Patrick ConoleSenior Vice President

Home Care Association of New York State

September 8-9, 2016 Mohonk Mountain HouseNew Paltz, NY

Senior and Financial Manager’s Retreat

State Medicaid Issues

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Minimum Wage Update

• As part of this year’s 2016-17 final budget the Governor and Legislature reached agreement of a phase-in $15 per hour minimum wage hike.

• Under the deal, NYC’s minimum wage will increase to $15 per hour in three years (beginning on December 31, 2016) and in Long Island and Westchester over six years.

• For the rest of state, the minimum wage will go up to $12.50 over the next 5 years and would be indexed to $15 per hour thereafter based on to be determined methodology developed by the Division of Budget.

• See Minimum Wage Effective Dates Chart in Handouts.

• Throughout the entire State Budget process (pre and post final budget), HCA has been working with a coalition of other State Associations that includes HCP, LeadingAge NY and HANYS to estimate the cost impact of any Minimum Wage policy, as well as to discuss DOH’s rollout of any implementation guidelines given to the MLTCs or other Medicaid Managed Care plans.

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Minimum Wage Update - continued

We have also had regular conference calls with a subgroup of HCA’s LHCSAs members.

• Included as part of the 2016-17 final budget are Medicaid state-share cash estimates of $13 million for 2016-17 across all sectors, starting with the January 1, 2017 implementation date of the wage hike to the end of the state fiscal year on March 31 (a three-month period). State officials are also proposing a state-share cash estimates of $88 million for the entire 2017-18 state fiscal year (with the vast majority of these monies dedicated to home care providers).

• These appropriations are below HCA's projections which account for Medicare cost impacts and other considerations (compression factor) not included in the state's projections.

• Jason Helgerson, New York’s Medicaid Director has stated that DOH intends to have updated Medicaid rates (for Plans and FFS providers) loaded by January 1, 2017 but many details need to be worked out, including the exact methodology of the additional funding and the status of federal-share amounts, which require approval from the U.S. Centers for Medicare and Medicaid Services.

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Minimum Wage Update - continued

Also unknown is the prospect of any future funding under Medicare for wage costs, which Mr. Helgerson said would be the subject of discussions with federal officials.

• HCA is working with our home care coalition partners (HCP and LeadingAge NY) to make sure any guidance from the Department will add increased funding for minimum wage compliance uniformly to the MLTC/MMC regional rate and this adjustment will be risk adjusted.

• DOH’s current minimum wage estimates (for NYC area only) on the expected impact to worker costs that should be given to contract providers is $1.33 an hour - in order to meet statutory wage requirements (minimum wage and wage parity.) HCA and our home care coalition have calculated a figure of $1.47 an hour that is needed and have shared those estimates with DOH.

• HCA’s top priority is that any guidance from DOH makes it clear that the plans have to pass through the entire amount that they receive from DOH to all of their contracted home care providers, that the plans cannot decrease their rates so that home care providers don’t receive the full amount, and home care providers/plans can go to DOH if there is a dispute over the increase.

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CHHA Episodic Pricing System (EPS) Update

• DOH implemented CHHA EPS on May 1, 2012. Statute requires the Department to rebase the EPS, no less than every 3 years.

• On October 1, 2015, DOH implemented a full CHHA EPS rebasing adjustment (new base year of 2013) which included updated information on the base price, the Medicaid EPS Grouper, Case-Mix score changes, new outlier thresholds, updated LUPA amounts, updated wage indices, etc.

• As part of the 2015-16 final state budget, DOH allocated a CHHA EPS rebasing savings of $30 million (gross) in the State Fiscal Plan however, the actual rebasing adjustment is producing savings anywhere from $70-100 million. The current EPS base price was lowered to $3,629 from the old base price of $5,633 – which represents a 35.6 percent reduction.

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CHHA Episodic Pricing System (EPS) - continued

• In fact, an analysis of CHHA EPS reimbursement from August 2015 thru July 2016 (compared to the previous 12 month period) shows CHHA EPS reimbursement decreasing to $183.6 million from $248.7 million (represents a 26.2% decrease).

• Because of the severe magnitude of this CHHA EPS rebasing rate reduction, HCA developed a bill (S.5878/A.8171) that the Legislature unanimously passed which limits the level of CHHA EPS rebasing cuts to $30 million; however, the Governor vetoed the Legislation.

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Medicaid Face-to-Face (F2F) Requirement

• On February 2, 2016, CMS published in the Federal Register a final rule on the Medicaid F2F requirements for Home Health Services. Can be reviewed at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-01585.pdf

• Effective July 1, 2016, Section 6407 of the ACA, requires a F2F encounter with the Medicaid beneficiary for the initial authorization of home health services provided by a Certified Home Health Agency (CHHA).

• However, DOH has stated to HCA that provider compliance and DOH enforcement with this requirement will not begin until July 1, 2017.

• DOH has developed draft guidance which HCA has reviewed (See ASAP article summary in packet).

• HCA and other Associations met last week with Andrew Segal, DOH’s new Director of Long Term Care to discuss this issue specifically regarding any flexibility DOH may have in making the requirement less burdensome. We had previously requested that DOH only make it applicable in Medicaid FFS situations, not in any Mainstream Medicaid Managed Care of MLTC type cases.

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Other State Medicaid Issues

• Regulatory Changes to Physician Signed Orders - Due to HCA’s advocacy, DOH issued a May 4, 2016 DAL notifying CHHAs, LTHHCPs and LHCSAs that DOH has amended the home care regulations in Sections 763 and 766 with regards to obtaining signed physician orders.

• The revised Medicaid regulations are similar to the Medicare regulation in that providers will have up to a 1 year time period for receipt of the signed orders. However, upon receipt of those orders, providers have 30 days to bill for services.

• DOH has also issued an article in the August 2016 Medicaid Update on this issue

• Standardization of Medicaid Managed care billing / revenue codes - As part of the 2015-16 final budget DOH was required to do this and HCA has been part of a Workgroup that has developed “draft” rate codes which have been shared with the plan associations. HCA is advocating strongly that implementation of these draft codes begins no later than January 1, 2017.

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Other State Medicaid Issues - continued

• Third Party Liability (TPL) Update - The OMIG and UMMS last month sent provider case selection report letters to many Medicare certified providers that includes a listing of all cases that need to be demand billed to Medicare for the first half of FFY 2016 only. Dates of service for this period include October 1, 2015 thru March 31, 2016.

• 2% Across the Board (ATB) Medicaid Reduction - Effective May 8, 2015, the 2 percent ATB Medicaid payment reduction was eliminated for claims with service dates on or after April 1, 2015. However, the retroactive repayment of the reduction taken over the period April 1, 2014 through March 31, 2015 is still pending federal approval from CMS.

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Federal/Medicare Issues

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CMS’s Proposed CY 2017 HH PPS

• On July 5, 2016, CMS published in the Federal Register the proposed rule for the CY 2017 Medicare Home Health PPS.

• HCA provided the membership with a detailed Public Policy Memorandum on CMS’s proposed rule (in handouts) which can be accessed at: http://hca-nys.org/wp-content/uploads/2016/06/HCAMemoProposed2017HHPPS.pdf

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CMS’s 2017 Proposed Rule:

• Maintains for the fourth year the -3.5 rebasing methodology first implemented in the CY 2014 HH PPS ($80.95 reduction to the base rate).

• Maintains for the second year an additional “Case-Mix Creep” type adjustment that would reduce the 60-day episodic payment by 0.97 percent first implemented in 2016 and continuing for CY 2017 and 2018, to account for a CMS-contended growth in “nominal” case-mix ($160 million decrease).

• Includes a proposed market basket update of 2.3 percent (a $420 million increase). CMS determined this percentage by subtracting a mandated 0.5 percent productivity adjustment from its calculation of a 2.8 percent market basket.

• Results in an overall 1.0 percent reduction in Medicare home health payments nationally (or $180 million) in CY 2017.

Continued…

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CMS’s 2017 Proposed Rule - continued:

• Once again, makes no comment or policy changes regarding F2F. CMS’s intentions appear to maintain the current F2F requirements, along with the changes implemented in 2015, which eliminated the physician narrative requirement but still require physicians (or an approved non-physician practitioner) to certify that a F2F patient encounter occurred no more than 90 days prior to the home health start of care date or within 30 days after the start of home health care.

• Proposes to change the methodology used to calculate the outlier payment, using a cost-per-unit approach rather than a cost-per-visit approach. CMS is also proposing to limit the amount of time per day (summed across the six disciplines of care) to 8 hours or 32 units per day when estimating the cost of an episode for outlier calculation purposes (consistent with the definition of “part-time” or “intermittent” which limits the amount of skilled nursing and home health aide minutes combined to less than 8 hours each day and 28 or fewer hours each week).

CMS is also proposing to keep the same 80 percent outlier loss ratio but would increase the fixed dollar loss (FDL) ratio from 0.45 to 0.56. This proposal would reduce the number of episodes that would qualify for outlier payment. CMS indicates that such a change is needed to keep outlier spending within the 2.5% national spending limit

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CMS’s 2017 Proposed Rule - continued:

• Includes another recalibration of the HHPPS case-mix weights (CMWs), using the most current cost and utilization data. CMS’s goal is to have an overall average case-mix score of 1.0 nationally.

• Includes some important updates to its value-based purchasing demonstration project which is currently operating in nine randomly selected states. New York is still not one of the nine states (Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska, and Tennessee). CMS’s proposal would apply a payment reduction or increase to current Medicare CHHA payments, depending on quality performance, for all agencies delivering services within the nine pilot states. This is a major ongoing initiative that will require continued analysis, review, education and examination of the experience in the pilot states selected for this project.

• Maintains the HHPPS wage index for CY 2017, so that it is fully based on the revised OMB delineations adopted in CY 2015. There are now 15 CBSA wage index designations for HHAs in New York. In this proposal, 6 CBSAs are expected to see decreases while 9 CBSAs are expected to see increases. HCA is particularly disappointed that the Nassau-Suffolk designation is proposed to have a -2.17 decrease while the NYC designation is proposed to have a -1.94 decrease in CY 2017 (but have heard that the NYC wage index may improve when CMS’s releases its final rule in November).

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CMS’s 2017 Proposed Rule - continued:

• Implements a new standard for the submission of the Outcome and Assessment Information Set (OASIS) to avoid payment rate reductions. In the first year (CY 2017), CMS is imposing a 70 percent compliance standard for the number of OASIS submitted (using a “Quality Assessment Only” formula), which rises to 80 percent in the second year (CY 2018) and caps out at 90 percent in the third year (CY 2019).

• Includes the extension of the Medicare home health rural add-on for home health episodes and visits furnished in a rural area ending before January 1, 2018.

• Is proposing a separate payment mechanism (outside HHPPS) for HHA services in cases where the sole purpose of a visit is to furnish negative pressure wound therapy (NPWT) using a disposable device. This separate service payment would be based on the Medicare Hospital Outpatient Prospective Payment System (OPPS) amount, which includes payment for both the device and furnishing the service.

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CMS’s 2017 Proposed Rule - continued:

On August 24, HCA submitted comments to CMS on the proposed CY 2017 HH PPS. Comments are included in your packets.

In our comments we objected to CMS’s continuation of their proposed rebasing methodology and discussed the following flaws:

• The rebasing estimates continue to use outdated, incomplete data. Still includes costs assumptions from 2011 Cost Reports.

• CMS does not include the costs of the following HHA regulatory obligations: the F2F requirement, PECOS enrollment mandate, CAHPS patient surveys, and ICD-10.

• CMS’s approach ignores regional differences in home health operating margins. In its 2014 HHPPS rulemaking, CMS estimated that 43 percent of all HHAs would face negative Medicare margins. However, an HCA analysis earlier this year (in a February 2016 report called Risk Factors) found that over 70% of NY home care providers were operating at a loss across all payors in 2014, not just Medicare.

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CMS’s 2017 Proposed Rule - continued:

Other issues addressed in our comments to CMS include:

• The proposed continuation of the second of a three year additional “Case-Mix Creep” adjustment to the CY 2017 episodic payment should be rescinded since it is not only unnecessary due to CMS recalibrating the case-mix weights but also appears to go beyond the statutory Congressional limits of home health rebasing that is in the ACA (CMS is not to go beyond a 3.5% reduction each year).

• CMS’s silence, in the proposed 2017 rule, on the question of Medicare F2F documentation issues which continue to plague providers with administrative costs, payment problems, and access-to-care burdens.

• HCA believes CMS made this home health F2F physician encounter requirement much more burdensome than the ACA ever intended and that physicians conducting the F2F encounter should be able to simply sign and date the beneficiary’s plan of care which would serve as an attestation that the F2F encounter has been met.

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CMS’s 2017 Proposed Rule - continued:

• Because New York is vigorously pursuing VBP from the Medicaid payment perspective (as well as recently releasing a draft Medicare Alignment paper which would integrate Medicaid and Medicare VBP efforts), we were pleased that CMS continued to not include New York as one of the nine states to participate in its home health VBP program from the Medicare perspective mainly because we believe it is critical for HHAs to be able to invest in the infrastructure necessary to successfully participate in any proposed Home Health VBP program. New York providers have enough work activities ahead of them to prepare for the New York-initiated Value Based Payment project, without the added focus of a federal project.

However, we recommended that CMS develop an application process so that interested HHAs can apply for the VBP program rather than require all agencies in the pilot states to participate. CMS could document the characteristics of these volunteer agencies and select a similar set of agencies for comparison in order to assess the success of the program.

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CMS’s 2017 Proposed Rule - continued:

We also recommended that CMS expedite its VBP program so that it’s concluded in no more than 4 to 5 years, rather than the current demonstration which goes for seven years.

• HCA also provided detailed comments on CMS’s proposed revisions to the outlier methodology, the home health wage index, the separate payment for negative pressure wound therapy using a disposable device and the lack of federal Health Information Technology (HIT) funding for home health providers.

On July 13, HCA held a Federal Advocacy Day in Washington DC in conjunction with the Forum of Statewide Home Care Associations to advocate all of our concerns about CMS’s current and proposed regulations – with the focus being on asking for Congressional assistance in obtaining relief on the overly burdensome F2F requirement as well rebasing relief in the CY 2017 final rule.

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NGS Update: Probe and Educate Audit

• Beginning in December 2015, NGS began conducting the first round of a medical review and audit initiative under the Home Health Probe and Educate medical review strategy outlined in CMS final rule for Calendar Year 2015 HHPPS.

• CMS implemented this Probe and Educate medical review strategy to assess and promote provider understanding and compliance with the Medicare home health eligibility requirements, including documentation of the F2F physician encounter.

• As part of this probe and educate audit process, CMS has instructed every home health MAC in the country to select a sample of 5 claims for pre-payment review from every HHA within its jurisdiction.

• Based on the results of these initial reviews, NGS and other MACs have conducted provider specific educational outreach. CMS has instructed MACs to deny each non-compliant claim and to outline the reasons for denial in a letter to the HHA, which will be sent at the conclusion of the probe review.

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NGS Update: Probe and Educate Audit - continued

• According to NGS, the following are the main reasons why claims selected for the Probe and Educate audit were denied:

Insufficient F2F documentation from the physician such as clinical notes or discharge summaries;

Community physician not identified when hospitalist completes the F2F encounter;

Untimely signature of the F2F documentation from certifying physician;

Insufficient homebound documentation; Providers not responding to NGS’s ADR request within 45 days; and

Documentation does not adequately describe the reasons and medical necessity for home health services.

• For those providers (almost everyone) that are identified as having moderate or major concerns (2-5 denials out of 5), the MACs will repeat the Probe and Educate process for dates of services occurring after education has been provided as part of Round 2, which NGS expects to begin towards the end of this year or early 2017.

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HCA’s Data Webpage

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HCA’s Data Webpage

• In the Fall of 2013, HCA introduced a new members-only web page called “HCA Data at: http://hca-nys.org/hca-data

• The site includes links to data reports that will assist home care, hospice and managed care members in their benchmarking efforts, understanding of system-wide trends and access to reimbursement and premium rates.

HCA’s Data Webpage includes the following resources:

• Home Health Medicaid Data Resources such as the CHHA & LTHHCP Medicaid Cost Report Summaries, DOH links to FFS Rates and the latest home care and hospice Directories from DOH.

• Medicaid Managed Care Operating Report (MMCOR) Data for MLTCS & PACE programs. Includes information on premium rates, percent of PMPM spent on Medical Services such as home health and unit cost and utilization data.

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HCA’s Data Webpage

• Home Health Medicare Resources including the latest home health Utilization data from NGS, as well as NYS Medicare Cost Report Data from CMS.

• MLTC and Managed Care Resources – includes links from DOH’s website that provides key information on Managed Care quality performance, access and utilization and beneficiary satisfaction.

• HCA regularly updates the Data Webpage. Over the summer we have entered the 2014 CHHA & LTHHCP Medicaid Cost Report data, the 4th quarter 2015 MLTC & PACE MMCOR data and the June through December 2015 Medicare utilization data from NGS.

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Questions?

Thank you

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