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Polsinelli PC. In California, Polsinelli LLP Affordable Assisted Living Coalition May 20, 2015 Surviving Managed Care

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Presenter Kathryn M. Stalmack Shareholder Polsinelli PC 312-873-3608 312-330-0734 (cell) KStalmack@Polsinelli.com

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real challenges. real answers. sm Overview Where are we now SB741 - know your rights and obligations Key contracting terms for MCOs Overview of litigation Becoming the provider of choice: understanding healthcare payment reform Positioning yourself for the future Practical problems and challenges

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real challenges. real answers. sm The really big issue The money! $$$$$$$$$$ 2012 Polsinelli Shughart PC

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real challenges. real answers. sm The Problem US Health Care is Poor Quality and High Cost 250,000 deaths per year due to medical error US quality ranks low when compared to other developed countries Health care comprises 18% of GDP... and increasing $2.5 trillion spent in 2009*; Projected growth to 4.6 trillion by 2020** Waste in 2009 = $765 Billion (30% of total): $210B -- unnecessary services $190B excessive administrative costs $130B inefficiently delivered services $105B prices too high $75B fraud $55B -- missed prevention opportunities 43 Million in Medicare today; 78 Million by 2030 (last year of baby boomer eligibility) $520B Medicare spending in 2010; $970B by 2021** By 2019, Medicare rates projected to be below current Medicaid rates* Sources: *Commonwealth Fund; Institute of Medicine, 2011;Medicare Office of Actuary; ** Kaiser Family Foundation

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real challenges. real answers. sm Health Care Reform Implements Payment Reform Reform is not just about insurance. The law is also a serious platform for improving the quality of healthcare and changing the delivery system so we stop doing things that dont work for patients and start doing things that will work. Its about better care: care that is safe, timely, effective, efficient, equitable and patient centered. Katherine Sebelius Addressing healthcare professionals at the IHI annual meeting December 7, 2010

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real challenges. real answers. sm New Delivery Models: WHY? Old system Incentivizes volume Misaligned incentives leads to Fragmented care Adversarial relationships New Model Incentivizes quality, efficiency and access Aligned incentives leads to Integration Coordination Team work

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real challenges. real answers. sm Rollout of Managed Care Coordination of Care + Incentivizing quality, efficiency and access = Unintended consequences? Poor preparation? Unfamiliar with operations of SLFs? Lack of training? Loss of revenue? Significant delays and errors in processing claims?

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real challenges. real answers. sm Total Enrollment Figures for Integrated Care Program - All Current Counties with Enrollment Health PlansApril 2015March 2015April 2014 Aetna Better Health Inc30,15630,34621,976 IlliniCare Health Plan Inc29,42726,62524,047 Community Care Alliance of Illinois 9,2759,3902614 Meridian Health Plan Inc10,73610,7856,698 Molina Healthcare of ILL5,7325,8515,511 Health Alliance Connect5,4815,5015,216 My Health Care Coordination (CCE) 9379501,291 Precedence (CCE)9379501,291 Blue Cross/Blue Shield of Illinois 6,2886,201766 Cigna HealthSpring of Illinois 4,4104,390166 Humana Health Plan4,5244,58887 County Care2,7042,6480 Be Well (CCE)1,3681,3841,439 EntireCare (CCE)2,4682,5481,771 Together4Health (CCE)2,1752,2731,550 Next Level (CCE)3,3533,4230 Total119,790120,66074,024

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real challenges. real answers. sm Enrollment Figures for Integrated Care Program Greater Chicago Region Health PlansApril 2015March 2015April 2014 Aetna Better Health Inc28,64028,85220,578 IlliniCare Health Plan Inc27,17827,37221,876 Humana Health Plan4,52427,37221,876 Meridian Health Plan4,4574,447290 Blue Cross/Blue Shield of Illinois 6,2886,201766 Cigna HealthSpring of Illinois4,4104,390166 Community Care Alliance of Illinois 7,7407,8411,094 County Care2,7042,6480 Be Well (CCE)1,3681,3841,439 EntireCare (CCE)2,4682,5481,771 Together4Health (CCE)2,1752,2731,550 Next Level (CCE)3,3533,4230 Total95,30595,96749,617

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real challenges. real answers. sm Enrollment Figures for Integrated Care Program - Rockford Region Health PlansApril 2015March 2015April 2014 Aetna Better Health Inc 1,5161,4941,398 IlliniCare Health Plan Inc 1,5841,5831,540 Community Care Alliance of Illinois 1,5351,5491,520 Total4,6354,6264,458

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real challenges. real answers. sm Enrollment Figures for Integrated Care Program - Central Illinois Region Health PlansApril 2015March 2015April 2014 Meridian Health Plan Inc 1,5281,5431,510 Molina Healthcare of ILL 3,4103,4913,322 Health Alliance Medical Plan 5,4815,5015,216 My Health Care Coordination (CCE) 9379501,291 Total11,35611,48511,339

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real challenges. real answers. sm Enrollment Within the Medicare Medicaid Alignment Initiative Health PlansApril 2015March 2015April 2014 Aetna Better Health 8,2248,682 53 Blue Cross/Blue Shield of Illinois 12,70412,882 165 Cigna HealthSpring of Illinois 8,9519,411 32 Humana Health Plan 8,2358,728 47 IlliniCare Health Plan 1,3601,356 39 Meridian Health Plan 7,5548,077 13 Health Alliance 6,5936,635 97 Molina Healthcare 4,7174,913 9 Total 58,33860,684 455

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real challenges. real answers. sm Future of Dual-Eligible Demonstrations Currently, 11+ states are participating in the current federal-state demonstrations Health plan leaders and other state officials have expressed concerns that current demonstrations may not yield the cost savings that the Obama administration hoped for What has caused this concern?

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real challenges. real answers. sm Future of Dual-Eligible Demonstrations 1) Participation for beneficiaries is optional and many are opting out 1.7 million people eligible, as of April 1 only 343,355 have signed up Ex. California has an opt-out rate of approximately 50% 2) Some providers are threatening to stop serving dual- eligible if they enroll in the demonstrations 3) Providers are experiencing difficulties locating and contacting beneficiaries due to incomplete or incorrect client information

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real challenges. real answers. sm Future of Dual-Eligible Demonstrations Despite these concerns, there have been positive results: High retention rates, and Better overall quality of care for enrolled beneficiaries

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real challenges. real answers. sm Future of Dual-Eligible Demonstrations What will the future hold for the demonstrations? CMS has stated that its too early to make conclusions about the success of the demonstrations However, CMS will be releasing evaluations of the demonstrations in Washington state and Massachusetts in early 2016

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real challenges. real answers. sm SB 741 Passed into law June 16, 2014 Medicare Medicaid Alignment Nursing Home Residents Managed Care Rights Law. Legislative finding that the Illinois residents residing in nursing homes are entitled to: Quality health care regardless of payor; Receive medically necessary care; A simple appeal process; The right to make decisions about their care and where they receive it.

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real challenges. real answers. sm SB741 First legislative adjustment in the new era of Illinois managed care Implementation of the ICP and MMAI programs highlight the concept of unintended consequences. Two key elements to managed care negotiated rates and case management.

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real challenges. real answers. sm SB741 Understanding your rights under the contract is KEY ALL contracts provide for an appeal process to contest denials of claims BE AWARE of DEADLINES to contest claims Most contracts have arbitration clauses Providers must be aggressive in order to survive

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real challenges. real answers. sm SB 741 MCOs must allow all SLFs to contract with it. Either party can limit the contract to existing residents. Limits the basis for terminating the contract to quality standards or material breach of contract. Provides for transition period and respect of care plan that is in place.

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real challenges. real answers. sm SB 741 MCOs must have a method for receiving prior approval requests 24 hours/day, 7 days / week. (PREAUTHORIZATIONS!) Additional guaranteed appeal procedures. Requires 30 day written notice for changes to contract. Providers given the right to terminate the contract on 90-days notice without cause.

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real challenges. real answers. sm Your Rights Illinois Prompt Payment Law for clean claims within prescribed period Payment of undisputed portion of claim cannot be delayed HFS will be monitoring Due process rights

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real challenges. real answers. sm Billing KNOW what is required for a clean claim MCO does not have to pay claims submitted after a certain period of time Timely payment on clean claims Train Staff on billing issues Ensure education and training occurs onsite to all staff

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real challenges. real answers. sm Due Process Rights Opportunity to remedy any problems before MCO can terminate agreement unless there is evidence of imminent patient harm, fraud or abuse If contract is terminated, MCO may not require member to transfer Must continue placement or out of network provider at fee for service rate in effect prior to transfer Member may voluntarily transfer

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real challenges. real answers. sm Litigation Westside Center for Independent Living v. California Department of Health Care Services Filed July 2, 2014 Filed by a variety of providers including physicians, SNFs, beneficiaries. Challenges the validity of Californias Medicaid Managed Care Program and dual eligible program.

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real challenges. real answers. sm Litigation Notice violates state law because it was not written at a 6 th grade level. Notice is misleading because it places a precondition on the beneficiary to retain traditional Medicare rights. Violates beneficiaries due process rights given their disabilities. Case was just filed. Long road ahead.

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real challenges. real answers. sm 2012 Polsinelli Shughart PC General MCO Contract Issues Concept of Medical Necessity Authorization for Services (Exception for Emergencies) Coordination of Care Planning Liaison between SLF and MCO Claims Processing Authorization Procedures Indemnification

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Contract Negotiations Negotiating power is a function of wants, needs, supply and demand. In a negotiation, the party with the scarcer resource has a significant advantage. The leverage that one party has in negotiations can change over time. Efficient Operations = More leverage with negotiating power

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Key Terms Reimbursement (Pay) Term Termination Definition of services Reconciling claim disputes Timing on payment of clean claims Appeal process

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Indemnification MCO assumes no responsibility for patient care SLF is ultimately responsible for providing medically appropriate services If MCO denies authorization but SLF feels service is necessary, provide service and APPEAL Otherwise, be aware of consequences

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real challenges. real answers. sm MCO Responsibilities Care Management Informing provider of pertinent P&P and billing procedures Appointing Liaison Training provider Prompt response time with authorizations Be aware of deadlines Timely payment of clean claims (30 days) Interest accrues per contract (ex. 6%)

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Top wish list 1.No non-contractual discounts 2.No other entities can access this contracts discount 3.No negative steerage of members 4.No unilateral changes to contract 5.Payment made, and made quickly 6.Under/overpayments resolved fairly 7.Eligibility risk falls on payer

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 1. No non-contractual discounts No tiering of provider (e.g., provider is labeled lower quality or made higher cost) No benefit plan changes to contract rates Allowed amounts Patient share increase No repricing (TPAs, repricers) No discounts related to affiliated entity deals Contract controls over all other documents All payors (Administrative Services Clients (ASO) clients) must honor rates Claims must be paid at in-network levels

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 2. No other entities can access rates Contract rates cannot be leased Payer affiliates must be listed, Provider has right to agree to inclusion of new affiliates No third party beneficiaries to agreement Rates confidential, even on payer websites

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 3. No negative steerage of members Cannot direct patients to competitor facilities for economic advantage or leverage Product mix must remain the same as expected Volume expectations specified Negative steerage penalties

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 4. No unilateral changes to contract by payer Amendments must be mutual, in writing Rates cannot be unilaterally changed by payer Payer policies cannot change terms of agreement ASO clients cannot change terms of agreement

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 5. Payment made, made quickly Payment within 30 days, or as legally required (state law overlay) Interest automatically assessed on late payment IMPORTANT! If ASO client doesnt fund account, payer will allow Provider direct action against payer, at higher rates

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 6. Under/overpayments resolved No offsets by either party Prompt resolution of overpayments process specified Payer must request refunds within 1 year State law overlay

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real challenges. real answers. sm 2012 Polsinelli Shughart PC 7. Eligibility risk falls on payers Payer must give 12-month authorizations prior to treatment Retro term of member liability falls on payer for specified period (90 days) Retro new eligibility must be paid for by payer

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real challenges. real answers. sm Unintended Consequences DELAYS DELAYS DELAYS In payment In consideration of clean claims In authorizing services In recognizing provider requirements In understanding process and procedure

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real challenges. real answers. sm Leverage in Negotiating Power Shift leverage from MCO to Provider side Understanding your rights and the process to enforce your rights under the contract Becoming the provider of choice Establishing a relationship with your representative Going up the ladder if unsuccessful DO NOT GIVE UP

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real challenges. real answers. sm Becoming the Provider of Choice Networks are inquiring about your coordination of care plan Changing the way providers practice SNFs set up models years ago NOW IS THE TIME! MAY BE REQUIRED IN THE FUTURE!

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real challenges. real answers. sm The Resolution Under new models, payment to Hospitals and Providers will depend on different activities: Working together differently to enhance quality and reduce cost Care coordination Managing the total cost of care for populations and defined episodes Developing/using evidence based protocols to reduce variation Quality control Using health information technology to facilitate change Providing patient-centered care and engaging patients

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real challenges. real answers. sm What Does This Mean for Supportive Living Providers?

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real challenges. real answers. sm Share and Align Goals with Hospitals Avoiding unnecessary inpatient stays Avoid Medicare denials (observation stays) Reduce avoidable hospitalizations Avoid CMS penalties Maintain continuity of care Reduce the gap between hospitalization and admission to SLF Employ an effective discharge planning process Work together to determine the best care for residents Reduce the chances of readmissions

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real challenges. real answers. sm Create TEAMS to Increase Quality Structured Programs Designate team leaders Use hospital physicians to manage groups Create a continuous quality model Identify breakdowns in communications Recognize and analyze avoidable vs. unavoidable admissions Report findings at quality improvement meetings RECOGNIZE TEACHING MOMENTS With every great success there was failure

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real challenges. real answers. sm Improve Transitions into SLFs Transition consultants Social workers meet with patients prior to discharge Registered nurses at hospital works with SLF staff 24 to 48 hours after discharge Hospital care coordinators works with SLF staff on Service Plans Ensure SLF has all relevant medical information PRIOR to discharge Shared goal to keep resident/patient out of hospital

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real challenges. real answers. sm Show me the MONEY! Track your data Reduction of hospitalizations Efficiency of care Quality indicators Add value at reduced cost Submit information to networks

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real challenges. real answers. sm Management of Relationship Management of Hospital and SLF should: Meet or confer monthly (unless otherwise agreed by the parties) to: Evaluate the services provided by each party To consider ongoing coordination to improve and enhance service for SLF residents Ensure the goals of discharge planning are met Other terms to open lines of communication Ensuring Residents receive follow up care needed

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real challenges. real answers. sm Quality Improvement and Compliance Programs SLF should provide: Appropriate intake services Ongoing quality improvement program Ongoing utilization review program Compliance program (NEW?) Consistency with hospital discharge regulations Access to medical information Follow up examinations by hospital staff/PCP RESIDENT EDUCATION AND CHOICE!

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real challenges. real answers. sm Additional Programs Physicians and nurses are on call 24/7 for consultation Identify gaps in patient care Discovery root causes Coach residents for success Encourage family and residents to request a care coordination meeting with all providers Use personal health records and educational materials to support residents Educate residents to take responsibility Work jointly with hospitals to address systemic problems that lead to readmissions

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real challenges. real answers. sm COMPLIANCE IS KEY! All health care providers need to prepare for quality reporting and implement systems to reduce compliance burdens and protect future reimbursement Simply because SLFs are not subject to readmission penalty does not mean you are not affected SLFs should consider developing compliance plan ASAP

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real challenges. real answers. sm What is a Compliance Program?

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real challenges. real answers. sm Compliance Program Basics Seven Fundamental Elements 1.Written policies and procedures 2.Compliance professionals 3.Effective training 4.Effective communication 5.Internal monitoring 6.Enforcement of standards 7.Prompt response

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real challenges. real answers. sm Purpose of Program Tool for identifying and mitigating audit risks Effective mechanism for preventing and detecting criminal, civil, and administrative violations and in promoting quality of care consistent with regulations developed by the Secretary of the Department of Health and Human Services, working jointly with the Office of the Inspector General

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real challenges. real answers. sm Do You Have a Program? How Would You Answer? Are you prepared to operate in a more transparent health care system? Does your community have the right systems and technology to meet new demands to collect, organize, track, retain, and report information and data accurately and completely? Do you have security and privacy protections in place for creating, transmitting, and storing data? Do you have systems in place to meet enhanced reporting and disclosure requirements?

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real challenges. real answers. sm Conceptual Problems Post-acute providers have long been largely ignored by managed care. Contracts are often physician or hospital contracts with a few words changed. Networks are not as familiar with services offered by LTCs. 2012 Polsinelli Shughart PC

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real challenges. real answers. sm Other Issues Who is responsible for incorrect eligibility determinations? Understanding affirmative reporting requirements adverse events, insurance. Who pays for copies? Recoupments without notice? Acceptance of beneficiaries 2012 Polsinelli Shughart PC

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real challenges. real answers. sm 2012 Polsinelli Shughart PC Beyond the contract The relationship will evolve. Competitive rate pressure is coming. Quality indicators will become a significant factor. The landscape will look very different in 5 years.

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real challenges. real answers. sm The Future What is your narrative? Best? Best what? Cheapest? Who are your partners? Who is your competition? What does your data look like? Whats your model? MCOs dont make money on Medicaid?

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real challenges. real answers. sm Some Good News Resident can change MCOs to be in a network that includes your SLF No residents will be required to change SLFs MCOs will be required to pay you for residents who voluntarily enroll and elect to stay in your community

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real challenges. real answers. sm What are the Take Aways Improve your Bargaining Position Create a Model to Coordinate Care Demonstrate Quality through Data and Ratings 24/7 Coverage by Physician or NP Integrate with other Providers Demonstrate Strong Track Record of keeping Residents out of Hospital

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real challenges. real answers. sm Focus on Financial Alignment Goal of financial alignment models Reduce costs for State and Federal governments by: Minimizing cost-shifting Aligning incentives between Medicare and Medicaid Supporting the best possible health and functional outcomes for enrollees.

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real challenges. real answers. sm Focus on Financial Alignment Twenty-six states submitted proposals to implement alignment models Seven states have entered Memorandum of Understanding with CMS to participate California, Illinois, Massachusetts, New York, Ohio, Virginia, Washington Illinois program = Medicare-Medicaid Alignment Initiative (MMAI)

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real challenges. real answers. sm Overview of MMAI CMS funds and manages evaluation of Illinois MMAI RTI International is contractor Will measure quality Beneficiary overall experience of care Care coordination Care transitions Support of community living

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real challenges. real answers. sm QUESTIONS? Be proactive Be aggressive Dont let frustrations interfere with operations and relief options

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real challenges. real answers. sm Presenter: Kathryn Stalmack Kathryn is a Shareholder of Polsinellis national health care practice group with over 70 attorneys devoted to serving the needs of health care clients across the country. Kathryn represents long term care, assisted living, senior housing providers and hospitals across the country in a variety of areas including regulatory compliance, fraud and abuse, certification, reimbursement, life safety code and operations. Kathryn was recently appointed by AHLA as a member of the Dispute Resolution Council.

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real challenges. real answers. sm Polsinelli provides this material for informational purposes only. The material provided herein is general and is not intended to be legal advice. Nothing herein should be relied upon or used without consulting a lawyer to consider your specific circumstances, possible changes to applicable laws, rules and regulations and other legal issues. Receipt of this material does not establish an attorney-client relationship. Polsinelli is very proud of the results we obtain for our clients, but you should know that past results do not guarantee future results; that every case is different and must be judged on its own merits; and that the choice of a lawyer is an important decision and should not be based solely upon advertisements. 2013 Polsinelli PC. In California, Polsinelli LLP. Polsinelli is a registered mark of Polsinelli PC