The Impact of Health Care Reform on Long- Term Care

Transcription

1 The Impact of Health Care Reform on Long- Term Care AMY RUNGE, CPA Moss Adams LLP Partner & National Practice Leader, Long-Term Care MARCY BOYD, CPA Moss Adams LLP Partner September 22, The material appearing in this presentation is for informational purposes only and should not be construed as advice of any kind, including, without limitation, legal, accounting, or investment advice. This information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although this information may have been prepared by professionals, it should not be used as a substitute for professional services. If legal, accounting, investment, or other professional advice is required, the services of a professional should be sought. 2 1

2 TODAY S PRESENTERS Amy Runge, CPA Amy has over 23 years of experience in accounting, auditing and consulting. Her emphasis is on audits and consulting of health care, not-for-profit organizations and governments. She has managed audits of CCRC s, skilled nursing facilities, assisted living facilities, clinics, hospitals, foundations, religious organizations, voluntary health and welfare organizations, special districts and municipalities. She has significant experience conducting audits in accordance with Government Auditing Standards, U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations and The Accounting and Audit Guide for Healthcare Organizations issued by the American Institute of Certified Public Accountants. Amy leads the long-term care industry group practice in California. Marcy Boyd, CPA Marcy is an assurance partner specializing in providing accounting and consulting services to health care systems, hospitals, acute care and specialty hospitals, medical groups, long term care facilities and health maintenance organizations. She also has vast experience in internal control risk management, revenue cycle, and providing client education training relating to technical accounting issues. Marcy is the leader of our Oregon long-term care health care practice. 3 AGENDA Affordable Care Act Mandatory Compliance Plans ACA Transparency Provisions Quality/Readmissions Employer Mandates Update Resources Q & A 4 2

3 WHAT IS THE AFFORDABLE CARE ACT? 2012 Through 2014 and Beyond 5 DEFINITION The Affordable Care Act, passed in March 2010, is a series of reforms to health insurance designed to increase availability of health insurance policies to individuals. 6 3

4 HOW DOES THE ACA AFFECT POST-ACUTE CARE? 7 COMPLIANCE PLAN MANDATES Contained in Section 6102 of Affordable Care Act: o Requires all owners, operators, and administrators of long-term care facilities to adopt effective compliance and ethics programs that prevent and detect criminal, civil, and administrative violations and promote quality of care. o Due date of compliance: March 23,

5 ACA COMPLIANCE PROGRAM REQUIREMENTS The ACA provides a general accountability overview that requires LTC compliance programs to have included the following eight components by March 23, 2013: o Develop compliance standards that reduce the prospect of criminal, civil, and administrative violations. o Identify executive personnel within the organization to assure compliance. o Avoid assigning responsibility to individuals likely to commit criminal, civil, or administrative violations. o Communicate compliance standards to employees and agents through publications and training. August 8, ACA COMPLIANCE PROGRAM REQUIREMENTS (CONTINUED) o Implement measures to achieve compliance, such as monitoring and auditing procedures to detect noncompliance. o Consistently enforce compliance standards, including effective disciplinary mechanisms in the event of noncompliance. o Apply mechanisms that correct noncompliance and prevent recurrence of noncompliance. o Periodically assess compliance programs to determine if modifications are necessary based on changes within the organization. 10 5

6 TRANSPARENCY MANDATES 11 ACA TRANSPARENCY PROVISIONS The ACA also includes provisions to improve transparency around LTC business operations. The Centers for Medicare & Medicaid Services (CMS), which oversees these provisions, hasn t yet published final regulations or time frames for reporting the information. However, LTC facilities should start planning ahead now. There are three critical areas LTC owners and administrators should be prepared to disclose: o Ownership & Financial Relationships o Nurse Staffing o Financial Information 12 6

7 OWNERSHIP & FINANCIAL RELATIONSHIPS The ACA requires nursing homes to disclose detailed information about their organizational structures and entities and individuals with at least a 5% ownership interest. In addition, nursing homes must disclose individuals and entities that provide governance, management, administration, operational, financial, and clinical services, including consultants. 13 NURSE STAFFING The ACA requires LTC facilities to provide accurate data on nurses and other care staff from payroll records, agency contracts, and cost reports. Eventually LTC facilities will be asked to report the total number of residents, resident case mix, turnover and retention rates, and daily hours of care provided by each direct care employee category for both regular and contract employees. 14 7

8 FINANCIAL INFORMATION The ACA requires LTC providers to categorize, in detail, expenditures from all payment sources on their cost reports and indicate whether the expenses are for: o Direct care, including nursing, therapy, or medical services o Indirect care, including housekeeping and dietary services o Capital expenses, such as building and land costs o Administrative services CMS is expected to make the expense data available to the public later this year. Further guidance will likely be released later this year as well, including an outline of what makes an effective compliance program. 15 PATIENT PROTECTION & AFFORDABLE CARE ACT (PPACA, ACA) & HOSPITAL READMISSION REDUCTION PROGRAM (HRRP) 16 8

9 EXTENT AND CAUSES OF HOSPITAL READMISSIONS High readmission rates considered marker of lower quality care. Approximately 19% of acute hospital admissions readmitted within 30 days. This percentage has remained steady over several years. 13% of acute hospital readmissions are potentially preventable. 17 EXTENT AND CAUSES OF HOSPITAL READMISSIONS (CONTINUED) Hospitals have traditionally accepted readmissions as a result of perverse financial incentives Significant proportion of total reimbursement Financial burden for reducing readmissions Financial incentive to reduce readmissions Section 3590 PPACA 18 9

10 HOSPITAL READMISSION REDUCTION PROGRAM (HRRP) The ACA created the HRRP, which will reduce Medicare payment rates for hospitals with higher than expected readmission rates for specific conditions HRRP began October 1, OPPORTUNITIES FOR LTC Hospital systems becoming insurers 20% of hospital networks market an insurance product Hospital systems entering full risk contracts with Medicare and Medicaid Bundled payments Hospital discharges to post-acute care settings 20 10

11 OPPORTUNITIES FOR LTC (CONTINUED) Approximately 40% of hospital discharges for heart attacks, heart failure and pneumonia patients go to post-acute care settings (SNF, HHA, IRF, LTACH) Of this 40%, at least half go to SNFs Increased admissions and occupancy Increased revenue Public and industry perception of being a quality provider Collaboration with hospital referral sources to coordinate care 21 WHAT HOSPITALS ARE DOING Motivated to better understand what is happening after acute care (referral patterns, readmissions / PAC venue, root cause) Assessing potential provider partners (surface level & in-depth assessment around capabilities and operating activities) Identifying high performers (those willing and able to align clinically and financially, pro-active, solution focused) Considering options (collaborate, preferred networks, own, J.V., shared resources, on-site presence, enhanced training) Implementing and monitoring Performance 22 11

12 WHAT PROACTIVE PAC PROVIDERS ARE DOING Tracking and Analyzing Data o Readmissions, ER visits, quality metrics Doing something with the Information Engaging at the Hospital Leadership Level (CEO, CFO, CNO) Understanding the Hospital s Data & Strategies o Readmissions, referral patterns, physician alignment, participation in ACOs, bundled payments, etc. Presenting Solutions Implementing Transitional Care Interventions Considering PAC Continuum Strategies o Enhance ability to manage care over an episode, secure 1 st & 2 nd PAC referral Keeping informed on payment reform strategies 23 RESOURCES 24 12

13 RESOURCES publications/archives/workplan/2013/work-plan pdf Service-Payment/AcuteInpatientPPS/Readmissions- Reduction-Program.html 25 QUESTIONS? Amy Runge, CPA Moss Adams LLP Partner & National Practice Leader, Long-Term Care Marcy Boyd, CPA Moss Adams LLP Partner