1. Senior Living Consultants

2. First Year Operations: Lessons Learned from a Hard First Year www.npaonline.org

3. PACE Model Five Service Elements Intensive primary care Integrated Team management Use of adult day health center Home care Transportation

4. PACE Model Required Best Practices Voluntary caregiver support End-of-life care Management of participant/family member noncompliance

5. The Consultant Role Assist new PACE organizations to reach program goals: Provide quality of care Manage operational costs Reach census goals Facilitate medical cost management and expense containment while capturing appropriate revenue

6. HE SAID WHAT??

7. Consultant-Client Communication The course of action is correct…but consultant failed to do a good job communicating with the clientthe client is dissatisfied and the consultant is blamed The difference between clarity and confusionwe are speaking two different languages..EDUCATING, LISTENING, PLANNING

8. Consultant-Client Communication Establish a set of objectives that both the client and the consultant understand: Understand the strategic mission Develop a well-defined work plan with assigned deadlines and responsibilities Formulate an action plan that will help the team achieve a successful opening and fill-up

9. Consultant-Client Communication Consultant should remember to: Focus on client goals Use industry specific language or just plain English will do..Thank You Very Much! Provide repetitive follow-up Establish reasonable feedback/communication timelines from the very beginning Relationships take time..give client examples of results when they are apprehensive about a strategy or idea

10. Consultant-Client Communication Client has responsibility, with consultant support, to: thoroughly learn the PACE language understand deadlines for submission of data Understand HCC method of reimbursement Consultant should provide to the client simplified definitions and topics to further study

11. Consultant-Client Communication Mind Shift The provider brings to PACE their unique perspective from their own fee-for-service world Health System: the Step Childload them up with overhead and dont give them any capital Hospicewe already know how to do this! CCRCwhat does a poor, old, frail person look like?

12. Consultant-Client Communication Time/Census/Operating Loss PRESSURE COOKER Sponsors/providers expect - shorter development periods - quicker fill-ups - lower start-up losses

13. Lessons Learned Extra Doses of: Training Pre-Marketing (Okay…Public Relations) Contingency planning and cash Excited stakeholders PAY BIG DIVIDENDS!

14. Lessons Learned Fast census growth provides the cushion to learn the model IDT function can be messy but is not easily learned from the sidelines The State Administering Agency is always moving the cheese lowering rate imposing census caps

15. Lessons Learned You will want access to affordable housing sooner than you think You have to be prepared to expand well before you are at full census The most common Team member you will have to change may be your primary care physician Team members must adopt the PACE model without reservation. Rehab staff may have difficulty letting go of the Medicare regulations pertaining to Skilled Nursing, affecting IDT.

16. …The Rest of Story Question? How can the same organization have two programs at different ends of the spectrum, one of the most financially successful programs, and the worst PACE start-up? Answer: Totally different markets Organization was a dominant brand in the first market

17. …The Rest of Story Question? How did a program identify 75 participants (prior to program approval) who mostly enrolled in the first few months of operation without marketing directly to the family or participant? Answer: Great pre-marketing and referral sources

18. …The Rest of Story Question? How did a PACE lose millions in just 6 months? Answer: not paying attention to Medicare Risk Scores

19. Page 19 PACE and the Numbers

20. Participant Net Growth Competitionreal or perceived Marketingreaching potential participants GatekeepersDivision of Aging, AAA Financial Eligibility100% to 300% of poverty level

21. Participant Net Growth Greater initial enrollment (accelerate break even) Staffing for growth (assessment and timely additions of staff) Timely expansion of adult day health center capacity

22. The Numbers StatisticExperienceMinimumImpact Net Growth 1 to 14 per month 3Five-year impact of achieving 5 instead of 3 Doubling of cash and operating income Initial Census 1 to 20 participants 5First year impact of opening with 20 instead of 8 Breakeven occurs 4 months earlier and operating losses drops by $500,000

23. Medicare Payment Based on diagnosis plus frailty factor Medicare risk scores ranged from 1.73 to 3.07 based on January 2012 PDAC data Average risk score=2.35 The % change $PMPM from interim January 2012 payment to 2012 Final Payment showed individual programs experiencing reimbursement changes from -19.11% reduction to +35.22% increase due to risk and frailty scores.

24. Capital Costs ComponentExpense Adult Day Center Build Purchase Lease Capital Improvements $4M to $15M* $1M to $3M* $3 to $30 per SF/year* $900K to $2.3M ($60-$150/SF)* Vans$45 to $50K each Start-up Costs$500K to $1M Operating Losses$500K to $4M Cash Reserves$500K *Range due to relationship between building condition and capital requirements

25. Operating Factors/Practices Participants living alone5 to 40% (dramatically affects costs) Prevalence of specific chronic diseases ESRD COPD Behavioral

26. Primary care effectiveness Team Performance Day center attendance Day center expansionmitosis or start from scratch Operating Factors/Practices

27. Review all hospital discharges and readmits within 30 days IDT decisions provide medically necessary services to members. With PACE flexibility, value and quality of care co-exist in preventive care Operating Factors/Practices

28. Contractual Services Hospitalrates and utilization significantly affect financial performance Nursing Homeutilization Assisted Living Home health/home care-utilization Specialists – automatically scheduling follow up visits…A PACE physician decision.

29. Total Capital Investment$1M to $5M Operating Margin5% to 15% Break Even6 to 18 months ProgramRevenue intensive for minimal investment Financial Performance

30. Contact Us 1501 Greer Lane Signal Mountain, TN 37377 423.517.0567 423.517.0568 Fax dan.gray@consulting-cds.com www.consulting-cds.com www.npaonline.org