H e a l t h ● W e l l n e s s ● N u t r i t i o n w w w . i l s h e a l t h . c o m

HEALTHCARE REFORM ITS IMPACT ON LONG TERM CARE

Medicaid Reform:

Texas State University, San Marcos, Texas - May 11th, 2012

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• Our nation has arrived at a critical juncture in history

• As the Baby Boomers age & America’s older population grows larger and more diverse, our country faces real challenges & great opportunities for its future

• The Baby Boom and dramatic increase in health care costs in the US have created a demographic imperative to change the way we do business

Health Care Reform: Its Impact on LTCHealth Care Reform: Its Impact on LTC

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• The one closest to my heart and our topic today is Long Term Care – in the context of Health Care Reform

• At its core, this issue is about how we, individually and collectively as a nation, will provide and pay for healthcare and how we will care for our loved ones as we age

Long Term CareLong Term Care

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In this time of exploding numbers of ageing adults, of tight budgets andrecord deficits and of complicated interactions among the Health & LTCsectors of our economy, it is clear we cannot afford to lean back on thesimple programs and formulas of the past

Current Health & LTCCurrent Health & LTC

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Independent Living Systems (“ILS”)

• Founded in 2001

• Serves individuals who are elderly, frail, have chronic medical conditions orother special needs

• Is a long term care company that does not operate nursing homes, butrebalances costs by using home and community based services as analternative to facility based care

• Clients are principally MCOs. Those that operate programs involving acapitated risk of LTC or serve special needs individuals-i.e. SNPs

Company OverviewCompany Overview

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FootprintFootprint

MT

ID

WA

CO

WY

NV

CA

NMAZ

MN

KS

TX

IA

IL

WI

TN

IN OH

MI

ALMS

AR

LA

GA

FL

WV VA

PA

VT

RI

ME

NHOR

SD

ND

MO

OK

NE

NY

CT

MA

SC

DE

MD

NC

NJ

KYDC

PR

Current Operations

Development in Progress

Florida, New Mexico, Michigan, California, Louisiana, Tennessee, Texas, and New YorkPuerto Rico

Delaware. Ohio , Kansas, Illinois and Pennsylvania

Targeted 2012/2013Georgia, New Jersey, Wisconsin, Indiana and Virginia

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ILS ServicesILS Services

Managed Long Term Care Services

Back office, administrative and 

coordination services for MLTC plans

Care Transition & Post‐Discharge 

Services

Nutrition Services & Home Delivered 

Meals

Nutrition care management, education 

& meals services

Care Management & Coordination

Population risk stratification, assessment, 

care plans and care management

Patient‐centered care transition, post 

discharge coordination and coaching

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• Affordable Care Act– focuses on uninsured, creates exchanges and subsidized health plans, will

expand Medicaid population and State responsibility, principal LTC initiative(CLASS ACT) now on hold, new Duals office is energetic change agent

• Duals Integration– integrates Medicare and Medicaid, but also integrates acute and Long Term

Care, moves LTC from principally Fee for Service environment into managedcare and capitation, permits states to share in savings in Medicare coveredcosts

• State/Medicaid Fiscal Crisis– major budget deficits and increasing Medicaid costs, principally LTC consume

disproportionate and infeasible shares of budgets, drive states to move mostexpensive Medicaid populations into managed care for first time (Aged, Blindand Disabled, LTC)

Health Care Reform EnginesHealth Care Reform Engines

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Health Plan ViewHealth Plan View

• States will move Dual Eligibles now in FFS Medicare into Medicaid Plans with SNPsfor both Medicaid and Medicare benefits, including both acute and long term care

• Capitation moves financial responsibility for rebalancing from State to MCO

• Rebalancing needs strong HCBS network with capacity and management capability

• Focus on early interventions, Nursing Home Diversion and Transitions

• HCBS Services must reduce acute care costs & improve health outcomeso Hospitalizations/Readmissionso ER Visitso Medications

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States w/Filed Dual Eligible Integration LOIsStates w/Filed Dual Eligible Integration LOIs

MT

ID

WA

CO

WY

NV

CA

NMAZ

MN

KS

TX

IA

IL

WI

TN

INOH

MI

ALMS

AR

LA

GA

FL

WV VA

PA

VT

RI

ME

NHOR

SD

ND

MO

OK

NE

NY

CT

MA

SC

DE

MD

NC

NJ

KYDC

PR

AK

HI

Filed

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Medicaid Costs for Dual EligiblesMedicaid Costs for Dual Eligibles

TENNESSEE

– Inpatient 1.35 %

– Outpatient 2.06 %

– Physician 5.62 %

– LTC 86.91 %

– Home Health 2.12 %

– Hospice 1.94 %

Total: 100.00 %

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Recent Managed LTC ExperienceRecent Managed LTC Experience

Tennessee TennCare Choices – Implemented April 2010• Rebalanced from 80% NF to 70% in 24 months• Eliminated all waiting lists for waiver/HCBS• More than doubled HCBS enrollment and spending• High satisfaction with members, HCBS Providers

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• Texas was early in moving A,B,D and HCBS LTC population into managed carewith STAR PLUS program, principally in metro areas, nursing home residentsreturn to Fee For Service after four months in nursing home

• Application to CMS for Duals program is available in draft and is targeted to file byJune 1, 2012

• Proposal is effective January 1, 2014, about 120,000 duals that are enrolled inSTAR PLUS will be mandatorily enrolled in Medicare Plans (Special Needs Plans)offered by their STAR PLUS HMOs

• Members will still be dis-enrolled from STAR PLUS after four months in NursingHome but will remain in SNP unless they elect to dis-enroll

• Consequence will be massive increase in SNP enrollment and it is likely thatnursing home residents will not be dis-enrolled after 120 days in the future

Texas Managed LTC & Duals InitiativeTexas Managed LTC & Duals Initiative

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• Rebalancing– more persons served in the community than

in institutions– rebalancing increases funding for HCBS providers

and increases the need for capacity and coordination– a significant opportunity and responsibility for

traditional aging/disability providers

How States or Health Plans Control LTC Costs ?How States or Health Plans Control LTC Costs ?

“Rebalancing” = Preventative HCBS + Appropriate Diversions+ Appropriate Transitions + HCBS Growth

• Improved Care Coordination-- integration of Medicare and Medicaid, Acute and LTC, and behavioral, physical and

social needs• Principal savings come from reduction in Hospital and Emergency Room costs,

Institutional LTC costs, fraud and abuse

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How Do HCBS Providers Pivot 180° ?How Do HCBS Providers Pivot 180° ?

Be Ready and Nimble to Re-Align Service Delivery Options:

• Expand hours of operation and geographic coverage

• Redesign service options to meet new and emerging client needs

• Proactive, preventative focus rather than reactive care delivery

• Broaden model of care delivery to incorporate medical as well as social factorsthat may impact clients

• Develop a more comprehensive view of the HCBS roles and responsibilities

• Participate in service models with multiple partners that wrap around meetingthe client’s needs

• Be willing to stand behind your work & share risks & rewards with the MCO’s

• Use client satisfaction survey to lead and monitor the process

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• Empty beds can be filled with more complex, more appropriate, higher revenuegenerating patients

• Nursing Homes leverage expertise, skill sets and assets to build care continuumsto support aging in place and appropriate placements

• Nursing Homes can use capabilities to provide therapies, various supports forthe consumer directed members, and Home & Community Based Services likeAdult Day Cares, Assisted Living, Meals and Respite Care

• Nursing Homes can share in savings from reduced hospitalizations and ER visitsby becoming a provider risk sharing entity. (i.e. Nursing Home CenteredAccountable Care Organizations or Institutional SNPs)

Challenge/Opportunity for Nursing HomesChallenge/Opportunity for Nursing Homes

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• Understandable fear of change and the unknown with an often unwarranted biasagainst new managed care plan enrollment mandates

• Hopeful outcomes will be expanded support for remaining at home through reducedwaiting lists, better access to preventative care, more quality oversight andtransparency, and better care coordination

• However the budget pressures are real and there will certainly be consequencesthat will be viewed as negative for example smaller provider networks, reducedbenefits, drug formularies and prior approval processes

• Consumer directed care options will be protected and will continue to grow

• Patient centric care models and patient self empowerment will become the normsand patients will benefit by high touch approaches of Health Plans and Providers

The Patient’s PerspectiveThe Patient’s Perspective

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• We need to increase the transparency of America’s health care system & empower Americans to find better value and better care

• We need a new business model to be more efficient and consumer focused with increased accountability, reward innovation and stimulate creativity

• Its not just about bending the cost curve but improving the Quality & Outcomes for our Patients!

Vision & Value PropositionVision & Value Proposition

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• Founded on the principles of assisting beneficiaries access a “sustainable”continuum of health and LTSS that are integrated in the setting most appropriateto their needs– to improve health outcomes

– reduce acute care episodes

– promotes comprehensive patient-centric care, and

– reduces overall costs

Future Models of CareFuture Models of Care

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THANK YOU