Regulatory Update Oregon Hospice AssociationWashington State Hospice and

Regulatory Update Oregon Hospice Association/Washington State Hospice and Palliative Care Organization Judi Lund Person, MPH Vice President, Regulatory and Compliance National Hospice and Palliative Care Organization 1

Recent regulatory updates • Effective October 1, 2014 – implementation of: – NOE filing and penalty for non-compliance. – NOTR filing. – Change in attending physician form • Effective March 31, 2015 – implementation of Cap Self-Report to be sent to MAC – If not filed, payments will be suspended • Effective April 1, 2015 – CAHPS mandatory participation for all hospice providers 2

What’s in the pipeline? • Calendar year 2015 – Spring 2015: Announcement of Medicare Choices Model awardees – Spring 2015: FY 2016 Hospice Wage Index Proposed rule • • • CBSA changes in wage index for hospice Possible other regulatory changes More Part D and hospice guidance – October 1, 2015: ICD-10 implementation 3

UPDATE ON WASHINGTON POLICY ACTIVITY 4

“Doc Fix” • Sustainable Growth Rate (SGR) • Possible permanent fix • Possible one year adjustment in marketbasket increase • FY 2018 • Latest information 5

Med. PAC • March 2015 Report to Congress just released • Recommendations: – Congress should eliminate the update to the hospice payment rates for fiscal year 2016. • Margins: – Margins for all hospices in 2012: 10. 1% – Predicted margins for 2015: 6. 6% 6

Number of Medicare Certified Hospices 4500 4000 3500 3000 2500 2000 1500 Number of Hospices 1000 500 0 1985 1990 1996 1999 2003 2005 2007 2008 2009 2010 2011 2012 2013 Source: Med. PAC March 2015 Report to Congress 7

Total Medicare Spending on Hospice 16 $13 Billions of Dollars 14 $15. 1 2011 2012 Expenditures by Year 2013 $13. 8 12 10 8 6 4 $2. 9 2 0 2000 Source: Med. PAC March 2015 Report to 2010

Days of Care Length of Service in Hospice 100 90 80 70 60 50 40 30 20 10 0 86 86 86 88 88 83 80 54 17 17 18 17 Average Length of Stay 2000 2007 2008 Source: Med. PAC March Report to Congress, various years 2009 Median Length of Stay 2010 2011 2012 2013

Med. PAC Reports on Levels of Care 10

Shifting from Diagnosis to Prognosis 11

Statutory Definition of Terminally Ill • Social Security Act - § 1861(dd)(3)(A): • Defines “terminally ill” as having a medical prognosis that the individual’s life expectancy is 6 months or less. 12

Diagnoses in perspective Terminal diagnosis Any other diagnosis or condition that is related to the terminal illness/prognosis Related diagnosis or condition Primary or Principal diagnosis Unrelated diagnosis Any other diagnosis that is not related to the terminal illness/prognosis 13

Determining prognosis • Hospice physicians determine prognosis from: – Records review and lab reports – IDG input – Discussions with referral sources/attending physicians – Clinical judgment – Examination of the patient (if applicable) – Certification narrative is a good place to explain this 14

15 Physician Determines Relatedness Clinical staff collect information from patient Hospice physician reviews all available information Hospice physician confers with attending physician and IDT Decision Made (subject to revision as patient conditions change) • Relatedness is not determined by the CFO based on cost to hospice provider • It is determined patient by patient, case by case, related to the palliative plan of care 15

If it is related to the terminal prognosis. … 16 • Hospice covers the cost – Care (services, treatment…) – Medications – DME & supplies • Documentation should appear in the clinical record that it is related – Physician narrative – Plan of Care – Medication profile 16

Steps your hospice can take • Evaluate admission process • Ask the question “Does this diagnosis or condition contribute to or influence the patient’s terminal prognosis? ” • Review hospice physician documentation of relatedness and unrelatedness • Review medications for – Related, hospice pays – Unrelated – Related but no longer effective, discontinue or patient pays • Check diagnosis reporting on claim form 17

NHPCO PROPOSALS TO CMS 18

Prognosis and Parts A, B and D “Leakage” • Addressing terminal prognosis • Addressing improvements in systems and practices for hospices – NOE submission – Improved care coordination functions – Identification of physicians and other healthcare providers actively involved in the patient’s care • Issues for other providers – Knowledge of the hospice election – Access to Common Working File before claim is submitted 19

Scope of Benefits and Services Waived • Section 1812(d)(2) of the Social Security Act establishes the scope of benefits and what the patient waives by electing to receive hospice care. • The current language has not changed since the Medicare hospice benefit was established as a demonstration in 1983. 20

Waiver Language • By electing to receive hospice care, beneficiaries waive their right to have payment made for: “services that are determined (in accordance with guidelines of the Secretary) to be related to the treatment of the individual’s condition with respect to which a diagnosis of terminal illness has been made. ” 21

NHPCO Relatedness Work Group Meeting weekly for more than one year A work group of the Regulatory Committee Clinical expertise, including four physicians Regulatory expertise for places where the prognosis language may be appropriate • HUGE discussions about approach • HUGE discussions about clinical practice • HUGE discussions about what makes sense for patients and families • • 22

Basic Tenets of Relatedness • Must be individualized and determined case-by- case • Decisions must be made by hospice physician • Based upon relationship to terminal prognosis and related conditions • Can be complex- how far down the chain of causality do you go? – Example: Diabetes and cardiac conditions; dialysis and heart failure 23

Medical Director’s Key Role • It is the role of the hospice medical director to determine whether a diagnosis or medication is related to the patient’s terminal illness and related conditions • The hospice must ensure that the hospice medical director is involved, reviews medications, and documents relatedness status in the medical record 24

Medical Directors’ Decisions • Diagnoses – Related or unrelated to the terminal prognosis – Case-by-case – Consistent reasoning that staff can understand communicate • Medications – Related, reasonable, and necessary – Clinically useful – Covered by hospice or insurance 25

Regulatory Committee Recommendations • Changes to Co. Ps and Interpretive Guidelines • Suggestions for changes in hospice processes as well as those of other Medicare providers 26

Changes to Co. Ps or Interpretive Guidelines – Appendix M is the hospice Appendix for “Surveyor Guidance” used by surveyors in judging compliance with the Co. Ps. – Includes “Procedures and Probes” – questions that the surveyor can ask hospice staff to assess compliance with a Condition of Participation. – Some, but not all recommended changes, will require rule-making. 27

Focus Areas • Comprehensive assessment – Must reflect health status related and unrelated to terminal prognosis – Updates reflect changes and discontinuation of treatments and medications • Drug profile – include a list of all drugs, including those unrelated to the terminal prognosis • Plan of care – include care coordination with other healthcare professionals actively involved in patient’s care • Hospice medical director – evidence of training in management of end of life care – Responsible for determining related diagnoses, treatments and medications 28

Proposed Process Changes for Hospices – Process changes for hospices § Admissions § Interdisciplinary team o Coordination of care o Initial and comprehensive assessment o Medication review – Comparing hospices to each other – New and ongoing education about hospice responsibilities for terminal prognosis – Clear guidance about billing requirements 29

Proposed Changes for Other Medicare Provider Types • Provider knowledge of hospice election • Hospital admission/discharge • Flags in billing for other Medicare providers to indicate hospice election/revocation/discharge • New and ongoing education for other provider types about hospice • Provide clear guidance on billing issues for other provider types 30

Further Study • Attending physician issues when the physician is – A nursing home medical director – A hospitalist identified by the hospital as the patient’s attending • Pre-hospice evaluation and goals of care discussion – Payment currently only for physicians – Could it be expanded to other hospice clinicians or to the hospice to avoid unnecessary hospitalizations 31

Ongoing Discussions • • NOE Prognosis/Relatedness Cap self report and calculation re sequester Program integrity MAC medical review Medicare Choices Model Advance Care Planning 32

DIAGNOSES ON CLAIM FORM 33

Diagnoses on the claim form • The principal diagnosis reported on the claim is the diagnosis most contributory to the terminal prognosis • The hospice must report other diagnoses and conditions that contribute to the patient’s terminal prognosis as “other diagnoses” • Follow coding conventions for ICD-9 -CM and then migrate to ICD-10 -CM 34

Coding Reminders • Certain dementia diagnoses may not be used as a primary diagnosis – see NHPCO resources • Alzheimer’s and dementia – still legitimate hospice diagnoses • Adult failure to thrive and debility unspecified may not be used as a primary diagnosis • Can be used as an other diagnosis • Watch use of protein malnutrition as an alternative 35

CMS Reports Multiple Diagnoses on Claim % of claims with one diagnosis 80 78 76 74 72 70 68 FY 2010 Q 1 - 10/1 -10/31/12 77. 2 66 72 64 67 62 60 36 FY 2013 FY 2010 Q 1 - 10/1 -10/31/12 FY 2013 36

OFFICE OF INSPECTOR GENERAL ACTIVITIES 37

Hospice care in assisted living • Report released January 2015 • Payments in ALFs more than doubled in 5 years, totaling $2. 1 billion in 2012. • Hospice beneficiaries in ALFs often had diagnoses that usually require less complex care. • Hospices typically provided fewer than 5 hours of visits per week • Visit mix was heavily hospice aides 38

Median Days in Hospice Care by Beneficiary, by Setting Median Days in Hospice Care 120 100 98 80 60 50 45 40 30 Days 20 0 ALF Nursing Facility Home Primary Setting of Hospice Care Skilled Nursing Facility 39

Percentage of Beneficiaries with Long Lengths of Stay, by Setting 40% 36% Percentage of Beneficiaries 35% 28% 30% 25% 20% 22% 181 -365 days 14% 15% 10% > 365 days 5% 0% ALF Nursing Facility Primary Setting of Hospice Care Home 40

Medical Social Service Visits; 0. 3 Visits per Week, 2012 Hospice Aide Visits; 2. 4 Hospice Aide Visits Nursing Visits Medical Social Service Visits Nursing Visits; 1. 7 41

Percentage of Visit-Hours Provided to Beneficiaries Receiving Routine Home Care in ALFs by Day of the Week, 2012 25% 20% 19% 18% 19% 15% Visits 10% 5% 0% 4% Monday Tuesda Wednesday Thursday Friday Saturday 3% Sunday 42

OIG Areas of Concern • 25 hospices reported no visits to their patients in ALFs in 2012 -- $2. 3 million in Medicare $$ • 97 hospices relied on ALFs for most of their Medicare patients. More than ½ of Medicare payments they received in 2012 43

OIG Recommendations 1. Reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays 2. Target certain hospices for review 3. Develop and adopt claims-based measures of quality 4. Make hospice data publicly available for beneficiaries 5. Provide additional information to hospices to educate them about how they compare to their peers. 44

Additional OIG Hospice Focus in 2015 • Review of Hospice GIP – Assess the appropriateness of hospices’ general inpatient care claims – Review content of election statements for hospice beneficiaries who receive general inpatient care – Review hospice medical records to address concerns that this level of hospice care is being misused or overused 45

KEY VULNERABILITIES 46

Key Vulnerabilities • Live discharges • General Inpatient Care, Continuous Care, Inpatient Respite • Non Hospice Spending In Medicare Parts A, B And D: “Leakage” • Visits in last 48 hours of life 47

LIVE DISCHARGES 48

Rates of Live Discharges % of Patients Discharged Alive 0 – 9. 9% Number of Hospices 10% - 19. 9% 1, 315 20% - 29. 9% 371 30% - 39. 9% 133 40% + 282 1, 601 2010 Live Discharge rates by state • CT • MS 12. 8% 40. 5% Hospice claims data from CY 2010 -CY 2012 for beneficiaries who were discharged (alive or deceased) in CY 2012 49

Source: Journal of Palliative Medicine, August 7 2014 50

Live Discharge and Readmissions Hospice Discharge Hospital Admission Expensive test/procedure $126 M 2010 Data 13, 770 patients of 182, 172 live discharges – 7. 5% Hospice Readmission Hospital Discharge Source: CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 51

Live Discharge and Readmission by State – Highest % MS VA OK TX AL NJ SC GA MD LA $56. 0 M (44%) of the hospitalization costs from these 10 states CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 52

GENERAL INPATIENT CARE, CONTINUOUS HOME CARE, AND INPATIENT RESPITE CARE UTILIZATION 53

Percentage of days by level of care Routine Home Care Percentage of Total Days 97. 4% Continuous Home Care 0. 4% Inpatient Respite Care 0. 3% General Inpatient Care 1. 9% Level of Care 54

GIP Utilization • Patient utilization: 77. 3% of patients electing hospice did not have a GIP stay during their hospice election • Hospices providing GIP 21. 1% of hospices did not bill for a single day of GIP in CY 2012 Source: CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 55

GIP Utilization • National average = 1. 9% of days are GIP • Do not provide GIP? – 66% for-profit • Provide GIP? – 5 -10% = 195 hospices – 10% or more = 46 hospices Any GIP Provided? Number of Hospices No 760 Yes 2, 758 Hospice claims data from CY 2010 -CY 2012 for beneficiaries who were discharged (alive or deceased) in CY 2012 56

Location of GIP 0. 8 0. 7 68. 0% 0. 6 0. 5 Hospice Inpt Facility 0. 4 Hospital 0. 3 Skilled Nursing Facility 24. 9% Multi 0. 2 0. 1 0 5. 5% 1. 6% % of Total Source: CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 57

Length of GIP Stay by Location 7 6 5 6. 1 days 5. 5 days 4. 7 days 4 All 3 Inpatient Hospital Inpatient Hospice SNF 2 1 0 Average Length of Stay in Days Source: CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 58

Policy Questions • Was the hospice able to provide GIP? • Was the hospice “cherry picking” patients who were “less sick? ” • Does the hospice comply with COP requirement for a contract for GIP? • Was quality of care compromised? 59

Non Hospice Spending In Medicare Parts A, B And D: “Leakage” 60

Medicare A and B Outside Hospice Benefit Part A or B Service DME Percentage of $$ Spent 7. 1% Inpatient care 28. 6% Outpatient Part B services 16. 9% Other Part B services (physician, practitioner, labs and diagnostic tests, ambulance transports, and physician office visits) 37. 4% Skilled Nursing Facility Care 5. 7% Home Health Care 4. 5% 61

States where Medicare A and B Outside the Hospice Benefit is Highest WV FL TX MS SC CMS CY 2012; FY 2015 Hospice Wage Index Proposed Rule 62

Part D Expenditures During a Hospice Stay • CY 2012 – Total Part D spending: $417. 9 million – Paid by Medicare: $334. 9 million 63

Highest Part D Expenditures by State ID WV AL OK CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 64

CY 2012 Total Non-Hospice Medicare Spending For beneficiaries after hospice election • Parts A & B: $710. 1 million • Part D: $334. 9 • TOTAL: $1. 3 Billion dollars • Note: 51. 6 % of $1. 3 billion -- 373 hospices • Average total per beneficiary: $1, 289 in non-hospice costs 65

VISITS IN LAST 48 HOURS OF LIFE 66

% of Patients with No Skilled Visits Days before Death % of Patients Last day of life 28. 9% of patients Last 2 days of life 14. 4% of patients Last 3 days of life 9. 1% of patients Last 4 days of life 6. 2% of patients Skilled visits include nurse, social worker, therapies (OT, PT, Speech). Does not include aide, chaplain, volunteer. CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 67

Lowest % of Patients with No Visits in Last 2 Days of Life State % with No Visits WI 5. 7% ND 7. 3% VT 7. 5% TN 7. 5% KS 8. 5% CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 68

Highest % of Patients with No Visits in Last 2 Days of Life State % with No Visits NJ 23% MA 22. 9% OR 21. 2% WA 21% MN 19. 4% CMS CY 2012; FY 2015 Hospice Wage Index Final Rule 69

CMS Commentary • We further examined hospice utilization data and developed a provider-level file to identify aberrant hospice behavior. The provider level file contains information on beneficiaries who were discharged (alive or deceased) in Calendar Year (CY) 2012 and includes claims data from January 1, 2010 through December 31, 2012. 70

HOSPICE PAYMENT REFORM LATEST ABT INFORMATION 71

Recent CMS Statements • Considering the analysis from Abt Associates • Not likely to wait until data from the new hospice cost report is in • Still considering – Rebasing (reducing) the routine home care rate • Budget neutrality required – U-shaped curve – or tiered payments • Higher at the beginning (5 days being considered) • Higher at the end 72

Abt Payment Reform Concepts • • • Site of service adjustment Rebasing the routine home care rate Tiered payment model Short stay add-on Skilled visits at the end of life Live discharge Abt presentation on Open Door Forum 1/14/15 73

Site of Service Adjustment • Hospice patients in a nursing facility receive more visits than patients in the home after controlling for patient and provider characteristics. • Hospice aides may be substituting for, rather than augmenting, nursing facility aides. Abt presentation on Open Door Forum 1/14/15 74

Rebasing the Routine Home Care Rate • Due to data limitations, only the labor portion of the base payment rate could be rebased, which represents approximately 70% of the rate. • Using just the labor information, it was found that rebasing using current cost information would result in a reduction in the FY 2014 RHC payment rate of 10. 1% ($1. 6 billion). Abt presentation on Open Door Forum 1/14/15 75

Tiered Payment Model • Unintended Consequences of a simple UShaped Payment System – Could encourage extremely short stays – Could increase live discharges – How would level of care transfers be handled (GIP to RHC? ) – Could reduce frequency of services in response to decreased reimbursement Abt presentation on Open Door Forum 1/14/15 76

Tiered Payment Model • Different payments for characteristics that might be associated with the cost of the stay. – Would have features of a U-Shaped Model. – Could also pay for • Extremely short stay hospice users (who tend to have high average resource use) • Hospice users who do not receive skilled care at the end of life. Abt presentation on Open Door Forum 1/14/15 77

Tiered Payment Model Group RHC Days of Hospice Implied Weight New Base Payment Rate Group 1 RHC Days 1 -5 2, 800, 144 2. 3 $337. 25 Group 2 RHC Days 6 -10 2, 493, 004 1. 11 $162. 76 Group 3 RHC Days 11 -30 7, 767, 918 0. 97 $142. 23 Group 4 RHC Days 31+ 65, 958, 740 0. 86 $126. 10 Group 5 RHC during last 7 days, skilled visits during last 2 days 2, 832, 620 2. 44 $357. 78 Group 6 RHC during last 7 days, NO skilled visits during last 2 days 476, 809 0. 91 $133. 43 Group 7 RHC when hospice LOS is 5 days or 510, 787 less and discharged dead 3. 64 $533. 73 Total 82, 840, 022 1 Abt presentation on Open Door Forum 1/14/15 $146. 63 78

Short Stay Add-on • Background: – Stays that are 5 days or less (25% of beneficiaries in 2011) are less U-shaped because there is not a lower cost middle period between the time of admission and the time of death. – A potential reform would be to only increase payments for the shortest stays through an addon that would be paid for through a reduction to payment for long stay beneficiaries Abt presentation on Open Door Forum 1/14/15 79

Skilled visits at the end of life • There is considerable variation in the probability of receiving skilled visits at the end of life that may be related to certain characteristics of the hospice stay. • These characteristics include – The day of the week a beneficiary died – Which state the beneficiary is located in – Which specific hospice a beneficiary receives services from Abt presentation on Open Door Forum 1/14/15 80

CAP REPORTING Cap self-report PS&R Inpatient cap 81

Cap Determination Notice § 418. 308 Limitation on the amount of hospice payments. (c) The hospice must file its aggregate cap determination notice with its Medicare contractor no later than 5 months after the end of the cap year (that is, by March 31 st) • Use data no earlier than three months after the end of the cap period, or January 31 • If hospice fails to file, payments will be suspended in whole or in part until cap report is filed • Overpayments will be due when cap report is filed. An Extended Repayment Schedule (ERS) is available. • The MAC will continue to issue final cap determination letter 82

2013 Cap Reports • For 2013, cap letters will come from MACs • Timing in question, could be up to one year 83

Inpatient days cap & non-compliance risk • MACs will continue to calculate the inpatient days cap • If hospice fails to file the aggregate cap report, payments will be suspended in whole or in part until cap report is filed 84

IMPACT Hospice Surveys Medical Review Hospice Aggregate Cap 85

IMPACT Act • Stands for: Improving Medicare Post-Acute Care Transformation Act of 2014 (“IMPACT Act”) • Impacts post acute providers including: – home health agency – skilled nursing facility – inpatient rehabilitation facility – long-term care hospital 86

Hospice Provisions in IMPACT Act • Three provisions: Hospice surveys every 36 months • Implementation date: April 6, 2015 • Surveys conducted by state survey agency or accrediting organization • No change in process except frequency • State determined implementation • In place for the next 10 years 87

Hospice Provisions in IMPACT Act Increased medical review for long lengths of stay • Technical correction to the Affordable Care Act • Intended for hospices who have a high percentage of patients with a length of stay >180 days • What is the “high percentage? ” – CMS will set the number – in the 40 -60% range • Implementation date: CMS can begin the process at any time. CMS reports that they are gathering data on the issue to make a decision 88

Hospice Provisions in IMPACT bill Hospice aggregate cap • Aligns the inflation increase for the aggregate cap and the hospice rate increase • Implementation date: FY 2017 (Payment year beginning October 1, 2016) • Example of when cap amount and rates increase at same rate: Example 10/31/2014 Cap for year ending October 31, 2014 $ 26, 725. 79 Marketbasket Increase Example of Cap Amount for Coming Year 1. 70% $ 27, 180. 13 89

QUALITY REPORTING 90

Quality Reporting Reminders • Hospice CAHPS survey: – Every hospice must participate in at least a one month dry run between January 1 and March 31 – Mandatory participation begins April 1 • HIS data submission: – ended for 2014 – ongoing for 2015 91

Moving Hospice Upstream Expanding the Use of Hospice Skills within the Healthcare Continuum November 2014 NHPCO Consulting Services 92

Hospice Use by Medicare Decedents, 2012 47% Received hospice care No hospice 53% Source: A Data Book: Healthcare Spending and the Medicare Program, Medicare Payment Advisory Commission (Med. PAC), June 2014, p. 187. November 2014 NHPCO Consulting Services 93

Transferrable Hospice Skills • Managing patients under a risk-based payment method – controlling costs • Managing patients with high needs and high levels of frailty • Managing patients with complex, lifethreatening illness • Managing patients in a home or home-like setting • Managing patients out in the community November 2014 NHPCO Consulting Services 94

Hospice Saves Medicare Significant Costs $7, 000 $ 6, 430 $6, 000 $ 5, 040 $5, 000 $4, 000 $3, 000 $ 2, 650 $ 2, 561 $2, 000 $1, 000 $0 1 -7 Days 8 -14 Days 15 -30 Days 53 -105 Days Source: Amy S. Kelley, et al. , “Hospice Enrollment Saves Money for Medicare and Improves Care Quality Across a Number of Different Lengths of Stay, ” Health Affairs, March 2013. November 2014 NHPCO Consulting Services 95

JAMA, November 12, 2014: Medicare patients with poor-prognosis cancers who received hospice care had: – Lower rates of hospitalization – Fewer ICU admissions – Fewer invasive procedures – Significantly lower health care costs Source: “Use of Hospice Care by Medicare Patients Associated with Lower Rate of Hospitalization, ICU Admission, Invasive Procedures and Costs, ” press release from JAMA, November 11, 2014. November 2014 NHPCO Consulting Services 96

Upstream Care Types • • Advanced illness management (AIM) programs Community based palliative care Post-acute transitional care Pre-hospice programs November 2014 NHPCO Consulting Services 97

Upstream Partners for Hospices in Washington and Oregon Seeking those at risk for health expenses: • Hospitals and health systems (at risk under exchanges and all-payer systems) • ACOs in your service area • Medicare Advantage plans • Commercial Insurers • Large self-insured employers (including hospitals) • Insurers November 2014 NHPCO Consulting Services 98

How likely is the following by 2019? 98 % Your hospital will be partnering with community organizations to support population health management initiatives 76% 93 % Formal mechanisms will be in place in your service area to ensure seamless coordination across the care continuum 51% 0% Very Likely Somewhat Likely 22% 20% 42% 40% Somewhat Unlikely 60% 80% 100% Very Unlikely Source: “Futurescan 2014: Healthcare Trends and Implications 2014 -2019, ” Society for Healthcare Strategy & Market Development and the American College of Healthcare Executives, 2014. November 2014 NHPCO Consulting Services 99

How likely is the following by 2019? 94 % Your hospital or health system will enter into a partnership or affiliation with another provider or payor organization to expand services or realize efficiencies 53% 0% Very Likely Somewhat Likely 20% 41% 40% Somewhat Unlikely 60% 80% 100% Very Unlikely Source: “Futurescan 2014: Healthcare Trends and Implications 2014 -2019, ” Society for Healthcare Strategy & Market Development and the American College of Healthcare Executives, 2014. November 2014 NHPCO Consulting Services 100

How likely is the following by 2019? 96 % Your hospital's strategic plan will have a goal of reducing unnecessary admissions 74% 0% Very Likely Somewhat Likely 20% 40% Somewhat Unlikely 22% 60% 80% 100% Very Unlikely Source: “Futurescan 2014: Healthcare Trends and Implications 2014 -2019, ” Society for Healthcare Strategy & Market Development and the American College of Healthcare Executives, 2014. November 2014 NHPCO Consulting Services 101

Making the Case to Your Partners: Benefits of Upstream Palliative Care/Patient Management • Patients have better quality of life • Patients are more likely to use hospice, less likely to use expensive hospital care • Patients cost less to care for (when appropriately selected) • They may even live longer Sources: Jennifer Temel, MD, et al. , “Early Palliative Care for Patients with Metastatic Non-Small-Cell Lung Cancer, ” NEJM, August 19, 2010; K. Eric De Jonge, MD, “Effects of Home-Based Primary Care on Medicare Costs in High-Risk Elders, ” JAGS, October 2014. November 2014 NHPCO Consulting Services 102

Business Planning for Upstream Programs 1. What population will you serve? 2. How will you manage your patients? – What clinical model will you use? – What administrative support will you need? 3. How will you be paid? – Who are your business partners and payers? – What are their needs? How can you help them? 4. What will you measure? – What measures will you track before and after the program? November 2014 NHPCO Consulting Services 103

#1 What Population Will You Serve? November 2014 NHPCO Consulting Services 104

High Cost Population Is Not All at End of Life High-Cost Population 18. 2 Million People High-Cost End-of-Life Population 2 Million People Low-Cost End-of-Life Population 0. 5 Million People Source: Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life, Institute of Medicine (IOM), The National Academies Press, Washington, DC, 2014, Appendix E, p. 27. November 2014 NHPCO Consulting Services 105

High Cost Population Not All Old Total Population, by Age High-Cost Population, by Age 65+ 14% Age 65+ 40% Age <65 86% Age <65 60% Source: Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life, Institute of Medicine (IOM), The National Academies Press, Washington, DC, 2014, Appendix E, p. 27. November 2014 NHPCO Consulting Services 106

The Top 5% of Patients Account for 50% of All Healthcare Spending Percentile Ranked by Health Care Expenditures, 2012 97. 3% 100% 86. 7% 80% 66. 0% 60% 50. 0% 40% 22. 7% 20% 0% Top 1% Top 5% Top 10% Top 25% Top 50% Source: Steven B. Cohen, Ph. D. , “The Concentration of Health Care Expenditures and Related Expenses for Costly Medical Conditions, 2012, ” Statistical Brief #455, AHRQ, October 2014. November 2014 NHPCO Consulting Services 107

Functional Limitations Greatly Increase Likelihood of High Expenditures per Patient Relative Risk of Being in Top 5% of Health Care Spenders 6. 1 7. 7 6. 6 4. 3 3. 6 1. 8 1 0. 8 0. 2 Everyone No Chronic Functional 1+ Chronic 3+ Chronic + ADL/IADL + ADLIADL + Limitation, illness only limitation Functional Chronic 3 Chronic no chronic only limitation illness Source: Lewin Group Analysis of 2006 Medical Expenditures Panel Survey, from “Individuals Living in the Community with Chronic Conditions and Functional Limitations, ” report to HHS, January 2010. 108

Ways to Identify the Target Population • Computer algorithms analyzing patient records within an insurer database • Documentation of functional limitations and chronic illness in a health system EHR • Routine documentation of answers to the “surprise” question: “Would you be surprised if the patient died in the next 12 to 24 months? ” • Physician referral November 2014 NHPCO Consulting Services 109

1. 2. 3. 4. 5. Top Five Most Costly Medical Conditions Heart disease Trauma-related disorders Cancer Mental disorders COPD/asthma Source: Steven B. Cohen, Ph. D. , “The Concentration of Health Care Expenditures and Related Expenses for Costly Medical Conditions, 2012, ” Statistical Brief #455, AHRQ, October 2014. November 2014 NHPCO Consulting Services 110

Clearly Define Your Target Population • Biggest savings will accrue only if you get the population right– cost differences are highest only among the sickest and frailest • If healthier, lower-risk population is included, costs can easily outweigh the benefits of intensive management November 2014 NHPCO Consulting Services 111

Start Simply, Start Small • Begin with the low-hanging fruit: Start with your best program initiative, that promises the greatest savings with a limited population • Grow over time: Expand later, after success is demonstrated November 2014 NHPCO Consulting Services 112

#2 How Will You Manage Your Patients? November 2014 NHPCO Consulting Services 113

Target Population = High Risk Patients May Have Upstream Care May Involve Functional limitations Multiple chronic conditions Dementia Serious (life threatening) illness • Uncontrolled symptoms • Recent discharge from hospital • Caregiver breakdown • • November 2014 • Home safety assessment • Patient and family education • Medication reconciliation • Diet counseling • What to do in crisis • Planning – Care goals • Visits • Telephonic support NHPCO Consulting Services 114

Formal Mechanisms Support Care Coordination • Documented handoffs when patient transfers to another care setting • Integrated health information portals • Patient navigators and case managers • Strong social support care • Telephonic and urgent care support November 2014 NHPCO Consulting Services 115

Ensure Your Savings Will Outweigh Your Costs of Caring for This Population • Care coordination can be very expensive – North Shore-Long Island Jewish Health System reports that new admits to its care coordination program (Care Solution) cost $400 per member per month • 2015 Medicare physician fee schedule permits $40. 39 per month per qualifying patient for care coordination management (codes 99487 -99489) • Most experienced providers suggest starting small to make sure volume and costs don’t overwhelm the fledgling program Sources: Kristofer Smith, MD, “Working within Value-Based Contracts to Support Community-Based Palliative Care, presentation to CAPC, September 24, 2014; Donna Marbury, “ 2015 Medicare fee schedule offers new care coordination, telehealth codes, ” Medical Economics, November 3, 2014. November 2014 NHPCO Consulting Services 116

Plan for the Fact that High Savings Are Reserved for Highest-Risk Patients Medicare Costs by Frailty Category $76, 840 $80, 000 $56, 589 $60, 000 $42, 223 $43, 353 Managed $40, 000 Control $22, 611 $20, 000 $19, 146 $0 Lowest frailty Moderate frailty Highest frailty Sources K. Eric De Jonge, MD, “Effects of Home-Based Primary Care on Medicare Costs in High-Risk Elders, ” JAGS, October 2014. November 2014 NHPCO Consulting Services 117

#3 How Will You Be Paid? (Who Will Your Business Partners Be? ) November 2014 NHPCO Consulting Services 118

Financing Upstream Services (In Order of Level of Support) Full support from partnering health system Per visit payment Case rate payment Palliative care billing for allowed clinical services (only partially offsets cost) • Risk-based payments (per member per month) • Shared savings (as with an MSSP ACO) • • November 2014 NHPCO Consulting Services 119

Types of Risk-based Contracts Type Description Pay for performance Provider receives incentive payments for meeting certain quality or cost efficiency targets (usually both) Shared savings Provider may receive a portion of any savings incurred through cost avoidance relative to a pre-determined budget Shared risk Providers shares upside and downside risk with insurer/payer relative to a pre-set target Full risk or capitated Provider gets all or a portion of the premium Flat payment per covered person, no matter what the utilization November 2014 NHPCO Consulting Services 120

High-Impact Target Areas for ACO Initiatives 1. 2. 3. 4. 5. Prevention and wellness Chronic disease Reduced hospitalizations Care transitions Multi-specialty care coordination of complex patients Source: Accountable Care Guide for Hospice & Palliative Care, Toward Accountable Care Consortium, Raleigh, North Carolina. November 2014 NHPCO Consulting Services 121

Shared Savings Distributions Anew. Care Collaborative, Tennessee • Aggregate Performance Year One: $6. 9 Million Savings • Distribution Plan: – ACO administration gets $10 pmpm off the top – Reinvest in infrastructure = 50% of remainder – Distribution to participants = 50% • Physicians get 64% of participant share • Hospitals get 36% of participant share Source: Anew. Care Collaborative, Johnson City, TN, from website anewcare. org, accessed November 2014 NHPCO Consulting Services 122

CMS Hospital Compare Can Help Target Your Efforts Source: http: //www. medicare. gov/hospitalcompare, accessed November 13, 2014. November 2014 NHPCO Consulting Services 123

#4 How Will You Measure Success? November 2014 NHPCO Consulting Services 124

Measure and Report Your Success • Be sure to collect baseline data – demonstrate savings and quality improvements made under your management • Work with your business partners to determine what measures are most meaningful to them: – – – – Hospital admissions/re-admissions Emergency department utilization Falls Patient and family satisfaction Cost reductions/cost avoidance Lab, imaging, drug costs chemotherapy use in last month of life November 2014 NHPCO Consulting Services 125

Models and Resources November 2014 NHPCO Consulting Services 126

@HOMe Support, Michigan • Hospice of Michigan in partnership with Blue. Cross Blue. Shield of Michigan • 80% of patients ultimately transition to hospice • Outcomes: – 9% decrease in ED use – 33% decrease in hospital admissions – 57% decrease in hospital re-admissions – High patient and family satisfaction scores Source: “Improving Access to High Quality Hospice Care: What is the Optimal Path? ” Melissa Aldrige and Jean Kutner, Health Affairs Blog, September 9, 2014. November 2014 NHPCO Consulting Services 127

Aetna Compassionate Care Program For the 1% of Medicare Advantage members enrolled in the program: – An 82% hospice election rate – An 81% decrease in acute hospital days – An 86% decrease in ICU days – High member and family satisfaction – Total cost reduction of $12, 000 per enrolled member Source: A Palliative Care Toolkit and Resource Guide, CAPC and the National Business Group on Health, 2014. November 2014 NHPCO Consulting Services 128

Hospice Care of California • Community based palliative care program serving 6 different riskbearing IPAs in California • Services include telephonic support from an RN and also visits from an interdisciplinary team: – MD – RN – Social worker – Chaplain • HCC receives a per-visit payment and also a small per member, per month admin fee Source: A Palliative Care Toolkit and Resource Guide, CAPC and the National Business Group on Health, 2014. November 2014 NHPCO Consulting Services 129

Use Available Resources for Planning an Upstream or Palliative Care Program • NHPCO • IPAL: Improving Outpatient Palliative Care (CAPC) • CSU: The Institute for Palliative Care at The California State University • Toward Affordable Care Consortium www. tac-consortium. org • IOM – “Dying In America” (September 2014) November 2014 NHPCO Consulting Services 130

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NHPCO members enjoy unlimited access to Regulatory Assistance 95% of questions received a response in < 24 hours in 2014 Feel free to email questions to regulatory@nhpco. org 134

Regulatory/ Compliance Team at NHPCO Judi Lund Person, MPH Vice President, Regulatory and Compliance Jennifer Kennedy, MA, BSN, CHC Director, Regulatory and Compliance Email us at: regulatory@nhpco. org 135

Resources and References • ICD-9 -CM Official Guidelines for Coding and Reporting http: //www. amaassn. org/resources/doc/cpt/icd 9 cm_coding_guidelines_ 08 -09_sm. pdf • Hospice Quality Reporting Program – https: //www. cms. gov/Medicare/Quality-Initiatives. Patient-Assessment-Instruments/Hospice-Quality. Reporting/index. html • Hospice CAHPS Survey – www. Hospicecahpssurvey. org 136

References • The Centers for Medicare & Medicaid Services (CMS) Medicare Hospice Wage Index Final Rule and Medicare hospice payment rates for fiscal year (FY) 2015 – http: //www. ofr. gov/OFRUpload/OFRData/2014 -18506_PI. pdf • Medicare Benefit Policy Manual, Chapter 9, Coverage of Hospice Services Under Hospital Insurance • Medicare Hospice Conditions of Participation • OIG FY 2015 Work Plan – http: //oig. hhs. gov/reports-andpublications/archives/workplan/2015/FY 15 -Work-Plan. pdf 137