Governor Issues State Budget Proposal

Transcription

1 ASAP Volume A Weekly Publication Of HCA Home Care Association of New York State Legislative Issues Public Policy News 20, No. 3 January 23, 2015 Governor Issues State Budget Proposal Governor Andrew Cuomo, on Wednesday, delivered a combined State-of-the-State and State Budget address in Albany, setting the stage for the coming weeks of negotiations with the Legislature and an eye toward the April 1 deadline for a new budget. The two policy declarations are usually made on separate occasions, spaced apart during the month of January. However, the State of the State, which is typically delivered earlier in the month, was postponed to observe the passing of former Governor Mario Cuomo, the current Governor s father. The Governor s budget is usually issued at about this time. See BUDGET p. 2 HCA Unveils Budget Agenda, Financial Report in Lead-up To Advocacy Day HCA has created two principal resource documents for Monday s HCA State Advocacy Day program in Albany, when members of our Board of Directors will engage with key legislative and Cuomo Administration officials on priority home care issues. Both of these new resource documents which include a publication outlining our legislative/budget agenda, as well as our 2015 financial condition report can be downloaded from HCA s Resource Library online. We have also included these signature documents at the back of this week s ASAP for Inside ASAP your reference. HCA will also be creating a brief outline of our positions on the just-released Executive State Budget proposal. (See related p. 1 story.) We Governor Issues State Budget Proposal...1 HCA Unveils Budget Agenda, Financial Report...1 Assembly Leader Faces Federal Charges...5 Value Based Purchasing Sought in Budget...8 Hold Feb. 12 for HCA Labor Law Program...9 Update on Companionship Exemption Suit...10 Materials Posted for PHHPC Committee Meetings...10 emedny Update...10 HCA, DOH Officials Meet on Reimbursement...11 News Media Shine Light on HCA Home Care Proud Winner...13 MSSNY, HCA, NAHC Discuss Face-to-Face Status, Strategies Poverty Levels Published...14 Home Care-related Bills Introduced...15 DSRIP Update...16 Influenza Update...16 NGS Updates...17 Publications...17 Helping New Yorkers Feel Right At Home See ADVOCACY p. 6

2 BUDGET from p. 1 The Governor s spoken remarks on Wednesday emphasized several major policy areas including education, property tax relief, public safety, economic development, addressing unemployment and homelessness, transportation and infrastructure, and other broad areas. One feature item that would impact providers is the Governor s proposed increase in the minimum hourly wage, from $9 to $11.50 in New York City and to $10.50 in the rest of the state, effective December 31, The current level of $8.75 is scheduled to rise to $9 on December 31, Total federal, state and local Medicaid spending is expected to be $62 billion in , according to budget briefing documents. However, very little of the Governor s spoken address focused on Medicaid policy, other than the Governor s emphasis on keeping the Medicaid Global Cap index at 3.6 percent. The current-year ( ) state budget extended the global cap until March 31, It also extended the Commissioner of Health s super powers to reduce expenditures that exceed projections. The cap for is $17 billion. In terms of other global Medicaid financing policies, the state Department of Health has been working to obtain federal approval for discontinuing the 2 percent across-the-board cut, pursuant to the state budget, which called for its discontinuation. That cut was turned off in April of 2014 but was reinstated in May of 2014, due to negotiations with the federal government that have affected the state s authorization of the cut, which may come into play during this current budget negotiation cycle. Members will recall that the final state budget discontinued the cut after March 31, 2014, including the alternative cuts made in lieu of the 2 percent cut (such as the additional 0.7 percent Gross Receipts Tax, or GRT, on LTHHCP payments). Continued on next page ASAP is a weekly publication of the Home Care Association of New York State (HCA). Unless otherwise noted, all articles appearing in ASAP are the property of the Home Care Association of New York State. Reuse of any content within this newsletter requires permission from HCA. President: Editor: Joanne Cunningham, jcunningham@hcanys.org Roger L. Noyes, Director of Communications, rnoyes@hcanys.org Al Cardillo, Executive Vice President, Policy & Programs, acardillo@hcanys.org Patrick Conole, Vice President, Finance & Management, pconole@hcanys.org Andrew Koski, Vice President, Program Policy and Services, akoski@hcanys.org Laura Constable, Senior Director, Membership & Operations, lconstable@hcanys.org Lynda Schoonbeek, Director of Education, lschoonbeek@hcanys.org Mercedes Teague, Finance Manager, mteague@hcanys.org Jenny Kerbein, Director of Governance and Special Projects, jkerbein@hcanys.org Billi Hoen, Manager, Meeting and Events, bhoen@hcanys.org Teresa Brown, Administrative Assistant, tbrown@hcanys.org 388 Broadway, 4th Floor, Albany, NY Tele: ; Fax: ; Website 2

3 Continued from p. 2 However, in May of 2014, DOH reinstated the 2 percent reduction pending approval from the U.S. Centers for Medicare and Medicaid Services (CMS) to eliminate it. To date, DOH is still in the process of seeking CMS s approval and the cut remains in effect. The Governor s spoken address also highlighted obligations of $850 million to settle overpayments that are due to the federal government related to billing for services under the Office for People With Developmental Disabilities. Those overpayments along with $3 billion for infrastructure upgrades and maintaining the current New York State Thruway tolls and $1.5 billion for upstate economic development would come from a $5.4 billion windfall pool attributable to the state s legal settlements with the financial services industry. As reported in last week s ASAP, Comptroller Tom DiNapoli has cautioned that this year s multibillion-dollar windfall is a unique increase in state revenue, not a surplus in the traditional sense, and, therefore, should not be devoted to long-term budget commitments (such as education or health care financing). The proposed budget language does, however, provide some new areas of health care funding. According to the Governor s budget briefing book, the Executive Budget provides $1.4 billion in new complimentary capital investments to make infrastructure improvements and provide additional tools to stabilize health care providers to advance health care transformation goals. This funding includes: $700 million in capital funding to stabilize the health care delivery system in Brooklyn, reduce unnecessary inpatient beds while improving the overall quality of inpatient and outpatient services, and increase access to community-based primary and preventive health care services. $300 million to create an integrated health care delivery system in Oneida County to reduce unnecessary inpatient beds and expand primary care services ; and $400 million to support debt restructuring and other capital projects to promote appropriate regional consolidations among health care providers and further health care transformation in rural communities. The budget also continues many initiatives that are already undergoing implementation as part of Medicaid Redesign, federal waivers and other federal financing vehicles, including: Implementation of the Basic Health Plan (BHP), a new state health insurance option to cover low income individuals, authorized under the Affordable Care Act (ACA); Increased payments to essential community providers; Enhanced reimbursement to hospitals and nursing homes to promote continued reforms and performance improvements; Enhanced federal Medicaid monies under the Community First Choice program to implement the state s Olmstead plan for serving individuals with disabilities in the most integrated setting. The amount of funding is pending a determination by CMS; Continued on next page 3

4 Continued from p. 3 Leveraging Health Homes to establish better linkages and improve care coordination for children and the criminal justice population; Facilitating the coverage of new immigrant populations, in accordance with federal requirements; Funding enhancements for medical transportation and services for those with traumatic brain injuries; and Investments to continue Balanced Incentive Payment initiatives and provide additional community supports to the aged and disabled. The briefing documents also refer to the $8 billion, 5-year Medicaid waiver awarded last year. In the first year under the waiver $500 million was awarded to financially distressed safety net hospitals whose viability is critical to achieving ongoing reforms, the budget documents state. Over the next year large consortiums of providers across the state will begin work as performing provider systems with the goal of reducing avoidable hospital use by 25 percent over the next five years. Through the new Delivery System Reform Incentive Payment (DSRIP) program, these systems will receive performance payments based upon achieving predefined results in system transformation, clinical management and population health. Governor Cuomo s budget proposes to implement value-based payments within DSRIP for Performing Provider Systems and managed care plans. By the fifth year of DSRIP, the budget documents state, 90 percent of provider payments must be value-based and not fee-for-service. (HCA has a detailed p. 8 story in this week s ASAP on the Governor s value-based payment proposal.) CHHA Episodic Pricing, Advanced aide proposal and other home care provisions For home care, specifically, the Governor s proposed budget would permanently extend the authorization for the CHHA Episodic Payment System (EPS). The current authorization expires on March 31, As part of the permanent authorization, the Department is in the process of re-basing the current CHHA EPS using 2013 Medicaid claims data as the base year. (The current base year for CHHA EPS is 2009.) The budget also includes the Governor s proposed exemption to the Nurse Practice Act for advanced home health aides to authorize such individuals to perform advanced tasks in home care and hospice settings with appropriate training and supervision. The Governor originally proposed an advanced home health aide designation during last year s legislative session. However, the proposal was held due to the need for further discussions with stakeholders. HCA is a member of a workgroup created by the Governor s office to discuss the range of tasks for inclusion in an advanced home health aide designation. The budget has a provision requiring the state Education Commissioner to consider the recommendations of this workgroup in developing the regulations. HCA will provide further information on the direction of this proposed budget provision as we further analyze the budget language and hold further discussions with the Cuomo Administration about this proposal. Many of the reimbursement policies set in motion from past years appear to remain in effect related to: the continued elimination of the Medicaid trend factor, as well as continuation of the Administrative and General cost caps and the Gross Receipts Tax and others. The budget also continues the 3 percent recruitment and retention funding for LTHHCPs and AIDS Home Care programs, as well as for CHHAs billing for services to children under age 18 and for services provided to a special needs population of medically complex and fragile children, adolescents and 4

5 young disabled adults by a CHHA operating under a pilot program, included in Public Health Law (PHL) Section 3614(8). DOH regards CHHA EPS payments as also incorporating recruitment and retention support. The final budget also continues the up to $100 million HCRA pool funding allocation for CHHAs, LTHHCPs, Hospice, MLTC plans and contracting LHCSAs for workforce recruitment and retention through March 31, Budget release follows closely with HCA advocacy day with HCA Board HCA is gearing up for our State Advocacy Day on Monday, January 26. This year s Advocacy Day program will specifically involve our Board of Directors in strategic meetings at the Capitol. Over the last few days, we have finalized our state advocacy resource documents and have discussed key message points with the Board. (Please see related p. 1 story.) HCA will be encouraging the general membership to meet with their lawmakers directly in their district offices as the budget negotiations proceed. We will also be working to provide you with a more detailed analysis of the state budget as we dig deeper into the legislative language. This analysis may yield still-further provisions for the home care community that HCA has yet to identify from our still-cursory review. HCA will be specifically examining the areas of investment highlighted in the Governor s budget materials for areas of delineation in home care and/or for opportunities to advance home care investment proposals outlined in our legislative/ budget agenda. Please stay tuned for further details. Assembly Leader Faces Federal Charges Albany s legislative process was ushered into a state of uncertainty late this week with news that Assembly Speaker Sheldon Silver, one of the Capitol s most powerful elected leaders, faces federal charges allegedly related to his outside income as a lawyer. The charges were announced by the U.S. Attorney for the Southern District of New York, Preet Bharara, during a press conference on Thursday afternoon and widely reported in statewide media. Earlier this month, Members of the Assembly had elected Speaker Silver to another term as the chamber s leader. He has served as Speaker since It is unclear whether this week s news will result in changes in the Assembly s leadership structure. According to news reports, the federal charges stem from investigations under the Moreland Commission. The Commission was convened, but later disbanded, by the Cuomo Administration to investigate public-integrity issues. Thursday s announcement of the federal charges just one day after the Governor issued his State Budget proposal has created a bumpy path for this year s legislative session as the pressure will soon build to negotiate a final state budget by April 1. As Speaker of the Assembly, Sheldon Silver plays a leading role in budget negotiations, along with the Governor and Senate Majority Leader; and he is responsible for setting the legislative agenda for his chamber. It is unclear whether or how much the balance of power will be upended by this week s developments, and to what extent they will disrupt the trajectory of imminent budget talks. HCA s State Advocacy Day is on Monday, when our Board will be meeting with legislative leaders to discuss home care priorities. HCA is pressing forward with our plan to advance a proactive agenda early in the legislative process and to get our issues on the table with the Governor s office, the Senate and the Assembly budget negotiators. Please see the related p. 1 story on HCA s legislative and budget agenda. For more information, please contact a Member of HCA s Policy staff. 5

6 ADVOCACY continued from p. 1 will share this budget analysis with the membership, along with a more detailed summary of the budget proposal, early next week. Legislative/Budget Agenda The feature document of our advocacy program is entitled Driving Health Care Improvement and Savings Through Home Care. This piece outlines six main areas of needed support and legislative action for home care to succeed and best fulfill the state s policy goals. HCA worked with our Board of Directors and gathered overall membership input as we fashioned this agenda, which reflects the needs of home care providers and managed care plans in meeting the state s policy vision under: the Fully Integrated Duals Advantage (FIDA) program; the Delivery System Reform Incentive Payment (DSRIP) program; Managed Long Term Care; and other integrated models. Our main pitch on Advocacy Day is to bolster financial and programmatic support in home care so that providers can succeed in their current role while also supporting and adapting to the aims of new and emerging care models a message that we believe will resonate positively with lawmakers. As reported elsewhere in this week s ASAP (see related p. 1 story), the Governor has issued a Executive State Budget proposal with new dedicated funding commitments to various areas of health care. HCA s proactive agenda seeks to include supportive home care policies within these larger system investments and to identify other opportunity areas for home care support as the Governor and Legislature negotiate a budget. In broad terms, the requested action items in our agenda are as follows: Finance and incentivize home care technology; Update the state insurance law provisions for home care; Amend the managed care-home care payment system; Authorize state Department of Health regulatory flexibility and fix for the home care-managed care model; Amend the law to encourage innovation and remove barriers; and Finance and incentivize advances and innovation in quality. More details of each issue area are outlined in the Driving Health Care Improvement and Savings Through Home Care document at the back of this week s ASAP. HCA is sharing this document with legislators and our Board leaders who will use it in their advocacy message on Monday. We will also be preparing specific legislative, budget and/or administrative language, as necessary, for the adoption of these proposals as the legislative/budget session progresses. Financial Condition Report HCA appreciates the many members who completed our financial condition survey in December. The results of that survey coupled with an analysis of Medicaid Cost Reports, Statistical Reports and Managed Care 6

7 Operating Reports are outlined in a report entitled Home Care Financial and Program Support Vital for Success of New Care-Delivery Models. HCA s financial report reveals a continuation of home care s severely compromised financial and regulatory state that is fundamentally challenging home care viability, let alone full and functional participation in emerging care-delivery models sought by state leaders. Among the major findings are: Approximately 70 percent of Certified Home Health Agencies (CHHAs) and Long Term Home Health Care Programs (LTHHCPs) had negative operating margins in 2011 and 2012 based on HCA s Medicaid Cost Report analysis. A similar result (70 percent of CHHAs/LTHHCPs having negative margins) was also shown in 2013, based on provider responses to HCA s survey. Over 90 percent of Licensed Home Care Services Agencies (LHCSAs) in the survey sample reported negative operating margins in 2012 based on their latest Statistical Report data submitted to DOH. 57 percent of Managed Long Term Care (MLTC) plans had negative premium incomes in 2013, up from 42 percent in 2012 and 2011 (a 35 percent difference). MLTC plans are currently the payment source for a vast majority of Medicaid community based long term care services. In the analysis, HCA found a strong correlation between the compromised financial condition of plans (as shown in their premium income losses) and a reduction in their rates of payment to downstream home care providers who are already coping with the impact of prior year cuts and mandates like the Wage Parity Law. On average, home care providers who have negotiated MLTC contracts are receiving Medicaid rates 13 percent below their fee for service rates, according to HCA s survey. HCA s survey and cost report analysis included other major findings related to: the volume and impact of bad-debt on agency operations; accounts receivable and cash-flow issues; the impact of late physician orders on billing as a percentage of Medicaid volume; and prompt-pay issues. We also reported on survey answers that assessed the impact of mandates and cuts on providers, specifically the recourses that providers expected to pursue in response to these strains (i.e. phasing out programs, closing their agency, pursuing licensure changes, staff cuts, etc.). Using these documents in your advocacy As previously reported, HCA s 2015 State Advocacy Day is designed this year to engage our Board of Directors in strategic meetings at the Capitol, but we will need the strong support of our whole membership during the critical upcoming months before the April 1 state budget deadline. All members should read HCA s advocacy documents carefully and prepare to engage with your legislators at the local level on these issues. HCA will be sending action alerts throughout the coming weeks to support you in these efforts. For more information, please contact a member of HCA s Policy staff. 7

8 Value-based Purchasing Sought in Budget DOH convenes advisory group to assist in formulation The Governor s State Budget introduced this week contains a proposal instituting sweeping changes in the health care payment system in New York State. (See related p. 1 story.) The Governor s value-based purchasing (VBP) proposal requests broad authority for the State Commissioner of Health to utilize reimbursement methodologies that are value based, as well as to authorize managed care plans, Performing Provider Systems operating under the Delivery System Reform Incentive Payment (DSRIP) program, and combinations of participating contracting providers to implement VBP. Under the terms of its $8 billion federal reinvestment waiver, the State Department of Health (DOH) agreed to move to a VBP model, by waiver year 5 (the end of 2019), and all managed care organizations must employ non-fee-for-service payment systems that reward value over volume for at least 90 percent of their provider payments. According to DOH, a plan towards VBP has to be submitted to the U.S. Centers for Medicare and Medicaid Services prior to April 1, To explore critical components of VBP models, DOH has convened a workgroup that taps the participation of HCA and representatives of the health care continuum. The workgroup convened today for the first time to review the Department s plans and begin the process of input. DOH introduced the following possible scope options for VBPs: All care for total population Integrated primary care Episodic care bundles All care for subpopulation A copy of the DOH slide presentation to the workgroup can be viewed at VBPWorkingGroupSlides.pdf and a roadmap plan is posted at RoadmapFirstDraftVBPWorkgroup pdf. While the terms and conditions of the federal waiver that would move the state toward VBP are already part of the state s $8 billion plan, the proposed approaches, including the Executive s budget proposal, are still subject to review, negotiation and approval by the Legislature. HCA will provide detailed reports to the membership as the budget and workgroup discussions further unfold. Further background on VBP CMS has implemented and/or tested VBP models for hospitals, nursing homes and home care. The Affordable Care Act also specifically requires CMS to develop a plan to implement a Medicare VBP for home care. A Home Health Pay-for-Performance (HHPFP) demonstration was conducted from 2008 to 2009 to gauge the impact of financial incentives on the quality of care provided to home health patients in traditional fee-for- 8

9 service Medicare and on their overall Medicare costs. According to the Health and Human Services Report to Congress on VBP for home health: The HHPFP demonstration distributed funds across home health agencies that either maintained high levels of quality or achieved significant improvement in quality of care. A total of 567 (280 treatment versus 287 control group) agencies participated; treatment sites included Illinois, Connecticut, Massachusetts, Alabama, Georgia, Tennessee and California. Funds were provided to agencies that either maintained high levels of quality or achieved significant improvement as defined by 7 OASIS measures: Incidence of acute care hospitalization Incidence of emergent care Improvement in bathing Improvement in ambulation/locomotion Improvement in transferring Improvement in management of oral medications Improvement in status of surgical wounds CMS has, meanwhile, required Pay for Reporting home health consumer satisfaction survey results, levying a 2 percent penalty for failing to report. For further information, please contact Al Cardillo at acardillo@hcanys.org. Hold Feb. 12 for HCA Labor Law Program HCA will be holding a program on February 12 in New York City that will review certain current labor regulations that affect home care agencies, despite the federal companionship exemption changes being put on hold due to court action. (See related p. 10 story.) The program will include presentations by the New York State Department of Labor and the New York City (NYC) Department of Consumer Affairs. The flyer for the February 12 program will be ed to members next week. The program will run from 9:30 a.m. to 2 p.m. Some of the topics to be covered include: NYC Paid Sick Leave law; Any responsibility by home care agencies to notify aides of increases in the minimum wage; How to compute hours worked by aides on sleep-in cases; Recordkeeping requirements for home care agencies that provide sleep-in cases; 9 Continued on next page

10 Continued from p. 9 Payment rules for individuals who work on overnight cases that are not sleep-in cases; How to calculate an aide s regular rate of pay when the aide is paid different hourly amounts in one week; Requirements related to reimbursement to aides for travel time and use of cell phones; Whether an agency can pay the same aide different hourly amounts for the same services but for different hours; and Findings of state Department of Labor investigators related to home care. For more information, contact Andrew Koski at (518) or akoski@hcanys.org. Update on Companionship Exemption Suit US DOL files appeal Yesterday, the United Stated Department of Labor (DOL) filed an appeal to the U.S. Court of Appeals for the District of Columbia Circuit in the lawsuit that challenges the Fair Labor Standards Act final rule that would effectively eliminate the companionship exemption for home care agencies. More information is at Prior to the filing of the appeal, the National Association for Home Care and Hospice (NAHC) provided the following update on the companionship exemption lawsuit. HCA will provide updates as they come available. The path taken in any appeal can vary widely. If DOL wants to stay (suspend) the district court ruling, it must first ask the district court Judge Leon to approve a stay. Judge Leon strongly hinted that he would deny such a request by DOL. If he denies a stay request, DOL can then ask the Court of Appeals to issue an emergency stay. The process in an emergency stay can take days or it may Materials Posted for PHHPC Committee Meetings The state Department of Health (DOH) has posted the agenda and supporting documents for the January 29 meeting of the Public Health and Health Planning Council (PHHPC) Committee on Establishment and Project Review. The materials are at public_health_and_health_planning_council/ meetings/ /. The agenda includes applications by one Certified Home Health Agency for a change in ownership; 28 entities to establish new Licensed Home Care Services Agencies (LHCSAs); and 6 LHCSAs for a change in ownership. emedny Update emedny has issued revised materials and updated its training schedule. A revised Medicaid Eligibility Verification System (MEVS) and Dispensing Validation System (DVS) Provider Manual has been posted at ProviderManuals/5010/MEVS/ MEVS_DVS_Provider_Manual_(5010).pdf. A new training schedule for January to March is at index.aspx. 10

11 extend for months. Generally, it is not a quick process. If a stay is granted, the rules challenged in the lawsuit will go into effect. Since that result is a change in the status quo, the Court of Appeals may be disinclined to issue a stay. Whether or not DOL seeks a stay of the district court rulings, the Court of Appeals will ultimately reach a decision on the merits of the case. The Court of Appeals has the power to review the lower court ruling as a de novo matter, meaning it is a fresh and full review not affected by the district court decisions. These reviews now take one to one-and-a-half years. If no stay has been issued, the district judge s rulings remain in effect, permitting the use and application of the longstanding overtime exemptions. If the Court of Appeals affirms or reverses the district judge, the next stop is the U.S. Supreme Court. NAHC and HCA remind home care agencies that they must be compliant with state and federal law. New York requires that those working more than 40 hours receive overtime, and overtime is calculated at timeand-a-half of minimum wage ($8.75 x 1.5 = $13.13). HCA will be holding a program on labor law for our members on February 12 (see related p. 9 story) and advises agencies to attend to ensure that they are in compliance with the current regulations. HCA, DOH Officials Meet on Reimbursement This week, HCA and state Department of Health (DOH) officials convened to discuss home care, hospice and managed care reimbursement issues. With Wednesday s introduction of the Executive Budget proposal, the meeting contained a particular focus on the budget s implications for the home care-managed care community, including the ongoing issues and initiatives discussed at the HCA-DOH meetings, conducted monthly. HCA s agenda items included: The proposed Executive Budget proposals affecting home care, Managed Long Term Care (MLTC) and hospice. Update on DOH s plans for rebasing of the episodic pricing system for Certified Home Health Agencies (CHHAs). DOH suggested that the proposed rebasing will reflect cost/expenditure reductions evidenced since the transition of cases to managed care. HCA identified critical areas for home care investment of such funds (e.g. health information technology, training, workforce) and stressed the need to avoid any destabilization. Status of DOH s consideration of a package of health information technology/clinical technology proposals presented to the Department by HCA in October. DOH indicated that HCA s proposals have been under internal consideration. HCA indicated that we would continue to be asking DOH s support, as well as the Legislature s support, in the upcoming budget negotiations. Status of the 2014 and 2015 MLTC premiums adjustments. DOH indicated that the Phase 2, April 1, 2014 rate package has been approved by the Division of Budget (DOB) and MLTCs should be receiving it soon. HCA reinforced ongoing concerns about the financial position of MLTCs and the 11

12 downstream effects on contracted providers. HCA shared specific examples with DOH of the consequences of the lag in payment adjustment. Update on the status of retroactive reinstatement of funds to providers and MLTCs from the expiration of the of 2 percent Medicaid cut (which was eliminated in last year s budget but reactivated by DOH in May pending federal approval of the rate restoration). DOH indicated that this matter is still pending federal approval. Update on Quality Incentive Vital Access Provider Pool (QIVAPP) payments for MLTC and contracted providers. DOH indicated that the review and scoring of plans are proceeding and that the funds have yet to be issued. Update on Fully Integrated Duals Advantage (FIDA) reimbursement, payment provisions and enrollment. DOH indicated that, based on information available to date, approximately 270 individuals have been enrolled in FIDA. While the discussion yielded no further specifics on current payment approaches, the state budget includes a proposal for a major reformulation of reimbursement throughout managed care and other programs using value based payment methodologies (see related page 8 story). A general update on the Delivery System Reform Incentive Payment (DSRIP) program. Medicaid Global Cap issues and status. HCA specifically inquired on the status of the promised savings reinvestment enacted in last year s budget. No update was able to be provided at the meeting; HCA will seek this information in the context of the new state budget discussions. Additionally, HCA noted the inequity of the current Global Cap policy on all of the unpaid but still-obligated state reimbursement adjustments for MLTCs and home care in 2014 (e.g., the 2014 premiums, QIVAPP funds, wage parity adjustments, quality incentive payments and more). Because the Global Cap is established against a cash paid methodology, funds not paid in one fiscal year, and rolled into the next, are combined with the new year s expenditures against the Global Cap (unadjusted for such rollover expenditures). Telehealth reimbursement for home care and MLTC. HCA again expressed concern related to the status of the home telehealth program, the absence of program continuity for CHHAs and Long Term Home Health Care Programs, and the absence of program incorporation and payment adjustment for MLTCs Outstanding issues from prior HCA-DOH reimbursement agendas. HCA will keep the membership apprised of the status and further developments with these issues. HCA encourages and invites input from the home care, hospice and MLTC community on issues HCA brings to this reimbursement table. For further information, please contact Al Cardillo at acardillo@hcanys.org or Patrick Conole at pconole@hcanys.org. 12

13 Binghamton News Media Shine Light on Home Care Proud Winner Lourdes at Home The winning agency in HCA s Home Care Proud contest, to recognize National Home Care Month, garnered some media attention this week from television and print news. As we reported in the December 12 issue of ASAP, Lourdes at Home of Vestal was awarded the top honor in our Home Care Proud contest based on a story about Lourdes Therapist Kim Jones who worked with a patient suffering from severe dementia. The patient has been bedbound and mostly non-verbal. Through a series of therapies, both physical and cognitive, Ms. Jones was able to help the woman regain her ability to speak and carry on conversations with her husband. In an interview this week with the Binghamton area s ABC affiliate, Ms. Jones explained: We really focus on the patient as a whole. We don t just look at them as a diagnosis. We get to know the patients, find out what they want to do, what they want to achieve, what their families want them to achieve, find out who they are as a person and work with them that way to help them achieve their goals. A link to the segment is on HCA s Facebook page at The story also gained coverage in last Sunday s edition of the Press and Sun Bulletin. HCA congratulates Ms. Jones and the Lourdes at Home team for this important recognition, including HCA Board Member Shelly Eggleton, Administrator of Lourdes, and Ben Robinson, the Rehab Manager at Lourdes, who submitted the nomination. For more information, please contact Roger Noyes at rnoyes@hcanys.org. MSSNY, HCA, NAHC Discuss Face-to-Face Status and Strategies The Long Term Care Subcommittee of the Medical Society of the State of New York (MSSNY) met this week for an agenda that included a discussion on physician-home care face-to-face requirements. Participating in the meeting were HCA Executive Vice President Al Cardillo and National Association for Home Care and Hospice (NAHC) Vice President for Law William Dombi. Mr. Cardillo and Mr. Dombi jointly presented the evolution, changes and current status of the Medicare face-toface requirements. They also described the multi-level and multi-partner advocacy efforts initiated over the past several years to address the serious access, process, documentation and payment problems associated with the requirements. These include: Direct advocacy by HCA, NAHC and others with the U.S. Centers for Medicare and Medicaid Services (CMS). Partnering with state associations across the country to urge reconsideration, revision and streamlining of the requirements. Continued on next page 13

14 Continued from p. 13 Successful outreach to and engagement of Congress to support HCA, NAHC and partner associations proposals for reform. HCA-NAHC partnering to draft and submit legislative remedy language stipulating Congressional intent that face-toface documentation be satisfied simply through physician signature of the plan of care, which would include the date of the face-to-face encounter. NAHC s current and continuing legal filing challenging CMS s overreach in its implementing regulations, along with NAHC s continuing meetings with CMS to arrive at a workable administrative solution on implementation and enforcement. Mr. Cardillo and Mr. Dombi each reinforced the importance of support from the American Medical Association (AMA) for a federal solution, and encouraged MSSNY s efforts to stress the same with the AMA. HCA has been directly engaging with MSSNY and its LTC subcommittee on joint advocacy and assistance efforts related to faceto-face. During the summer, MSSNY s LTC chair, Dr. Evelyn Dooley- Seidman, led a physician-perspective discussion with the HCA Quality Committee, culminating in ways that HCA and MSSNY could further collaborate on concrete and policy level solutions. Over the fall, HCA and MSSNY followed these talks by holding a joint discussion with the CMS contactor, National Government Services, on educational and technical assistance for streamlining compliance with the requirements. HCA appreciates MSSNY s collaboration on this issue, and we applaud NAHC and Mr. Dombi on their relentless efforts to remedy the CMS policy and procedure through policy development, advocacy and NAHC s ongoing litigation aimed at addressing the narrative component of face-to-face (as summarized in several past editions of ASAP). Other issues of interest to the home care community were discussed with the LTC committee, including the committee s intentions to rouse health leaders support for the Long Term Home Health Care Program in the evolving long term care environment, the committee s interest in joining HCA in efforts related to home care for veterans, avoiding potential patient access issues stemming from the coming March implementation of e-prescribing requirements, and other areas Poverty Levels Published The U.S. Department of Health and Human Services has published the 2015 poverty levels at poverty/15poverty.cfm. The annual levels are: $11,770 for individuals (up from $11,670 in 2014) and $15,930 (up from $15,730 in 2014) for couples. The poverty levels for prior years are at poverty/index.cfm. These levels are used to calculate one of the charity care requirements for Certified Home Health Agencies and to determine eligibility levels for the Medicare Savings Programs and other federal benefits. For more information, contact Andrew Koski at (518) or akoski@hcanys.org. For further information, please contact Al Cardillo at acardillo@hcanys.org. 14

15 Home Care-related Bills Introduced A series of bills were introduced into the new State Legislative Session relating to or impacting home care. A number were either co-authored by or with the involvement of HCA. These bills are summarized below and will be further detailed as the bills and session progress. S.2405 Senator Young/A.2552 Assemblywoman Russell Amends the new telehealth/ telemedicine coverage law signed by the Governor in December to implement changes in the original bill necessary for the Governor s signature. HCA believes additional fixes and elements are necessary for home care in the legislation and HCA has been indicating such to the sponsors, Administration and other supporters. HCA strongly supports Assemblywoman Russell s and Senator Young s efforts on behalf of telehealth/telemedicine services in the state and will continue advocating for these additional improvements. S.2276 Senator Young (Reintroduced) Enacts the Independent Senior Housing Resident Freedom of Choice Act, a bill co-authored with HCA and LeadingAge New York, to clarify the authority under the public health law for persons in independent senior housing to receive home care and supportive services they could otherwise receive if they resided in a private residence. A.2332 Assemblyman Brindisi (Reintroduced) Provides payment and financial support for home care in the transition to managed care. Multiple bills and proposals are introduced on this concept, including a directive to the State Home and Community Based Care Regulatory Workgroup to examine billing and payment issues. Payment adequacy for managed care plans and home care providers is among HCA s priority advocacy initiatives in this year s state budget and otherwise. A.2385 Assemblyman Brindisi (Reintroduced) provides that recoupments and reductions of medical assistance payments for home care services shall not be subject to interest. Similar and previously introduced bills have been strongly supported by HCA. A.3354 Assemblyman Gottfried/S.720 Senator Rivera Prohibits extrapolation in certain cases; provides that, except where there is a reasonable belief of fraud or intentional misconduct, a health plan shall not determine an overpayment amount through the use of extrapolation except with the consent of the health care provider. (The text of this bill is not yet available.) S.2188 Senator Hassell-Thompson Increases aggregate Medicaid reimbursement for privateduty nursing services and care. Private duty nursing has been difficult to access in many areas due to inadequate reimbursement levels. HCA has long urged increases in private duty nursing reimbursement. For further information, please contact a member of the HCA policy staff. 15

16 DSRIP Update This week, the state Department of Health (DOH) posted a new timeline for the Delivery System Reform Incentive Payment (DSRIP) Program. It is at Project Plan Applications were posted on January 15 ( redesign/dsrip/pps_applications/index.htm). The Independent Assessor s recommendations on the applications will be released on February 2, and a public comment period on the Project Plan applications will be held until February 15. DOH is scheduled to make Project Plan awards by early March and the Performing Provider Systems (PPSs) must submit an implementation plan by April 1. The DSRIP year-one begins on April 1 and the first year-one payment to PPSs is expected to be made in mid-april. Influenza Update The state Department of Health (DOH) Weekly Influenza Surveillance Report for the week ending January 17 indicated that influenza is widespread (increased or sustained numbers of lab-confirmed cases of influenza reported in at least 31 of the 62 counties) with laboratory-confirmed influenza reporting in 56 counties plus New York City. Other results include: There were 4,180 laboratory-confirmed influenza reports, a 0 percent change over the preceding week. The number of patients hospitalized with laboratory-confirmed influenza or hospitalized patients newly diagnosed with laboratory-confirmed influenza was 813, a 25 percent decrease over the preceding week. There was one influenza-associated pediatric death reported this week. There have been two influenzaassociated pediatric deaths reported this season. As detailed in numerous HCA communications, the DOH Commissioner has declared that influenza is prevalent in the state and, thus, the flu mask requirement is in effect. Under this requirement, home care and other health care providers are mandated to ensure that their aides and other designated personnel who are not vaccinated against influenza for the current season wear a surgical or procedure mask while in areas where patients are present. Any personnel vaccinated after July 1, 2014 count as being vaccinated for this influenza season. In addition, providers are required to document the number and percentage of personnel vaccinated against influenza. HCA also recently alerted members about the activation of the Healthcare Personnel Influenza Vaccination Report. This year s report covers health care personnel employed by or affiliated with your agency from October 16

17 1, 2014 through March 31, Agencies are required to submit a single, longitudinal report that will remain open from November 19, 2014 through May 1, More information on the influenza mask requirement and Vaccination Report, including FAQs, is at Questions about the report should be directed to the DOH Bureau of Immunization at either (518) or immunize@health.ny.gov. Technical questions about the report or on the use of Health Electronic Response Data System (HERDs) used to complete the report should be directed to the Health Emergency Preparedness Program at (518) or hseppny@health.ny.gov. Questions about the flu mask requirement should be directed to flumaskreg@health.ny.gov. For more information, contact Andrew Koski at (518) or akoski@hcanys.org. NGS Updates National Government Services (NGS), New York s Medicare Administrative Contractor (MAC), has recently posted the following information to its website. Submitting Electronic Appeal Requests via esmd NGS has announced a new way for providers to submit first-level appeals using Electronic Submission of Medical Documentation, or esmd. Some providers may be familiar with esmd, as it can also be used for submission of medical documentation in response to an additional development request (ADR) from a CMS review contractor. Providers can learn more about signing up for esmd at: Computer-Data-and-Systems/ESMD/index.html. CMS emphasizes that the appeals process is not changing. Providers will continue to be required to include a complete and signed CMS Medicare Redetermination Request Form (or other acceptable form of Appeal request or letter). The first page of the submission should be the appeal request. January 2015 PPS Provider Data Available The January 2015 Prospective Payment System (PPS) provider data is now available in the Downloads section at Fee-for-Service-Payment/ProspMedicareFeeSvcPmtGen/psf_text.html. For further information, contact Patrick Conole at (518) or pconole@hcanys.org. Publications Performing Provider System Projects: Tackling the Health Needs of Communities, by the United Hospital Fund For more information, contact Andrew Koski at (518) or akoski@hcanys.org. 17

18 Driving Health Care Improvement and Savings Through Home Care Home Care s Core Role in New Policies and Care Models State, national and health system leaders are all turning to home care to help drive an agenda of health improvement, quality and cost savings. Home care providers are being commissioned for this task through their vital partnerships with hospitals, physicians, and other stakeholders in achieving the triple aim of better care for individuals, better care for health populations, and cost-effective service utilization. This overall policy vision assumes a core role for home care in virtually every major care model and cost-savings initiative. Home care providers are being asked to: coordinate and provide services to high need/complex care cases, help improve patient care transitions, prevent avoidable hospitalizations and long term care institutionalization, provide service access to remote and under-served populations, and more. Policy leaders are counting on home care s expertise and innovation for solving some of the most serious, costly and priority concerns plaguing the health system. The success of numerous priority initiatives hinges on a well-functioning home care system. Home Care is vital to: The state-mandated enrollment of individuals into managed care; Operation of the state s new Fully Integrated Duals Advantage (FIDA) program, implemented on January 1, 2015; Implementation and operation of the Delivery System Reform Incentive Payment (DSRIP) program, beginning in April; Avoidance of state and federal financial penalties on hospitals for readmissions; Successful implementation of the state s health home initiative; and more. The dependence on home care in today s policy environment is exceeded only by the direct and increasing needs of elderly, chronically ill and disabled individuals looking to home care as a means to remain independent and healthy at home, especially as the population ages. For the sake of better health, lower costs and improved system operation, home care must be available, supported, and at the ready State Budget Actions Needed to Equip Home Care to Meet State Goals and Citizens Needs 388 Broadway Fourth Floor Albany, New York P: (518) F: (518)

19 Driving Health Care Improvement and Savings Through Home Care Enabling Home Care to Fulfill the State s Health Program Goals and the Needs of NYers New York s home care community asks the Executive and Legislature to adopt the following support measures so that home care can best fulfill the state s intended service, health outcome and cost-reduction policy goals, and ultimately the needs of New York s citizens. Health Information Technology and Clinical Technology Development Connecting and Unleashing Home Care Innovation and Integration Requested State Action: Finance and Incentivize Home Care Technology Incorporate provisions in the 2015 state budget to invest in health information technology and integrated clinical technology for home care. Such technology investments should be targeted to promote health care quality, cost-effectiveness, care management, and integration of home care within provider systems, between sectors, and with regional and statewide health information systems. These home care technology efforts can be accomplished through adjustments to managed care and managed long term care premiums, adjustments to provider fee-for-service rates, the addition of technology investment as a criterion for quality incentive payments to managed care plans, inclusion of home care technology investment as an explicit expectation of all Performing Provider Systems seeking DSRIP funds, and other measures. Why it is needed: Health information technology and clinical technology are at the core of every aspect of health facility/agency operation; they are integral to service delivery, quality evaluation and outcomes, cost-effectiveness and administration. However, state, federal and private payors have long overlooked home care in the health IT development arena, even though virtually every new state policy and care model requires this kind of technology infrastructure and interoperability to succeed. Update Health Coverage/Payment Innovation to Reflect Home Care s Current Role Requested State Action: Update State Insurance Law Provisions for Home Care Incorporate provisions in the 2015 state budget to modernize the long-outdated insurance law coverage provisions for home care, which would support patients, the overall system and Medicaid savings. Why it is needed: The current home care coverage provisions, adopted in the early 1970s, were designed for the health care system at that time. Back then, hospitals were reimbursed per diem and without today s limitations on length of stay; nursing homes were the primary option for chronically ill patients who lacked family support; and home care itself occupied a very narrow niche versus its heavily relied-upon, core role in today s system. Simply put, the type of system that framed these original insurance provisions bears little resemblance to the health care system of today. Ensuring Adequate and Efficient Managed Care-Provider Payment Requested State Action: Amend the Managed Care-Home Care Payment System Incorporate provisions in the 2015 state budget to ensure that rate methodologies for managed care and managed long term care premiums, as well as the ensuing payments to providers, are adequate to meet plan/provider/patient needs and fulfill state public health goals and mandates. The same standard is also necessary in the state s direct payment to providers. Why it is needed: The current state payment structure for the managed care-home care model is not adequately supporting service goals and requirements. It also does not incorporate the desired efficiencies for plans, providers and taxpayers, nor does it ensure workforce stability. Additionally, the Department s direct payment methodologies for home care similarly need responsiveness to the changing system and both workforce and service needs. Payment standards must be developed which ensure that managed care premiums and provider payment rates are adequate to meet the needs of: enrollee services, maintenance of a qualified home care workforce, and public goods (such as staff training, capital, public health, etc.). Payment standards must also cover the cost of essential supports formerly included under fee-for-service but now relegated to rate negotiation as well as the significant costs of state and federal mandates, such as the wage parity law, changes to the federal companionship exemption, the state s pre-claim visit verification requirement, added supervision/training requirements associated with the anticipated new Advanced Home Health Aide designation, and other mandates. The managed care/home care financing system also must promote efficiency by: supporting the well-established and cost-effective home telehealth program; streamlining billing and payment procedures for providers and plans through standardized codes, uniform billing and/or other procedures; and addressing, through the managed care quality incentive pool criteria and other means, adherence to prompt-pay/cleanclaim payment standards. With regard to direct agency payments, DOH will be rebasing the Medicaid payment methodology for certified home health agencies, the outcome of which (i.e., the payment level and responsiveness to critical needs) will be crucial for both these agencies and subcontracting licensed home care services agencies. Aligning and Streamlining Home Care-Managed Care Regulation Requested State Action: Authorize DOH Regulatory Flexibility & Fix for this Model Incorporate provisions in the 2015 state budget to add specific DOH waiver authority and directives to implement existing recommendations already made by the State Workgroup on Home and Community Based Care for streamlining and aligning managed care-home care regulations. Why it is needed: The State Legislature and Governor adopted a state policy that mandates enrollment of long term home care patients into managed care. The model calls for managed care plans and home care agencies to contract with one another for the delivery and financing of care. However, the regulatory provisions for managed care and home care continue to govern each respective sector in fragmented silos, rather than reflect the new contractual, integrated model enacted into statute. This lack of realignment has left in place overlapping, conflicting, confusing, excessive and costly duplication. In 2013, the Legislature and Governor created, and in 2014 renewed, a Home and Community Based Care Regulatory Workgroup to make recommendations on alignment and streamlining of regulations for the new system. Additionally, a coalition of state health associations has been working diligently to support this effort. The Department should be given the authority and directive to act promptly and thoroughly on the workgroup s and provider/health plan/association recommendations. Facilitating Home Care Innovation & Participation in New Models Requested State Action: Amend the Law to Encourage Innovation & Remove Barriers Incorporate provisions in the 2015 state budget amending Article 36 and respective portions of the Public Health Law to facilitate home care innovation and participation in new models and partnerships for care, such as: new types of home care partnership initiatives with hospitals, physicians, long term care facilities, behavioral health, and others; participation in ACOs and Health Homes; home care-housing/community service combinations; telehealth innovation; new innovations in care and agency service lines, and other. Why it is needed: The state has created and encouraged formation of new models and partnerships for care. Such partnerships include home care and behavioral health providers, physicians, nursing homes, hospitals and others. In keeping with the state s assumption of a prominent role for home care in these designs, the governing statutes should be amended to better promote home care s participation and innovation. Quality Enhancement Requested State Action: Finance and Incentivize Advances & Innovation in Quality Incorporate in the 2015 state budget some set-aside funds and programmatic provisions for quality innovation and enhancement for home care. Why it is needed: So many opportunities exist for the state to pursue quality advancement and cost-savings by fostering home care s development of best practices, clinical protocols, clinical pathways, evidence-based practice, technology, staff training/specialty care development, quality risk assessment, quality benchmarking, and other initiatives. The HCA Quality Committee has developed groundbreaking proposals for home care quality advancement in all of these areas. However, no dedicated funding pool currently exists to help seed these quality innovations for home care, which would carry benefits to all sectors and, above all, benefits to patients. The time is ripe for insurance reforms to: eliminate artificial limitations; create a framework that reflects today s home care service structure; and cover home care/partner innovations in care transitions, care management, telehealth, etc. These changes are essential to patient access, the efficient and effective operation of our health care system, the lowering of costs and the avoidance of Medicaid spend-down/long term institutionalization for many patients. HCA will be providing specific legislative, budget and/or administrative language as necessary for the adoption of these critical home care proposals.

20 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models State leaders are looking to home care in new and heightened ways to help drive an agenda of health care improvement and cost effectiveness for New York. Home care providers are attempting to respond to this charge, looking to the future with vision, expertise, clinical tools, and a long established functional role in the health care system that makes them uniquely designed and situated to embrace new and emerging models of care delivery. They see within these new models a reflection and affirmation of their existing core function: to provide an array of skilled, therapeutic, postacute, preventive, chronic and supportive care; to provide flexible, costeffective care; to achieve quality outcomes that prevent needless hospitalizations or nursing home admissions; to orient care decisions towards the individual and his or her family at the location of the individual s choosing; to navigate new, decentralized, and increasingly integrated payment structures; to coordinate care in an otherwise fragmented system; and more. Over the past three years, the home care community has undergone a rapid and ground shifting transition to Managed Long Term Care (MLTC) and Mainstream Medicaid Managed Care plans. While that transition is still happening, other major changes are now in motion. Home care providers are now also working to participate in other new models, such as the Delivery System Reform Incentive Payment (DSRIP) program and Fully Integrated Duals Advantage (FIDA) plans, which seek to further integrate services and payment. Both programs FIDA and DSRIP are priority components of the state government s vision for health care going forward. Both are fundamentally reliant on the availability, accessibility and ability of home care to play key care delivery and care management roles within their structures. While home care is integral to these priority models, its participation requires critical supports commensurate with the state s intended roles and, most importantly, New Yorkers medical needs. The state s methodologies for financing home care and managed care must be adapted to meet the realities of home care s infrastructure needs; and the state s home care managed care regulatory structure likewise requires adaptation. Especially concerning, then, are the results of a recent financial and program analysis conducted by the Home Care Association of New York State (HCA) showing home care to be in a severely compromised financial and regulatory state that is fundamentally challenging home care viability, let alone full and functional participation in these emerging care delivery models sought by state leaders. A summary of the HCA analysis follows.

21 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models HCA s Survey and Financial Analysis In late 2014, HCA conducted statistical, cost report and surveyderived analyses of home care providers to assess the financial, programmatic and operational impact of state policies on the home care community and to gauge the home care community s needs and proactive steps in a changing health care landscape. To gather the most up to date statistical data, HCA specifically asked Certified Home Health Agencies (CHHAs) and Long Term Home Health Care Programs (LTHHCPs) to report key data elements from their 2013 Medicaid Cost Reports, adding to HCAcompiled data from prior year cost reports. The Medicaid Cost Report provides official, independently certified financial and statistical data related to all categories of an organization s revenues and expenses. In addition, HCA asked Licensed Home Care Services Agencies (LHCSAs) to report key elements from their 2012 Statistical Reports. The state Department of Health (DOH) requires LHCSAs to complete these yearly Statistical Reports, which contain demographic information, revenue data from LHCSA contracts with other home care agencies, as well as data on expenses/costs incurred in the provision of home care services. More than 60 providers responded to HCA s survey, yielding an important set of statistical and descriptive data from a crosssection of providers representing various program types and demographics. Alongside the survey analysis, HCA also analyzed the 2012 Medicaid Cost Reports submitted by all CHHAs and all LTHHCPs in the state. In addition, HCA examined the key financial elements submitted by managed care plans in their fourth quarter 2013 Medicaid Managed Care Operating Reports (MMCORs). Some Key Findings at a Glance Approximately 70% of CHHAs and LTHHCPs had negative operating margins in 2011 and 2012 based on HCA s Medicaid Cost Report analysis. A similar result (70% of CHHAs/ LTHHCPs having negative margins) was also shown in 2013, based on provider responses to HCA s survey. Over 90% of LHCSAs in the survey sample reported negative operating margins in 2012 based on their latest Statistical Report data submitted to DOH. 57% of MLTCs had negative premium incomes in 2013, up from 42% in 2012 and 2011 (a 35% difference). MLTC plans are currently the payment source for a vast majority of Medicaid community based long term care services. In the analysis, HCA found a strong correlation between the compromised financial condition of plans (as shown in their premium income losses) and a reduction in their rates of payment to downstream home care providers who are already coping with the impact of prior year cuts and mandates like the Wage Parity Law. On average, home care providers who have negotiated MLTC contracts are receiving Medicaid rates 13% below their fee for service rates, according to HCA s survey. 2

22 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models A Worsening Financial Picture in Home Care: Further Details HCA s survey and cost report analysis confirms several of the concerning trends that have been identified in prior year financial reports. The impact of past home care cuts, unfunded mandates, the structure and flow of Medicaid payments under managed care, and other state changes have threatened the financial viability of home care providers and their contracting managed care plans at a time when the health care system relies on vital home care services to support the aims of models like DSRIP, ACOs, Health Homes, FIDA and MLTC. The data from HCA s analysis clearly show that inadequate premium payments to managed care coupled with regulatory, payment, billing and other obstacles in the financing and care authorization structure all have a compounding effect on cash flow and the financial viability of home care providers. More specifically, LTHHCPs continue to face a marked fiscal and viability challenge in this environment resulting from the state s policy to redirect virtually all Medicaid long term care enrollment into managed care plans. The policy change requires LTHHCPs in order to maintain service to Medicaid patients to land contracts with health plans and other new models that must recognize the value of LTHHCP s care management, coordination and service delivery expertise. In last year s HCA survey, 12% of home care agencies said they planned to close their doors. In this year s survey, 20% said they plan to do so as a result of recent policy changes, including more than one third of LTHHCPs pressured to pursue a phase out of their programs absent supportive actions by the state. More findings are below. In the past several years, home care provider margins have remained consistently in the red, compromising viability. Approximately 70% of home care providers had negative operating margins in 2011 and 2012, according to an analysis of home care cost reports, and over 70% were reporting negative operating margins in 2013 based on our survey respondents. Almost half of all survey respondents have had to use a line of credit or borrow money over the past two years to pay for operating expenses. Financial data confirms that LTHHCPs are experiencing the most severe losses in terms of financial or programmatic viability, despite having served as a linchpin of the state s community based long term care system for decades. Principally, state finance methodologies and lack of transition policy in the move to mandatory managed care enrollment resulted in a 85% of LTHHCPs having negative operating margins in The median operating margin of LTHHCPs who completed HCA s survey was in Between 2011 and 2012, total operating losses for all LTHHCPs increased from $47 million to $75 million a 60% increase in operating losses over one year. Due to the managed care transition, specifically, 34% of survey respondents have already phased out or plan to phase out their LTHHCPs, and 62% of all home care survey respondents have already (or will) reduce staff and other expenses to become more efficient. As a result of state policies and Medicaid funding reductions in recent years, 21% of LTHHCPs have already closed their program since 2013, with 33% still planning a phase out. A similar financial trend is shown in the CHHA sector where operating margins have only gotten worse in the past year. Over half of all CHHAs had negative operating margins in 2012 and The median operating margin of CHHAs surveyed in 2013 was approximately 1.3%, worse than the 0.5% median operating margin in the 2012 Cost Reports. Home care providers also reported that their revenue (from all payors) remained in Accounts Receivable (AR) for an average of 76 days, with 60 days being the median timeframe for AR, based on all survey respondents. More than 12% of providers indicated that 11% to 20% of their revenue in AR resulted in bad debt or not getting paid. 3

23 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models Negative Premium Income for Managed Care Has Downstream Effect on Home Care Provider Financial and Operational Stability According to MMCOR data, 57% of MLTCs had negative premium incomes in 2013 up from 42% in 2012 and As MLTC plans cope with the pressures of negative premium incomes, their downstream providers are seeing costs rise, especially administrative, wage and benefit costs. As a result, a major source of the financial vulnerability occurring system wide in home care involves inadequate premium levels for managed care and the consequent squeeze this puts on rates to downstream providers who are negotiating from a financially precarious position. According to HCA survey results, other financial and operational impediments in this working relationship between home care providers and managed care plans include: delays in authorizations and payment; inconsistent billing codes; inadequate rates; and a lack of state policy clarity about regulatory requirements under managed care. Below are some detailed findings: HCA s data analysis finds a correlation between premium income for plans and the negotiated rate that providers receive from plans. As premium incomes get worse, so have the contracted rates to providers. On average, providers with MLTC contracts are receiving Medicaid rates 13% below their fee for service (FFS) rates, according to HCA s survey, at a time when 57% of MLTC plans have had negative premium income. Compare that to the prior year: When 42% of MLTCs had negative premium incomes, and the average provider contractual rate was 7.45% below fee for service rates. Considering that approximately 70% of home care providers were operating in the red in 2012 at a time when the fee for service (FFS) rate was largely still in effect this 13% variance from the already inadequate FFS rate suggests that providers will continue to face extreme financial hardship and continued difficulty functioning as they are expected to do under current models. Inadequate managed care rates to home care providers ranked among the highest concerns voiced by respondents in HCA s survey. When asked about the overall impact of managed care contracting, more than twothirds of providers selected inadequate rates as having the largest impact, along with lack of timely authorizations, lack of timely payment, inconsistent billing codes, and lack of a clear state policy about regulatory requirements under managed care. Approximately 40% of survey respondents reported that their Medicaid Managed Care claims were not paid within the prompt pay law timeframe for clean claims needing no edits (30 days for electronic claims and 45 days for paper claims), a backlog which leads to significant cash flow issues and, in some cases, bad debt that contributes to operating losses. 4

24 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models Wage Parity Law and Other Regulatory Requirements Lead to Staffing Cuts, Bad Debt, and Operating Losses Consistent with last year s findings, wages and benefits costs remain the biggest factor in rising costs for home care providers. Forty two percent of respondents chose wage costs as having the largest impact, while 35% said benefits costs had the largest impact. Similarly, providers were most concerned about the Affordable Care Act (ACA) health coverage mandates and the elimination of the companionship exemption for home care (now on hold due to court action) two wage and benefit related mandates that providers ranked highest as having an impact on agencies. The state s Worker Wage Parity Law continues to impact agency operations and services. Most providers have responded to these increased Worker Wage Parity costs by seeking a higher contractor rate, where possible; however, in an environment of inadequate managed care premium rates and mounting fee for service losses, providers have had to increasingly resort to staffing cuts and other measures to remain compliant with the law. In our survey, HCA asked providers to indicate the current impact of wage parity as well as the expected 2015 impact of wage parity. For every impact of wage parity whether it was staffing cuts, administrative cuts or changes in caseload providers indicated that they would have to resort to even stronger remediation measures in 2015 versus In addition to growing labor costs, other mandates like physician order issues are having a major impact on providers. As one respondent noted: The 90 day Medicaid M.D. order requirement is too burdensome and, in some instances, not achievable. It drives high Medicaid bad debt rates. Below are some further findings about the impact of wage parity and other regulatory requirements. In 2014, 35% of providers (survey respondents) have reduced the hours of direct care staff, due to wage parity, while 50% expect to do so in In 2014, 39% of providers have stopped accepting cases where the contractor rate was inadequate to meet wage parity expenses, while 62% expect to do so in Forty eight percent of providers affected by wage parity have reduced staff overtime an option (overtime hours) that agencies, workers and patients will likely find increasingly less available as the federal government looks to implement changes in the calculation of overtime under the Fair Labor Standards Act. The lack of receiving timely physician orders has adversely affected agency finances in terms of administrative expenses, delayed billing and unrecovered expenses. According to HCA s survey, almost 40% of respondents said that timely physician orders had a large financial impact (defined as affecting between 6% and 10% of their Medicaid revenue). 5

25 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models Home Care Providers are Adjusting to New Models but Need Substantive Support to Participate Effectively Home care agencies are working to retool their operations and adjust to the changes in the health care delivery system. According to our survey, more than three quarters of respondents have been recognized as safety net providers for DSRIP and over half are participating as network providers in a DSRIP Performing Provider System (PPS). However, the role of home care in the DSRIP structure remains inadequately supported for home care providers even as the DSRIP model, and home care s charged role, represents a central, multi billion dollar component of the state s plan to integrate New York s health care system. For instance, 82% of home care providers already involved in a PPS under DSRIP have not yet been able to determine, fundamentally, how they would be paid under such a system. Moreover, to date, little to no support has been targeted to home care for its health information technology capacity and interoperability both vital to functionality under DSRIP, FIDA, managed care or any integrated system. New and emerging models of care also have not adequately supported care management tools and functions in home care that could be of benefit to the new system. This includes home telehealth, which is an important and cost effective disease management technology that allows for remote monitoring of patients, prompting interventions that reduce the rate of hospital admissions. In the current fiscal, regulatory and program environment, home care agencies indicate they need: greater state clarity on the role and regulatory responsibilities for agencies; regulatory relief; and capital and technology funding support. Only 27 percent of survey respondents answered that they have contracted with MLTCs/MCOs for telehealth services. Many providers have separately reported erosion of over 50 percent of their Medicaid home telehealth enrollment coinciding with the state s redirection of patients to managed care. The home telehealth program, created in 2007 by the State Legislature and Governor, has been a national leader. Telehealth viability under the state s policy changes is an area that requires major attention. MLTCs report that their current premium structure has not included costs for telehealth, and thus many do not yet regard it as a truly covered service. Telehealth seems to fluctuate too much between authorized one time and then not authorized another time, writes one survey respondent about the inconsistency in home telehealth coverage, echoing the concerns of several respondents in HCA s survey. Home care providers have been, in large part, bypassed in state and federal efforts to promote Health Information Technology. Having systems that are interoperable with hospitals, Health Homes, ACOs, DSRIP partners and others is a vital but unrealized goal. Providers reported the need for IT funding to align with health policy directives such as: becoming interoperable with local providers ; interoperability to advance initiatives such as bundling and DSRIP ; community portals to hospitals, managed care plans and patients ; expand and upgrade the use and availability of mobile devices for all field staff. 6

26 Home Care Financial and Program Support Vital for Success of New Care-Delivery Models Conclusion To maintain viability, to meet home care s burgeoning role in meeting patients health care needs across the continuum, and to participate in the changing health care system as sought by government leaders, home care providers need support measures that: ensure adequate and effective managed care provider payment structures; better align and streamline the regulations governing home care and managed care; promote innovations in Health Information Technology; and other infrastructure investment. Home care is uniquely designed and suited to help drive state and federal policy goals of better care for individuals, better care for health populations and cost effective service utilization. However, targeted relief and support measures are first needed to address chronic and emerging financial, operational and regulatory issues that compromise its abilities and the state s goals. 7

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