2015 Skilled Nursing Facility Medicaid Cost Report Data

Transcription

1 2015 Skilled Nursing Facility Medicaid Cost Report Data Source and Sample Size Plante Moran is once again pleased to announce that we have 2015 Medicaid cost report data available for all skilled nursing facilities (SNFs) in the state of Ohio. We have derived this information from the Department of Medicaid's (ODM) cost report database. Our consulting team has developed a number of analyses and benchmarking reports to help SNFs better understand market share, staffing trends, payor margins, and overall facility operations. All available reports are explained in further detail in Appendix I. There was a total of 919 nursing facilities included in the database for the 2015 calendar year. Market Share Regardless of shifts in payors, we believe achieving and/or maintaining high occupancy levels is still vital for future success. From 2014 to 2015, the statewide average occupancy decreased from 85.37% to 84.41%. This is based upon certified bed days, not licensed. The statewide average (SWA) occupancy level had previously shown a slow decline from 2012 through 2015, with the exception of 2014 that had an estimated 1% increase from In total there were 87,800 certified beds in Ohio with approximately 13,400 unoccupied beds, which averages about 15 empty beds per facility. There was a small reduction of 99 licensed beds and 61 certified beds from It is our opinion that overall occupancy will be challenged due to preferred provider agreements, alternative payments, and trends to support the transition of seniors living in more home and community based settings, rather than SNFs. An additional factor within SNF occupancy is finding the appropriate resident payor mix, which is another key for future success of senior care providers. When combining MyCare Medicaid with Traditional, Medicaid utilization is at percent, which is a 2.47 percent increase from For 2015, we saw a small.35 percent increase in combined MyCare Medicare and Traditional Part A to percent. We anticipate this utilization to continue to decline as Medicare Managed Care will be more prevalent with the baby boomers who reach age 65. Private utilization has also decreased by.39 percent to percent. Veterans/Other utilization (which includes Medicare Managed Care residents) also decreased by 1.08 percent to percent. Medicaid Managed Care utilization decreased to 2.15 percent. The charts on the next page illustrate current payor trends Plante Moran, PLLC 1

2 Statewide Occupancy 84.88% 84.32% 85.37% 84.41% Cost Trend Analysis The 2015 database information has illustrated some interesting trends and provides insight regarding how our industry is utilizing resources and managing expenditures. Ohio providers continued spending below CPI inflation (A) from 2012 to 2014 but had a 2.23 percent increase for 2015 for an overall statewide average allowable cost per day of $ Please note, this per diem excludes expenses related to consolidated services. Please see the next page for a breakdown of cost trends. (A) CPI for all items from 2012 to 2014 was 1.55 percent per year 2016 Plante Moran, PLLC 2

3 Statewide Cost Trend $ $ $ $ % 12% Direct Care Cost Center Ancillary/Support Cost Center Capital Cost Center Franchise Permit Fee Tax Cost Center Ohio's current Medicaid reimbursement methodology is based upon three peer groups (CSA1, CSA2, CSA3), so we continue to monitor each peer group s cost per day trend year over year. As you can see below, while all peer groups increased total allowable cost per day, peer group 1 incurred the highest increases in costs. Peer Group 2012 Cost 2013 Cost % Diff 2014 Cost % Diff 2015 Cost % Diff CSA1 L $ $ % $ % $ % CSA1 S % % % CSA2 L % % % CSA2 S % % % CSA3 L % % % CSA3 S % % % Total Allowable Cost per Day (A) $ $ % $ % $ % (A) Excludes Consolidated Services for Therapy, Oxygen, Resident Transportation and Custom Wheelchairs 2015 Medicaid Margin Analysis Comparing these costs to Medicaid reimbursement, the table below illustrates the average Medicaid margin for each peer group and on a statewide level. Not surprising, the statewide average margin per Medicaid resident in 2015 was a loss of $20.17 per day, which is an increase compared to the $18.88 loss in The main reason was due to costs increasing by 2.23 percent, while rates only increased 1.73 percent. With the introduction of the Medicaid rebased rates on page 4, there will be a significant improvement in Medicaid margins in FY Plante Moran, PLLC 3

4 Peer Group 2014 Rate (B) 2014 Cost $ Diff 2015 Rate 2015 Cost $ Diff CSA1 L $ ($1.74) $ $ ($5.45) CSA1 S (10.03) $ (15.32) CSA2 L (18.86) $ (20.58) CSA2 S (23.88) $ (24.91) CSA3 L (24.12) $ (23.86) CSA3 S (24.13) $ (25.79) Statewide $ $ ($18.88) $ $ ($20.17) Difference from '14 ' % 2.23% 6.82% (B) In 2014, Mahoning County transitioned from CSA 3 to CSA 2 We compared the Ohio statewide average to our neighboring states, Indiana and Michigan. Both Indiana s SWA rate of $ and Michigan s SWA rate of $ are greater than the Ohio s 2015 SWA of $ Projected FY 2017 Medicaid Margin Analysis As required by statue, July 1, 2016 Medicaid rates were finally rebased after 10 years. While not every nursing facility received an increase, we were happy to see a projected $14.89 per day increase over the 1/1/2016 Medicaid rates highlighted below: These increases are expected to add an additional $224 million of needed Medicaid funds for Ohio providers. If we use an inflation factor of 2.2% to project costs to FY 2017, we estimate that the overall Medicaid loss for this fiscal period will drop to ($11.41) per day as follows: Peer Group 2014 Rate (B) 2014 Cost $ Diff 2015 Rate 2015 Cost $ Diff CSA1 L $ $ ($1.74) $ $ ($5.45) CSA1 S (10.03) $ (15.32) CSA2 L (18.86) $ (20.58) CSA2 S (23.88) $ (24.91) CSA3 L (24.12) $ (23.86) CSA3 S (24.13) $ (25.79) Statewide $ $ ($18.88) $ $ ($20.18) Difference from '14 ' % 2.23% 6.88% (B) In 2014, Mahoning County transitioned from CSA 3 to CSA Plante Moran, PLLC 4

5 Case Mix Patterns While prices for cost components increased in 2015, rates had a very slight increase that can be seen in the grid above. This is due to an acuity increase in the first half of the year and decreasing in the second half. Keep in mind that with the rebasing, the case mix weight has changed as well. Staffing & Compensation Patterns Based upon cost reports, providers have maintained constant overall staffing with minimal decrease in overall FTEs. While there was a slight decline of direct care hours per patient day from 3.94 to 3.93, on a statewide basis this represents an estimated decrease of approximately 800 direct care FTEs. Ancillary/support hours per patient day actually increased slightly from 1.98 to 2.01, which equates to an increase of 850 FTEs. The table below provides detail of these trends for direct care positions and ancillary/support in total. Statewide Administrative Nursing RNs (Includes Charge Nurse) LPNs (Includes Charge Nurse) Aides (Includes Hab Aides) Total Direct "Hands On" Care Total Direct Care Total Ancillary / Support Total Facility Hours per Day Although cost per day increased within direct care and ancillary/support, the data indicates that SNFs are paying higher wages to fewer staff, which makes costs nearly a breakeven in these two cost centers. Below is a trend of the statewide wage per hour. Direct care and ancillary/support wages have continually increased from 2012 to 2015 while benefits as a percentage of salary has decreased Plante Moran, PLLC 5

6 Statewide Administrative Nursing RNs (Includes Charge Nurse) LPNs (Includes Charge Nurse) Aides (Includes Hab Aides) Total Direct Care Total Ancillary / Support Total Benefits as a % of Salary 21.41% 20.11% 19.99% 19.20% With the implementation of Payroll Based Journal (PBJ), it s essential to know the relationship between direct hours per patient day, PBJ reported hours, and your five star staffing rating. Beginning in FY 2018, PBJ will have a direct impact on providers five star staffing rating. It s important to practice awareness of direct care hours and their dependence on five star staffing before the impact of PBJ on the five star staffing rating. This will also allow organizations to forecast their five star staffing score and assist with determining the best staffing model for their facility from that perspective. Transition from FFS to Other Payment Models We continue to emphasize having a firm foot on optimizing financial results under fee for service (FFS) arrangements and at the same time brace ourselves for managed care and other evolving payment reform. This will require providers to move away from fee for service strategies and start building strong referral sources by providing a high quality of care, cost efficient care, and care management across the post acute continuum. In order to accomplish this, providers need to understand which benchmarks are key to success other than cost per day that has been ingrained in our minds for more than two decades. Providers need to know what is important to payors and referral sources such as Cost per Medicare beneficiary. Cost per Medicare beneficiary represents CMS payments made to traditional Medicare (PPS rates times length of stay). We foresee this benchmark being used to price bundles and for hospitals to choose future preferred providers. Here s an example of what we see for the top five facilities referred from The Ohio State University Medical Hospital: Skilled Nursing Facility Name Total Pmts Unique Patients Cost per Beneficiary Skilled Nursing Facility A $2,508, $ 13,342 Skilled Nursing Facility B $1,327, $ 13,975 Skilled Nursing Facility C $1,298, $ 14,593 Skilled Nursing Facility D $1,215, $ 18,413 Skilled Nursing Facility E $1,008, $ 12,449 Please see our list of available Plante Moran EDGE benchmarking reports below. Our goal is to help align these FFS benchmarks along with other performance and quality indicators to give you a performance EDGE in the short term, knowing that providers will also need to develop new metrics for episodic payments and bundling Plante Moran, PLLC 6

7 Appendix I Benchmarking Reports The analyses, derived from the ODM 2015 Medicaid cost report database, will help providers compare their facilities' data to their peer providers. Cost Per Patient Day Analysis This analysis is a line by line comparison of your facility s costs to that of your peer group s 25th, 50th, and 75th percentiles, your county providers, and the SWA. This allows for a quick benchmark comparison, hopefully helping you notice specific operational strengths and weaknesses. Percentile Analysis The percentile analysis compares each line item of expense for your facility to the peer group s average, 25th, 50th, and 75th percentiles. It also ranks each line item cost within your peer group, which allows you to quickly discover high cost areas that may warrant further investigation. Wage Per Hour Analysis This analysis compares your direct care and ancillary/support wage per hour line items to the 25th, 50th, and 75th percentiles wage per hour within your geographical area, as well as the average of your control type. This data is derived from Attachment 6 of the 2015 Ohio Medicaid cost report. FTE Analysis This analysis compares full time equivalents (FTEs) for positions in direct care and ancillary/support in your facility to the 25th, 50th, and 75th percentiles within your occupied bed range, as well as the average of your control type. This data is derived from Attachment 6 of the 2015 Ohio Medicaid cost report. Hours Per Patient Day Analysis This analysis compares the number of hours per inpatient day for positions in direct care and ancillary/support in your facility to the 25th, 50th, and 75th percentiles within your occupied bed range, as well as the average of your control type. This data is derived from Attachment 6 of the 2015 Ohio Medicaid cost report. Historical Dashboard This analysis provides a historical five year comparison of key economic indicators for your facility, control type, county, and SWA. We can customize your report to compare your top chosen categories simultaneously. Five Star Staffing Calculator This tool allows you to complete a PBJ like submission for any period of time to forecast your five star staffing score. This calculator allows you to complete a what if analysis to determine how different staffing models would impact your star rating. Hospital Discharge Data This analysis compares discharge data from hospitals and calculates a cost per beneficiary for each skilled nursing facility. We customize this report to compare the top referring facilities and/or where you stand in comparison to other preferred providers. Custom Analyses We are also able to prepare a customized report for your facility, comparing it to those of your competitors, other counties, your control type, facility size, etc. If you would like to order any of these reports, feel free to contact one of the following Plante Moran representatives: Denise Gadomski, Partner Jeff Heaphy, Partner Christopher Joos, Partner Plante Moran, PLLC 7