Home Care Association of New York State Managed Care Reforms and Strategic Home Care Provider Positioning in a DSRIP / PPS Structure September 9, 2016 Gerald J. Archibald, CPA, Partner Tax-Exempt Practice Leader, The Bonadio Group 315.748.0939 / garchibald@bonadio.com
Objectives for Today • A brief overview of the NYS funding challenges facing all Home Care service providers • The opportunities and challenges presented by the DSRIP / PPS Reform Initiative • Discussion of Value Based Payments, the VBP Road Map, and Integrated Delivery Networks • Discussion of Regional Provider Networks, like Independent Provider Associations and CBO Provider Networks, and why they are beneficial • Top 10 things you need to know about Managed Care 2 2
Objectives for Today • Under the DSRIP / PPS Initiative, New York State is attempting a major transformation towards integration of Primary Care and specialty service providers. • To identify, discuss, and present the challenge of developing effective linkages between Home Care providers and the following vulnerable service providers under a Managed Care Reform model: Frail Elderly o Long-Term Care (at home or facility-based) o Substance Abuse o Mental Health o At Risk Youth o Developmentally Disabled o • These reform initiatives represent a paradigm shift in the New York State Medicaid program, which is close to $60 billion a year 3 3
Background and Introduction • I am a member of the Value Based Payment Reform Subcommittee of NYS DOH • The VBP Road Map represents a revolutionary reform in Medicaid payment methodologies • I am also a member of the Transformation Panel, responsible for designing how Medicaid Managed Care reforms are to be implemented for individuals with disabilities • The VBP Road Map was approved by CMS in August 2015 and amended March 2016 • The VBP Road Map has required Community-Based service providers, including Home Care, to initiate transformational change • Most significant question of all is the expected but difficult integration between MCO Managed Care contracts and the DSRIP / PPS initiative 4 4
The VBP Road Map – Table of Contents • Can be found at: https://www.health.ny.gov/health_care/medicaid/redesign/ o dsrip/docs/vbp_roadmap_final.pdf • DOH objective is to reduce fee for service payments so that providers are “rewarded” to the extent of 80-90% of provider Medicaid revenue based on Value-Based Payments First level of VBP is at the MCO / NYS contract o Sustainable delivery reform requires appropriate and o viable payment reform Starting point: how should an integrated delivery system o function from the consumer/patient’s perspective? 5 5
The VBP Road Map – Table of Contents • DOH objective is to reduce fee for service payments so that providers are “rewarded” to the extent of 80- 90% of provider Medicaid revenue based on Value- Based Payments (Continued) Facilitating the Development of an Optimally o Functioning Delivery System through Value-Based Payments: A Variety of Options Total care for the total population Integrated Primary Care Bundles of care Total care for special needs subpopulations Possible contracting combinations From Shared Savings towards Assuming Risk Attribution 6 6
Challenges Facing Home Care and All Community-Based Service Providers The five-year DSRIP / PPS State Medicaid Reform 1) initiated in April 2015 Implementation of Health Homes, Case 2) Management, and Conflict Free Case Management demanded by the Center for Medicare and Medicaid Services – CMS (Federal Government) The Managed Long Term Care (MLTC) initiative has 3) had and will continue to have a significant impact on independent Home Care providers Certified Community Behavioral Health Centers – 4) Changing Service Delivery Models – integration of Primary Care with specialty services (e.g., BH) The DOH Initiative to Transition the entire Medicaid 5) population with negotiated rates coupled with Value Based Payments (VBP) incentives and penalties 7 7
Challenges Facing Home Care and All Community-Based Service Providers Transformation of service delivery models, focused 6) on Medicaid, will ultimately have an impact on all New York State funding sources The primary management and operating 7) challenges are / will be: o Balancing salary and fringe benefit costs with available funding, in light of minimum wage increases and salary compression o Transition of service delivery modalities will result in an increased need for staff training and education o Transition to Pay 4 Performance (P4P / VBP) models of funding services based on achieving desirable targets, service outcomes, and quality measures 8 8
Challenges Facing Home Care and All Community-Based Service Providers The primary management and operating challenges 7) are / will be (continued): o Recruitment, retention, and training of qualified care givers in a highly competitive and tight labor market. o The new service modalities and payment methodologies increase the need for integrated technology sophistication. o For example, Electronic Health Records (EHR / EMR) are an absolute requirement and information accumulated must be responsive to P4P / VBP targeted service outcomes and quality measures. o Payment for transportation costs and travel downtime will continue to plague the Home Care service sector. 9 9
The Most Critical Assessment Criteria • Never lose sight of the fact that quality of care, positive service outcomes, and cost effective delivery of services are the primary focus of NYS DOH and the Federal Government 10 10
What Have We Learned So Far? 1) Since the Medicaid Redesign Team issued its 79 recommendations in 2012, the NYS DOH has been implementing those recommendations. 2) Almost all of the recommendations being implemented are being characterized under the matter of Medicaid Managed Care Reform Initiatives (MMCRI). 3) Almost all reforms initiated to date have involved paying providers at their published Medicaid rate, subject to future negotiated rates. 4) MLTC implementation, through a state-wide effort, has created service delivery, access, and payment issues. 5) As you know, most of the MLTC / Home Care reforms are being dictated / driven by the Federal Government in the name of CMS. 6) Medicaid is approaching $60 billion annually in New York State, and Medicare is approaching $50 billion annually in New York State. 11 11
What Have We Learned So Far? 7) The primary objective of NYS DOH is to transfer its financial risk for Medicaid spending growth from NYS to both for-profit and not-for-profit Mainstream Insurance Companies. 8) The transfer of financial risk is accomplished by Capitation, Sub-Capitation, Bundled Payments, Value Based Payments, Service Carve-Outs, and More! 9) The one constant in Home Care, as well as Long Term Care, continues to be maximizing your private pay revenue to close the gap resulting from inadequate MLTC / MCO reimbursement amounts. 10) Fee For Service reimbursement is now perceived by government regulators and some healthcare industry experts to be an archaic and dying methodology that emphasizes Volume over Value. That is, volume of services provided is less important than the value / outcomes derived. 11) The primary goal of an insurance company is to generate profits and/or additional reserves while paying providers the least amount they will contractually agree to. The insurance industry also has to remain fiscally viable. 12 12
Be Careful Whenever Government Tries to Reform Healthcare • Government reform = increased risk of compliance violations • Government reform = more complexity in your contracting terms and conditions, resulting in increased compliance risk • Government reform = more organizations / regulators will be looking over your shoulder and wanting to audit your compliance with “their” terms and conditions • Government reform = represents a “Transformational Change” required in your historical approach to your Compliance Program, Work Plan, training initiatives, and audit routines 13 13
Be Careful Whenever Government Tries to Reform Healthcare • They have been trying to do it continuously since 1965, with the enactment of Medicare and Medicaid (Titles XVIII and XIX) • NYS Medicaid reforms since 2012 have resulted in an explosion of plans and service delivery offerings that I refer to as a “Ball of Confusion” • Repealing Obamacare (aka Affordable Care Act) will never happen, in my opinion • It is important to note that government-sponsored programs represent almost 75% of total healthcare spending – that is, Medicare, Medicaid, and Obamacare • However, you can be assured that Reform Initiatives will continue unabated for decades to come 14 14
Explosion of Plans / Service Delivery Offerings = Increased Compliance Risk • Will complicate Agency Management and the Compliance Officer’s duties and responsibilities exponentially • For example: Managed Long Term Care Plans (MLTC) – Nursing o Homes / Home Care Performing Provider Systems (PPS) o Independent Provider Associations (IPA) o Program for All-Inclusive Care to the Elderly (PACE) o Health Homes (HH) o Medicare Shared Savings Plans (MSSP) o Accountable Care Organizations (ACO) o Health and Recovery Plans (HARP / Behavioral Health) o Fully Integrated Dual Advantage Programs (FIDA) o Patient Centered Medical Homes (PCMH) o Special Needs Plans (SNP) o 15 Service Carve-Outs, Bundled Payments, and More! o 15
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