Transitions in Care - A NEW HOME HEALTH CARE PRODUCT LINE OPPORTUNITY NAHC ANNUAL MEETING - 2012

1. Transitions in Care - A NEW HOME HEALTH CAREPRODUCT LINE OPPORTUNITYNAHC ANNUAL MEETING - 2012 Pat Laff – LYNDA LAFF – walt borginis - Barbara Rosenblum

2. Talking points • The ingredients of Transitions in Care (TIC) • The opportunity for home health • Does your hospitalization & readmit rate get you a seat at the table? • Does the hospital/health system have significant exposure to the TIC penalties • Does the hospital/health system have significant costs associated with Emergency Department and Vacated Days for re-hospitalized patients within 30 days of their discharge? • Is data available to analyze? • Patient rehospitalizations • Post acute referrals, if any • Number of vacated days and ED incidents leading to readmissions • Average cost per bed day and ED incident • Outcomes and HHCAHPS

3. Talking points • Identify the services to be included to meet the goals of reduced ED incidents and re-hospitalizations of the non-post acute referred patients • Development of patient identification criteria protocols to be implemented by the hospital/health system • Development of the service components for a 35 day program • Skilled nursing assessment • Social service component to identify and engage community support agencies • Telehealth for patients with at-risk diagnose • Medical Record Requirements • Identify the Direct Costs related to the desired services and developing price points (Gross Profit Margins) for selling these services

4. transitions in care – The issues The ACA provisions for Transitions in Care take effect in 2013 • Provides for penalties to hospitals whose re-hospitalization rates exceed levels as determined by CMS • Re-admissions are above national average for AMI, Heart Failure and Pneumonia beginning with discharges on or after Oct. 1, 2012. • The penalties are 1%, 2%, and 3% of Medicare payments graduated from 2013 to 2015 • The penalties are separate from the lost revenue from vacated days due to re-hospitalizations within 30 days of discharge • Many hospitals have an exposure • CMS has stated that “64% of re-hospitalizations are patients discharged without a post acute referral”

5. transitions in care – the hospitals’ issues Inadequate discharge planning for significant numbers of patients • Budget constraints – appropriate staffing • Inability to identify all “at risk” patients, regardless of “homebound status • Appropriate clinical and social service staffing components • Protocols • Late day discharges by physicians without notification • Lack of a post acute service component to prevent re-hospitalizations with 30 days of discharge • Can not provide free care to a patient using hospital employees Violation of the “Stark” laws

6. transitions in care – Home Care’s opportunities A non-hospital-based agency can provide services to non-homebound patients paid for by the hospital • Who gets a seat at the table? • Excellent Home Health Compare and HH-CAHPS scores • Avoidance of Adverse Events (drivers of hospitalization) • Low re-hospitalization and ED incidents • Patient transition protocols • Service plan design, including technology with the right pricing

7. Getting a Seat at the Table Does your agency stand out?

8. Do You Deserve a seat at the table? • Excellent Outcomes and Low Hospital and Emergent Care Usage Compare scores Source: SHP National Database. Provider: VNA of Cape Cod

9. Demonstrating sound business practices Source: SHP National Database. Provider: VNA of Cape Cod

10. Do You Deserve a seat at the table? • Demonstrating beneficiary satisfaction (excellent HHCAHPS results Source: SHP National Database. Provider: VNA of Cape Cod

11. Bringing transparency to the table • Hospitals want to see detailed data • Although it’s helpful to show risk-adjusted scores, they’re oftentimes more interested in raw numbers • Hospitals find benchmarks interesting, and local benchmarks even more interesting

12. Do You Deserve a seat at the table? Source: SHP National Database.

15. When do most of your readmissions occur?

16. Why Raw counts are important

17. Demonstrating trends

19. Are you getting admissions that are highly likely to re-hospitalize?

20. home health needs to improve interventions to keep high risk patients from readmitting Communities that have a high hospital utilization rate also have higher readmit rates.

24. The Transitions in care Service Program

25. The “Transitions in care”Service Program • Pure transitions patients – are not Medicare eligible • May not be homebound • May not have Medicare benefits • May not meet Medicare qualifying criteria • Always validate the criteria before enrollment! • Create a separate “transitions” service/program within your organization • The patient is an agency patient/client – not in certified home care program. • This patient/client becomes part of the “Transitions Program or Transitions Service Line

26. Written Contract • Must have a written agreement with hospital • Include written purpose and scope of transitions program • Specific responsibilities of both the hospital and the agency • Responsible parties • Contact information • Hours of availability • Agreed upon payment rates • Include rates for all functions with inclusion of differentials and mileage (if indicted)

27. Written Contract • Basic requirements of participation in the program • Physician participation and orders required • Clients must be willing and able to participate • Specify inclusion of Tele-monitoring or Telephone contact • Frequency and type of contact – focus of care is “contact” not in-home visit • Specify (few) circumstances that may require in-home visit • Patient/client education materials/teaching/follow-up • Agreement must specify that the program is for a minimum patient service period of 35 days from hospital discharge at no charge to the patient

28. Transitions in care • Must include complete referral information; • Patient name • Address • Telephone and emergency contact • Hospital diagnoses • History and physical • Signed patient consent and willingness to participate • Responsible physician and transition services agreement (participation in transitions program)

29. Nursing assessment Visit • Non-OASIS clinical assessment RN visit • Complete necessary intake and clinical assessment information to manage (and monitor) the patient • Identify social service needs and safety issues that may require a PT, OT or Social Work evaluation • Perform a complete/thorough Medication reconciliation • Verify current medication orders • Schedule a physician follow-up appointment if not already scheduled • Verify vital sign parameters and when to notify physician • Review disease management education with patient/client • Reaffirm willingness of patient/client to participate in program

30. The “Transitions in care”Service Program – Tele-monitoring • Monitoring via ongoing remote monitoring of vital signs via tele-health, as ordered • Must have a process for monitor removal • Performance of necessary telephone contact with patient and attending physician • Vital sign alerts • Other signs or symptoms indicating a potential problem • Follow-up visit(s) not anticipated unless specifically ordered by attending physician and included in written contract • Transitions program must be included in agency’s quality and performance improvement process

31. The “Transitions in care”Service Program – Telephone contact • Performance of necessary telephone contact with patient and attending physician • Establish appropriate frequency for contacts • Set goals for each call • May include teaching patient to take and record vital signs daily • Identification of other signs or symptoms indicating a potential problem • Review of medications, response and potential side effects • Follow-up visit(s) not anticipated unless specifically ordered by attending physician and included in written contract • Transitions program must be included in agency’s quality and performance improvement process

32. The “Transitions in care”Service Program • Identify patient enrollment exclusions: • Strong history of non-compliance with meds, diet and physician appointments • Evidence of unsafe/inadequate home environment – patient not safe at home • Attending physician must agree to manage the patient care with shared goals: • To maintain and improve patients health • To prevent unnecessary re-hospitalizations and emergency room visits • To provide patient education ands support/mentoring regarding symptom and medication management • To promote compliance with appropriate disease management principles • Teach self care and independence to patients and families/caregivers

33. Price point development

34. Price Point Development Visit Pricing to be developed: 1. Nursing visits- initial and follow up 2. Physical Therapy 3. Occupational Therapy 4. Social Work

35. Price Point Development Consideration--- Should you price at full cost including allocated overhead or do you default to managed care visit prices? Do your managed care prices per visit constitute a floor for pricing of this model? Should you use the visit costs that your Medicare cost report show on Worksheet C Part I? Is a specific cost finding more appropriate?

36. Price Point Development Calculation of cost of an initial and follow up nursing visit: Direct cost per RN visit averages $77.76 per visit overall. Total visits were 9,249. Total direct costs were $719,202. Here is how to isolate the cost per type of RN visit: RN visits Time Visit Weight % Direct cost Per Visit Admissions 1,214 1.60 1942.40 18.9% $135,881 $112 Discharges 1,214 1.25 1517.50 14.8 106,157 87 Follow up 6,821 1.00 6821.00 66.3 477,164 70 Using 120% of direct cost to in order to account for overhead, your visit price would be $135 Initial Visit , $84 Follow Up Visit and $21 for a Telephone Follow-up.

37. Price Point Development What cost do you use for pricing an RN visit? Medicare cost report: $138 Specific cost finding: Initial $ 135 Follow up $84 Telephone Follow-up $21 Largest managed care contract rate: $119 Is this your lowest price?

38. Price point development Calculation of PT/OT Visit costs: Using fully allocated costs per cost report, since all visits are equal: PT $132 OT $133 Use $135 per visit. Note: costs include employees and contracted staff combined and are derived from Worksheet C Part I of the cost report modified to reflect managed care division costs.

39. Price Point Development • Calculation of Cost for a Social Work Visit: • Social work costs from the cost report are greatly distorted due to fewer actual visit being made--- much of the cost reflects telephone time. • Need to do a cost finding on actual cost per visit: • We looked at our hospice data due to larger staff and more in-person visits. • We estimated that 60% of total direct costs relate to in-person visits. • Total direct costs were $493,781. Visits were 3,096. • As a result, direct costs were $97 per visit. Indirect costs were $58 per visit. • Overall cost per visit is $155.

40. Price Point development Estimate for Telemonitoring costs: All monitoring equipment is fully depreciated at this point. Costs involve person assigned to pick up and deliver devices to the home and to on call charges for weekend monitoring of results Based upon total monthly costs divided by average number of monitors in use, we have a monthly charge of $70. Applying 120% of direct cost formula to account for overhead, we arrive at a monthly charge of $84.

41. Price Point Development Recap of per visit costs: Nursing—Initial $135 Nursing ---Follow up 84 PT 135 OT 135 MSW 155 Telemonitoring- per month 84

42. Price Point Development Real life example of implementation: Large Medicare Advantage plan contract provides for a bonus to reduce readmissions: Base line readmission rate of 22% Bonus based upon savings in hospital costs at $8,000 per admission times the difference between actual readmissions and the base line readmissions (22% of hospital discharges assigned to us). Bonus equals cost of hospital readmissions avoided times: 15% if readmission rate drops by 11 to 20% 25% if readmission rate drops by 21 to 30% 30% if readmission rate drops by over 30%

43. Cost / benefit to the hospital

44. Cost / benefit to the hospital • Large 500 bed teaching hospital in the Philadelphia metropolitan area • Total of 4,627 Medicare Fee for Service discharges in fiscal year 2011 • 1,074 (23.21%) discharged patients referred to Homecare • 1,079 (23.32%) discharged patients referred to other post acute settings • 162 (3.50%) discharged patients expired • 2,312 (49.97%) discharged patients not referred to any post acute settings ! • Hospital does not track its re-admission data! • Hospital’s variable cost per Bed Day is $1,130 and likely a $1,950 total cost • Hospital’s variable cost of an Emergency Room visit is $124.30 and likely a $ 214.31 total cost • Hospital’s re-admission rate on Hospital Compare is above the national average for all reported measured diagnoses! • Hospital’s H-CAHP scores are all below national averages!

45. Cost / benefit to the hospital • The Hospital’s 2011 Medicare revenue was $101,000,000. • If this was 2013, the Hospital’s 1% penalty risk is $1,010,000 • The Vacated Days and ER visits are estimated: • Assuming an average of 3 re-hospitalized days for each patient and a 50% patient usage of an emergency room visit (actual data unknown) • Estimated variable cost: 2,312 patients discharged x 23.07% readmission rate = 533 patients x 3 re-hospitalized days = 1599 days @ $1,130 = $1,806,870 50% of 533 patient admitted through ER @ 124.30 = 33,126 $1,839,996

46. Cost / benefit to the hospitalVariation and costs of services for 35 days:

47. Cost / benefit to the hospital • Assumed cost of Vacated Days and ER Visit Costs $ 1,839,996 • Cost of Services – 2,312 patients • 30% RN only 694 @ $219 = $ 151,986 • 25% RN & Monitoring 578 @ $317 = 183,226 • 20% RN, Monitoring and OT 462 @ $450 = 207,900 • 25% RN, Monitoring OT & SS 578 @ $605 = 349,690 892,802 • Net Savings to Hospital $ 947,194

48. Hospital Readmission Study Within the 30-Day DRG Period

49. Hospital Readmission StudyWithin the 30-Day DRG Period Large Regional Medical Center in a Western State • 680 Readmits (single and multiple)of Medicare Patients within the DRG Period resulted in 8,214 inpatient days for FY 2003 • 23.53% re-admission rate (2,890 Medicare discharges)! • 12.08 average days per readmitted patient! • Loss of $15,072,700 @ $ 1,835 per Bed Day Cost • Not including ER or any other Department Costs • Only 80 of the Readmitted Patients had ever been Referred to Home Care • Tele-health was not available at the Hospital-based Home Health Agency

50. Hospital Readmission StudyWithin the 30-Day DRG Period External Review of Readmission DRGs • 231 Readmitted Patients (34%) should have been in Home Care • Only 34 of the Readmitted patient were referred to home care • Potential Savings to Hospital of 2,752 days (33.50%) @ $1,835 = $5,049,900 • Additional Revenue to Home Care Agency = $482,650 • Estimated 197 Episodes @ $2,450