Presented by: Lynda Laff Pat Laff

1. 2011 HHFMA Financial Management Conference Optimize Clinical & Financial Outcomes by Enhancing Episode Management Presented by: Lynda Laff Pat Laff Laff Associates 2011

2. Managing Smarter • Efficient Home Care Means… • Less care? • Fewer staff? • Cut middle management? • Eliminate PI programs? • Hiring freeze? • Eliminate all educational travel? • No IT system upgrades??? • No “tools”? REALLY? Laff Associates 2011

3. How Did We Get Here? • Escalating health care costs – all sectors of the delivery system • CMS identified home care “behavioral changes” to influence payment • Practice variation among providers • Continued potentially avoidable events • Slow outcomes improvement • Continued re-hospitalization Laff Associates 2011

4. Continued Increase In Home Health Care Utilization Laff Associates 2011

5. Costs Increase But… Outcomes Do Not Improve • Costs continue to escalate with little improvement in outcomes • Major variations in the cost of care delivery vs. patient outcomes • No substantial improvement in re-hospitalization rates • High numbers of potentially avoidable events • Inadequate communication and coordination of patient care Laff Associates 2011

6. Statistics Don’t Lie

7. Statistics Don’t Lie

8. Cost Savings

9. MedPac Findings • Capacity and supply of providers: Agency participation is at record levels • In 2010, HHAs numbered more than 11,400 with a net increase of 527 agencies. • “Number of agencies has exceeded the high watermark of the 1990s, when the number of agencies exceeded 10,900. The high rate of growth is particularly concerning because new agencies appear to be concentrated in areas with fraud concerns, including California, Texas, and Florida”. Laff Associates 2011

10. MedPac Findings • Volume of services continues to rise • Beneficiaries without a prior hospitalization account for a rising share of episodes • Changes in therapy distribution • “Providers target therapy visit thresholds used to adjust home health payments”. • “Volume changes since implementation of PPS provide evidence of providers targeting the ranges that appear most profitable”. Laff Associates 2011

11. MedPac Findings & Conclusions • Outcomes improve on functional measures but the rate of adverse events is unchanged ????? • Payments increase by more than costs in 2009 • Medicare continues to overpay for home health services • High margins for home health in 2011 reflect that payments substantially exceed costs and that reductions and administrative adjustments by CMS have not significantly reduced payments. • Conclusion: overutilization and inadequate care • Encourage appropriate use of the home health benefit Laff Associates 2011

12. MedPac Recommendations • Increase medical review in counties with aberrant home health utilization; suspend payment and limit provider enrollment. • Begin a two-year rebasing of home health rates in 2013 and eliminate the market basket update for 2012. • Revise the home health case-mix system to rely on patient characteristics to set payment for therapy and non-therapy services; no longer use the number of therapy visits as a payment factor. Laff Associates 2011

13. MedPac Recommendations • Establish a per episode co-pay for home health episodes that are not preceded by hospitalization or post-acute care use. • Modify the home health payment system to protect beneficiaries from stinting or lower quality of care in response to rebasing.. Laff Associates 2011

14. Method To the Madness… • Where is CMS going and will YOU be there when they get there? • Cost Reimbursement 1999 • PPS 2000 • Home Health Compare - 2003 • PPS Refinement 2008 • RAC and ZPIC audits – 2009 • OASIS – C – process measures - 2010 • Billing code changes - G Code additions – 2011 • Face to Face visits at SOC and therapy thresholds • Diagnosis coding – ICD-10 - 2013 • PPS Refinement 2013? 2014? • Value Based Purchasing – 2013? Laff Associates 2011

15. Can You Afford The Affordable Care Act? ACA Establishes: • Hospital Readmissions Reduction Program • Hospital Value-Based Purchasing program and plans for a home health and skilled nursing Value-Based Purchasing program • Medicare Shared Savings Program (Accountable Care Organizations)

16. Heart Failure • Heart failure is the most common diagnosis associated with 30-day readmission among Medicare beneficiaries (Hernandez et al., 2010). • 30-day readmission rates for heart failure patients have increased while LOS decreased • In-hospital mortality rates have decreased • Less marked reductions in 30-day mortality rates

17. HospitalValue Based Purchasing • ACA – will reduce hospital payment in 2013 for Medicare admissions by 1% if hospital readmissions are above national average for AMI, Heart Failure and Pneumonia beginning with discharges on or after Oct. 1, 2012. • Penalties to hospitals will increase to 3% in 2015 • What happens in the acute care setting will happen in home care!

18. Affordable Care Act (ACA) Facilitate care transitions across the continuum to; • Optimize choice and control of services • Ensure that decisions are based on patient needs • Provide coordinated, high quality care with seamless transitions between settings • Reward excellence - pay for quality measures- P4P (VBP) • Recognize role of family care giving • Utilize health information technology • Improve Patient Safety • Promote Evidence Based Best Practices • Focus on Error Prevention -PAE Laff Associates 2011

19. Manage Smarter • Clinical Management Information • Key Indicators • Routine Reports • Education • Clinical assessment • OASIS Accuracy • Supervision & Oversight • Documentation Timeliness • Care Plan Development • Continuity • Case management • Clinical model • Accountability/ Responsibility • Reward / incentive • Corrective Action Laff Associates 2011

20. Manage Smarter • To be profitable, management must: • Know what it costs to provide services — by discipline • Monitor and manage ALLaspects of agency operations from intake to billing • Create appropriate efficiencies • Prevent redundancy and unnecessary hand-offs • Promote standardization for entire agency Laff Associates 2011

21. Smart Moves • Patient Centered Care • Patient Outcomes at or above state and national averages • Best Practice implementation • “Right-size” • May or may not add or eliminate positions • Focus on function and responsibility • Invest in people • Right person for the position • Invest in education • Eliminate “warm body syndrome” • Stop “fixing” • Implement and integrate Telehealth Laff Associates 2011

22. Accountability • Primary case management – • Clinician – with F2F contact • May be RN or PT • Must be accountable for patient and financial outcomes • Accurate assessment • Appropriate care plan • Constant knowledge of; • Goals of care • Projected visits vs. actual • Team performance – Therapists must be included in the team • Patient response to care • Need for change in plan Laff Associates 2011

23. Management Statistics • Case Weight • Case weight variance – SOC to EOE • EOE case weight • Re-certifications and LOS • Visit Utilization Averages • Ratio nursing/therapy • Actual Revenue versus Anticipated Revenues • Timeliness of RAP Submission • % of Therapy Visits per Threshold • Average visits per episode • Productivity by discipline - Actual # of Patients • Cases Managed per Clinician – • WHO IS REALLY MANAGING THE PATIENT? Laff Associates 2011

24. Management Statistics • OASIS Errors by Clinician • OASIS Corrections Completed • Outcomes Improvement • Patient Declines – actual or documentation? • Potentially Avoidable Events • Have you audited each of them? • What did you do to prevent them in the future? Laff Associates 2011

25. Smart Moves • OASIS Accuracy • Who is reviewing the OASIS? • Is that a primary function? • Is that individual qualified? • Manual review or Data Scrubber? • Duplicative functions • Corrections versus consequence…. • Management oversight Laff Associates 2011

26. Smart Moves • Adequate education • Validate and reinforce • How do you know? • What checks are in place? • How long does it take? • Who is validating what? • Were the suggested corrections actually made? • What “tools” do you use? • Are there repeated errors? If so – WHY? • Repeated errors cost money Laff Associates 2011

27. Do You EverHave Enough Staff? • How do you know???? • It depends…….. • Clinical Model • Agency Size and Scope • Geography • Volume • Paper or Point of Care • Clerical versus Clinical Function Laff Associates 2011

28. When is Enough Enough? • The Clinical Director comes to you and says “I don’t have enough nurses to see all these new patients. What’s the first thing you do? • Call a temp agency • Put an add in the paper • Review statistics Laff Associates 2011

29. Staffing-Statistics to Review • Number of ACTIVE patients on your census list • “Clean” census list • All discharges removed at least weekly • Identify why “old” patients remain • Expectations for staff productivity • Visits per day, per week • Actual performance of staff – how many actualun-weighted visits per day did they perform last week? • Identify “weakest links” and investigate why…. Laff Associates 2011

30. Standardize Productivity • Do you expect the same level performance from each clinician? • If not – why not? • Are your expectations per clinician met? • Are they reasonable? Maybe too reasonable??? • Do you use remote monitoring? • Do you monitor and enforce the expectations? • Are you using the “warm body approach?” • Is there a consequence for non-performance? Laff Associates 2011

31. Set Realistic Expectations • Number of visits per day is dependent upon clinical model • Do your field nurses case manage a census of patients” • If so – is the number consistent among your staff? • Do you have admission nurses? • Do you use a point of care documentation system? • How many miles does a clinician average per day/week? • How are they compensated? • How often are the patients’ care case conferenced? Laff Associates 2011

32. You May Be At Risk If…. • A review of operations and records indicates presence of one or all of the following; • Many OASIS item inconsistencies • Large variance in SOC/EOE • DX Coding errors • Low EOE case weight • High LUPA rate • Higher than average therapy utilization • LOS average over 60 days / multiple re-certifications • Rotating primary DX • Skilled service provided to large % of patients is “Observation & Assessment” Laff Associates 2011

33. Smartest Moves…It Depends… • Primary Care Case Management • Clinician manages – 20 – 25 patients…it depends…. • Effective use of Telehealth increase capacity • Responsible for entire episode of care • Responsible for outcomes • Don’t come into the office to get NRS • Adequate supervision • Supervision – primary responsibility • Ability to enforce process and policy for productivity, OASIS corrections, appropriate care delivery Laff Associates 2011

34. Smartest Moves • Productivity expectations • SN -Minimum average of 5 actual visits per day – 6 – 6.25 weighted visits • PT – Minimum average of 5.5 actual visits per day – 6.5 weighted visits • Supervisor/Manager – 1 per 5-7 FTEs (depends on function) • OASIS Reviewer – w/data manager - 75 - 85 patients • Adequate OASIS review process • Data management tool to decrease review time and increase accuracy Laff Associates 2011

35. Achieving Positive Financial Outcomes Good clinical outcomes lead directly to good financial outcomes! • Required ingredients • Strong clinical management and staff oversight • Field clinician responsibility and accountability • Consistent and continuing oversight of episode frequencies and durations to achieve realistic outcome goals • Plan of Care consistently reviewed every 14 days! • Adjusted to medical necessity and realistic outcome goals! • Consistent use of the “data scrubber” in OASIS review • The annual cost will be covered within a week! • Efficient use of the field clinician resources – no office time! • Consider a “Weekender Program” Laff Associates 2011

36. Achieving Positive Financial Outcomes • Gross profit issues • The majority of the direct cost/visit is compensation and related taxes (staff and direct supervision) • The cost/visit of premium-based fringes is directly proportional to visits made • The cost of mileage/auto reimbursement is directly related to geographically sequential patient scheduling, the size of the territory and a global vision of the entire week • An agency specific formulary and trunk supply protocol, electronic ordering with independent oversight and patient specific direct delivery reduces costs and increases productivity Laff Associates 2011

37. Weekender Program • Begins Friday at noon..ends Monday at noon • Friday admissions – patients with weekend follow-up visits • Monday morning conference call with weekday RNs • Converts Agency from 5 days/ week plus weekends to 7 days/week • Frequencies spread over 7 days, not just 5 days • Do all weekend visits • Takes weekend on-call • Eliminates weekday staff weekend rotation and compensatory time Laff Associates 2011

38. Weekender Program • Shares case management responsibilities with weekday RN – patients with weekend frequencies • Weekend differentials apply • Considered full-time for Fringe Benefits Laff Associates 2011

39. Achieving Positive Financial Outcomes Who owns the patient? • Using a combination of Admission and Visit RNs /LPNs challenges both good clinical and financial outcomes • Lacks care consistency and continuity • Limited, if any, patient care oversight • Cause of patient dissatisfaction • Primary Care Case Management achieves all of the desired patient care outcome goals and is the best approach towards best financial outcomes • Completely integrates with incentive compensation for both the field clinician and their immediate supervisor! Laff Associates 2011

40. Achieving Positive Financial Outcomes • Align Clinical and Case Conference Modelswith Compensation! • Incentive Compensation… • Determines ownership of the patient, resource utilization and care oversight and outcomes achieved • Matches clinician responsibilities and achievements • Not based upon the length of time or just a fixed salary to accomplish their patient needs • Reinforces consistency and continuity of patient care • Reduces the direct cost of care for those disciplines Laff Associates 2011

41. Achieving Positive Financial Outcomes Key Ingredients! • Effective Clinical Management (Supervisory) staff • Primary Case Management • Case Conference Model • Every Patient…Every 14 days! • Reviews prior 14 days utilization and outcome achievement • Plans next 14 days utilization and outcome goals • Tools for efficiency • Laptops with power cords to car power source and air-cards • Smart cell phones • Patient specific electronic ordering and delivery of NRS Laff Associates 2011

42. Achieving Positive Financial Outcomes Primary Care Case Managers are responsible for the: • Case Management of their patients • Primary visits, including admission, resumptions and recerts, most follow-ups and the discharge. • Achieve the desired patient outcomes and HH-CAHPs results • Self scheduling! • Places responsibility where it belongs • Provides for more autonomy and control of clinician’s day… • Eliminates the cost of schedulers Laff Associates 2011

43. Incentive Based Compensation • Compensates the staff for what they do, not for how long it takes them to complete what they do! • Rewards efficiency, productivity, capacity and clinical (HH-CAHP) outcomes achievement • Improves team chemistry…Encourages under-performing staff to improve or seek a successful career elsewhere • Assures that clinicians meet and exceed individual productivity and case capacity goals • Applies to Weekender staff • IT WORKS! Laff Associates 2011

44. Incentive Based Compensation • Can apply to all disciplines, depending upon patient census and discipline demand • Exempt status does not apply to LPNs, PTAs, COTAs and HHAs (FLSA) • Most effective for RNs, PTs and OTs • Supervisory responsibility • Visits are Unique • No portion of compensation is based on time (Hourly) Laff Associates 2011

45. Visit Weights • Visit weighting – Based the Requirements and Complexities of completing OASIS C • Admission (evaluation) visit 1.90 • Resumption visit 1.30 • Recertification Visit 1.20 • Discharge Visit 1.25 • Follow-up Visit 1.00 • Virtual Telephone Visit (Telehealth) 0.25 Laff Associates 2011

46. Questions Often Asked( Visit Weight – Time Equivalents Based upon OASIS C)

47. Incentive Based Compensation • Bonus structure for Primary Care Case Managers • Calendar quarter or 12 week period (based upon payroll periods) • Accumulated Visit Weights = $ per hands-on visit for every visit • Total Cases Managed = % of earnings for the measured period • Outcomes Achieved = % of earnings for the measured period • Bonus structure for their immediate “supervisors” • Same as above, plus • Other to address problem areas, such as • OASIS error rates • Timeliness of corrections, etc. • Time to RAP and EOE billing Laff Associates 2011

48. Case StudyAlterna-Care Home Health Agency • Located in Central Illinois • Main office located in Springfield, IL with branches in Jacksonville, and Litchfield, IL • Serves over 2000 patients annually in 31 contiguous counties • Free-standing for profit agency • Over 50 employees

49. Benefits of Incentive Compensation • Lost a nurse and didn’t have to be replaced • Improved communication with nurses and supervisor • Documentation is timely and better quality • Telehealth is being used more consistently and the telephone follow up visits are visit weighted • Incentive compensation has improved ER and Hospital outcomes

50. Incentive Compensation Results • Nursing productivity increased • Timeliness of documentation improved. For the first time anyone can remember, all nurses notes were completed within 24 hours. • MD verbal orders and recertifications were completed on time • Visit frequency orders were accurate • Case loads increased per nurse • Nurses made more visits per day and made more money • Monitors were in patient homes and no longer on the shelves