Home Care and Hospice: A View from Washington 2014

Oklahoma Association for Home Care

September 17, 2014 William A. DombiVice President for LawNational Association for Home Care & Hospice

2014: The Home Care is in the Forefront

• New delivery models underway• Chronic care management• Transitions in care• Accountable Care Organizations• Post-acute care bundling

• Community-based care is the focus• Avoiding hospitalizations and institutional LTC• Medicaid home care expansions• Medicare demonstration programs

PROGRAM FOCUS• Private Pay Home Care• Department of Labor FLSA Companionship Services rule• ACA employer mandate

• Medicaid home care• Expanded HCBS• Managed LTSS

• Medicare• Home health Services• Hospice Care

2014 Home Care Legislative/Regulatory Issues and Priorities

• Block HHPPS cuts through rebasing• Stop Copays• Delay ACA provision on individual mandate and employer

responsibilities/penalties• Seek exemption or protection from employer penalties for home care and hospice employers

• Reverse changes to FLSA companionship exemption• Improve Medicare F2F rules• Manage MLTSS• Nurse practitioner certification authorization• Telehealth pilot program• Program integrity changes• Toughened participation standards

• Establish reasonable hospice payment model reforms

Private Pay Home Care: Companionship Services FLSA Exemption

• DoL rule effectively eliminates minimum wage and overtime exemption• http://www.gpo.gov/fdsys/pkg/FR-2013-10-01/pdf/2013-22799.pdf • Eliminates exemption for 3rd party employment on companionship services and

live-in domestic services• Changes definition of companionship services• Excludes 3rd party employers from live-in exemption• Medicaid and disability rights advocates opposition

• HCAOA, et al v Perez• Case No. 1:14-cv-00967 (D.DC) filed 6-6-14• Challenges validity of rule

• Increased private litigation on W&H issues• Validity of claimed FLSA exemption status• “hours worked”• Break time rights

IMPACT• DoL sees limited impact• Transfer of dollars from employer/payer at $232M annually

• Industry sees greater impact• Increased staff recruiting• Higher staff turnover• Shift to part-time workers• Limited Medicaid rate support

• NAMD requests DoL delay• Gov. Brown (CA) limits MediCal worker hours

• Lower customer satisfaction

ACA Employer Mandate: Home Care Impact• On January 1, 2015, employers of 100 or more FTEs must offer a

qualified health plan• 50-99 FTEs delayed until 2016• Less than 50 FTE exempt

• Many, but not all Medicare HHA/hospices have or offer comprehensive health insurance– $3000 per non-insured penalty a risk

• Most Medicaid home care providers do not have health insurance for employees– $2000 per FTE penalty a risk

• Private pay home care companies rarely have employee health insurance– $2000 per FTE penalty a virtual certainty

Employer Mandate: Advocacy Efforts

• Delay the implementation date• HR 5098 Ensuring Medicaid and Medicare Access to Providers Act• S1330 Realistic Employer Responsibility Act of 2013

• Eliminate the employer mandate• Change the law• E.g., Redefine full time to 40 hours per week (30 is current standard)

• Employer options• Stay below 50 FTEs and/or 30 full time employees• Limit the number of employees at 30 hours or more per week • Offer bare bones, qualified health plan • Seek higher Medicaid rates (good luck!)• Raise charges to clients (tough sell)

Medicaid Home Care• Rebalancing of LTC spending continues• Just less than 50% of Medicaid LTC spending now in home care• States’ balance in spending wide ranging

• ACA incents home care• Higher federal match to low balance states (BIP)• New HCBS option benefit

• https://www.federalregister.gov/articles/2014/01/16/2014-00487/medicaid-program-state-plan-home-and-community-based-services-5-year-period-for-waivers-provider

• States increasing Medicaid home care audits and oversight• Big focus on caregiver qualifications by OIG• Documentation weaknesses on care plans ad authorizations

• Major movement to managed care Medicaid• LTSS• Duals

Medicaid Managed Care

• Nationwide shift to managed Medicaid Long Term Services and Supports (MLTSS)• CMS supports move with some caution• Dual-eligible demo programs are the big wave• Managed care programs “flying blind”?• Great opportunities for some, impossible challenges for

others• Expanded home care?• Lower rates; restricted utilization; limited networks?

• Need comprehensive standards for both providers and beneficiaries

MEDICARE HOSPICE Final Rule for FY 2015

• Final Rule can be found at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Regulations-and-Notices-Items/CMS-1609-F.html

• CMS Issued the FY2015 proposed rule: https://www.federalregister.gov/articles/2014/05/08/2014-10505/medicare-program-fy-2015-hospice-wage-index-and-payment-rate-update-hospice-quality-reporting

• No new payment model proposed• CMS indicates that it wants to evaluate not yet available data

from new cost reports and claims submissions; focus on program integrity for now

MEDICARE HOSPICE Final Rule

• 1.4% net payment rate increase • 2.9% MBI

• (0.3%) ACA reduction• (0.5%) productivity adjustment• (0.7%) BNAF wage index reduction

• Add in 2% sequestration

MEDICARE HOSPICE Final Rule

• Solicited comments on:• “terminal illness” definition• “related condition” definition

• Hospice cap calculation (speed up)• Attending MD on election form• Quality data reporting• Medicare Part D coordination (codify existing guidance

already underway)• Prior authorization; hospice or prescriber must document

unrelatedness to terminal condition(s)

MEDICARE HOSPICE: Drug Liability

• Who pays for drugs: Part D or the hospice?• National coalition addressing CMS policy • Potential solutions under consideration• Long term risk to hospices?• Final rule sets out prior authorization standards for 4

drug categories

Medicare Hospice: Regulatory Challenges

• Collection of additional data on claims • Hospice face-to-face rule• Terminal illness documentation• Quality reporting -- Hospice Item Set (July 2014);

Hospice Experience of Care Survey (Jan. 2015)• New Cost report• Effective for cost reporting years beginning 10/1/14• Final report and instructions???• Institution-based TBD

2015 MedPAC Hospice Recommendations

• No inflation update• Accelerate new payment model• U-Shaped reimbursement• Provide hospice within MA Plans

Home Health Regulatory Issues

• HHPPS 2015 proposed rule• Rate rebasing• Face to Face • Therapy assessments• More….

• PECOS• Medicare “improvement” standard • New Medicare CoP sanctions (and potential new CoPs)• Moratorium on new HHAs

2015 Medicare Home Health Rate Final Rule

• CMS Proposed Rule (July 2, 2014) http://www.ofr.gov/OFRUpload/OFRData/2014-15736_PI.pdf.

• Continued rebasing payment rates• Full cut (3.5%) allowed under law (14 points total)

• Recalibrated case mix weights• Focus on therapy episodes• Budget neutrality adjustment• Outlier eligibility remains same despite low spending

• MBI: 2.6%• New Productivity Adjustment (-0.4%) net MBI at 2.2%

• Remember 2% payment sequestration (February 1 and later payments)• New wage index blend of CBSAs• 105 counties lose the rural add-on

2014 Medicare Home Health Rate Proposal: Assessment

• CMS continues 4 year phase-in from 2014• CMS chose unfavorable calculation method• Used proxies for episode revenue and costs• Formula guarantees aggregate payments less than

average cost• Better alternatives available• Ignored cost increases and costs not on cost report• Telehealth• F2F; therapy assessment

• Siloed rebasing rather than aggregation• Failed to include capital needs

Proposed HHPPS Rates -2015• Case mix weights recalibrated unevenly• 0-5 therapy visits + increase weights 3.75%• 14-15 therapy visits decrease weights by 2.5%• 20+ therapy visits decrease weights by 5% • Budget neutrality adjustment of 1.0237• This is just the beginning as all variables are recalibrated

• No consistent change in case mix weights• Higher payments for 20+ therapy visit episodes

• Base rate in 2014 --$2869.27 • Base rate in 2015 –$2922.76• This is a decrease because of case mix weight recalibration• 1.45% effective decrease in base rate • Add in 2.0% Sequestration

2015 MedPAC Home Health Recommendations

• Repeat 2014 recommendations• Accelerate rebasing• No inflation update• Add copay on community admission episodes

• Institute a hospital readmission penalty• Establish a common PAC patient assessment• Supports PAC bundling

PROPOSED RULE: Other Regulatory Developments Affecting Home Health Services

• Face-to-Face Physician Encounter rule modifications• Significant change to the requirement for professional therapy reassessments• A new standard for the submission of OASIS to avoid payment rate reductions• Modifications of the standards for qualification of speech-language pathologists

under the CoPs• The introduction of possible new coverage standards on the administration of

insulin injections• The unveiling of a likely model for Value Based Purchasing • Clarifications of the requirements for imposition of alternative Civil Money

Penalty sanctions for CoP violations• Changes to recertification requirements

Face-to- Face Physician Encounter Proposed Changes

• Eliminate physician narrative requirement• Require certifying physician to have sufficient records to

support certification• Reject physician payment claims for

certification/recertification when home health claim denied for noncompliant certification/recertification

• Lawsuit Filed• NAHC v. Sebelius/Burwell• 1:14-cv-00950 (filed 6-5-14)• US District Court for the District of Columbia

• Alleges • excess documentation required in relation to ACA

requirements• failure to provide adequate and clear guidance on

acceptable documentation• Failure to review whole record

• Lawsuit will continue to address past claims denials and continuing audits

Face-to- Face Physician Encounter

Medicaid F2F

•Proposed rule July 2011 •Unified Agenda - October 2014 • Some States have a F2F requirement• CMS permits, but does not encourage

Proposed Rule Changes• OASIS submission• Require 70/80/90% submissions over 3 year phase-in• Noncompliance leads to 2% rate penalty• NAHC: qualified support

• Speech-Language Pathologist qualifications modified to require state licensure and educational levels ; NAHC: support

• Therapy Assessments• Drop 13th/19th visit requirement• Substitute a professional therapy visit/assessment every 14th day• NAHC: support shift to a 30 day standard

• Clarification of Start of Care certifications/OASIS• Readmission w/in episode where discharged with goals met• Would require another F2F• NAHC: oppose unless modified

New CMS Ideas• Insulin injection standards• Request for input on standards• Signals likely oversight on insulin injection outlier episodes• NAHC: Need more transparent process, more study

• Value-based Purchasing• Request for input• CMS possible VBP model

• 5-8 selected states• Mandatory application of VBP• 5-8% of payment at risk• Sliding scale of bonuses and penalties• Based on performance and improvement in performance

• NAHC: Oppose CMS VBP concepts; need more detail; withhold amount should be much lower

PECOS: Physician enrollment as a HH Condition of Payment

ACA and regulation requires all home health certifying and ordering physicians be enrolled in Medicare 42 CFR 424.507(b)

Medicare requires an approved enrollment record in PECOS HHAs only have access to “ordering and referring” file

Physician name and NPI as they appear in PECOS on the claim

Edit effective with SOC January 6, 2014 Edit currently on certifying MD only Watch for expanded enrollment focus in claims reviews

Problems: VA physicians and MD re-enrollment procrastinators

PECOS• Full Implementation of Edits starting January 6, 2014.• http://www.cms.gov/Outreach-and-Education/Medicare-Learning-

Network-MLN/MLNMattersArticles/Downloads/SE1305.pdf • See also• 8441 : Home Health Agency Reporting Requirements for the Certifying

Physician and the Physician Who Signs the Plan of Care - Effective July 2014

• http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2789CP.pdf

• 8356:Handling of Incomplete or Invalid Claims once the Phase 2 Ordering and Referring Edits are Implemented

• http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2767CP.pdf

MEDICARE HOME HEALTH: Alternative Sanctions• Applies to condition level deficiencies• Sanctions include:• Directed corrective action• Temporary management• Payment suspension• Civil monetary penalties

• $500-$10,000• Per diem/per instance

• Termination• Informal dispute resolution possible• CMPs and payment suspension no earlier than 7/1/14, • Appeal rights w/o penalty suspension• In the 2015 NPRM CMS proposes to limit ALJ power to reduce CMPs

COMPLIANCE: FOCUS ON HOME CARE • MACs, ZPICs, RACS, and Supplemental Medical Review Contractors looking

at home care• Homebound status• Medical necessity• Technical compliance incl. F2F

• High level fraud/False Claims Act investigations• E.g., $375M physician-directed fraud allegation

• OIG continues home care efforts• New report alleges widespread fraud and abuse• Report is weak on facts and methodology, strong on hyperbole

• Medicaid home care new on the agenda• Personal care is the main focus• Staff credentials including health screening a target

NEW Medicare coverage guidelines• Jimmo v Sebelius settlement• http://www.medicareadvocacy.org/wp-content/uploads/2012/12/Jimmo-Settlement-Agreement-

00011764.pdf.

• Focused on illegal “improvement” standard• CMS is clarifying existing guidelines; provider education

will follow• Permit coverage of skilled maintenance therapy• Permit coverage of chronic care/terminal patients• Existing guidelines recognize such coverage but MACs

changed the “rules”• CMS clarified guidelines with specific prohibition of an

improvement standard (w/in 6 months) http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM8458.pdf

Moratorium on New HHAs • http://www.ofr.gov/(S(xgqtqafgzqqtwvs2kfilcbfv))/

OFRUpload/OFRData/2014-18174_PI.pdf.

• Through January 2015• Miami - Dade counties in Florida • Cook County (Chicago area) in Illinois • Dallas, Houston, Detroit, Ft. Lauderdale• New providers • CHOWS allowed• Relocation w/in area permitted• New Branches included in moratoria

FORECAST FOR HOME CARE• Political• Mega-Systems• Health Care Delivery Systems• Reimbursement • Medicare and Medicaid Home Care and Hospice• Managed Care • Technology• Workforce• Oversight and Management by Payers• The Business of Home Care

FORECAST: Political• Political• Option A: Republicans control Congress; Democrat in

the White House• Option B: Congress maintains split control; Democrat

in the White House• Option C: Split Congress; Republican in White House

• FACTORS: Medicare solvency; Medicaid control/flexibility; Health insurance access and premiums; power of payer or provider (payer as provider) • RESULT: Gridlock; Shift to conservative policies; shift

to liberal policies; or gridlock• HOME CARE BAROMETER: Positive support for home care

expansion

FORECAST: Mega SYSTEMS

• MEGA SYSTEM CHANGE• Option A: “Kick the can down the road”• Option B: Wholesale Medicare and Medicaid

reform comparable to welfare reform in the 90s.• Option C: Reform around the edges with

continued experimentation• FACTORS: Politics and the economy• RESULT: C• HOME CARE BAROMETER: Living under an environment

of threats with minor consequences ultimately

FORECAST: Delivery Systems• Health Care Delivery Systems• Option A: Fully integrated care delivery• Option B: post-acute care integration• Option C: New delivery models layered on top of existing

system• Option D: Limited experiments

• FACTORS: Legal barriers; resources; advocacy power; vested interests; successes with innovative experiments

• RESULT: C plus D• HOME CARE BAROMETER: Positive; home care viewed as a

solution, but new players enter the market

FORECAST: Reimbursement• Reimbursement • Option A: Cuts, cuts, cuts, cuts, and more cuts• Option B: Value Based Purchasing• Option C: Shared savings programs• Option D: all of the above

• Factors: Market power, political power, sector creativity and engagement• Result: D• HOME CARE BAROMETER: Positive with need for home

care companies to evolve and adjust to change

FORECAST: Medicare and Medicaid

• Medicare and Medicaid Home Care and Hospice• Option A: Medicare peripheral changes; Medicaid moves to managed

care• Option B: Medicare changes on cost sharing, eligibility age, and

premiums; Medicaid moves to managed care• Option C: Medicare is privatized; Medicaid gets block granted or

privatized• FACTORS: Political power and control; state of the economy• RESULT: A + Medicaid privatized (in part)• HOME CARE BAROMETER: Business as usual in Medicare

(headaches without big changes); totally new business model in Medicaid

FORECAST: Managed Care• Managed Care• Option A: growth in enrollment in Medicare Advantage; MLTSS

becomes the norm• Option B: stagnant enrollment in Medicare Advantage; MLTSS

becomes the norm• Option C: decrease in Medicare Advantage enrollment; Medicaid is

mixed• Option D: stagnant MA enrollment; Medicaid returns to fee for

service model • FACTORS: Public perception of managed care; MCO payment rates• RESULTS:B• HOME CARE BAROMETER: Limited growth in MA enrollment is

good for home health based on the track record of the plans. With Medicaid it is TBD—some plans recognize value of home care, others see it as a cost only.

FORECAST: Technology• Technology• Option A: technology replaces the need for in person care• Option B: technology greatly expands home care opportunities• Option C: technology advances, but home care is taken over by

other clinicians• Option D: technology establishes value, but no one pays for it

• FACTORS: CBO scoring; whether the nature of technology is a skilled tool or a consumer-directed replacement; skilled sets of home care personnel

• RESULTS: B• HOME CARE BAROMETER: Current home care providers still have

the upper-hand in capture the technology-related opportunities. However, they may be losing ground to outsiders (physicians/hospitals) due to the lack of reimbursement to current providers

FORECAST: Workforce• Workforce• Option A: Unending supply of happy workers• Option B: limited reimbursements challenge recruitment and

retention• Option C: Adequate reimbursements permit payment of a fair

compensation• Option D: widespread unionization• Option E: Expanded scope of practice• Option F: Robotics takes over• Option G: same as today

• FACTORS: Economy, court rulings on public unions, application of overtime requirements, ACA employer mandate impact, identity of joint employers

• RESULT: B + E + G• HOME CARE BAROMETER: Difficulties in recruitment and retention

of paraprofessional staff will continue•

FORECAST: Oversight and Management by Payers• Oversight and Management by Payers• Option A: Increasing for both government and private payers• Option B: Licensing/credentialing of private pay home care and registries• Option C: Expanded data demands on quality and utilization• Option D: Some prior authorization

• FACTORS: Perception of industry; actual findings from investigations and prosecutions; and funding

• RESULTS: A + B + C + D + more• HOME CARE BAROMETER: Need to raise expectations on the burden

of oversight and the need for perfect compliance on technical requirements for payment and provider participation

FORECAST: Business• The Business of Home Care• Option A: Consolidation • Option B: New start-ups in Medicare• Option C: Expanded development of post-acute providers• Option D: Diversification of revenue streams• Option E: Integrated working relationships with the health care community

• FACTORS: Congress, payment rates, creativity, outsider influence• RESULTS: All of the above• HOME CARE BAROMETER: Ever changing nature of threats and

opportunities requires balanced business action on current and emerging matters

CONCLUSION• Home Care and Hospice is diverse and in the midst of a

revolution/evolution• Opportunities/Challenges abound• Range of legal/regulatory issues is endless• Significant regulatory energy directed towards home care and

hospice• Compliance issues/concerns

• Significant bottom-line affect• Center of innovation in care is home care; change triggers

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