MANAGED CARE

CASE MANAGEMENT

August 17 – 18, 2016 Atlantic City, NJ

Reimbursement, Compliance & Planning Solutions for Post-Acute Care

Medicare Payment (2018)

35.0%

32.5%

32.5% MA

Traditional FFS

APM

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MA Program: Key Facts (2015)

• 3,500 plan options; 16.7M beneficiaries (30%); $170B paid to cover Part A and B services

• Enrollment varies by geographical region

• Plans are paid on a predetermined per member rate, based on enrollee’s risk score

• MA plans receive bonus payments for high quality

• 10% of beneficiaries changed MA plan

• 2% of MA enrollees left for Medicare FFS 3

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MA vs. FFS

• Patient Characteristics

• Choice of Healthcare Providers

• Administrative Costs

• MA Plan Payment Flexibility

• Variability vs. Universality

• Incentive to Coordinate Care and Modify Care Delivery

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FFS MA

(100% RUG Rate) MA

(Levels)

Per Diem Rate $500 $500 $350

Receipt of Payment (days) 14 45 45

ALOS (days) 27 14 14

Revenue (per admit) $13,500 $7,000 $4,900

MA vs. FFS

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PAYMENT

SNF FFS MA %

Diversicare $452 $383 18.0%

Ensign Group $566 $418 35.4%

Kindred $570 $450 26.7%

Genesis $502 $488 12.1%

MA vs. FFS

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TOP 12 CHALLENGES: MANAGED CARE CASE MANAGEMENT

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I. Administratively Taxing

II. Fragmented Process

III. Contract Ignorance

IV. Contract Ambiguity

V. Authorization of Appropriate Level

VI. Outdated Rate Structures

VII. Inefficient Therapy Treatment

VIII.Capturing Exclusions

IX. Complex Billing Requirements

X. Denials Not Appealed

XI. Securing Part B Payments

XII. Bad Debt

I. Administratively Taxing

Obtaining Prior Authorization

– Frequency of required authorizations varies from contract to contract

– Different methods of obtaining (e.g., telephone, email, fax)

– Fighting for appropriate level

– Authorization of exclusions

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II. Fragmented Process

SNF

MCO HOSPITAL

CASE MANAGEMENT

NURSING REHAB BILLING SOCIAL

SERVICES MDS PHARMACY

DISCHARGE PLANNING

MEDICAL RECORDS

ADMISSIONS

II. Fragmented Process (cont.)

Admissions MDS Nursing Rehab Social Services Medical Records Billing Discharge Planning

ADMISSIONS

Contract Review, Levels,

Rates, Contract Exclusions, Clinical Criteria

CASE MANAGEMENT?

MCO

MCO

III. Contract Ignorance

• Rate Confusion

• Level Confusion

• Outliers / Exclusions

• Fragmented Process

– Different Players

– Outsourced Billing

“NOT TO BE DISCUSSED WITH ANYONE”

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IV. Contract Ambiguity

Antiquated contracts with misleading or conflicting language

– Unscheduled assessment completion?

– “Adhere to Medicare guidelines”

– “At least 2 to 3 hours of rehab per day”

– 0.5 – 1.5 hours (level I); 2 – 3 hours (level II)

– 90% of the RUG rate – sequestration?

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V. Authorization of Appropriate Level

LEVEL I Basic

Skilled Nursing

• General nursing care and observation up to 3 hours/day

• Assessment of vitals & body systems 1-2 times/day

• Respite Care

• Insulin dependent diabetic care

• Colostomy and ileostomy care

• Bowel and bladder training

• Wound care (Stage I & II)

• Routine oxygen and medication administration

LEVEL II Skilled Nursing

and Rehab

• Rehab: up to 90

mins/day, up to 7

days/week

• Assessment of vitals &

body systems 2-3

times/day

• IV therapy

• Enteral therapy

LEVEL III Subacute Skilled

Nursing and Rehab

• Rehab: up to 3 hours/day, up to 7 days/week

• Skilled nursing services greater than 3 hours/day

• Assessment of vitals & body systems 3-4 times/day

• Orthopedic & amputation rehab cases

• Aneurysm

• TPN therapy

• Wound care (stage-III and IV)

• Blood transfusion

• X-rays

LEVEL IV Intensive Subacute

Skilled Nursing

• Ventilator care

• Tracheostomy care

• Assessment of vitals &

body systems 4-6

times/day

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V. Authorization of Appropriate Level (cont.)

What we’ve seen:

– Level II (stage-II ulcer); documentation supports level III (stage-III ulcer) $4,000

– Level III (intensive subacute), but tracheostomy care provided (Level IV) $13,000

– ADL miscoding (RUG-based contracts) $3,000

– COT OMRA strategy (RUG-based contracts) $1,500

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VI. Outdated Rate Structures

• Average age of contract > 5 years

• Unlike FFS, no annual rate increases

• Importance of scale

• Trouble getting to the table

• Data

– Low re-hospitalization

– Reduced LOS

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VII. Inefficient Therapy Treatment

• Treatment in excess of the level authorized by the MA plan; contracts often indicate “up to”

• One-on-one treatment provided • Not using concurrent & group treatment

Assumptions: $50/hour salary; average 7 patients per day; 1 hour of treatment per resident; 5 treatment days per week

Mode of TX Hours of TX Staffing Costs

(Per Day) Staffing Costs (Per Month)

Individual 7 $350 $7,000

Concurrent 3.5 $175 $3,500

Group 2 $100 $2,000

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VIII. Capturing Exclusions

INCLUSIONS

• Primary physician fees, Administration of drugs and biologicals, Semi private room, meals, 24-hour nursing care, assistance with ADLs, medical supplies, routine radiology, routine dental services, routine laboratory, therapy, oral medications daily (up to $50) per drug per day, TPN administration, initial psychiatric consultations, recreational therapies, routine medical/surgical supplies & standard DMR, discharge planning, discharge planning, case management, isolation supplies, IV supplies, social services, maintenance of patient room cleanliness, blood draws, diets (special or religious), respiratory therapy

EXCLUSIONS

• Medical transportation, Customized DME, specialty consults, home infusion therapy, drugs > $50 per drug per day, 3rd generation antibiotics, HIV medication, blood and blood supplies, MRI and CT scans, oxygen over 28% concentration, medication not included in facility formulary, out of facility services, parenteral nutrition supplies and solutions, MD visits, oral chemotherapy

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VIII. Capturing Exclusions (cont.)

• Items not included in authorized level

• Often must receive prior authorization or acquire from an ‘approved vendor’ list

– “Pre-certified by case manager or designated representative”

– “Drugs exceeding $50/day on average must be purchased through the MCO’s designated pharmacy network or contracted provider of infusion therapy”

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IX. Complex Billing Requirements

• Must submit UB-04 to both the MAC and the MA insurer

• Billed rate vs. contracted rate (MA will pay the lesser of the two)

• Different revenue codes match different levels

• Authorization Codes

• Timely Submission

• Diagnosis coding/ICD-10 for data analytics?

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X. Denials Not Appealed

• Well-established appeals system for all MA denials

• MA plan must offer the same benefits as the FFS program

• Pre-admission denials

• Increasing trend of denials for issues that we commonly equate with FFS (technical items)

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XI. Securing Part B Payments

• Remember: MA is a “full replacement” product

• Part B Services: Therapy, MD Services, Wound Care, etc.

• Prior Authorization

• Failure to Receive Payment

• What Rate?

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XII. Bad Debt

• Unlike FFS, MA bad debt may not be claimed on the Medicare cost report

• Co-pays range significantly

• The co-pay often represents a significant portion of the margin

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Data

• What data should you use?

• Determine episodic & per diem cost of providing care

• Re-hospitalization, functional improvement, LOS, transition to lower cost settings – organize data by diagnosis

• Identify and mitigate risk

• Leverage favorable data

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MGH Medicare Discharges to SNF

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Massachusetts General Hospital (MGH)

SNF Medicare Payments

Referrals (#) Referrals (%)

Spaulding (North End) $2,555,296 323 8.0%

Leonard Florence Center $2,941,265 222 5.5%

Lighthouse Nursing $2,081,203 165 4.1%

Eastpointe Rehabilitation $2,517,659 142 3.5%

Chelsea Center $1,470,884 103 2.6%

Brudnick Center $826,505 91 2.3%

Chelsea Jewish $960,033 69 1.7%

Aberjona Nursing $713,456 64 1.6%

Courtyard Nursing $783,979 61 1.5%

Don Orione $734,038 60 1.5%

ALOS

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Massachusetts General Hospital (MGH)

SNF Referrals (#) Referrals (%) ALOS

Spaulding (North End) 323 8.0% 18

Leonard Florence Center 222 5.5% 23

Lighthouse Nursing 165 4.1% 30

Eastpointe Rehabilitation 142 3.5% 55

Chelsea Center 103 2.6% 33

Brudnick Center 91 2.3% 22

Chelsea Jewish 69 1.7% 34

Aberjona Nursing 64 1.6% 26

Courtyard Nursing 61 1.5% 40

Don Orione 60 1.5% 64

Per Diem Rate

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Massachusetts General Hospital (MGH)

SNF Referrals (#) Referrals (%) ALOS Avg. Rate

Spaulding (North End) 323 8.0% 18 $542.57

Leonard Florence Center 222 5.5% 23 $660.39

Lighthouse Nursing 165 4.1% 30 $638.63

Eastpointe Rehabilitation 142 3.5% 55 $626.53

Chelsea Center 103 2.6% 33 $577.92

Brudnick Center 91 2.3% 22 $609.78

Chelsea Jewish 69 1.7% 34 $631.36

Aberjona Nursing 64 1.6% 26 $692.97

Courtyard Nursing 61 1.5% 40 $601.97

Don Orione 60 1.5% 64 $498.88

Episodic Cost

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Massachusetts General Hospital (MGH)

SNF Referrals (#) Referrals (%) ALOS Avg. Rate Episodic Cost

Spaulding (North End) 323 8.0% 18 $542.57 $9,766

Leonard Florence Center 222 5.5% 23 $660.39 $15,189

Lighthouse Nursing 165 4.1% 30 $638.63 $19,159

Eastpointe Rehabilitation 142 3.5% 55 $626.53 $34,459

Chelsea Center 103 2.6% 33 $577.92 $19,071

Brudnick Center 91 2.3% 22 $609.78 $13,415

Chelsea Jewish 69 1.7% 34 $631.36 $21,466

Aberjona Nursing 64 1.6% 26 $692.97 $18,017

Courtyard Nursing 61 1.5% 40 $601.97 $24,079

Don Orione 60 1.5% 64 $498.88 $31,928

Five-Star

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Massachusetts General Hospital (MGH)

SNF Referrals (#) Referrals (%) 5 Star

Spaulding (North End) 323 8.0% *

Leonard Florence Center 222 5.5% ***

Lighthouse Nursing 165 4.1% ****

Eastpointe Rehabilitation 142 3.5% ****

Chelsea Center 103 2.6% *

Brudnick Center 91 2.3% ****

Chelsea Jewish 69 1.7% *****

Aberjona Nursing 64 1.6% ****

Courtyard Nursing 61 1.5% ***

Don Orione 60 1.5% **

Re-Hospitalization Rate

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Massachusetts General Hospital (MGH)

SNF Referrals (#) Referrals (%) 5 Star Re-Hosp (%)

Spaulding (North End) 323 8.0% * 22.9%

Leonard Florence Center 222 5.5% *** 24.2%

Lighthouse Nursing 165 4.1% **** 22.5%

Eastpointe Rehabilitation 142 3.5% **** 14.3%

Chelsea Center 103 2.6% * 25.6%

Brudnick Center 91 2.3% **** 23.7%

Chelsea Jewish 69 1.7% ***** 24.5%

Aberjona Nursing 64 1.6% **** 24.5%

Courtyard Nursing 61 1.5% *** 23.6%

Don Orione 60 1.5% ** 16.3%

Dashboard

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Massachusetts General Hospital (MGH)

SNF (#)

Referrals (%)

Referrals ALOS Avg. Rate

Episodic Cost 5 Star Re-Hosp (%)

Spaulding (North End) 323 8.0% 18 $542.57 $9,766 * 22.9%

Leonard Florence Center 222 5.5% 23 $660.39 $15,189 *** 24.2%

Lighthouse Nursing 165 4.1% 30 $638.63 $19,159 **** 22.5%

Eastpointe Rehabilitation 142 3.5% 55 $626.53 $34,459 **** 14.3%

Chelsea Center 103 2.6% 33 $577.92 $19,071 * 25.6%

Brudnick Center 91 2.3% 22 $609.78 $13,415 **** 23.7%

Chelsea Jewish 69 1.7% 34 $631.36 $21,466 ***** 24.5%

Aberjona Nursing 64 1.6% 26 $692.97 $18,017 **** 24.5%

Courtyard Nursing 61 1.5% 40 $601.97 $24,079 *** 23.6%

Don Orione 60 1.5% 64 $498.88 $31,928 ** 16.3%

Cost By Diagnosis

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Aftercare of Joint Replacement

Skilled Nursing Facility Medicare Payments Total Claims $ Per Claim

TCU at Spaulding Hospital North Shore $246,037 42 $5,858

Newbridge on the Charles $293,974 32 $9,187

Brudnick Center $92,410 21 $4,400

Sherrill House $94,994 19 $5,000

Erickson Living Linden Ponds $99,221 18 $5,512

Woodbriar of Wilmington $66,285 17 $3,899

Marina Bay Nursing $76,497 15 $5,100

Alliance Health of Mass $62,855 13 $4,835

HealthSouth New England $55,890 13 $4,299

EPOCH Senior Health Care of Weston $40,875 11 $3,716

Innovation & Technology

What Are You Doing To Improve Care Coordination and Reduce Costs?

Case Management

Care Management

Care Transitions

Data Analytics

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Outsource?

• Who is responsible for case management?

• When do you outsource?

• Value Proposition

– Exchanging a portion of your per diem rate for centralized management and expert/specialized case management

• Fully Integrated EMR

• Automated Process

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Next Steps

• Cost Benefit Analysis

• Subjective SWOT Analysis

– Leverage strengths

– Improve upon weakness

– Identify MA opportunities

– Protect against threats

• Incorporate takeaways

• Make decisions based on data!

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