Gary Castillo, Tri-Cities Chaplaincy Chris McFaul, Horizon Hospice

1. Gary Castillo, Tri-Cities Chaplaincy Chris McFaul, Horizon Hospice Mark Rake-Marona, Franciscan Hospice & Palliative Care Where the Money Comes Fromand Where it Goes:How to Help Your Staff Understand the Financial Realities of your Program-A Panel Discussion WSHPCO Annual Conference, Session 5C

2. Session Overview • The Factors Behind Our Revenue • How Revenue Will Work in the Future – Big Changes Coming! • How Expenses Work • Q&A

4. Percentage of Patients Served by Payer 2014 NHPCO Facts and Figures on Hospice Care

5. Percentage of Patient Care Days by Payer 2014 NHPCO Facts and Figures on Hospice Care

6. 2013 Demographics & Hospice Utilization www.HospiceAnalytics.com

7. 2013 Hospice Utilization(Medicare Hospice Deaths / Total Medicare Deaths) www.HospiceAnalytics.com 7

8. 2013 Medicare HospiceMean Days of Care / Beneficiary National: 70 WA #40: 58 www.HospiceAnalytics.com 8

9. 2013 Medicare HospiceMedian Days of Care / Beneficiary National: 24 WA #28: 23 www.HospiceAnalytics.com 9

10. 2013 Medicare Hospice BeneficiariesLevels of Care (days) www.HospiceAnalytics.com 10

11. 2013 Mean Medicare Hospice Payments/Beneficiary National: $11,444 WA #31: $10,021 www.HospiceAnalytics.com 11

12. Medicare Reimbursement Changes 2009-2016 BNAF Quality Reporting Penalty 2 Tier RHC + SIA Sequestration ACA Prod Adjustment 2017 10-1-2012 1-2013…2024 10-1-2014 10-1-2009 1.1.2016

13. MEDICARE PAYMENT: HISTORICAL REVIEW

14. How reimbursements works in the future Show me the money…

15. 8/6/15: http://www.gpo.gov/fdsys/pkg/FR-2015-08-06/pdf/2015-19033.pdf www.HospiceAnalytics.com 15

16. Changes to RHC Starting 1/1/16 • Higher RHC rates days 1-60: $186.84 • Versus $159.34 through September 30, 2015 • Versus $161.89 October first through December 31, 2015 • Lower RHC rates days greater than or equal to 61: $146.83 • Versus $159.34 through September 30, 2015 • Versus $161.89 October first through December 31, 2015 • Wage Index Adjustments www.HospiceAnalytics.com

17. MEDICARE PAYMENT

18. “Days follow the Patient” • Example One: Live discharge on RHC day 45 • Less than 60 days later, patient reenrolls (any hospice) • That reenrollment day is day 46 and $186.84 is daily rate • 15 days later (day 61), the lower $146.83 rate starts • Example Two: Live discharge on day 77 (lower rate in effect) • At least 60 Days without hospice care • Patient reenrolls (even on day 61) • Higher daily rate is paid • The 60 day clock begins again www.HospiceAnalytics.com

19. Service Intensity Add-On • Optional, as-needed additional rate for high-intensity service during last seven days of life: up to four hours total per day paid at CHC rate ($39.37 per hour*). • $0-$1,100/beneficiary who dies on service • Day must be billed as RHC day. • Day occurs during last seven days of beneficiary’s life (and beneficiary’s dc deceased). • Direct patient care provided by RN or SW (i.e., in person). • The proposed rule excluded SIA payments if the beneficiary was being served in a SNF or NF – the final rule includes SNF/NF. www.HospiceAnalytics.com

20. Changes to Other Rates • Wage Index Adjustments • Market Basket Increase 1.6% • Final Year BNAF Phase Out • Adjustment Factor 1.018% • -2% for Hospice Agencies that DO NOT Submit Required Quality Data

26. Summary of the 8/6/15Hospice Final Rule www.HospiceAnalytics.com 26

27. Hospice Reimbursement Modeling(based on levels of care only, no SIA or wage index adjustment) www.HospiceAnalytics.com 27

28. Quality Reporting • Submit HIS-Admission and HIS-Discharge record for each patient admission or face 2% rate reduction. • No new quality measures proposed for FY2017; some changes to timeline, requirements for new hospice agencies. • Public reporting timeline not yet set, but coming! • Areas for future quality measure development: • Patient/proxy reported pain outcome. • Claims-based measures looking at skilled visits in last days of life, burdensome transitions in/out of hospice, rates of live discharge. • Responsiveness of hospice to patient /family needs. • Hospice team coordination/communication. www.HospiceAnalytics.com

29. A Final Thought… We are concerned that some hospices are making determinations of hospice coverage based solely on cost and reimbursement. It was very clear throughout the development, and years after the implementation, of the Medicare hospice benefit that hospices were expected to make good on their promise to do a better job in the provision and coordination of care than conventional Medicare services for those who were at the end of life. However, if hospices are not making good on that promise, it results in increased burden on hospice beneficiaries and their families – both clinically and financially – and is not in keeping with the intent of the Medicare hospice benefit as originally developed and implemented in 1983. ~CMS 2016 Hospice Proposed Final Rule www.HospiceAnalytics.com

30. How the Expenses Work

31. Routine Home Care

32. Medicare Cost Reports

33. Cost Reports - Continued

34. Cost Reports – Continued

35. Questions…..Discussion?