Where We Are Today

1. THE IAH STORY ANDOPPORTUNITIES FOR HOME BASEDPRIMARY CARE UNDER HEALTH REFORMJames C. PylesPowers, Pyles, Sutter & Verville, P.C.1501 M Street, N.W.Washington, D.C. 20005(202) 466-6550jim.pyles@ppsv.com Powers, Pyles, Sutter & Verville, P.C.

2. Where We Are Today The Independence at Home program has been enacted as part of the most sweeping health reform legislation in the history of the U.S. Home Based Primary Care is poised to become “the future of health care” The Academy of Home Care Physicians has become the most influential professional association for its size. How did we get here? Powers, Pyles, Sutter & Verville, P.C.

3. THE IAH STORY—A 15-YEAR OVERNIGHT SUCCESS • 1995-2000—Moved home health care from cost reimbursement to prospective pay • 2000—GWU report—“If home health has a future, it is in chronic care coordination” • 2002—Johns Hopkins report—5% of chronically ill account for 50% of costs • 2002—The Farragut West Group develops IAH specs.-The importance of house calls • Dec. 2002—White House signs on • 2003—Voluntary Chronic Care Coordination Pilot enacted in MMA ’03 • 2004—April 2004—Disaster! VCCI pilot hijacked • 2006—Suggested new IAH proposal—contact Congressman Markey • 2007-2008—IAH Coalition assembled, IAH drafted and vetted Powers, Pyles, Sutter & Verville, P.C.

4. Sept. 2008—IAH introduced by Cong. Markey and Senator Wyden • Oct. 2008—VCCI confirmed a failure • May 2009—IAH reintroduced in House and Senate • March 2010—IAH enacted as sec. 3024 of PPACA—33 member IAH Coalition, more than 100 organizations interested in participating  Powers, Pyles, Sutter & Verville, P.C.

5. Information That Will Drive Health Reform: • The number one fiscal problem facing the U.S. is the high and rising cost of Medicare— “nothing else even comes close”—President Obama • 25% of Medicare beneficiaries account for 85% of costs—CBO • High cost Medicare beneficiaries suffer from multiple chronic illnesses and disabilities Powers, Pyles, Sutter & Verville, P.C.

6. These beneficiaries get poor care and have poor outcomes under the Medicare FFS • This is the fastest growing segment of the Medicare population • Public’s three greatest fears about chronic illness: • *Not being able to pay for care • *Loss of independence • *Becoming a burden to family and friends • Health reform criticized for doing little to reduce costs Powers, Pyles, Sutter & Verville, P.C.

7. PPACA may make the problem worse • Will add 34 million Americans to insurance rolls • Expands coverage for mental health and preventive services • Earlier diagnosis of chronic illness • Recommended cuts by deficit reduction commission in early Dec. 2010 • Further reductions recommended by IMAB by 2014 • Spending will go up, not down-AP 9/9/10 Powers, Pyles, Sutter & Verville, P.C.

8. Medicare • Payments will be cut $575 billion • Home care cut by $40 billion • Increase in documentation requirements for physicians to prescribe home health • Increase in face-to-face meeting • requirements Powers, Pyles, Sutter & Verville, P.C.

9. Medicaid • Broadened coverage, new services • Increased FMAP • But only for a limited time • States cannot deficit spend Powers, Pyles, Sutter & Verville, P.C.

10. Private Insurance and MA • Medicare Advantage cut $147 billion • Adding 34 million new insured individuals • Providing free prevention and wellness services • Cannot exclude for pre-existing condition • Cannot rate based on illness • Cannot rescind coverage • Cannot have lifetime or annuals limits on payments • Essential benefits must include prevention, • wellness and chronic disease management • Plans must cover and reimburse effective case management, care coordination, and chronic disease management Powers, Pyles, Sutter & Verville, P.C.

11. Private Insurance and MA (cont)--Milliman • “While not explicitly in the law, cost effectiveness will be central. Health plans are revisiting risk-sharing methods as a way to help control costs and to create quality incentives” • Medicare Advantage plans will become less attractive to consumers and carriers. An effort to reduce MA payments will have a significant effect on the MA market, with plans facing difficult questions over efficiency and benefit mix Powers, Pyles, Sutter & Verville, P.C.

12. Essential features of any successful health reform model • It must reduce costs • It must be able to show the savings • Primary care will be the coordinator • It will be patient-centered—Administrator Berwick • It must reduce institutionalizations Powers, Pyles, Sutter & Verville, P.C.

13. Home health not viewed as answer • MedPAC March report—”home health payments need to be significantly reduced” • Wyatt Matas report (April 12, 2010)—must evolve “from basic home healthcare to true chronic care management” • Wall Street Journal (April 27, 2010)—”the number of in-home therapy visits tracks Medicare financial incentives” Powers, Pyles, Sutter & Verville, P.C.

14. May 12 letter from Senate Finance Committee--WSJ findings “suggest that HHAs are basing the number of therapy visits they provide on how much Medicare will pay them instead of what is in the best interest of the patients.” Illustrates that Congress is feeling the heat for lack of cost reduction • DOJ/OIG Medicare fraud bust involving home care 7/16/10 • 2011 prospective pay cut $900 million • Rebased prospective pay 3/1/11 Powers, Pyles, Sutter & Verville, P.C.

15. Between 1997-2008 • Spending on home health declined by $1 billion (6%) to $17 billion • Number of beneficiaries declined by 400,000 (11%) to 3.2 million • Medicare spending grew by $259 billion (123%) • Spending on hospital care grew by $90 billion (73%) • Spending on SNFs grew by $16 billion (162%) Powers, Pyles, Sutter & Verville, P.C.

16. New Opportunities for Home-based primary care • Preventive care and screening services • -- $500 million--$2 billion annually • -- 100% Medicare coverage of “personalized prevention plan”—1/1/11 • -- 100% health plan coverage 9/23/10 • -- 100% Medicaid coverage 1/1/13-incentives Powers, Pyles, Sutter & Verville, P.C.

17. Independence at Home Demo- • -- “Health care of the future” Sen. Aging Committee--4/22/10 • -- PPAC, Title III section 3024 • -- Unanimous bipartisan support • -- Adds new chronic care coordination benefit across all treatment settings • -- Funded entirely from savings Powers, Pyles, Sutter & Verville, P.C.

18. -- Targets the highest cost Medicare beneficiaries with specific multiple chronic conditions, and functional disabilities including--chronic heart failure, diabetes, chronic obstructive pulmonary disease, ischemic heart disease, peripheral arterial disease, stroke, Alzheimer’s Disease and other dementias, pressure ulcers, hypertension, and neurodegenerative diseases • -- Holds providers and practitioners accountable for minimum savings of 5%, good outcomes and patient/caregiver satisfaction Powers, Pyles, Sutter & Verville, P.C.

19. -- Splits savings beyond 5% on an 80%/20% basis—creates source for reinvestment in technology • -- Allows chronically ill beneficiaries to receive primary care at home and avoid hospitalizations, ER visits and nursing home admissions • -- Provides relief for “sandwich generation” • -- Preserves beneficiary choice—benefits and providers • -- Allows participation by home health providers • -- Implemented no later than Jan. 1, 2012 Powers, Pyles, Sutter & Verville, P.C.

20. IAH is the ONLY Health Reform Proposal That -- Requires any savings -- Targets the highest cost Medicare beneficiaries -- Provides a new chronic care coordination benefit and is based on hundreds of similar programs across the country that have proven successful in reducing costs and improving outcomes for high cost chronically ill Powers, Pyles, Sutter & Verville, P.C.

21. The VA Home-Based Primary Care Program -- Reduced hospital days 62% -- Reduced nursing home days 88% -- Reduced total VA costs 24% -- Reduced Medicare costs 10.8% -- While increasing home care visits by 264% and home care spending by 460% Powers, Pyles, Sutter & Verville, P.C.

22. Shared Savings Program (ACOs) Sec. 3022 -- HHS can enter into 3-year agreements with groups of hospitals, physicians and physician groups which after a mechanism for “shared governance” -- No mention of home health providers or DME suppliers but Secretary may add “other groups of providers and suppliers” as “appropriate” -- ACO must be willing to “become accountable for the quality, cost, and overall care of Medicare fee-for-service beneficiaries assigned to it” Powers, Pyles, Sutter & Verville, P.C.

23. -- Groups of providers and suppliers in an ACO “may” work together to manage and coordinate care for FFS Medicare beneficiaries • -- ACOs will have a minimum of 5,000 beneficiaries assigned to it by CMS from patients receiving services from primary care physicians in the ACO • -- Providers and suppliers in an ACO continue to receive all FFS payments plus some share of savings, IF ANY Powers, Pyles, Sutter & Verville, P.C.

24. -- ACOs can receive a percentage of savings (specified by the Secretary), after a threshold percentage (specified by the Secretary) up to a cap (specified by the Secretary) • -- Savings are computed by comparing the estimated per capita average costs in a year with the estimated “benchmark” costs per capita for those beneficiaries over the most recent 3 years for which data are available • -- Reimbursement can also be “partial capitation” or any other method selected by the Secretary Powers, Pyles, Sutter & Verville, P.C.

25. -- Program must be “established” not later than January 1, 2012 -- ACO program is a permanent new part of Medicare—not a pilot or demonstration project Powers, Pyles, Sutter & Verville, P.C.

26. CMS Innovation Center, Sec. 3021—to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing quality preference for models that improve coordination, quality and efficiency shall select models where there is evidence they address a “defined population” with deficits in care leading to poor clinical outcomes, potentially avoidable expenditures Powers, Pyles, Sutter & Verville, P.C.

27. 18 Models “May” Be Tested Including the Following: • Funding home health providers who offer chronic care management in cooperation with interdisciplinary teams • Patient-centered medical home for “high-need” individuals • Establishing “community-based health teams” to support small practice medical homes • Contracting directly with groups of providers and suppliers under “risk-based comprehensive payment or salary-based payment” Powers, Pyles, Sutter & Verville, P.C.

28. Using geriatric assessments and care plans to coordinate care of individuals with “multiple chronic conditions” and an inability to perform 2 or more ADLs and cognitive impairment • Care coordination that moves providers from FFS reimbursement to salary-based payment • Care coordination for chronically-ill beneficiaries at high risk of hospitalization through HIT enabled provider network that includes care coordinators, a chronic disease registry, and home telehealth Powers, Pyles, Sutter & Verville, P.C.

29. Paying providers and suppliers for using “patient decision-support tools” • Payment incentives for using evidence-based guidelines or cancer care and follow-up care planning • Paying for home health care in continuing care hospitals and 30 days following discharge • Allowing outpatient services, including outpatient physical therapy to be provided without a referral from a physician if permitted by state law Powers, Pyles, Sutter & Verville, P.C.

30. CMS Innovation Center programs can be extended or expanded if CMS Actuary determines they would reduce program spending • Center must begin carrying out its duties not later than January 1, 2011 Powers, Pyles, Sutter & Verville, P.C.

31. Hospital Readmission Reduction Program, Sec. 3025 • Hospital payments reduced for “excess readmissions” • Beginning fiscal years Oct. 1, 2012 • Community-Based Care Transitions Program, Sec. 3026 • Additional funding for hospitals with high readmission rates • For “high-risk” Medicare beneficiaries with multiple chronic conditions • Begins January 1, 2011 Powers, Pyles, Sutter & Verville, P.C.

32. National Pilot on Payment Bundling, Sec. 3023 -- Group of hospitals, physician practices nursing homes and home health agencies receive single payment for all services 3 days prior to hospitalization to 30 days after -- Not later than Jan. 1, 2013 • Community First Option, Sec. 2401 -- States may amend Medicaid plans to offer medical assistance for home and community-based attendant services and supports -- Beginning Oct. 1, 2011 Powers, Pyles, Sutter & Verville, P.C.

33. Removal of Barriers to Home and Community–Based Services, Sec. 2402 • -- Secretary to issue regulations requiring states to allocate resources to meet the needs and choice of individuals who want to receive services outside of an institution and maintain their independence • -- States may expand HCB programs to individuals at 300% of SSI income benefit rate • -- Plan amendments can be made April 1, 2010 Powers, Pyles, Sutter & Verville, P.C.

34. Health Home Medicaid Option for Chronic Conditions • States can amend plans to provide chronically ill beneficiaries comprehensive care management, care coordination, health promotion and transitional care • Can be provided by designated providers (including HHAs), team of health care professionals, or a health care team • 90% federal funding for 2 years • Effective 1/1/11 Powers, Pyles, Sutter & Verville, P.C.