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Home health agencies (HHA) may soon be financially rewarded or penalized by Medicare based on their quality measures. 


In 2016, the Centers for Medicare and Medicaid Services (CMS) implemented a value based purchasing (VBP) model for all Medicare-certified agencies in nine states: Arizona, Florida, Iowa, Maryland, Massachusetts, North Carolina, Nebraska, Tennessee, and Washington. While the program is technically a pilot, providers in those states must participate and will be scored based on their quality measures. 


What will be measured? 


The VBP program will initially look at 24 home health quality measures that are collected by CMS through claims submissions, the Outcome and Assessment Information Set (OASIS) patient assessment tool, the Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPs) patient satisfaction tool, and self-reported data. Additional measures may be added in the future.


How will scoring work? 


Each HHA’s total score will be based on two separate factors: 


  • How its quality measures compare to other agencies within its state 

  • Whether its quality measures have improved over time 

CMS will use each agency’s 2015 quality measures as the base year to compare its initial measures. As the program continues, CMS will determine if the agency’s quality measures have improved from the previous year and how each agency compares with other home health providers in its state. 


Each quality measure will be scored equally to create the agency’s total quality score. Agencies will be notified annually in late summer of their total score, and their “quality-adjusted” payment rate will increase or reduce the Medicare PPS payment amounts they will receive for that year. 


How much will the reimbursement rate change? 


Beginning in 2018, home health agencies’ reimbursement rates will include a payment modification based on their total quality score of up to a 3 percent increase or decrease in their Medicare prospective payment system reimbursement payments. The maximum adjustment will gradually increase or decrease up to 8 percent by 2022. CMS says the program is budget-neutral for home health agencies but estimates that it will save $380 million in unnecessary hospitalizations and skilled nursing facility usage through this model. 


What Medicare programs does this apply to? 


The reimbursement adjustments associated with this program will only apply to traditional Medicare patients, not Medicare Advantage patients. However, OASIS data from traditional Medicare, Medicare Advantage, Medicaid, and Medicaid managed care patients will be used in computing the quality scores. The quality measures are risk adjusted to compensate for differences in the patient population served by HHAs. 


What should an agency do? 


As a first step, Medicare certified HHAs with providers in the nine selected states should register now on the CMS Enterprise Portal to obtain an Enterprise Identity Management (EIDM) user ID. The website allows agencies to view their quarterly and annual performance reports and annual payment adjustment reports and submit their new measurement data. In late spring, CMS will provide an individualized report for each agency in the nine states that will identify its scores and the statewide median scores of other home health providers. 


Agencies in states that do not currently participate in the program may also register, but they cannot submit quality data through the CMS Enterprise Portal or receive reports. However, all agencies nationwide should focus on the 24 quality metrics to assess their performance, see how they compare to other agencies, and develop plans to improve their scores. Most of the measures included in the calculation of the VBP score are already available on the CMS Home Health Compare website, and others are available through HHCAHPs. 


How we can help 


CliftonLarsonAllen is available to work with Medicare certified home health providers to better understand the VBP program and to help them receive the appropriate awards under this new system. CLA offers operational assessments to identify and implement opportunities for improvement and provides strategic discussions to align home health programs for changes in reimbursement, referral relationships, and bundled services. 


This article by Gary Massey, Principal, Health Care, was reprinted with permission from CliftonLarsonAllen


 

The Centers for Medicare and Medicaid Services (CMS) has finalized the proposed rule to test bundled payment and quality measurement for hip and knee replacements. The final rule was published November 16, 2015, and the implementation date is set for April 1, 2016. The program is scheduled to run through December 31, 2020. 

This program is a major step in CMS’ initiative of establishing 30 percent of all Medicare fee-for-service payments via alternative payment models by 2016 and 50 percent by 2018.

Program tests bundled payments and quality measures 

The Comprehensive Care for Joint Replacement (CJR) (also known as Lower Extremity Joint Replacements (LEJR)) program explores episodes of illness associated with hip and knee replacements, which are two of the most common surgical procedures for Medicare beneficiaries. In 2014, over 400,000 procedures were performed and cost $7 billion for the hospital stays alone. 

All 800 prospective payment system hospitals in 67 designated metropolitan statistical areas are required to participate in the CJR/LEJR bundled payment and quality measurement initiatives, unless they are already part of the Bundled Payment for Care Improvement Initiative. The participating hospitals will be held financially accountable for the quality and all costs of the CJR/LEJR episode of illness and care, including the 90 days following the episode. This means that the hospital is both the acute episode care provider and the post-acute care coordinator. 

The post-acute responsibilities include: 

  • Physician’s services 
  • Inpatient hospitalization (including readmission) 
  • Inpatient psychiatric facility (IPF) 
  • Long-term care hospital (LTCH) 
  • Inpatient rehabilitation facility (IRF) 
  • Skilled nursing facility (SNF) 
  • Home health agency (HHA) 
  • Hospital outpatient services 
  • Independent outpatient therapy 
  • Clinical laboratory 
  • Durable medical equipment (DME) 
  • Part B drugs 
  • Hospice 

Episode time frame and payment 

The episode of care begins with the admission to the hospital for any fee-for-service beneficiary who is discharged with the MS-DRG 469 (major joint replacement or reattachment of lower extremity with major complications or comorbidities) and MS-DRG 470 (major joint replacement or reattachment of lower extremity without major complications or comorbidities). This episode of illness ends 90 days post-discharge from the participating hospital. 

All providers involved in the episode will continue to be paid under the Medicare fee for service (FFS) rates. In addition, CMS will hold participating hospitals accountable for an actual episode target price for MS-DRG 469 and 470 that reflects a discount off current episodic spending and is based on a blend of the hospital’s own historical costs and the regional historical episodic costs. The target price will be used as follows: 

  1. CMS will reconcile the actual target price to the actual episode spending. 
  2. If the target prices are lower than the actual episode spending, the hospital may have to repay Medicare. 
  3. If the actual target price is higher than the actual episode spending, the hospital may be eligible for additional reimbursement, called reconciliation payments. 

As currently outlined, there is no risk to the program in the first year (beginning April 1, 2016). During year one, all providers in the CJR Model will be paid as usual through the Medicare FFS payment models. Year two of the payment model will begin the initial phase-in of the repayment process for the hospital providers, but would include built-in protection for high-cost cases. 

To qualify for reconciliation payments, hospitals would be required to perform favorably on three of the National Quality Forum (NQF) measures: 

  • Meets standard level of risk for procedure (NQF #1550) 
  • Meets 30-day readmission rate for procedure (NQF #1551) 
  • Meets targets for consumer assessment of provider and systems (NQF #0166) 

Details for skilled nursing facilities 

The final CMS rule includes the potential to waive the three-day hospital stay requirement before SNF payment can be triggered in cases following the CJR hospitalization or anchor hospitalization. This waiver will take effect for years two through five under the CJR bundled payment. 

However, for a SNF to be eligible to receive an admission under this waiver and the CJR bundle, it must be identified on the quarter calendar list of qualified SNFs when the CJR/LEJR beneficiary was admitted and have an overall rating of at least three stars for at least seven of the twelve months measured. 

This criteria is based on the CMS Five Star Rating System, which is a critical point for both the participating hospitals and transferring SNF providers. All qualified SNFs will be posted in advance of the calendar quarter. 

Provider outcomes and expectations 

This program is a major step in CMS’ initiative of establishing 30 percent of all Medicare fee-for-service payments via alternative payment models by 2016 and 50 percent by 2018. CMS’ goal in this initiative is to hold providers accountable while coordinating care and working closely together for better outcomes. Hospitals involved in this bundled payment will need to be closely involved in the post-acute care services and monitor providers much more stringently than in the past. As organizations begin this new initiative leaders should keep the following in mind: 

  • Strong partnerships are critical. 
  • Hospitals will need to partner with the various providers of post-acute services. 
  • Understanding and developing best practice protocols and clinical pathways for these DRGs will be essential to ensure better outcomes, lower episodic cost, and the potential to capture additional reimbursement or reconciliation payments. 
  • Hospital readmission rates can be a key driver of costs. Working with partners to reduce readmissions through strong care transitions, clear care protocols, and communication will be important in managing the episodic cost, and enabling better outcomes, stronger results, and higher reimbursement. 
  • Discharge protocols will need to be developed and advertised to all post-acute care providers with expectations of customer service outcomes. 

How we can help 

CLA can analyze your costs associated with MS-DRG 469 and 470 from recent discharges. We can assist you in partnering with the best possible post-acute care providers in your geographic regions based on information available from CMS. This will permit you to be the best possible “gatekeeper” of your reimbursement and, with proper management oversight and involvement, the best care coordinator available. 

This article by Lou Shiber, Reimbursement Director, Health Care, was reprinted with permission from CliftonLarsonAllen. 

Cleaning and disinfection plans are an important consideration during an influenza outbreak. The influenza virus can live as long as eight hours on some surfaces.  

Proper cleaning and disinfection are effective ways to minimize the spread of the virus through surface contact. Whether you have in-house janitorial staff or a contract cleaning service, it is important to have a comprehensive cleaning plan to help ensure all parties understand their responsibilities.

Fitch Ratings released its 2016 Outlook for Nonprofit Continuing Care Retirement Communities in January 2016.

Consistent with the 2015 Outlook, Fitch assigned a stable outlook for 2016. The sector continues to see gradually improving occupancy levels, stable financial ratios, and a favorable capital markets environment.

Uncertainties include the dynamic healthcare environment and changing reimbursement levels, along with the expected rise in interest rates by the Federal Reserve.

Ziegler tracks the not-for-profit senior living credit rating trends and shows that, as of the end of November 2015, there were 9 ratings upgrades and only 2 downgrades, with the remainder of the rating actions maintaining their same rating.

Fitch Ratings also noted an increase in capital expenditures in 2015 compared to the prior year.

This is likely related to a number of factors, one being the advantageous interest rates and lending options for the not-for-profit sector.

Ziegler has also observed increases in the number of providers who are reinvesting in their existing campuses, engaging in overdue repositioning projects, and also expanding the geographic footprint of the community to undeveloped adjacent land.

The recently released 2015 LeadingAge Ziegler 150 (“LZ 150”) report showed that nearly 72% of the LZ 150 organizations planned to expand or reposition a community in 2015 or 2016. In 2015, nearly 1/4 of the LZ 150 grew their number of units through community expansions.

While the number of new community locations is down among not-for-profits, there are providers who are proactively engaging in growth plans through new campus development in nearby markets or areas with a limited supply of CCRCs.

Ziegler is currently tracking roughly 60 not-for-profit CCRCs that are at various stages of conceptualization, from early planning to under construction and soon to open.

While the majority of these projects are from multi-site organizations, roughly 10 are single-site communities looking to grow to 2 locations. Among for-profits, Ziegler is tracking approximately 25 CCRC development projects in planning, most of which are intended to be rental CCRC communities.

It is also important to note that not-for-profit providers are engaging in other types of development that do not include the full continuum. These projects generally include some Independent Living and Assisted Living or Memory Care, without the Skilled Nursing component. A few are also embarking on free-standing Assisted Living and Memory Care facilities.

If you are interested in further information on Ziegler, or have questions regarding anything included in this article, please contact the Ziegler banker in your region.

 

This article was reprinted with permission from Ziegler.

Boston is a place of new ideas. It’s a place of learning. And it’s a place where people challenge themselves. As LeadingAge and its members gathered in Boston for the 2015 Annual Meeting, Greystone observed there were new ideas as shared by industry leaders, mutual learning among peers, and people challenging themselves to find innovative ways to approach non-profit missions. 

At Greystone, we were honored to take part in this gathering. We enjoyed sharing about what our clients are doing to better serve residents. And, in the name of new ideas, learning and challenging ourselves, we announced a series of white papers. 

In 2016, we’ll write about continuing care retirement communities, now known as Life Plan Communities. We hope this series will help continue the dialogue we started in Boston. 

It’s always exciting to gather for the Annual Meeting. And it’s always exciting to head home and implement many of the ideas shared and lessons learned. It’s our hope that, when we gather in Indianapolis, these new ideas and lessons learned will have given way to action — that we can all share about the progress that’s been made in the past year. 

View our video reflecting on the Boston Annual Meeting.

Sign up to stay in touch with us over the next year. We look forward to seeing you in Indianapolis in 2016.

 

This article was reprinted with permission from Greystone.

If you’re looking to get more out of your marketing efforts, but don’t know exactly where to start, try these 3 strategies from GlynnDevins:

 

  1. Find a Sounding Board 

    Seek out a knowledgeable resource – peer group, mentor, state association, other marketing professionals – and bounce some ideas off them. Find out what others are doing and what they think of your situation. It’s easier to create with outside stimulation than it is staring at a blank sheet of paper.

  2. Be Willing to Change 

    If you want different results, don’t keep doing the same thing. Be open to new ideas and strategies, as well as dropping what you’ve always done. It’s tough to do and often comes with more work, but therein lies the chance for greater return on your investment.

  3. Take It to the Next Level 

    New ways of selling the same old thing might not get you the results you’re looking for. Be open to changing your product, contract types or mix of services. Think about what the market is asking for—whether that’s multiple dining options, home health services, home sale assistance, or some other service or amenity—and do whatever you can to provide it. Consumers are changing, are you?

 

Of course, marketing isn’t as easy as 1–2–3, but these might get you started down the right path… or at least open up the conversation to new possibilities.

 

This article was reprinted with permission from GlynnDevins.

The Financial Accounting Standards Board (FASB) has announced plans to move forward on proposed accounting standards changes for nonprofit organizations, according to CliftonLarsonAllen.


Based on feedback received from the nonprofit community, FASB plans to split the proposed changes that were included in its exposure draft into 2 phases. FASB discussed the first phase at a December meeting, affirming several changes that could result in a final standard in 2016.


This is the latest step in a process started more than 3 years ago when FASB set out to improve financial reporting in the nonprofit sector. The proposed changes will impact financial statements, including note disclosures.


Reporting changes affirmed


New net asset classifications


For organizations that receive contributions or grants with donor-imposed restrictions, the 3 current net asset classifications will be collapsed into 2.


Unrestricted net assets will become net assets without donor restrictions; temporarily and permanently restricted net assets will collectively become net assets with donor restrictions. Footnote disclosures will include the differentiation between temporary and perpetual donor restrictions.


In addition, disclosures relating to amounts and purpose of board-designated net assets will be required either on the statements or in the notes.


Direct versus indirect cash flow reporting


Nonprofits will be allowed to continue to choose between the direct and indirect method when preparing the statement of cash flows. However, if an entity chooses the direct method, it will no longer be required to also present the indirect reconciliation.


All other proposed changes to the cash flow statement will be included in future phases of the project.


Underwater endowments


Underwater endowments are those permanent gifts having a current market value that is less than the historic or original gift amount. The board affirmed its proposal that underwater endowments will be classified in net assets with donor restrictions instead of the current classification in unrestricted net assets.


Expanded notes will also be required to disclose amounts underwater and to present plans for reducing or not spending from these funds.


Items not yet affirmed, but may be in future phases


Liquidity disclosures


The exposure draft proposed new disclosures meant to help the reviewer better understand the organization’s management of liquidity and the financial assets available to meet its near-term demands for cash. FASB will continue to discuss qualitative disclosure requirements surrounding how organizations manage liquidity risk, but may include a quantitative disclosure requirement as well.


Reporting of functional expenses


Existing standards require all organizations to report expenses by function (program services and supporting activities) on either the statement of activities or in the notes. Costs by natural expense classification (salary, occupancy, professional fees, and depreciation) are currently allowed but not required.


Under the proposed standard, all organizations would disclose expenses by both function and natural classification.


This can be accomplished through either a statement of functional expenses or disclosure in the notes.


Reporting investment returns


Organizations will be required to report investment income after deducting external and direct internal investment expenses. Given the varying size and complexity of investment portfolios, this information has been inconsistently tracked by some nonprofit organizations.


This change would provide a more comparable measure of overall investment return among peers. Future discussions would include the types of expenses that should be deducted.


Additional reporting measures in the statement of activities


An intermediate operating measure is currently optional. The proposed standard would have required organizations to report a defined operating measure based on mission and availability.


Based on feedback received, the FASB is continuing to discuss whether this should be required. However, it is anticipated that if an organization elects to show an intermediate measure of operations, disclosures surrounding what is included and excluded would be enhanced.


Next steps


FASB is urging preparers of financial statements to review and understand the proposed guidance. The standards board is expected to continue discussing additional proposed changes in early 2016, and will continue to post updates to the standard on its website.


Once the standard is approved, early communication to the users of your financial statements is also a key to successful implementation. Consider formal training for certain financial statement users, such as your board of directors, to explain the impact of the new reporting structure.


This article was reprinted with permission from CliftonLarsonAllen.

Ziegler conducted a CFO HotlineSM poll in December 2015 on the topic of board activities. While every organization has its own approach to governance, whether it is board composition or frequency of meetings, knowing how peers manage board-related activities can be helpful. Nearly 260 not-for-profit senior living providers gave feedback on topics such as frequency of board meetings, board compensation and budgeting.

The 1st question asked respondents how often the full board of directors meets. Roughly 4 out of 10 respondents indicated that they have quarterly board meetings. When looking at the results by single-site versus multi-site organizations, nearly half of the quarterly meetings were held by multi-sites while the most common among single-site providers were quarterly and bi-monthly meetings.

The survey also asked about board compensation. Specifically, respondents were asked if they compensate their board, excluding reimbursement for travel, trainings, etc. The vast majority, 94%, does not compensate their board, as shown below. Among those organizations that do compensate their board members, it is a combination of both multi-site organizations and single-site communities.

Respondents were asked to share their estimated annual budget for board activities, as well as their overall annual revenue. The 2 were then used to calculate the percentage of the budget designated for the board budget/activities.

On average, the respondents devote .037% of their budget toward board activities. Quite a few respondents (more than 25) indicated that they budget $0 for board activities. The two organizations with the largest budget for board activities were both organizations who indicated that they compensate their board. There was not a significant difference between single-site providers and multi-site providers in the percentage of board budget to overall revenue.

When asked how many organizations have corporate-level boards and/or local boards, nearly 62% of the multi-site organizations indicated that they have a corporate board only. An additional 37% indicated that they have both a corporate board and local board. Only one organization indicated the absence of a corporate board; they rely on their local boards only.

For the most part, it was explained that for those with both corporate and local boards, the vast majority of the decision-making power lies at the corporate board and that the local board serves largely in an advisory capacity. For a number of the organizations, at least one corporate-level board member must be a member of the local board.


Printed by permission of the author, Lisa McCracken Senior Vice President of Senior Living Research & Development Ziegler.

Late December is the time of year when it seems the local media shifts its focus a bit. There are fewer tales of tragedy on the evening news, or in the local newspaper, and a few more tales of hope. The only question for senior living marketers is what you’re doing to be part of the holiday headlines.

If it’s been awhile since you’ve seen your community featured prominently in print or on the local television news, it’s time to look aroound for the seasonal story that makes you stand out. Here are some suggestions to help point you in the right direction:

  1. Does your community collectively donate to a soup kitchen or charity? What’s unique about the way your residents are pitching in this holiday season?
  2. Do any of your residents do anything special on their own time for charity? Any shopping mall Santa Clauses?
  3. Ask around. Not everyone who helps the needy likes to talk about it. Find out from residents if there’s someone who’s doing something spectacular, but might be too humble to share.
  4. Who are the staff members doing unique things this holiday season? Is anyone involved in donating their time to a charity? Is there anyone on staff from another nation who has a unique cultural holiday tradition they brought with them? Try to find those uncommon stories.
  5. Look for the back story. Is there a worthy cause that a resident or staff member is passionate about because of a personal experience, such as the loss of the loved one or the kindness of a stranger?

Once you’ve begun to identify these opportunities, local or regional media outreach is a good place to start. Be sure, however, not to stop there. Use the social media channels at your disposal, as well. Tell those heartwarming stories and ask others to share.

It’s also important to think visually. Do you have a lights display outside of your community? What about an intergenerational story involving kids singing carols to some of your residents? What’s happening this time of year that would look great on video?

Generosity breeds generosity. That’s why sharing your community’s charitable endeavors isn’t just good for promoting who you are. If you’ve got a resident who’s hesitating about having their story shared, remind them that positive news can often lead to more positive news, as inspired viewers begin to find their own ways of making a difference.

The media, with or without your contributions, will run holiday-related, heartstrings-tugging stories in the coming weeks. Making sure yours is one of them could feel like an early holiday gift, wrapped up neatly under the tree.

 

This article by Jeff Bell was reprinted with permission from GlynnDevins.

 

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