollment – National

Medicare Advantage Enrollment – National

Bundled Payments Medicare BPCI Models

The four Medicare BPCI models are as follows: • Model 1 – The episode of care is defined as the inpatient stay in the acute care

hospital. Medicare pays the hospital a discounted amount based on the Diagnosis Related Grouping (DRG).

• Model 2 – A retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care. The episode includes the inpatient stay in an acute care hospital plus the post-acute care and all related services up to 90 days after hospital discharge.

• Model 3 – A retrospective bundled payment arrangement where actual expenditures are reconciled against a target price for an episode of care. The episode of care is triggered by an acute care hospital stay but begins at initiation of post-acute care services with a skilled nursing facility, inpatient rehabilitation facility, long-term care hospital or home health agency.

• Model 4 – A single prospectively determined bundled payment to the hospital that encompasses all services furnished by the hospital, physicians, and other practitioners during the episode of care, which lasts the entire inpatient stay.

Bundled Payments Medicare BPCI Models as of October 2016

Bundled Payments Mandatory Bundles

CMS Final Comprehensive Care for Joint Replacement (CCJR) Model Bundled Payment • CMS’ final rule requires all PPS hospitals in 67 Metropolitan

Statistical Areas to participate in a Bundled Payment demo for a Lower Extremity Joint Replacement – MS-DRG 469 -470

• 90-day episode post-discharge • Hospitals in these areas are required to participate unless already in a

BPCI model.

• Goal – Reduce current variation in cost and quality of care for hip and knee replacements

• Annually set prices over 5 performance years • Payment reconciled at the end based on price & quality (Fee for

Service with Reconciliation)

Bundled Payments Mandatory Bundles

CMS’ proposed rule for cardiac care and cardiac rehab was released in July 2016 • 98 MSA (not yet selected) • 90-day episode post-discharge • Hospitals in these areas are required to participate unless already in

a BPCI model.

Accountable Care Organizations Overview

Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, collaborating voluntarily to provide coordinated high quality care to their Medicare patients. The goal of coordinated care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program. Medicare offers several ACO programs: • Medicare Shared Savings Program (MSSP) – Assists a Medicare fee-for-service

program providers become an ACO • Advance Payment ACO Model – A supplementary incentive program for selected

participants in the Shared Savings Program • Pioneer ACO Model – A program designed for early adopters of coordinated care • Next Generation ACO Model – Sets predictable financial targets, enables providers

and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care

Accountable Care Organizations MSSP ACO Assigned Beneficiary Population

Managed Care Impact For Senior Living Providers

• Fewer admissions from hospitals, as these admissions are being diverted to other settings (i.e. home, comfort suites via orthopedic entities) – Consider the impact in your senior housing!

• Hospitals may discharge direct to home with or without home health

• Hospitals may discharge to SNFs earlier (shorter hospital lengths of stay with more co-morbidities)

• Shorter lengths of stay • Must control readmissions • Manage the Star Rating for admissions – 3 Star or better

for at least 7 of the previous 12 months

Approaches to Operating in a Managed Care Environment

• Individual Stand Alone Provider - each provider contracts separately with each managed care entity in the marketplace using resources within their own organization to manage all functions necessary to efficiently operate within managed care environment.

• Network Provider Contracting- multiple providers collaborate to efficiently operate within managed care environment.

Relationships With Health Systems

0% 10% 20% 30% 40% 50%

N/A (no relationship)

Shared services

Partnership

Owned by health system

Contractual relationship

Discharges received

FutureNow

Source: Perkins Eastman Senior Living 2015 Survey

Relationships with health Systems

Collaboration Exploration Process

• Internal Discussion • What do we want from an partner(if this is not well understood – the organization

looks unprepared and not serious when the discussions begin) • What do we have to offer • What do we want to avoid • “Deal breakers”

• When opportunities are presented or sought: • First determine if there is a cultural, missional, values ‘fit’ • Understand their objectives from collaborating • Consider the strategic opportunities • Then understand the business aspects

• Operations, Market Viability, Financing/Financial

• Design the structure • Based on objectives of each organization • And the business needs

Organizational Relationship Continuum

Holding Company Model

Merger Sale/ Acquisition

Joint Venture

Informal ‘Partnering’

Joint Operating Agreement

Mgmt. Services Org.

Association membership Sharing information or costs

Formal link or partnership – frequently to pursue a business line or opportunity

Two or more orgs join together – form a holding company or ‘parent’ to guide the system

Two or more orgs join together – with one surviving corporation

One organization sells to another

Collaboration Affiliation

Two or more organizations agree to joint operations – shared governance and management (‘holding company lite’)

Provide management and admin services – to ‘partners’ and to others

Successful & Unsuccessful Collaboration

Successful • Find the ‘compelling reason’

early and easily • Result from the alignment of

clear, shared objectives • Are based on mutual respect,

not the appearance of mutual respect

• Appreciate the emotional dimension

Unsuccessful • Are based solely on the

achievement of economic leveraging/efficiencies

• Attempt to create a uniform culture within individual communities

• Are based on unrealistic expectations and objectives – or the wrong motives

Next Steps

• The clarity of the objectives will drive the rest of the process

• Everyone participating should have a serious interest in the topic – Need for different perspectives

• Knowing the difference between competitive advantage and long standing practices is essential to determining how much and how fast the advantages can be achieved

Payroll-Based Journal Reporting

Payroll Based Journal Overview

CMS has long identified staffing as one of the vital components of a nursing home’s ability to provide care. Over time, CMS has utilized staffing data for many purposes in an effort to more accurately and effectively gauge its impact on quality of care in nursing homes.

• MANDATORY Reporting Period: Began July 1,

2016 • First Deadline: November 14, 2016 (for data

through September 2016)

Payroll Based Journal Reporting Details

• Submission of direct care staffing on a daily basis – required to be submitted within 45 days after the end of each quarter (7/1/16-9/30/16 is first mandatory quarter)

• Employee Record o Employee ID (No PII such as Name or SS#), Hire Date, Term Date

• Daily Staffing Hours Record o Date, Hours Paid, Job Title Code, Labor Category Code, Pay type

• Census Data o Last day of each month in quarter (not average for month)

• Methods of Submission o Manual data entry (virtually impossible) o Uploaded data from an automated payroll or time and attendance

system (XML format only)

Current System Staffing Domain as it Affects Your 5 Star Rating

The rating for staffing is based on two case-mix adjusted measures: • Total nursing hours per resident date (RN + LPN + nurse aide hours)

• RN hours per resident day The source data for the staffing measures is CMS form CMS-671 (Long Term Care Facility Application for Medicare and Medicaid) from CASPER. The resident census is based on the count of total residents from CMS form CMS-672 (Resident Census and Conditions of Residents). The specific fields that are currently used in the RN, LPN, and nurse aide hours calculations are: • RN hours: Includes registered nurses (tag number F41 on the CMS-671

form), RN director of nursing (F39), and nurses with administrative duties (F40) (now split between LPN and RNs)

Current System Staffing Domain as it Affects Your 5 Star Rating

But an examination of the rating system by The New York Times has found that Rosewood and many other top-ranked nursing homes have been given a seal of approval that is based on incomplete information and that can seriously mislead consumers, investors, and others about conditions at the homes.

PBJ Reporting Outcomes

HOW IMPORTANT WILL IT BE TO YOU TO KNOW

WHAT YOU ARE SUBMITTING THROUGH

PBJ EACH PAYROLL/MONTH?

Hours Excluded from Nursing Home PBJ Reporting

• Hours NOT worked but paid (i.e. PTO, Sick Time, FMLA, Etc.)

• Overtime worked by exempt staff • In-service/training hours (internal and/or external) • Hours for services performed that are billable (i.e.

to Medicare FFS, Medicaid, Other payers etc.) • Convenience fees for outside medical providers

such as Dentists, Audiologists, etc. • Staff hours providing services to non-nursing home

residents (e.g. shared staff with ALF, ILF, ADHC, etc.)

PBJ Reporting Concepts Key Interpretations of the CMS PBJ Manual • Primary Role • Role changes during a workday • Administrators, DONs and ADONs • Medical Directors, Nurse Practitioners, Dentists, Podiatrists, etc. • Activities and Social Workers • Optional Categories • Housekeeping and Maintenance • Differences from CMS 671

PBJ Provider Issues • Properly capturing direct care hours of staff who do not punch a

timeclock • Payroll and timekeeping systems that do not capture time as

required by PBJ with the midnight split between days • Tracking direct care given by an employee or therapist to

residents outside of the “nursing facility” • Adjusting time for paid hours that are not direct care – in service

training, administrative duties, vacation, PTO, jury duty, etc. • Providing data that can be audited back to payroll or a vendor

invoice/contract • Working with contractors who provide direct care to efficiently

gather staff names, time worked and residents served in an efficient manner when the contractors have no incentive

• Payroll Vendor PBJ systems cumbersome and incomplete

PBJ Provider Issues • Payroll does not report “daily” hours, only a lump sum • Time and Attendance software….. Produce .xml file? • Allocation of hours worked for “nursing facility” and

across payroll companies • Data capture of hours outside of the Time and

Attendance System – creating a repeatable, efficient process

• CMS Juniper Software

PBJ Audits and Documentation

• Most data coming from external files or Time and Attendance systems (not payroll files) so tracing to contracts, invoices and payroll is important to document

• Some Time and Attendance systems have reporting available, but they are still cumbersome and it is difficult to tell if these are accurately reported (i.e. midnight hours splits, staff allocated less than 100%, method to report staff in more than one role, etc.)

• Internal time capture process changes may be needed • Allocations of hours worked to CMS Certified Beds is challenging

– many questions very specific to each community • Document rationale for hours included and staff allocations • Document methods of capturing hours worked

Questions To Ask Yourself • Have you successfully submitted data from contractors,

payroll and manual time capture through the CMS PBJ website?

• Have you been able to verify that the data submitted is complete and accurate?

• Will your submitted data provide the same or a better staffing ratio as your current staffing rating in Nursing Home Compare?

• Is your process efficient and automated so that this process will not take a considerable amount of time every week?

Quality Metrics

Success Under New Payment Models

Providers need to be able to:

• Define value proposition with support from data

• Understand and improve performance/quality metrics

• Benchmark against competition

• Understand costs at a patient or diagnosis level

The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their business model that make them good at the existing business, actually make them bad at competing for the disruption”

– Clayton Christensen, author of the Innovator’s Dilemma

Practical Advice • Many innovators are large organizations

• Size is becoming less of a barrier as data evolves

• Data sets that can offer practical insight that will improve your organizational awareness

• CASPER • LeadingAge Insights • Externally sourced data

CASPER Overview

CASPER

CASPER

LeadingAge Insights and Quality Metrics

• LeadingAge Insights is a collection of tools to help you better understand your performance and market position. With the added advantage of easy access to experts in the field, these tools are designed to help you improve your competitiveness. LeadingAge Insights includes:

• LeadingAge Quality Metrics: Interactive data tools, developed by staff at LeadingAge New York, to assist nursing homes in analyzing how they measure up to their peers, demonstrate value and improve performance.

• Market Position Reports by Avalere Powered by Vantage CPS: These reports allow PAC providers to understand how Medicare beneficiaries and health systems are using hospitals, SNFs and home health in their local markets.

• Ask the Avalere Expert: Service where members may submit two questions about their reports via email monthly and receive a timely response from industry experts.

• State Survey and Certification Reports: Data reports for member nursing homes with a member's individual facility data, compared to state or nation.

• Ask the MDS Expert: A feature that allows members to receive real-time responses to MDS issues. Answers are provided by Judy Wilhide Brandt, R.N., B.A., RAC-MT, a nurse and master teacher on the MDS.

LeadingAge Insights Collaborative Reports

Avalere VantageCare Positioning System

Core Analytics Post-Acute Scorecard

LeadingAge Insights Collaborative Reports

Report Filter Criteria /Selected Hospital: UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORITY (520098)Year: 2013

Provider SettingReadmission

RatePercent-

age

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT Home 719/5160 13.93

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT SNF 227/1595 14.23

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT HHA 148/904 16.37

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT IRF 14/142 9.86

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT LTACH 22/115 19.13

UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORIT Other IP Not reportable

Number and Rate of Readmissions by Care Setting, For All Causes

13.93 14.2316.37

9.86

19.13

05

10152025

Home SNF HHA IRF LTACH Other IP

Hospital Readmission % by PAC Setting

Peer SNFs Readmission % by Diagnosis

Hospital Overall Avg. LOS Heart Diseases Major Joint Replacement Stroke

UNIVERSITY OF WI HOSPITAL 5.12 5.55 NR 5.90

PAC Care Setting Average LOS by Setting

HHA 15.66IRF 11.77

LTACH 29.26Other IP 5.52SNF 23.09

Market Average Length of Stay by PAC Care Setting

Report Snapshot: LOS Snapshot for UNIVERSITY OF WI HOSPITALS & CLINICS AUTHORITY (STACH) (MADISON,WI) (520098)

Hospital Average Length of Stay

PAC Provider Avg. LOS

SNF A (includes facility name, city, state, provider #) 15.11SNF B 21.39SNF C 20.78SNF D 18.84SNF E 24.34

Post-Acute Care Average Length of Stay

ALOS Stats for Hospital, PAC Setting, & Peer SNFs

Nursing Home Quality Metrics Tool

• Analyzes the following quality metrics: • 5-star Rating • Staffing • Quality measures and deficiencies based on the most

current public data • Providers can compare themselves as an organization to:

• Similar sized facilities • Comparable # of beds • Other facilities by state, county or region • Institution Type

• Profit, Non Profit, Government • Urban/Rural Designation • Specific Facility

• How do my costs per resident day compare? • Is my wage per hour competitive? Am I higher/lower

than the average? • How does my 5 star rating compare to my neighbors? • Are my staffing ratios comparable? • Hospital readmissions higher/lower than average? • Is my CMI higher/lower in comparison to others?

Nursing Home Quality Metrics Tool

Externally Sourced Benchmark Data

Externally Sourced Data

Externally Sourced Data

Next Steps • Evaluate where you are today: Using existing sources

(e.g. LTC Trend tracker, organizational data), compile available data on key metrics for your organization and some key competitors

• Celebrate and reinforce successes, as well as identify issues that require improvement or more data

• Determine what data you collect today and that which you still need

• Develop your value proposition for prospective partners and payers using available data

Conclusion

Conclusion • Integration of risk management activities to achieve

results • Be Nimble: what works today, might not work tomorrow;

test, try, try again • Understand how the emerging payment models work • Realize that payment and care delivery continue to evolve • Keep your eye on the “quality”

• 5-star ratings • Metrics you are paid for and how others are paid

• Understand your market – local environmental scan • Must have data to tell your story and identify opportunities • Improved skills in managing, exploring and capturing data

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