Colorado Medical Directors Association

1. Colorado Medical Directors Association Healthcare Trends Local Impact

2. Healthcare Industry Trends

3. Projected growth of the U.S. economy and federal spending for major mandatory programs Significant projected growth of combined Medicare & Medicaid spending. However, Skilled Nursing Facilities will likely see growth primarily in in Medicare, as Medicaid dollars are directed more toward community based services

4. ACUTE CAREHOSPITALS TRANSCARE ICU OUTPATIENTREHAB LTACHs INPATIENTREHABFACILITIES SKILLED NURSING FACILITIES ASSISTEDLIVING HOMEHEALTHCARE HOSPICE ADULTDAYCARE The Continuum of Healthcare Sites of Service High TRANS CARE CHRONIC CARE Intensity of patient service Low HOME Low Severity of patient illness High  Kindred Healthcare 2006

5. Policy Changes moving patients to lower cost settings • 1984 - 2009 - Hospital DRGs (Diagnosis Related Groups) • 2005 - Inpatient Rehab Facilities (IRF) 75% Rule (now frozen at 60 %) • 2005 - Home and Community Based Services (HCBS) Waiver Program • 2006 - Long Term Acute Care Hospital (LTACH) reimbursement cuts • 2006 - SNF RUGs (Resource Utilization Groups) enhancement • Add nine more RUG categories (44  53) •  reimbursement for more extensive services (arrival of higher acuity patients in SNFs) • 2008 - Nursing Facility Physician Visit CPT code refinement • Increase physician payment between 10% and 49% depending on visit code

6. Nursing Center Physician CPT code % RVU Increases January 1, 2008

7. Policy Changes In the works • 2007 - 2011 - Post-Acute Care (PAC) Payment Reform Demonstration Program • Mandated by Section 5008 of the Deficit Reduction Act of 2005 • Medicare Continuity Assessment Record and Evaluation (CARE) is a uniform patient assessment instrument • Develop a setting neutral post-acute care payment model • Used to characterize patient severity of illness and level of function in order to predict: • Resource use • Post acute care discharge placement • Beneficiary outcomes

8. ACUTE CAREHOSPITALS TRANS CARE ICU OUTPATIENTREHAB LTACs INPATIENTREHAB SKILLEDNURSINGFACILITIES ASSISTEDLIVING HOMEHEALTHCARE HOSPICE ADULTDAYCARE Future Continuum of Care – One Hypothesis IRFs shrink and LTACH growth slows High Intensityof patientservice SNF licensed facilities/units grow Transitional / Subacute Care TRANS CARE CHRONIC CARE ALFs and Home Health grow Continued hospice growth Low HOME Low Severity of patient illness High  Kindred Healthcare 2006

9. Basic Profile of Post Acute Care Patient Today Different subgroups have differing priorities, needs and discharge plans. Anticipate growth in the Short Stay or Transitional Care population, which is primarily Medicare or Medicare Advantage.

10. Transitional / Subacute Care is the bridge to recovery Hospital Acute Rehab Acute Rehab 75% Rule reimbursement changes are pushing patients downstream Hospital DRGs and Managed Care Payors driving shorter LOS & quicker sicker discharges LTACH & SNF (Transitional / Subacute Care) State waivers will drive existing lower acuity residents to HCBS Less frail with financial means choosing more privacy and amenities in ALF Assisted Living Facility (ALF) Home & Community Based Srvcs (HCBS) H O M E H O M E H O M E

11. A Healthcare Setting may contain several “Service Lines” Long Term Acute Care Hospital Nursing & Rehabilitation Center Dementia Care Outpatient Services Long Term Acute Care Outpatient Services Long Term & Palliative Care Inpatient Hospice Subacute Care Transitional / Subacute Care Hospice Each Healthcare Setting (LTACH or Nursing Center) may offer a combination of any or all of the above Service Lines depending on market need and adherence to Kindred Criteria

12. Clinical Competencies and Programs • While Service Lines are essentially “levels of care” determined primarily by patient / resident care needs including physician oversight, nursing and therapy assistance, ancillary resource and medical equipment utilization • Clinical Competenciesassure appropriate interdisciplinary application of healthcare services/treatments for patients with specific diagnoses, occurring alone or in conjunction with other co-morbid conditions delivered within or among our Service Lines. • Competenciesmay be formally combined and coordinated to createClinical Programs

13. ADL & Functional Support Bariatric Care Behavior Management GeroPsych TBI Cardiac Care Cardiopulmonary Recovery Heart Failure Dementia Care Diabetic Care & Management Falls Management Incontinence Care Infection Control Infectious Diseases Hospice & Palliative Care Medication Administration Nutrition & Oral Care “Examples” of Relevant Clinical Topics • Pain Management • Psychosocial Well Being • Activities and Spiritual needs • Depression • Rehabilitation • Ortho & Neuro • Functional Outcome Measures • Renal Management • CKD and Dialysis • Respiratory Care • COPD, Tracheostomy care • Vent Weaning • Restraint Reduction • Skin Care • Prevention • Wound Care (Tier Program) • Sleep Management

14. The Future • Advancing medical technologies and the willingness of surgeons and their elder patients to undergo more procedures also creates a subpopulation of elders who really don't need to linger in a hospital setting, but are just not ready to return to the community. They need transitional / subacute care for their recuperation and recovery. • Great need for physician involvement, both primary care and specialty • Transitions and handoffs must be improved with enhanced communication between healthcare settings • Opportunity for clinical program development • Must enhance palliative and end of life care and continue to focus on dignity, respect and autonomy issues

15. Colorado Medical Directors Association Thank you for your time and consideration Enjoy the CMDA Meeting