SPECIAL EDITOR’S NOTE: Special thanks to Barbara Citarella, MS, RN, RBC, Limited Healthcare & Management, www.rbclimited.com, for writing today’s story on “Home Care and Hospice Preparation for Ebola.” If you are attending the National Association of Home Care and Hospice (NAHC) Annual Meeting & Exposition in Phoenix, AZ on October 19 – 22, 2014, Barbara will present two education sessions at the Annual Meeting. The first session will take place on Sunday, Oct. 19, entitled “How to Prevent Infection Control Breaches,” and the second session will be held on Tuesday, Oct. 21, entitled “How to Identify Home Care and Hospice’s Triggers and Indicators: Crisis Standards of Care.”
As the Ebola outbreak continues to make headlines around the world, much of the focus, guidance and protocol development have been on acute care facilities. But we in home care and hospice need to be prepared also. At this moment in time, chances are slim we will see an acutely ill patient with Ebola, but we cannot rule it out as the situation changes daily. (As of this moment, a second strain of Ebola has been identified in the Congo, which has a 71% mortality rate.) Here are some suggestions that providers can begin implementing now for the current situation. We will update as it changes.
As home care and hospice providers, our role is to prevent and control the spread of the Ebola virus while protecting our staff and patients.
Protecting Healthcare Workers:
The Centers for Medicare & Medicaid Services (CMS), Survey and Certification Group has issued a memo that reiterates its policy on the timing of initial surveys for providers/suppliers who reject assignment when an acquisition of another provider/supplier organization occurs.
When an acquisition has occurred, CMS automatically assigns the existing Medicare provider agreement or supplier approval to the new owner. Automatic assignment means uninterrupted participation of the acquired provider or supplier in the Medicare program. There is also no required survey of the provider or supplier as a result of the acquisition.
However, new owners have the option to reject automatic assignment, resulting in termination of the prior Medicare agreement. Generally, rejecting assignment precludes the buyer from having successor liability for Medicare overpayments or underpayments. However, it also means that there has been a voluntary termination of the existing Medicare provider agreement. If the new owner rejects assignment, the provider/supplier must be treated as an initial applicant for participation in Medicare. Like all initial applicants the provider/supplier will experience a period with no Medicare payments.
Given the lead time normally required to schedule and prepare for a full survey, if an initial survey takes place shortly after the acquisition date, for example 14 days after the effective date of the acquisition, it suggest that the survey may have been unannounced. CMS is requiring that when a State Survey Agency (SA) conducts an initial certification survey of an applicant that acquired a provider/supplier but rejected assignment, the Region Office must review the case carefully to determine whether the SA deviated from CMS workload priorities as well as the SA’s typical practice for initial applicants.
The memo also reiterates that the effective date for Medicare participation of the provider under its new owner is established in the same manner as for any initial applicant, that is, after a prospective provider/supplier demonstrates it meets all Federal requirements. The effective date is not the date of the acquisition of the provider or supplier. Rather, the effective date of the Medicare agreement is the date when the last applicable Federal requirement has been met.
To view the Survey and Certification Memo click here
The following article comes from an upcoming CARING Magazine piece written by CARING’s Managing Editor Lisa Yarkony. CARING is published by the National Association for Home Care and Hospice.
A new rule from the Labor Department decrees overtime pay for home care workers, a move that may ruin Jonathan’s life. Jonathan is disabled and depends on a ventilator to breathe. He has three regular caregivers who cover most of his shifts, and two of them work the majority of hours. He has had these trusted caregivers for over 20 years, but he may soon be seeing some strange, new faces in his home. Because they aren’t family and don’t live with him, their hours will be capped at 40 under the rule. This means that Jonathan will need to hire additional caregivers and the earnings for his current caregivers will be cut. Jonathan is worried that he won’t be able to find caregivers who are as skilled when their weekly pay check is less than half of what he’s been paying his current ones. If Jonathan can’t make it work, he knows he will wind up in a nursing home … or worse.
And he isn’t the only one who fears the new rule despite cheers that the “White House is giving 2 million health care workers a raise,” as the Washington Post gleefully declared. The Cato Institute was more inclined to jeer at the rule requiring time-and-a-half overtime pay for home care workers who put in more than 40 hours a week serving the disabled and aged. “This is a terrible move,” the institute sneered in no uncertain terms. “The fear and anger it has stirred is coming not just from commercial employment agencies, as some careless media accounts might leave you to believe, but above all from elderly and disabled persons and their families and loved ones who know that home attendant services are often the only alternative to institutional and nursing home care.”
But they will have less access to this valued option under the new rule, according to Andrea Devoti, chairman of the board of directors at the National Association for Home Care & Hospice (NAHC). Devoti said the changes would force home care companies to employ more workers part time because Medicaid payment rates and consumers cannot bear higher costs. “Caregivers who were hired full time will be shifted to part time,” she explained. “What it means for aides and caregivers is less work and reduced compensation. Under these circumstances, there is no way to view the rule as a boon to either patients, their families, or to federal and state governments. It certainly will not encourage more people to take on the difficult job of personal care assistant or home health aide. In the end, it will cost individuals, home health agencies, and governments billions more. Yet the end result will be less care, not more,” a consequence that the Labor Department blithely ignored when it changed a rule that dates back 39 years.
Home care aides have been exempt from federal wage laws since 1974 when they were placed in the same “companionship services” category as baby sitters. But that will change when the rule goes into in effect in 2015, a date meant to give states and agencies time to adjust to all the changes in store. The biggest change is that third-party employers, such as home care agencies, will no longer be able to claim the exemption for workers who provide companionship services. Another change will be to narrow the scope of the term “companionship services” and limit the care-related services aides can perform each week. According to the Labor Department, activities like meal preparation, bathing, and driving should be secondary to the “fellowship and protection” that companions also provide. If aides spend more than 20 percent of total hours performing care services in a given workweek, agencies will be required to give them overtime pay. Consumers alone can claim the exemption, but they, too, will have to pay overtime to workers who devote more than 20 percent of their time to giving care — instead of crucial activities like playing cards.
The stated intent of these changes is to give home care workers the same legal protections as most other employees. “Health care workers are no longer treated like teenage babysitters performing casual employment under this final rule,” said Labor Secretary Thomas Perez. “They are treated with dignity and their hard work is indeed rewarded,” — as it should be. No one disputes that home care workers are essential to this nation’s future. We should do everything possible to show home health aides and personal care assistants that they are respected and valued.
Yet the new rule will have the opposite effect, Devoti points out based on the facts. “The experiences in states that previously eliminated the companionship exemption indicate that workers get fewer hours and less total pay,” she explained. “The reason for this is that most home care is paid for under government programs, such as Medicaid, that set payment rates. Home care agencies have no way to cover the increase in costs for overtime compensation, so they can only limit their caregivers’ hours,” a prospect that our nation’s largest state has already discussed. “Earlier this year California Governor Jerry Brown suggested that the state may need to prohibit any caregivers funded under its Medi-Cal program from working over eight hours in a day and over 40 hours per week to avoid the added cost of overtime pay.”
Do these valued workers deserve to be paid fairly for their work? In theory, yes, Devoti would heartily agree. “But the central problem with this rule change,” she says, “is that it is occurring in isolation from other changes that are needed to make it work. There is no concurrent change in Medicaid rules that would require a revision in payment rates to cover this cost. Also, there is no support offered to the many aged and disabled persons who are on limited incomes yet pay out of pocket for the home care services that will let them stay out of nursing homes and other institutions. We support fair compensation to the hardworking caregivers who assist the most vulnerable people in our country. But that added pay does not just come out of thin air,” Devoti said, expressing NAHC’s long-term stand against changes to the rule.
Since the 1990s, NAHC has fought numerous attempts to narrow the scope of the companionship services exemption, mainly by limiting the exemption to cover only those home care workers employed directly by consumers. NAHC formed a coalition of stakeholders made up of the Private Care Association, representing caregiver registries; the Home Care Association of America, representing private duty home care; the International Franchise Association; and the National Federation of Independent Business. NAHC has met with the secretary of the Labor Department and garnered bipartisan support for its position from both the U.S. Senate and House. It has testified at Congressional hearings on bills to change the rule and on two occasions, it has gone before the Supreme Court, where it played a role in the justices’ decision to uphold the rule. Last year, NAHC and its affiliate Private Duty Home Care Association of America also conducted a national survey of 1,500 home care agencies on the impact of the rule.
The survey results showed that ending the overtime exemption for home care workers will have serious negative consequences for workers, clients/patients, and home care companies. The major impact on workers is the cut in hours triggered by the home care companies’ efforts to control costs. Nearly 63 percent of the respondents who had to pay overtime under state law said they restricted overtime hours. More than 86 percent of the companies that will face a new overtime requirement under the rule said they would restrict the hours worked by staff to prevent overtime costs. And workers won’t be the only ones to lose out. The survey showed that 81.8 percent of companies expect to increase their private pay billing charges and 23.7 percent expected to scale back the availability of care. The result will be less continuity of care brought on by the need to assign multiple caregivers to control overtime costs. In response, some respondents remarked, clients would hire workers “under the table,” where they would lose the quality control and oversight that agency workers provide.
Patients would suffer, agreed the national associations for the state Medicaid, Aging and Disability, and Developmental Disability directors who pointed to the adverse impact the new rule would have on people who received Medicaid home and community-based care. “We are deeply disappointed,” they stated, “that the Administration ultimately failed to adopt a rule that balances fair compensation for home care workers with the equally critical goal of assuring the ability of older adults and people with disabilities to maintain their independence at home and in their communities. Implementation of this rule will require additional funding and may result in the cost of supporting people in their homes becoming prohibitive.”
If that happens, federal programs like Medicaid will end up paying a great deal more with no improvement in access to care or in its quality, Devoti said. “Like the disability community, we believe it is better policy to affirm the decision of the U.S. Supreme Court which unanimously sustained the validity of the companionship exemption as it had been applied for over 35 years. We believe there is much that Congress can do to put this matter right — which means helping people to receive the quality care they need and at the same time giving caregivers a fair and honorable wage. The federal wage and hour laws were written when most health care was received in institutional settings. Today more and more care is delivered in the home setting. These laws need to be reevaluated by Congress in total rather than piecemeal fashion. The central focus should always be what is best for the people needing care.”
Given all that’s at stake, NAHC, along with its affiliates the Private Duty Homecare Association and the National Council on Medicaid Home Care, is exploring further advocacy efforts on the rule change, including federal court litigation and congressional legislation. They already have support from two members of the House Education and Workforce Committee who pointed to estimates showing the new rule could lead to a $2 billion increase in health care costs over the next decade. “Faced with higher costs, some individuals will have no choice but to leave their homes and enter institutional care,” said Committee Chairman John Kline (R-MN) and Rep. Tim Walberg (R-MI), who chairs the panel’s subcommittee on Workforce Protections.
Rep. Jim Langevin (D-RI) also came out against the rule in a recent interview with NAHC President Val J. Halamandaris. Langevin is a quadriplegic who has received home care for most of his life. He’s also an expert on issues involved in the rule change, and he worries about the consequences it will produce. “I’m concerned,” he said, “both for the people receiving the care and for the people who are giving the care. I believe and I value greatly the services of the people who have assisted me over the years. But I understand that without greater reimbursement reform and more resources, it will be very difficult to see a change in the rule.” And the results could be grim, he warned, if the rule does go into effect. “I think you would potentially see less care for the persons who need it and hours cut back for the caregivers who provide it. Neither patients nor caregivers would benefit from the rule change; it might actually put them both at a disadvantage,” Langevin said. And many aged and disabled share his concerns. They know this ruinous rule could rob them of the chance to have independent lives at home.
The National Association for Home Care & Hospice (NAHC) recently published a white paper entitled, Rate Rebasing in Medicare Home Health Services: A Review of the 2014 HHPPS Proposed Rate Rule, which offers home health care providers an in-depth look at how CMS’ proposed rebasing rules will affect them. Below are some excerpts from the white paper:
The Patient Protection and Affordable Care Act of 2010 (PPACA) requires that Medicare reset or rebase the home health services episode payment rate beginning in 2014 and phased-in proportionately over a four (4) year period. The legislative mandate provides some direction to Medicare on the factors required to be considered in the calculation of the rebased payment rate.
MedPAC recommended that home health services payment rates be rebased because of significant changes in the nature of the services provided during the 60 episode of care along with what it perceived to be “overpayments” for services evidenced by continuing double-digit Medicare margins in comparison to costs. The average episode of care in the base year used for rate setting involved 37 visits primarily made up of nursing and home health aide services while the current care utilization in an episode is less than 20 visits with few aide services and significantly more therapy visits. From 2001 through 2011, MedPAC’s calculation of margins shows freestanding HHAs with an average ranging from 16-18%
On June 27, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that sets out the proposed rates for home health services in 2014 along with the methodology used by CMS in calculating such.
While the proposed rule states that the impact on home health services spending would be a reduction of $290 million in CY 2014, in actuality it is far greater as the proposal, if finalized, would trigger four consecutive years of 3.5% reductions in the primary payment rates, totaling a 14% reduction by 2017. That level of rate cuts is estimated to reduce Medicare home health spending by well in excess of $25 billion over the next ten years.
The proposed rule is open for the submission of written public comments through August 26, 2014. This White Paper offers a report on the makeup of the proposed rule, an impact analysis, and a critical review of its shortcomings.
The Proposed Rule
The CMS proposed rule combines a rebasing of the base-level rates for normal episodes, per visit payments for Low Utilization Payment Adjustment (LUPA) episodes, and the add-on payments for Non- Routine Supplies (NRS) along with a recalibration of the case-mix weights assigned to each of the categories within the case-mix adjuster.
This presents a complication in an initial review as it makes the 2014 proposed rates seem much greater than the 2013 rates. However, the recalibration is proposed in a budget neutral manner by reducing each of the case-mix categories by 26.02%. (Alternatively, by dividing the case mix weights by 1.3517 which CMS states is the average weight in early 2012).
The Proposed Rates
The proposed rated for 2014 reflect a 2.4 Market Basket Index adjustment to reflect estimate costs increases in 2014. In addition, these rates reflect a rebasing adjustment of -3.5% for episodes, +3.5% for per visit LUPA rates, and -2.58% for Non-Routine Supplies.
Impact of Proposed 2014 HHPPS Rates
CMS estimates that the overall impact of the proposed rate rebasing and other rate changes is a reduction in Medicare spending of $290 million in 2014. That represents a decrease of approximately 1.5% in comparison to estimated 2013 payments.
The impact analysis performed by NAHC demonstrates that the continued delivery of home health services throughout the country is at high risk if the proposed rule is finalized. NAHC estimates that by 2017, 72.29% of all HHAs will be paid less than the cost of care and that the average Medicare margin will be -9.77%.
This estimate come by way of reviewing over 8,200 FYE 2011 cost reports from all types of HHAs from all over the country. In Alaska (91.7%), Hawaii (100%), New York (89.9%) and Oregon (87.2%) in can be expected that the entire home health infrastructure is at risk of crumbling to nothing. That is certain to lead to an access to care crisis and increased Medicare spending as patients seek care in the only viable option remaining: high cost care settings.
Rate rebasing is not a simple task for CMS. It has serious consequences to Medicare, providers of care and the patients served. As such, it must be performed carefully and correctly.
The CMS proposal fails on numerous counts, but most notably in the absence of any consideration as to its impact on access to care. The proposal should be abandoned and replaced with one that puts care access first, considers all methods of calculating rates, recognizes all of the current costs of care, and includes an appropriate margin to secure operating capital and a fair return on investment to allow for continued modernization of home health care for today’s health care delivery innovations.
The full text of the white paper is available here.
Health care merger and acquisition activity strengthened in the second quarter of 2013. (View full video: http://www.levinassociates.com/pr2013/pr1307mamq2.) Deal volume was up 10% versus the previous quarter, with 223 deals announced. However, the quarter underperformed (-15%) in comparison with the same quarter a year ago, according to The Health Care M&A Report. Deal value rose significantly compared with the previous quarter. The preliminary total for health care M&A activity in the second quarter is $52.6 billion, up nearly 252%, compared with the $14.9 billion spent in Q1:13. Deal value held steady compared with the second quarter of 2012, when buyers committed $52.3 billion.
|The Health Care M&A Market – Deal Volume by Sector|
|Behavioral Health Care||4||7||-43%||4||0%|
|Home Health and Hospice||10||9||11%||6||67%|
|Laboratories, MRI and Dialysis||10||8||25%||10||0%|
|Physician Medical Groups||17||12||42%||24||-29%|
Source: Irving Levin Associates, Inc., July 2013
Three sectors posted declines compared with the previous quarter: Behavioral Health Care (-43%), eHealth (-63%) and Hospitals (-32%). In the Behavioral Health sector, the number of M&A deals is typically fewer than 10 announced per quarter, so even a minor change in the number of deals can result in exaggerated swings. The eHealth sector, however, is seeing a definite slowdown from the M&A frenzy that occurred in Q2:12, when 24 deals were announced. Since then, deal-making activity has tapered off: only six deals were announced in the most recent quarter. In the Hospital sector, economic pressures brought on by weakening inpatient volumes and Medicare reimbursement reductions have created an atmosphere of uncertainty, particularly for non-profits. “Survival of the biggest” is one motivation behind big hospital deals such as Tenet Healthcare Corp.’s (NYSE: THC) $4.3 billion acquisition of Vanguard Health Systems (NYSE: VHS).
The health care services sector still managed to post a 16% gain over Q1:13, with 145 deals announced, and eked out a 1% increase versus Q2:12. The health care technology sector remained steady, with 78 deals announced in each quarter. Biotechnology, Pharmaceuticals and Medical Devices each showed an uptick in M&A activity, while eHealth held the sector back from greater gains.
“The health care merger and acquisition market is held hostage to the onset of the Affordable Care Act,” said Lisa E. Phillips, editor of The Health Care M&A Report. “Some services sectors, such as Home Health and Hospice, Long-Term Care, Physician Medical Groups and Rehabilitation, are seeing continued activity, thanks to the move toward Accountable Care Organizations.”
The Biotechnology sector experienced a strong rebound, up 55%, with 17 deals announced in the second quarter. Eleven transactions were initiated by other biotech companies, and five acquirers were pharmaceutical companies hoping to bolster their product pipelines. One private equity firm, Ares Life Sciences, purchased a biotech company, Antigen Laboratories.
Pharmaceutical companies were also busy buying other pharma companies, or certain assets of other pharmas. Fifteen of the 30 announced deals in this sector involved the rights to drugs still in clinical trials, rights to commercialize drugs in new geographic markets or the intellectual property rights to promising early-stage drugs.
“Expect the Biotech and Pharmaceuticals sector to stay active,” Ms. Phillips said. “Investors are paying a lot more attention, thanks to the surge in the biotech IPO market this year. Valuations are a bit crazy right now, with Onyx Pharmaceuticals looking for more than $120 per share. How that deal plays out will set the tone for the healthcare technology sector through the end of the year.”
For more information on The Health Care M&A Information Source or The Health Care M&A Report, or for a membership to any of Irving Levin Associates’ subscriptions, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at www.levinassociates.com. This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition databases, on the health care and senior housing markets.
Irving Levin Associates, Inc.
Lisa E. Phillips, Editor
Stephen M. Monroe, Partner
Reposted from http://www.businesswire.com
Florida’s statewide Medicaid managed-care gamble gets officially under way on Thursday, beginning with thousands of the state’s most vulnerable clients: low-income seniors too sick to get by without help.
If all goes according to plan, taxpayers will save money and frail elders will get preventive and well-coordinated care. They’ll have the medical and social support they need to remain in their own homes or in the community, rather than in a nursing home. (more…)
As many kids are starting back to school and calendars begin filling up, it’s time to start marking your dates with the Home Health Quality Improvement (HHQI) National Campaign’s upcoming events. Hopefully everyone has downloaded the Immunization and Infection Control Best Practice Intervention Package or ‘BPIP’ that was released in June. This will be necessary to ensure your immunization program is following best practices this flu season.
Here’s a list of upcoming events for you to “Save the Dates”: (more…)
The Centers for Medicare and Medicaid Services (CMS) recently announced a temporary and targeted moratorium on the approval of new home health agencies in Miami-Dade and Monroe counties. The moratorium takes effect on July 30, 2013.
According to CMS, the goal of the temporary moratoria is to fight fraud and safeguard taxpayer dollars, while ensuring patient access to care. Authority to impose such moratoria was included in the Affordable Care Act, and CMS is exercising this authority for the first time. (more…)
The Centers for Medicare & Medicaid Services have announced a temporary moratorium on the enrollment of new home health provider enrollments in Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) in fraud “hot spot” areas of the country. The goal of the temporary moratorium is to fight fraud and safeguard taxpayer dollars, while ensuring patient access to care. Authority to impose such moratoria was included in the Affordable Care Act, and CMS is exercising this authority for the first time. (more…)