1. W43: Data: Simply Put, It Can’t Be Ignored Presented by: Steven C. Anderson, CPA Senior Manager HW Healthcare Advisors Email: anderson@hwco.com OHCA/OCAL/OCID 2014 Long-Term Care Convention & Expo Columbus, Convention Center April 30, 2014

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3. Agenda What data is available? Cost Report databases PEPPER reports Nursing Home Compare/CMS Five Star MyCare Ohio How is it used by external parties? How can you use it to your advantage? 3

4. Growth of Available Data Concept of “big data” The availability of data is growing exponentially Is there a correlation between seemingly unrelated data? Companies and universities are creating faculty groups focused on “big data” 4

5. “Big Data” It’s all about predictive ability 5

6. “Big Data” and Long-Term Care Can “big data” theories and methods apply to long- term care? Hiring “People analytics” and “robot recruiters” Software to analyze applicants, generally based on personality traits rather than experience “We’re getting to the point where some of our hiring managers don’t even want to interview anymore. They just want to hire the people with the highest scores.” - Xerox HR Manager Government oversight RACs, ZPICs, data mining 6

7. “Big Data” and Long-Term Care Can “big data” theories and methods apply to long- term care? MyCare Ohio A quick 10 minute analysis of the correlation between nursing hours per day and survey deficiencies at G or above: Zero deficiencies: 3.93 nursing hours per day (777 facilities) At least 1 G or above: 3.88 (132 facilities) At least 2 G or above: 3.87 (33 facilities) At least 3 G or above: 3.68 (12 facilities) 4 G or above: 3.74 (3 facilities) MyCare Ohio plans will have access to much more data than any single facility will have Remember, it’s about predictive ability 7

8. Cost Report Databases All Medicaid and Medicare cost reports are public record Medicaid database is available by year from ODM Individual cost reports also available from ODM Medicare is available by fiscal year on CMS’s HCRIS website: http://www.cms.gov/Research-Statistics-Data-and- Systems/Files-for-Order/CostReports/Cost-Reports- by-Fiscal-Year.html Or search “CMS cost reports by fiscal year” and click first link 8

9. Combined with your PEPPER reports, the Medicare database can be useful in being prepared in the case of an audit Focus areas of PEPPER reports: Therapy RUGs with High ADL Non-therapy RUGs with High ADL Change of Therapy assessments Ultrahigh Therapy RUGs Overall Therapy RUGs 90+ Day Episodes of Care CMS is taking a serious look at these focus areas in an effort to reduce improper payments Medicare Cost Reports and PEPPER Reports 9

10. CMS’s concern regarding therapy payments is growing year-by-year Ultra high therapy utilization has grown considerably in recent years National Averages: 16% in 2006 34% in 2009 49% in 2012 Zone Program Integrity Contractors (ZPICs) are very active in the SNF therapy arena Potential kickback schemes Medicare Cost Reports and PEPPER Reports 10

11. Can also be particularly useful in evaluating your margins on an average Medicare day in your facility Can also be used to evaluate your managed care population Ohio averages from fiscal year 2013 Medicare cost reports (including 2012 calendar year cost reports): Medicare Cost Report Database 11

12. Includes all cost reports filed for a given calendar year Extremely useful for benchmarking Statewide average expenses from the 2012 Medicaid cost report database: Medicaid Cost Report Database 12

13. From the 2012 Medicaid cost report database All cost categories over $1.00 per patient day: What can you control? Medicaid Cost Report Database 13

14. Let’s take a closer look at nursing labor What does 1 LPN minute per resident day cost your facility? Statewide average hourly wage for LPNs in 2012 was $20.34 An average 100 bed facility in 2012 had approximately 31,000 days 31,000 LPN minutes = 517 LPN hours 517 LPN hours = $10,500 Add 20% for taxes and benefits and you are looking at $12,600 If this facility is.1 of an hour over the statewide average, impact could be as much as $75,000 with no change in reimbursement Medicaid Cost Report Database 14

15. Average hours per day by wage category in 2012 and compared to prior years (includes all worked and non-worked hours): Medicaid Cost Report Database 15

16. What can you do? Know where your facility stands compared to statewide, peer and competitor averages Expenses Hourly rates Hours per day Documentation to support services Data analysis by RACs, ZPICs, etc. could target your facility Must demonstrate medical necessity to an outsider looking only at the medical records Cost Report Databases 16

17. Created in 2008 to give the public a method to compare nursing homes more easily Complete database is available publically on CMS’s Nursing Home Compare website Not popular with the provider community due to perceived unfairness in the formula However, it can no longer be ignored! Potential residents Hospitals/referral sources MyCare Ohio plans Insurance companies CMS Five-Star Program 17

18. Take advantage of the formula! Evaluates facilities in three different domains Health Inspections Staffing Quality Measures The star ratings for each domain are used to calculate an overall star rating for every nursing facility All domains are important, but it all starts with health inspections CMS Five-Star Program 18

19. Formula looks at the three most recent standard surveys and any complaint surveys within the prior 36 months Points are assigned for each deficiency at Level D or higher Additional points can be added if more than one revisit survey is necessary Health Inspections 19

20. Deficiencies are weighted more heavily for recent surveys Most recent standard survey – 1/2 Next most recent standard survey – 1/3 Third most recent standard survey – 1/6 Complaint survey deficiencies are also weighted Surveys in last 0-12 months – 1/2 Surveys 13-24 months ago – 1/3 Surveys 25-36 months ago – 1/6 Health Inspections 20

21. Health Inspections 21 HWCO.com. HW&o.

22. Facility’s weighted points are compared against state- specific cut lines Cut lines are determined based on percentiles Top 10% get five stars Next 70% get 4, 3 or 2 stars (23.33% each) Bottom 20% get one star Cut lines are updated monthly However, your star rating is only updated when new information about your facility is available Health Inspections 22

23. It sounds obvious, but avoid high level deficiencies A G or higher deficiency can lower the overall star rating one to three stars for up to three years Always be survey ready Talk with your surveyors Obtain outside help if needed IDRs and IIDRs Health Inspection Strategies 23

24. Looks at two factors: RN hours per resident day Total nursing hours per resident day (includes RN, LPN and Aide) Both are case-mix adjusted Staffing is based on the CMS-671 form filled out during the survey Resident census is based on CMS-672 form Includes bed hold residents Staffing Domain 24

25. RN Hours include: Registered Nurses (F41), RN Director of Nurses (F39) and Nurses with Administrative Duties (F40) LPN hours include: Licensed practical/vocational nurses (F42) Nurse Aide hours include: Certified nurse aides (F43), aides in training (F44) and medication aides (F45) Staffing Domain 25

26. Include all productive nursing hours Don’t forget contract employees!! When is an LPN considered an RN? When they do MDS work MDS nurses doing resident assessment work are considered nurses with administrative duties, so they are always included with RN in the Five Star formula, even if they are LPNs Form CMS-671 26

27. Case Mix Adjustment: Hours Adjusted = (Hours Reported/Hours Expected) * (Hours National Average) Hours Reported is based on the CMS-671 Hours Expected is based on nursing minutes from CMS 1995/1997 Staff Time Measurement Studies Residents are grouped based on RUG-III 53 Grouper Sum for each category is divided by number of residents to get hours per day Staffing Domain Calculation 27

28. National averages are based on December 2011 Data: Total Nursing Staff – 4.0309 hours per day RN Staffing –.7472 hours per day Adjusted hours are compared to cut points Cut points are determined on a national basis and were updated in April 2012 Each staffing type is assigned a star rating Overall rating is based on the individual star ratings Staffing Domain Calculation 28

29. Staffing Star Tables 29 HWCO.com. HW&Co.

30. Remember the formula: Hours Adjusted = (Hours Reported/Hours Expected) * (Hours National Average) Staffing Example 30 Results: RN –.651 adjusted hours = 4 stars Total – 3.600 adjusted hours = 2 stars 4 RN stars and 2 total stars = 3 Star staffing rating

31. There are quirks in the formula The question is…can you exploit them? The facility above replaced 5 RNs with 6 STNAs Staffing Example 31 Results: RN -.379 adjusted hours = 3 stars Total – 3.661 adjusted hours = 3 stars 3 RN stars and 3 total stars = 4 Star staffing rating The facility increased an overall star rating while significantly reducing staffing costs ($110K reduction in salaries)

32. Make sure the CMS-671 and CMS-672 are complete and accurate for survey Don’t forget MDS nurses performing resident assessment work go into nurses with administrative duties and are counted as RNs If you know you are at the end of the window, maybe staff up a little? Caution – can be expensive if surveyors take longer than expected In most cases, five star staffing is incredibly expensive to attain, but it can be a useful marketing tool if you are already close The facility in the example would have to spend about $300,000 per year to reach a five star staffing rating Staffing Domain Strategies 32

33. 9 of 18 quality measures are used for calculation Seven long-stay and two short-stay measures 1-100 points are assigned for each quality measure depending on a facility’s percentile Facilities achieving the best score are given 100 points Remaining facilities are given 1-99 points based on their percentile Ratings are based on the three most recent quarters for which data are available Quality Measure Domain 33

34. Long-Stay Residents: Percent of residents whose need for help with activities of daily living has increased Percent of high risk residents with pressure sores Percent of residents who have/had a catheter inserted and left in their bladder Percent of residents who were physically restrained Percent of residents with a urinary tract infection Percent of residents who self-report moderate to severe pain Percent of residents experiencing one or more falls with major injury Quality Measures 34

35. Short-stay residents: Percent of residents with pressure ulcers (sores) that are new or worsened Percent of residents who self-report moderate to severe pain Quality Measures Strategies Proper documentation Accurate reporting of MDS data Education Quality Measures 35

36. MyCare Ohio - Core Quality Measures Plans will be evaluated on various “core quality measures” Potential for monetary sanctions tied to premium payments for not meeting performance standards CMS and Ohio have each developed required measures 36 HWCO.com. HW&Co.

37. Core measures include: Care for older adults Medication review Functional status assessments Pain screenings All-cause hospital readmissions MyCare Ohio - Core Quality Measures 37

38. Long-term care specific measures: Percent of residents: whose ADL need has increased with catheter with physical restraints experiencing one or more falls with major injury with UTI LTC overall balance measure Number of enrollees who did not reside in a NF for more than 100 continuous days as a proportion of total enrollees MyCare Ohio - Core Quality Measures 38

39. Long-term care specific measures: Nursing Facility diversion rate Number of enrollees who lived outside a NF in current year compared to number who lived outside a NF in prior year LTC rebalancing measure Number of enrollees discharged to a community setting from a NF and did not return to NF as a proportion of the number of enrollees who resided in a NF during the prior year LTC transition measure Number of enrollees who were in a NF during the current measurement year, the previous year, or a combination of both years who were discharged to a community setting for at least 9 months during the current measurement year as a proportion of the number of enrollees who resided in a NF during the current measurement year, the previous year, or a combination of both years. MyCare Ohio - Core Quality Measures 39

40. Be prepared! MyCare Ohio will be a highly data driven program Electronic medical records will be extremely useful Plans will probably play nice for the first three years But what happens after that? Will the plans want to contract with your facility? You must be able to show quality: Rehospitalizations Return to community Shorter lengths of stay MyCare Ohio – What can you do? 40

41. AHCA’s LTC Trend Tracker http://www.ahcancal.org/research_data/trendtracker /Pages/default.aspx Includes: Five Star Comparisons Survey and Staffing Discharge to community Rehospitalization measures Quality measures Medicare cost report and utilization reports AHCA LTC Trend Tracker 41

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