Pre-Conference 2 701. Home Health Summer Camp 2013 · Pre-Conference 2 701. Home Health Summer Camp 2013 Medicare Cost Report July 28, 2013 3 NAHC Cost Report Data Compendium (All

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Presented by

Tom Boyd, MBA, CFE Melinda Gaboury, COS-C Principal Chief Executive Officer Boyd & Nicholas, Inc. Healthcare Provider Solutions, Inc. Rohnert Park, CA Nashville, TN [email protected] [email protected] M. Aaron Little, CPA William Simione, III Director Principal BKD, LLP Simione Healthcare Consultants, LLC Springfield, MO Hamden, CT [email protected] [email protected]

Agenda

Sunday, July 28, 2013, 9:00 a.m. – 3:00 p.m.

9:00 a.m. Current Medicare reimbursement issues (Gaboury) 9:25 a.m. Billing oversight and compliance processes (Gaboury) 10:20 a.m. Break 10:35 a.m. Using the Medicare cost report as a management tool (Boyd) 11:05 a.m. Essential management benchmarking data (Little) 12:00 p.m. Lunch 1:00 p.m. Reporting Medicare organizational changes (Boyd) 1:15 p.m. Achieving compliance in organizational changes (Simione) 2:00 p.m. Feasibility analysis practices for business expansion (Simione) 3:00 p.m. Adjourn

Pre-Conference 2701. Home Health Summer Camp 2013Current Medicare Reimbursement Issues &Billing Oversight & Compliance Processes

July 28, 2013

1

Current Reimbursement Issues

Home Health PreConference 2013

Base rate of $2,860.20 (increase from $2,137.73) BUT– CMS’s proposed rebasing changes are the most complex factor of the new

rule. As stated in the proposed regulation: “rebasing must be phased-in over a four-year period in equal increments.” So, starting with the 2014 proposed HHPPS rule, CMS has chosen to begin this four-year process with a -3.5 percent rebasing adjustment in 2014. This 3.5 percent reduction is based on CMS projection of an average home health margin of 13.63 percent in 2013 (the difference between the average national episode revenue in home health and the average national episode cost) using 2011 Cost Report Data. This data appears to be skewed and is under intense review.

– Labor Rate Increase from 77.082 to 78.535 percent changing the non-labor rate from 22.918 to 21.465 (good for agencies whose wage index is 1.0 or greater)

Proposed 2014 Payment RatesHome Health


July 28, 2013

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Proposed 2014 Payment RatesHome Health

• CMS arrived at its CY 2014 proposed case mix weightsby dividing the CY 2013 case mix weights (which arethe same weights as those finalized in the CY 2012rulemaking) by 1.3517.

• To offset the effect of re-setting the case mix weightssuch that the average is 1.00, CMS increased theproposed CY 2014 national, standardized 60-dayepisodic payment rate by the same factor used todecrease the weights (1.3517).

• The proposed rule suggests that the rebasing of theHHPPS payment rates and case mix weights do notrequire a “case-mix creep” adjustment.

Case Mix Weight Changes 2012

Weight Weight Variance

2011 2012 In Payment

1AFKS 0.5827 0.8186 473.27

1AFLS 0.8507 0.9793 229.46

1AFMS 1.0599 1.1401 114.75

2BHLS 2.2074 2.2145 -103.02

2BHMS 2.3445 2.4691 140.91

2CFKS 2.1524 2.0453 -344.30

5CFKS 3.0835 2.7140 -955.30

5CGKS 3.2730 2.8712 -1034.53

5CHKS 3.4872 3.0014 -1225.63


July 28, 2013

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Case Mix Weight PROPOSED Changes 2014

Weight Weight Proposed

2011 2012 2014

1AFKS 0.5827 0.8186 0.6056

1AFLS 0.8507 0.9793 0.7245

1AFMS 1.0599 1.1401 0.8435

2BHLS 2.2074 2.2145 1.6383

2BHMS 2.3445 2.4691 1.8267

2CFKS 2.1524 2.0453 1.5131

5CFKS 3.0835 2.7140 2.0078

5CGKS 3.2730 2.8712 2.1241

5CHKS 3.4872 3.0014 2.2205

FINAL Proposed2012 2013 2014

HHA $ 51.13 $ 51.79 $ 54.91MSS $180.96 $183.31 $194.34OT $124.26 $125.88 $133.46PT $123.43 $125.03 $132.56SN $112.88 $114.35 $121.23SLP $134.12 $135.86 $144.03

LUPA


July 28, 2013

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NonroutineMedical Supplies

Severity Level Points2013 – FINAL

Urban

2014PROPOSED

Urban

1 0 $14.56 $14.53

2 1 – 14 $52.68 $52.45

3 15 – 27 $144.16 $143.82

4 28 – 48 $214.19 $213.67

5 49 – 98 $330.29 $329.49

6 99+ $568.06 $566.69

Non-Routine Medical SuppliesFINAL - 2013

Case-Mix Reform - 2014

• Proposed case-mix refinement–Expanded set of case-mix variables

• 153 case mix groups – weights changed on all

• CMS states that Category 1 codes likely reflect conditions thepatient had prior to the home health admission (for example,while being treated in a hospital setting). Conditions codedunder this category are anticipated to have progressed to a lessacute state, or are completely resolved for the patient to becared for in the home setting, thus meaning that anotherdiagnosis code would likely have been a more accuratereflection of the patient’s condition in the home.


July 28, 2013

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Case-Mix Reform - 2014

• CMS proposes to remove Category 2 codes from the HHPPSGrouper based upon clinical judgment that the condition wouldnot require home health intervention, would not impact the homehealth plan of care (POC), or would not result in additionalresource use when providing home health services to thepatient.

• There are 170 ICD-9-CM codes that CMS proposes to removefrom the HHPPS grouper, effective January 1, 2014.

• Finally, the proposed rule confirms that ICD-10-CM diagnosiscodes are set to be adopted by October 1, 2014 for use byentities covered under the Health Insurance Portability andAccountability Act of 1996 (HIPAA), such as home healthagencies.

Therapy – FINAL 2013

• CMS proposes that if a qualified therapist missed a reassessment visit, therapy coverage would resume with the visit during which the qualified therapist completed the late reassessment, not the visit after the therapist completed late reassessment.

• CMS proposes that if multiple therapy disciplines are involved, if the required reassessment visit was missed for any one of the therapy disciplines for which therapy services were being provided, therapy coverage would cease only for that particular therapy discipline.

• CMS proposes to revise the assessment timing for individuals receiving more than one type of therapy. The reassessment could occur during the 11th, 12th, or 13th

visit for the required 13th visit reassessment and on the 17th, 18th, or 19th visit for the required 19th visit reassessment.


July 28, 2013

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New Codes for Billing HHJuly 2013

EFFECTIVE DATE: July 1, 2013 (HH episodes beginning on or after this date.)

IMPLEMENTATION DATE: July 1, 2013

• HHAs must report where home health services were provided on home health claims, using the Q codes:

– Q5001 - HOME

– Q5002 – ASSISTED LIVING FACILITY

– Q5009 – NOT OTHERWISE SPECIFIED

Billing Compliance Oversight

Home Health PreConference 2013


July 28, 2013

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Billing Performance

Job Descriptions: Do they exist for all positions? Do Employees have a copy? Do Employees truly understand what they are responsible for? Are positions over/under-staffed?

Develop measures to monitor staff performance Review measures in team meetings Set reasonable expectations/goals Require staff to be accountableDeal with low performanceSet limits for time allowed to perform at these levels

Reward high performance

Who Does What?

Billers – Collectors – Cash Posters –Managers/SupervisorsDo you have separate designations or does

one person wear all four hats?Does each employee understand his/her

responsibilities?Who is the leader/manager/supervisor?Is there required reporting in place to monitor

progress?


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Prebilling Audit

Audit 100% of Charts Catch Compliance Issues Catch Issues Associated w/PPS Avoid unnecessary denials

Who should conduct these audits? Billing or Clerical Staff are sufficient – it

is not a clinical audit

When do we conduct these audits?End of episode – no need to audit prior to

end of episode or dischargeWhat do you need for audit?

Patient ChartAudit ToolTrial Bill (Pre-bill)

Prebilling Audit


July 28, 2013

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Face To Face Compliance Quick Review of 485 All Blanks Completed, Signed & Dated by Clinician Signed & Dated by Physician Supplies ordered on 485

Supplemental Orders Signed & Dated by Physician Clinical Note for every visit Frequency & Duration Match Visits provided Therapy ReAssessment Visits Correct G code usage Supplies billed correctly OASIS transmitted to the state

Prebilling Audit

Recommend that Agencies do the following: Send Billers/Collectors to Billing Workshops at least once per

year Join List Serves/Participate in Webinars/Teleconferences

frequently Have someone in agency closely monitor the Medicare MAC

websites/newsletters Update PreBilling Audit Tools as necessary Have peers within agency randomly pull prebilling audits and

double check the accuracy Billing/Reimbursement Review by Third Party at least every

two years

Recommendations


July 28, 2013

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Faculty Contact Info

Melinda A. Gaboury, COS-CChief Financial Officer

Healthcare Provider Solutions, Inc.810 Royal Parkway, Suite 200

Nashville, TN 37214615-399-7499

info@healthcareprovidersolutions.comwww.healthcareprovidersolutions.com

Pre-Conference 2701. Home Health Summer Camp 2013Medicare Cost Report

July 28, 2013

1

NAHC Financial Management Conference & Exposition

“Using the Medicare Cost Report for Management Information, Benchmarking

and Competitive Knowledge”

July 28, 2013

701. Home Health Summer Camp 2013

Presented by: Thomas E. Boyd, Principal Boyd & Nicholas, Inc.

Benchmarking & Productivity

Evaluate Your Data

Illuminate the Results

Improve Your Business


July 28, 2013

2

THE MEDICARE COST REPORT CAN BE USED FOR BENCHMARKING DATA

A COMPLETED AND ACCURATE MEDICARE COST REPORT will permit an organization to benchmark their PPS data against the information provided by ALL the cost reports for the nation and for their state.

Management Use of Cost Report

The MCR is NOT just a “compliance” requirement thatmust be filed with CMS but can be a valuable tool toassist in budgeting, pricing and strategic analysis.

Direct and indirect costs by discipline (per hour and per visit)

Fixed and variable costs

Non-routine medical supplies


July 28, 2013

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NAHC Cost Report Data Compendium (All States)

Item Number: M-083, All States

The NAHC COST REPORT DATA COMPENDIUM is an in-depth analysis of Medicare cost reports filed by home health agencies since the beginning of the HH PPS payment system in October 2000. NAHC has acquired over 20,000 filed cost reports to develop this Compendium. Cost reports contain a wealth of data. For purposes of this compendium, NAHC used data on per unit costs, supply costs, service utilization, and Medicare PPS episodes. In addition, overall HHA cost and revenue data is used to calculate overall financial margins. The geographic location of the HHA and its categorizations also is utilized. The Compendium is a valuable tool for providers of services, consultants, health policy planners, home care advocates, investors, and trade associations looking to gain an understanding of the financial status of home health agencies.

FOIA

Freedom of Information Act


July 28, 2013

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2012 2011 2010

SN 59.31$ 50.70$ 51.94$ PT 86.47$ 81.56$ 67.77$ OT 80.69$ 73.45$ 59.44$ ST 110.64$ 97.42$ 72.84$ MSW 85.54$ 75.98$ 53.66$ HHA 26.42$ 23.77$ 21.63$

Direct Cost Per Visit

Salaries of worksheet A, column 1, lines 6-11, divided by the visits of worksheet S-3 Part 1, column 5, lines 1-6

2012 2011 2010 Nevada National

SN 113.65$ 116.44$ 123.33$ 147.38$ 130.81$ PT 165.70$ 187.34$ 160.90$ 193.70$ 137.11$ OT 154.62$ 168.72$ 141.13$ 180.60$ 135.22$ ST 212.01$ 223.77$ 172.95$ 198.97$ 147.80$ MSW 163.90$ 174.51$ 127.41$ 209.35$ 201.54$ HHA 50.63$ 54.59$ 51.37$ 78.50$ 60.71$

Total Cost Per Visit

Worksheet C, Part 1, column 4, lines 1-6


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SN 11.12 11.58 11.51 9.8 9.9PT 4.18 4.18 3.07 3.2 4.1OT 1.35 1.35 0.98 0.8 0.7ST 0.17 0.04 0.07 0.1 0.1MSW 0.23 0.24 0.21 0.2 0.1HHA 2.57 2.44 2.6 2.7 3.9

Statistics - Average Visits Per Episode

Worksheet S-3 Part IV, visits column 7, divided by total episodes of lines 45 & 46 column 7


SN 10.49 10.50 10.41 8.40 8.30PT 4.67 4.62 4.14 3.60 4.70OT 1.47 1.47 1.07 0.90 0.80ST 0.16 0.05 0.08 0.10 0.10MSW 0.25 0.26 0.22 0.20 0.20HHA 2.83 2.61 2.77 3.00 4.10Total 19.87 19.50 18.69 16.10 18.20

Visits Per Full Episode

Worksheet S-3 Part IV visits column 1 divided by total episodes column 1 line 45


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Full w/o Outliers

Full with Outliers LUPA PEP

Your Agency 84.83% 3.27% 8.97% 2.65%

Nevada 82.91% 3.22% 10.24% 2.71%

National 80.59% 4.00% 11.38% 2.29%

Episodes By Type


Revenue 3,095.84$ 3,138.47$ 2,734.15$ 2,764.84$ 2,527.78$ Cost 2,369.85$ 2,544.17$ 2,326.04$ 2,149.91$ 2,007.20$ Profit 725.99$ 594.30$ 408.11$ 614.93$ 520.58$ Visits 19.63 19.83 19.07 16.70 19.00

Average Per Episode


July 28, 2013

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3,382.38$ 3,366.64$ 2,967.26$ 3,009.68$ 2,752.65$

Payment Per Full Episode

Worksheet D Part II line 12.01, total of columns 1 & 2 divided by Worksheet S-3 Part IV, column 1 line 45

Full w/o Outliers

Full with Outliers

LUPA PEP Total

Revenue $600,270 $26,195 $14,789 $8,353 $649,607

Cost $444,324 $35,096 $12,822 $5,755 $497,997

Profit $155,946 ($8,901) $ 1,967 $2,598 $151,610

Profit By Episode Type

Cost Report Indicators


July 28, 2013

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• Cost Analysis Capital Costs $ 55,500Plant Operation / Maint $ 10,400Administration $ 464,218 26.48%Total Overhead Costs $ 530,118 30.24%Direct Costs $1,222,646 69.76%Total Costs $1,752,764Total Patient Revenue $1,809,392

Admin Costs as % of Revenue 25.66%


All Costs from Worksheet A column 10

• Medicare Profit MarginMedicare PPS Reimbursement $649,607

Medicare PPS CostVisit Cost $491,437NRS Cost $ 6,560Total Cost $497,997

Medicare Profit Margin $151,610

Medicare Margin % 23.3%


PPS reimbursement from Worksheet B Part II total of lines 28 columns 1 & 2

PPS costs from Worksheet C Part IV line 19 column 6


July 28, 2013

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ZPIC REQUESTS COST REPORT INFORMATIONFROM HOME HEALTH AGENCY

Home Health Alert, Volume 13.03April 10, 2013

www.healthgroup.com

Contact Information

Tom Boyd, MBA, CFEPrincipalBoyd & Nicholas, [email protected]

July 28, 2013

1

Pre-Conference 2701. Home Health Summer Camp 2013Essential Benchmark Data

CPAs & ADVISORS


M. Aaron Little, CPA

BKD, LLP | [email protected]

July 28, 20139:00 a.m. – 3:00 p.m.Washington, DC

2

OBJECTIVES

July 28, 2013

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OBJECTIVESEvaluating home health (HH) performance using key metricsComparing HH performance using key benchmarks

3

4

EVALUATING PERFORMANCE

July 28, 2013

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EVALUATING PERFORMANCE

5

Identify• key metrics

Gather• raw performance

data

Measure• performance data

Compare• performance results

Examine• processes driving

performance

Implement• action &

accountability plan

EVALUATING PERFORMANCEIdentify key metrics

Are metrics meaningful, objective & measurable, & comparable?Is data available & obtainable?Are data management requirements sustainable?

Gather raw performance dataInternal data

Billing, accounting & operations systems, CASPER, cost reports, etc.

External dataPublicly available &/or reported data, benchmarking & market analysis vendors, government or advocacy organizations, etc.

6

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EVALUATING PERFORMANCEMeasure performance data

Are industry benchmarks available?Relevant & comparable to your organization?

Do personnel know how to measure & manage performance data?

Compare performance resultsIs data comparable?

Are data sources comparable?Are time periods measured comparable?

7

EVALUATING PERFORMANCEExamine process drivers

What are processes responsible for performance?What are primary improvement opportunities?How will action plan address opportunities?

Implement action & accountability planWhat are reasonable timelines & performance milestones?What will be used to monitor & manage accountability?With what frequency will performance be monitored?

8

July 28, 2013

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9

COMPARING PERFORMANCE

COMPARING PERFORMANCEQualityFinancial & cash flowVolumeRevenuesExpensesCompliance

10

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QUALITYPatient perception & satisfaction

HH Consumer Assessment of Healthcare Providers & Systems (CAHPS) data

Publicly reported & quantifiableAvailable to all Medicare providers

How often HH team gives care in professional way?How well did HH team communicate with patients?Did HH team discuss medicines, pain, & home safety with patients?How do patients rate overall care from HH agency?Would patients recommend HH agency to friends & family?

11

QUALITYOutcome & Assessment Information Set (OASIS) data

OutcomesPublicly reported & quantifiableAvailable to all Medicare providers

How often patients got better at walking or moving around?How often patients got better at getting in & out of bed?How often patients got better at bathing?How often patients had to be readmitted to hospital?

Outcome-Based Quality Improvement & Outcome-Based Quality Monitoring

12

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0%

20%

40%

60%

80%

Rehospitalization Ambulation Transferring Bathing

Outcomes

13

70%75%80%85%90%

Professionalism Communication Meds, pain,safety

Care rating We'rerecommended

Patient Satisfaction

State

Nation

Per Centers for Medicare & Medicaid Services (CMS) Home Health Compare website

QUALITYOther metrics to consider

Admission response timeReferral intake timeReferral source satisfactionImpact of telemonitoring or other specialty programs, etc.Post-discharge patient activitiesDisease-specific outcomesSpecialty-specific program outcomes

14

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FINANCIAL & CASH FLOWBenchmark sources

BKD analyzed & compiledMedicare cost report data obtained directly from CMSFreestanding & hospital-based agencies

Excludes skilled nursing facility-based agenciesFiscal years ended in 2011

15

FINANCIAL & CASH FLOWStrategic Healthcare Programs, LLC (SHP) analyzed & compiled

Study conducted by SHP of its user database to determine its Benchmark Leaders

Based on outcomes & compliance indicatorsBenchmarking Leaders financial performance then analyzed by BKD using Medicare cost report data

OCS HomeCare EliteStudy conducted by OCS to determine its HomeCare Elite

Based on outcomes & financial indicatorsTop 100 agencies

HomeCare Elite Medicare cost report data analyzed by BKD

16

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FINANCIAL & CASH FLOWMargins

Gross marginMargin after direct costsData not available for hospital-based agencies

Medicare marginIncludes traditional Medicare only

Excludes Medicare AdvantageBased on average episode payment & average episode cost

17

FINANCIAL & CASH FLOWOverall margin

Includes all payers & programsHH, hospice, private duty, etc.

Data not available for hospital-based agencies

Cash flowDays in accounts receivable (AR)/days sales outstanding (DSO)Data not available for hospital-based agencies

18

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FINANCIAL & CASH FLOW

19

Metric Median Best 25% Median Best 25% Median Best 25%Gross margin3 52% 61% 47% 55% 51% 61%Medicare margin 19.7% 29.0% 20.9% 28.3% 10.5% 23.3%Overall margin3 10.5% 19.2% 7.5% 18.4% 2.8% 10.8%Days in AR 52 37 53 41 54 38

1Per BKD study of 2011 Medicare cost report data of OCS HomeCare Elite Top 100 & SHP Benchmark Leaders2Per BKD study of Medicare freestanding & hospital-based cost reports with fiscal years ended in 20113Data only available for freestanding agencies

OCS Top 1001 SHP/BKD1 Nation2

FINANCIAL & CASH FLOWOther metrics to consider

ProfitabilityMargins by program, i.e., HH, hospice, private duty, etc.Margins by payer, i.e., Medicare, Medicaid, commercial, etc.Earnings before interest, taxes, depreciation & amortization (EBITDA)Return on assets

LiquidityCurrent ratioQuick ratioLeverage ratio

20

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FINANCIAL & CASH FLOWCash flow

Percent of AR older than 90 or 120 daysCollections as a percent of net revenuesWrite-offs as percent of net revenuesAverage days to bill

Medicare requests for anticipated payments (RAPs)Medicare final claimsNon-Medicare claims

21

VOLUMENet revenues

Includes all payers & programsData not available for hospital-based agencies

VisitsIncludes all HH visits

PatientsIncludes all HH unduplicated patientsData not available for hospital-based agencies

22

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VOLUMEMedicare patient percentage

Traditional Medicare onlyData not available for hospital-based agencies

Medicare episodesTraditional Medicare only

Medicare revenuesTraditional Medicare only

23

VOLUME

24

Metric Median Best 25% Median Best 25% Median Best 25%Net revenues3 $2.1 mil. $3.5 mil. $3.3 mil. $7.4 mil. $1.4 mil. $3.2 mil.Visits 10,115 16,643 19,263 39,965 9,062 19,432Patients 318 562 949 1,708 250 628Medicare patients3 78% 94% 64% 79% 86% 100%Medicare episodes 461 907 822 1,516 371 772Medicare revenues $1.3 mil. $2.3 mil. $2.2 mil. $3.3 mil. $0.9 mil. $2.0 mil.



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VOLUMEOther metrics to consider

Current censusVolume by program & payer & by diagnosis/diseaseNumber of referrals by source & by diagnosis/diseaseNumber of new admissions vs. readmissionsNumber of non-admissionsMarket assessment

25

REVENUESVisitsPercent of traditional Medicare visitsMedicare low utilization payment adjustments (LUPAs)Medicare episodes per patientAverage Medicare case-mix weight

Includes full episodes onlyExcludes LUPAs, partial episode payments, & outliers

26

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REVENUESAverage therapy visits per Medicare episode

Traditional Medicare onlyIncludes physical therapy (PT), occupational therapy (OT), & speech therapy (ST)Average of all episodes

Average Medicare episode paymentTraditional Medicare onlyIncludes all payment adjustments

27

Metric Median Best 25% Median Best 25% Median Best 25%Visits 10,115 16,643 19,263 39,965 9,062 19,432Medicare visits 84% 96% 69% 79% 86% 100%Medicare episodes 461 907 822 1,516 371 772LUPAs 5.1% 2.8% 9.5% 5.1% 6.5% 2.9%Episodes per patient 1.6 2.3 1.3 1.6 1.6 2.3

Case-mix weight 1.3300 1.5395 1.3444 1.4722 1.3133 1.5193Therapy visits per episode 5.1 7.6 5.4 7.2 5.3 7.6Average episode payment $2,648 $3,148 $2,708 $3,141 $2,670 $3,115

REVENUES

28


1Per BKD study of 2011 Medicare cost report data of OCS HomeCare Elite Top 100 & SHP Benchmark Leaders2Per BKD study of Medicare freestanding & hospital-based cost reports with fiscal years ended in 2011

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REVENUESOther metrics to consider

Revenues by program & payer/plan & diagnosis/diseaseAverage payment per episode per referral/admission sourceAverage payment per visit &/or per patient

For all per-visit payers/plansAverage payment per Medicare episode dimension

Clinical, functional & service utilizationNonroutine medical supplies

Average case-mix weight & payment adjustments per clinician

29

EXPENSESCost per visit

Includes hospital-based overhead

Visits per Medicare episodeIncludes all episodes

Cost per Medicare episodeIncludes hospital-based overhead

Labor costs as a percent of revenuesIncludes compensation, contract labor & benefits

30

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EXPENSESAdministrative & general (A&G) costs as a percent of revenuesHours per visit

Includes all personnel hours workedTotal hoursA&G hours

31

EXPENSES

32

Metric Median Best 25% Median Best 25% Median Best 25%Cost per visit $125 $101 $136 $116 $136 $106Hours per visit 3.3 2.3 3.0 2.3 3.2 2.5

Visits per episode 16.9 14.5 14.9 13.7 16.9 14.3

Cost per episode $2,196 $1,888 $2,127 $1,900 $2,405 $1,953

Labor percent of revenues3 68% 61% 72% 64% 75% 65%

A&G cost percent of revenues3 36% 32% 35% 26% 39.2% 30%

A&G hours per visit 1.2 0.9 1.2 0.8 1.3 0.9



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EXPENSESDiscipline-specific drill-down

Visits per episodeCost per visit

Without hospital-based overheadDirectIndirectHospital-based overhead

Hours per visitVisits per day per full-time equivalent (FTE)

33

EXPENSES

34

Metric Median Best 25% Median Best 25% Median Best 25%Visits per episode 8.4 6.9 7.7 6.5 8.5 6.9Cost per visit3 $142 $97 $135 $118 $137 $107

Direct only $74 $50 $78 $62 $69 $50Indirect $52 $37 $56 $39 $63 $43Overhead $42 $29 $34 $25 $43 $28

Hours per visit 2.3 1.3 2.0 1.5 2.0 1.2Visits per day 3.7 6.9 4.5 5.9 4.5 6.8

Skilled Nursing OCS Top 1001 SHP/BKD1 Nation2


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EXPENSES

35


Direct only $72 $60 $81 $70 $83 $69Indirect $54 $34 $56 $37 $72 $46Overhead $30 $18 $32 $25 $36 $24

Visits per day 6.2 9.0 5.5 6.7 6.1 8.7

Physical Therapy OCS Top 1001 SHP/BKD1 Nation2


EXPENSES

36


Direct $77 $60 $76 $64 $80 $64Indirect $55 $31 $59 $38 $73 $47Overhead $26 $16 $31 $24 $37 $24

Visits per day 5.6 8.5 5.3 7.3 5.2 8.4

Occupational Therapy OCS Top 1001 SHP/BKD1 Nation2


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EXPENSES

37


Direct $27 $21 $30 $24 $27 $20Indirect $24 $14 $24 $16 $26 $16Overhead $13 $5 $12 $8 $16 $10

Hours per visit 1.9 1.2 1.8 1.2 1.6 1.1Visits per day 4.8 7.2 4.9 6.7 5.5 8.0

Aide OCS Top 1001 SHP/BKD1 Nation2


EXPENSESOther metrics to consider

Transportation expensesPer visit, personnel, patient

Costs per referral/admission source & diagnosis/diseaseSupply costs per patient & per diagnosis/diseaseProductivity standards

Per visit vs. per case-load

38

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COMPLIANCEPayment per episodeCase-mix weightTherapy visits per episodeEpisodes per patientOutliersLUPAsOutcomes

39

COMPLIANCE

40

Metric Provider OCS Top 1001 SHP/BKD1 Nation2

Average episode payment $3,502 $2,648 $2,708 $2,670Case-mix weight 1.8616 1.3300 1.3444 1.3133Average therapy visits per episode 11.5 5.1 5.4 5.3Episodes per patient 1.2 1.6 1.3 1.6Outliers 1.7% 0.4% 0.5% 0.8%LUPAs 6.5% 5.1% 9.5% 6.5%Ambulation3 55% Not available Not available 58%Transfers3 67% Not available Not available 55%Bathing3 70% Not available Not available 66%

1Per BKD study of 2011 Medicare cost report data of OCS HomeCare Elite Top 100 & SHP Benchmark Leaders2Per BKD study of Medicare freestanding & hospital-based cost reports with fiscal years ended in 20113Per CMS Home Health Compare

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COMPLIANCEOther considerations

Frequency of additional development requests & denialsRegulatory survey resultsProgram integrity actionsPatient &/or personnel complaintsAverage Medicare payment per beneficiaryFrequency of Medicare HIPPS codes

41

42

MANAGING PERFORMANCE

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0%

50%

100%

Professional care Patient rating Patientrecommendations

Rehospitalizations Ambulation Transfers Bathing

0.00 0.50 1.00 1.50 2.00

Case-mix

LUPAs

Episodes/patient65%

31%4%

Revenue Mix

45%55%

4%

Census Mix

0 5 10 15 20

Skilled

Therapies

Aides

Total

Visits Per Episode0 500 1,000 1,500

Census

YTD non-admits

YTD patients

YTD episodes

$0 $1,000 $2,000 $3,000 $4,000

Pay per episode

Cost per episode

$0 $50 $100 $150 $200

Per-visit revenue

Per-visit cost

0 5,000 10,000 15,000 20,000

YTD visits

YTD non-Medicare

Medicare

Medicare

16%2%

75 days

Us

Them Nation

State

Patient Satisfaction & Clinical Outcomes

43

44

July 28, 2013

23


45

46

July 28, 2013

24


CPAs & ADVISORS


M. Aaron Little, CPA

BKD, LLP | [email protected]

July 28, 20139:00 a.m. – 3:00 p.m.Washington, DC

Attachment A

Formula Key

Current Ratio = Total Current Assets / Total Current Liabilities Quick Ratio = (Cash + Accounts Receivable) / Total Current Liabilities Gross Profit Margin = Gross Profit / Sales Net Profit Margin = Adjusted Net Profit before Taxes / Sales Inventory Days = (Inventory / COGS) * 365 Accounts Receivable Days = (Accounts Receivable / Sales) * 365 Accounts Payable Days = (Accounts Payable / COGS) * 365 Interest Coverage Ratio = EBITDA / Interest Expense Debt-to-Equity Ratio = Total Liabilities / Total Equity Return on Equity = Net Income / Total Equity Return on Assets = Net Income / Total Assets Fixed Asset Turnover = Sales / Gross Fixed Assets Sales per Employee = Sales / Total Employees (FTE) Profit per Employee = Adjusted Net Profit before Taxes / Total Employees (FTE) Profit Growth = (Current Period Adjusted Net Profit before Taxes - Prior Period

Adjusted Net Profit Before Taxes) / Prior Period Adjusted Net Profit before Taxes

Sales Growth = (Current Period Sales - Prior Period Sales) / Prior Period Sales

Attachment B

Sample Home Care & HospiceOverall Financial Dashboard

Monthly DashboardPrior

Key Performance Indicators Year January February March April May June July August September October November December YTD Target

ProfitabilityContribution Margin %

Home Health 38.0% 40.7% 56.0% 36.9% 48.4% 31.7% 34.9% 47.9% 43.4%

Hospice 29.6% 23.5% 28.2% 30.8% 45.5% 44.7% 35.8% 33.7% 35.8%

Private Duty 24.4% 22.2% 33.0% 33.6% 43.8% 50.1% 38.9% 45.5% 42.2%

Net Profit % -3.3% 4.3% 27.5% -1.3% 35.3% 2.7% 1.3% 10.2% 11.6%

EBITDA % -2.0% 5.7% 28.8% 0.1% 36.5% 3.9% 2.4% 11.0% 12.8%

Return on Assets -4.2% 0.5% 3.2% -0.1% 3.9% 0.3% 0.2% 1.4%

Return on Net Assets -18.6% 2.0% 13.9% -0.6% 15.6% 1.1% 0.6% 5.2%

Cash FlowDays in AR 40.9 47.1 45.7 39.5 39.5 49.9 43.3 45.3

AR over 90 Days 41,096 45,976 53,603 42,552 26,267 15,868 63,839 81,061

Cash Collections as a % of Revenue 79.9% 77.4% 79.0% 106.3% 87.1% 71.3% 60.2% 78.3% 79.2%

Days to RAP Billing 9 7 5 6 4 4 6 4

LiquidityCurrent Ratio 1.57 1.57 1.58 1.68 1.86 1.95 2.10 2.00

Quick Ratio 1.40 1.32 1.35 1.33 1.52 1.58 1.71 1.69

Leverage Ratio 22.5% 22.6% 25.9% 22.3% 20.3% 19.7% 18.8% 22.4%

Sample Home Care & HospiceHome Health Financial Dashboard

Monthly Home Health DashboardPrior

Key Performance Indicators Year January February March April May June July August September October November December YTD Target

VolumeCensus - Beginning of Period 113 122 145 146 122 105 124 113

Admissions 710 97 81 70 76 79 70 86 Discharges 701 74 80 94 93 60 81 68

Census - End of Period 122 145 146 122 105 124 113 131

Non-Medicare Payer Mix 35.3% 39.3% 35.1% 38.7% 29.1% 30.1% 35.6% 34.8% 34.9%

Medicare Recertification Rate 13.6% 26.4% 22.2% 15.8% 19.2% 25.7% 20.1% 9.1% 19.5%

RevenueAvg Medicare Payment per Episode 3,298$ 2,288$ 2,560$ 2,484$ 2,622$ 2,835$ 2,508$ 2,693$ 2,563$

Avg Case Mix Weight 1.3339 1.2287 1.3758 1.4714 1.4439 1.5825 1.3415 1.5188 1.4536

% of Episodes Adjusted 24% 11% 15% 18% 20% 16% 17% 10% 15%

Avg Non-Medicare Payment Per Visit 33.90$ 40.81$ 29.51$ 67.39$ 64.34$ 37.88$ 35.05$ 35.76$ 43.39$

ExpenseGross Profit % 38.0% 40.7% 56.0% 36.9% 48.4% 31.7% 34.9% 47.9% 43.4%

Visits Per Medicare Episode 24.21 17.42 20.60 23.49 21.67 20.73 14.77 19.13 19.67

Overall Direct Cost per Visit 60.51$ 62.12$ 50.17$ 58.09$ 59.21$ 75.05$ 84.15$ 66.96$ 63.45$

Labor as a % of Revenue 85.3% 86.1% 63.8% 90.1% 75.9% 95.3% 93.0% 75.0% 81.2%

Attachment C

07/17/2013

Medicare Home Health Operations Detail Dashboard ReportPeer Group Data1 State Data1 National Data1

BKD Analysis of All United StatesSHP Benchmark Medicare Certified

Measure Leaders Agencies

Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile

Number of Agencies Total agencies in peer group data: 88 Total agencies in peer group data: 65 Total agencies in national data: 9,510Service Delivery Dashboards

Total home health visits 5,815 10,115 16,643 11,165 19,263 39,965 4,213 9,062 19,432 Total visits for other services4 - - - - - - - - - Total net patient revenue4 1,161,534$ 2,123,723$ 3,450,816$ 1,914,427$ 3,315,397$ 7,440,538$ 672,662$ 1,445,622$ 3,229,937$ Total Medicare episodes 250 461 907 495 822 1,516 174 371 772 Total Medicare home health revenue 724,736$ 1,252,870$ 2,320,513$ 1,356,623$ 2,172,526$ 3,994,875$ 433,839$ 939,215$ 2,013,330$ Total home health unduplicated patients4 197 318 562 558 949 1,708 105 250 628 Total unduplicated patients for other services4 - - - - - - - - - Payer mix, measured on total visits

Medicare 69.1% 83.4% 95.5% 60.6% 68.5% 80.1% 63.0% 85.7% 100.0%Other 4.5% 16.6% 30.9% 19.9% 31.5% 39.5% 0.0% 14.3% 37.1%

Payer mix, measured on unduplicated patients4

Medicare 63.4% 77.7% 93.5% 53.7% 63.8% 78.7% 61.5% 86.3% 100.0%Other 6.6% 22.3% 36.6% 21.3% 36.2% 46.3% 0.0% 13.7% 38.5%

Visits per Medicare episode (all episodes)Skilled nursing 6.9 8.4 10.4 6.5 7.7 8.9 6.9 8.5 10.6 Physical therapy 2.9 4.4 6.2 3.5 4.2 5.5 2.9 4.3 6.1 Occupational therapy 0.1 0.5 1.1 0.7 1.2 1.8 0.2 0.6 1.4 Speech therapy 0.0 0.1 0.2 0.1 0.1 0.3 - 0.1 0.2 Medical social services - 0.0 0.1 0.1 0.1 0.2 - 0.1 0.1 Home health aide 0.8 1.6 2.8 0.7 1.4 2.2 0.8 1.8 3.8

Total visits per episode 14.5 16.9 18.7 13.7 14.9 17.5 14.3 16.9 20.3 Total therapy visits per episode 3.8 5.1 7.6 4.7 5.4 7.2 3.5 5.3 7.6

Skilled nursing 7.4 8.9 10.7 7.2 8.3 9.6 7.6 9.0 11.2 Physical therapy 3.1 4.7 6.8 3.9 4.7 6.2 3.1 4.7 6.6 Occupational therapy 0.1 0.5 1.2 0.7 1.3 1.9 0.2 0.7 1.5 Speech therapy 0.0 0.1 0.3 0.1 0.2 0.3 - 0.1 0.2 Medical social services - 0.0 0.1 0.1 0.1 0.2 - 0.1 0.2 Home health aide 0.9 1.8 3.3 0.8 1.6 2.4 0.9 2.0 4.1

Total visits per episode 15.7 17.9 20.0 15.0 16.6 19.1 15.5 18.2 21.7 Total therapy visits per episode 4.0 5.6 8.4 5.2 6.1 8.1 3.8 5.8 8.3

Visits per Medicare LUPA episode 2.6 2.8 3.0 2.5 2.7 2.9 2.5 2.7 2.9

Health Care Group | www.bkd.com Questions? Contact M. Aaron Little at [email protected].

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BKD Analysis ofOCS HomeCare Elite,

Top 100

Visits per Medicare full episode (including outliers)

07/17/2013






Top 100

Service Delivery Dashboards (Continued)Number of episodes per Medicare patient 1.3 1.6 2.3 1.2 1.3 1.6 1.3 1.6 2.3 Estimated number of hours per visit

Direct nursing service (based on SN visits) 1.3 2.3 3.2 1.5 2.0 2.9 1.2 2.0 2.8 Home health aide service (based on HHA visits) 1.2 1.9 2.7 1.2 1.8 2.3 1.1 1.6 2.2 Administrative staff 0.9 1.2 1.7 0.8 1.2 1.4 0.9 1.3 1.9 Total staff 2.3 3.3 4.1 2.3 3.0 3.4 2.5 3.2 4.2

Estimated number of visits per day per FTE5

Direct nursing service 2.7 3.7 6.9 3.2 4.5 5.9 3.2 4.5 6.8 Physical therapy service 4.5 6.2 9.0 4.5 5.5 6.7 4.4 6.1 8.7 Occupational therapy service 4.4 5.6 8.5 4.3 5.3 7.3 3.9 5.7 8.4 Speech therapy service 3.8 5.4 6.9 3.3 5.7 7.7 3.4 5.2 7.6 Medical social services - 0.6 2.8 1.0 2.5 5.4 - 0.7 3.5 Home health aide service 3.1 4.8 7.2 3.9 4.9 6.7 3.8 5.5 8.0

Operating DashboardsCost Per VisitSkilled nursing

Salaries4 33.32$ 58.04$ 73.69$ 49.77$ 60.72$ 74.84$ 35.00$ 51.77$ 69.36$ Employee benefits4 3.68 7.48 10.63 5.85 8.86 15.47 1.28 6.25 10.99 Contract services4 - - 0.16 - - 0.19 - - 1.71

Total labor 47.27 70.86 96.98 57.91 71.47 96.98 47.89 65.72 89.39 Transportation - 0.52 5.56 - 3.56 5.54 - - 4.61 Other direct costs - - - - - - - - -

Total direct care costs 50.05 73.68 100.64 62.17 77.89 102.32 49.66 68.83 94.17 Indirect agency costs 37.25 52.01 82.58 39.41 56.38 67.42 42.91 62.51 90.44

Total agency cost per visit 97.14 141.51 166.78 118.39 135.14 166.44 107.46 136.77 173.54 Provider-based overhead costs3 29.09 41.76 50.59 24.97 33.90 42.54 28.16 42.83 60.16

Total cost per visit 99.56$ 141.96$ 187.30$ 120.32$ 137.40$ 166.44$ 109.24$ 140.10$ 179.86$


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07/17/2013






Top 100

Operating Dashboards (Continued)Cost Per Visit (Continued )Physical therapy

Salaries4 -$ -$ 50.32$ 27.92$ 50.30$ 61.96$ -$ 2.96$ 57.07$ Employee benefits4 - - 7.62 2.78 7.02 11.27 - - 7.84 Contract services4 0.03 53.83 69.90 2.44 15.19 36.54 4.93 54.64 80.15

Total labor 58.21 71.68 83.61 66.84 76.53 90.16 67.86 80.95 95.15 Transportation - - 1.22 - 1.41 3.83 - - 2.42 Other direct costs - - - - - - - - -



Total cost per visit 113.77$ 140.59$ 167.41$ 120.78$ 142.39$ 168.96$ 130.72$ 163.50$ 210.09$ Occupational therapy

Salaries4 -$ -$ 52.51$ 9.57$ 43.76$ 71.56$ -$ -$ 59.66$ Employee benefits4 - - 8.78 - 5.96 8.69 - - 7.82 Contract services4 - 55.44 75.54 - 3.29 44.10 - 48.50 78.85






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07/17/2013






Top 100

Operating Dashboards (Continued)Cost Per Visit (Continued )Speech therapy

Salaries4 -$ -$ 21.30$ -$ 53.73$ 80.52$ -$ -$ 61.84$ Employee benefits4 - - 0.88 - 4.84 12.17 - - 7.89 Contract services4 - 61.43 87.38 - 4.37 54.49 - 53.18 81.95

Total labor 63.72 76.23 100.69 61.76 77.27 108.23 63.68 81.26 100.92 Transportation - - - - 0.49 5.90 - - 2.63 Other direct costs - - - - - - - - -



Total cost per visit 112.23$ 151.15$ 207.46$ 107.70$ 148.93$ 183.18$ 128.53$ 165.70$ 219.09$ Medical social services

Salaries4 -$ 23.50$ 84.38$ 35.77$ 68.65$ 92.23$ -$ 31.42$ 81.06$ Employee benefits4 - - 12.48 - 8.71 15.86 - - 12.33 Contract services4 - - 65.84 - - 4.09 - - 78.00






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07/17/2013






Top 100

Operating Dashboards (Continued)Cost Per Visit (Continued )Home health aide

Salaries4 12.14$ 18.84$ 26.90$ 15.70$ 21.81$ 28.51$ 13.10$ 19.69$ 27.04$ Employee benefits4 0.46 2.91 4.88 1.62 3.70 5.73 - 2.38 4.31 Contract services4 - - - - - - - - -




Total cost per visit 41.85$ 55.08$ 70.61$ 46.64$ 59.35$ 76.03$ 41.82$ 56.92$ 80.01$ Overall agency cost per visit (all disciplines) 101.04$ 124.83$ 163.88$ 115.74$ 135.65$ 157.97$ 105.85$ 136.09$ 172.20$ Medical Supplies

Non-routine medical supplies 0.71$ 2.01$ 3.27$ 1.34$ 2.34$ 3.63$ 0.94$ 2.26$ 4.16$ Medicare Episode PaymentsEstimated average case-mix weight2 1.1940 1.3300 1.5395 1.2588 1.3444 1.4722 1.1564 1.3133 1.5193 Average payment ratio2 1.1184 1.2535 1.4527 1.1102 1.1944 1.3817 1.0720 1.2180 1.4200 Medicare episode mix by payment type

Unadjusted episodes 87.1% 90.6% 94.1% 83.7% 86.5% 91.0% 83.7% 88.6% 93.1%LUPA episodes 2.8% 5.1% 9.1% 5.1% 9.5% 12.5% 2.9% 6.5% 11.0%PEP episodes 0.8% 1.6% 2.3% 1.6% 2.3% 3.4% 0.9% 1.8% 3.0%Outlier episodes 0.0% 0.4% 1.8% 0.2% 0.5% 1.3% 0.0% 0.8% 3.1%

Average payment per episode by payment typeUnadjusted episodes 2,458.92$ 2,941.02$ 3,368.09$ 2,788.27$ 3,039.38$ 3,349.99$ 2,481.72$ 2,883.22$ 3,315.64$ LUPA episodes 288.27 321.83 378.67 311.59 347.84 383.64 291.29 328.24 370.90 PEP episodes 868.09 1,011.82 1,508.78 960.55 1,071.28 1,246.43 919.16 1,169.59 1,490.63 Outlier episodes 2,770.30 3,810.96 5,490.54 2,752.89 3,307.33 4,377.80 2,897.57 3,679.16 5,034.59


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07/17/2013






Top 100

Operating Dashboards (Continued)Medicare Episode ProfitabilityAverage payment per episode 2,328$ 2,648$ 3,148$ 2,501$ 2,708$ 3,141$ 2,285$ 2,670$ 3,115$ Direct costs per episode

Salaries4 554 784 968 687 769 990 512 734 1,003 Employee benefits4 73 116 176 81 125 177 46 97 169 Contract services4 26 148 354 38 104 276 50 219 473

Total labor 869 1,147 1,489 969 1,122 1,344 936 1,170 1,455 Transportation - 33 79 1 47 71 - 15 70 Other direct costs - - - - - - - - - Nonroutine supplies - 9 26 2 18 29 - 8 27

Total direct care costs per episode 919 1,241 1,570 1,025 1,170 1,379 991 1,243 1,536 Direct profit (loss) per episode 1,141 1,365 1,707 1,228 1,507 1,742 1,056 1,409 1,770 Direct profit (loss) margin per episode 45.1% 55.1% 63.8% 48.0% 54.4% 61.8% 44.0% 54.1% 62.3%Indirect agency costs per episode 555 903 1,258 558 814 1,006 727 1,066 1,601

Total agency cost per episode 1,806 2,062 2,435 1,812 2,051 2,396 1,894 2,336 2,914 437 588 833 482 705 928 (22) 337 678

16.1% 23.1% 30.6% 18.3% 25.7% 30.9% -0.9% 12.7% 25.0%Provider-based overhead costs per episode3 387 619 779 384 494 770 499 675 993 Total costs per episode 1,888 2,196 2,573 1,900 2,127 2,501 1,953 2,405 2,984

Overall profit (loss) per episode 266 540 776 384 540 846 (111) 279 637 Profit (loss) margin per episode 9.8% 19.7% 29.0% 16.1% 20.9% 28.3% -4.3% 10.5% 23.3%


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Profit (loss) per episode based on total agency costsProfit (loss) margin per episode based on total agency costs

07/17/2013






Top 100

Operating Dashboards (Continued)Gross profit (loss) margin4 35.3% 52.0% 60.8% 34.0% 46.5% 55.3% 39.0% 51.0% 61.0%Agency profit (loss) margin4 1.8% 10.5% 19.2% 4.7% 7.5% 18.4% -3.2% 2.8% 10.8%Salaries as a % of total costs4 50.4% 59.7% 67.6% 52.6% 58.8% 66.9% 47.5% 57.1% 65.0%Salaries as a % of total revenue4 45.9% 50.8% 61.0% 47.7% 53.9% 61.1% 43.9% 54.4% 64.5%Employee benefits as a % of total salaries4 13.5% 18.0% 22.3% 13.5% 18.3% 22.8% 11.0% 15.2% 20.1%

56.0% 70.1% 78.3% 62.6% 72.3% 79.1% 50.8% 65.0% 74.6%47.9% 60.7% 70.8% 55.0% 64.3% 73.9% 46.4% 61.3% 73.4%2.7% 7.8% 14.9% 2.2% 5.2% 12.6% 3.2% 10.3% 21.3%3.3% 6.2% 13.0% 2.1% 4.9% 10.7% 3.1% 10.2% 21.0%

73.5% 81.3% 86.5% 74.2% 80.5% 85.1% 72.3% 79.6% 85.3%61.2% 68.1% 77.3% 63.9% 71.5% 80.8% 64.7% 74.8% 84.3%38.9% 50.8% 60.8% 46.8% 53.1% 62.6% 36.9% 47.5% 58.0%31.1% 41.6% 56.4% 39.9% 47.9% 59.1% 34.6% 44.6% 55.3%19.2% 27.7% 35.7% 16.4% 24.4% 33.3% 19.3% 27.8% 38.7%17.6% 25.9% 29.9% 14.6% 21.0% 29.8% 17.6% 26.8% 39.5%0.2% 2.3% 4.4% 1.8% 3.1% 4.1% 0.0% 1.9% 3.8%0.1% 2.1% 3.8% 1.6% 2.9% 3.6% 0.0% 1.5% 3.4%

10.4% 15.9% 25.0% 12.2% 15.2% 22.2% 12.2% 18.3% 26.0%10.5% 17.2% 24.5% 10.4% 15.5% 20.7% 12.9% 18.9% 27.1%29.5% 39.0% 47.7% 29.1% 37.6% 44.5% 30.7% 39.8% 48.7%31.6% 36.0% 42.0% 26.2% 34.7% 41.4% 29.5% 39.2% 48.9%

Capital & plant costs as a % of total cost4 2.0% 2.8% 4.2% 2.4% 2.9% 4.1% 2.4% 3.5% 5.1%Capital & plant costs as a % of total revenue4 1.8% 2.8% 4.1% 2.1% 2.7% 3.8% 2.3% 3.4% 5.2%Days in accounts receivable4 36.5 52.3 78.1 41.4 53.1 75.7 38.1 53.5 77.6 Current ratio4 1.4 3.4 8.3 1.1 2.4 4.9 0.9 1.8 4.9 Quick ratio4 1.0 3.0 5.5 1.0 1.9 3.5 0.8 1.5 3.9 Return on equity4 8.2% 28.8% 76.4% 3.6% 19.9% 45.9% -6.1% 13.9% 77.1%Return on assets4 2.4% 28.6% 87.5% 6.4% 16.6% 50.5% -9.5% 8.7% 51.9%

1Data compiled using all Medicare cost reports available from CMS with fiscal years ending in 2011.2Estimated based on payment rates effective for the location of the agency rather than service area.3Dashboard indicator only applies to hospital-based agencies, and accounts for costs allocated to the agency from the provider.4Dashboard indicator only includes freestanding agencies as hospital-based agency data is not available from CMS data sets.5Estimated based on 230 work days per year.


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Total labor as a % of total revenue4

Direct labor as a % of total costs4

Direct labor as a % of total revenue4

Indirect labor as a % of total costs4

Total salaries & employee benefits as a % of total costs4

Total salaries & employee benefits as a % of total revenue4

Purchased services as a % of total costs4

Administrative & general costs as a % of total revenue4

Indirect labor as a % of total revenue4

Transportation as a % of total costsTransportation as a % of total revenue4

Other costs as a % of total costsOther costs as a % of total revenue4

Administrative & general costs as a % of total cost

Purchased services as a % of total revenue4

Total labor as a % of total costs

Pre-Conference 2701. Home Health Summer Camp 2013Reporting Medicare Organizational Changes

July 28, 2013

1

NAHC Financial Management Conference & Exposition

July 28, 2013

855A Requirements & Revalidation

Presented by: Thomas E. Boyd, Principal Boyd & Nicholas, Inc.

• New Location• New Business Name/add LLC or Inc.• Change in ownership• Acquisition/merger or stock transfer• Additional Branch office

Requirements for Filing


July 28, 2013

2

Individual Updates/Changes

• If they have a 5 percent or greater direct or indirect ownership interest in the provider

• If (and only if) the provider is a corporation(whether for-profit or non-profit), all officersand directors of the provider

Individual Updates/Changes

• All managing employees of the provider• All individuals with a partnership interest in

the provider, regardless of the percentage of ownership the partner has

• Authorized and delegated officials


July 28, 2013

3

Timeline for Submission

√ Change of ownership√ Acquisition/Merger√ Asset Sale√ Stock Transfer

Timeline for Submission

√ Updates to the provider – ie: change of information


July 28, 2013

4

Revalidation Project

• If you enrolled in the Medicare Program before March 25, 2011 you will get a letter by March of 2015.


• DO NOT respond until you get your letter.

• You have 60 days from the date of your letter (not two months) to submit your 855A revalidation.


July 28, 2013

5

• Be watching for your letter. Many are not addressed to a specific person.




July 28, 2013

6


You must submit a paid receipt with your revalidation letter and 855A

https://pecos.cms.hhs.gov/pecos/FeePaymentWelcome.do


• MACs are requesting your NPI email assigning your NPI – most went out in 2006. If you don’t have a copy of the email:

• Contact NPPES customer service at 800-465-3203 OR if you remember your user ID and password go to website and login, check that info is current and proceed to end and submit.

• You will get a new email in 24-36 hours.

https://nppes.cms.hhs.gov/NPPES/Welcome.do


July 28, 2013

7


We recommend at this time NOT to submit your 855As or Revalidation 855As in PECOS. There are many bugs in the PECOS system causing hardship to providers and delaying the submission. Instead complete the CMS downloaded pdf form:

https://www.cms.gov/cmsforms/downloads/cms855a.pdf

This form was updated in July 2011. Make sure you are using the correct form as above.

Who Has Questions ???


July 28, 2013

8

Contact Information

Tom Boyd, MBA, CFEPrincipalBoyd & Nicholas, [email protected]

Pre-Conference 2701. Home Health Summer Camp 2013Compliance in Organizational Change

July 28, 2013

1

2013 Financial Management Conference

Home Health Summer Camp 2013

William J. Simione, IIIPrincipal Simione Healthcare Consultants, LLC

Value Driven Health Care Environment

What do we know & what do we need to know

1. Do we truly understand our costs & how they relate to patient care?

2


July 28, 2013

2


A. Do we truly understand our cost and how they relate to patient care?① What do I need to get myself ready?

Do I have the data? Do I understand the data? Do I know how to react to the data?

② Understanding the Gross Margin Direct Salaries & Benefits Contracted Services Transportation Medical Supplies Other Direct Care Costs

3


B. Do we truly understand our cost and how they relate to patient care?③ Payer Analysis

GM Profitability Net Margin Profitability

④ Can we measure the true value of our services? Difficult many times to truly qualify the value of Home

Health Need to demonstrate that we are operating efficiently Need to have the seat at the table to educate all parties All indicators need to be positive Know the “Pain Points” of our referral sources

“Home Care is not an adjunct service, but a key component in the health care continuum”

4


July 28, 2013

3

INTEGRATING CLINICAL &

FINANCIAL MANAGEMENT

Integrating Clinical & Financial Management

• The need for both clinical and financial information is becoming more important to home care agencies.→Recognize key clinical and financial indicators

that can be used daily, weekly, etc.→Analyze trends by comparing to previously run

data.→Use data to integrate and educate your clinical

and financial teams; and→Report to senior managers and Board of

Directors

6


July 28, 2013

4

Key Financial Indicators

• Gross Margin• Net Margin• Payer Mix• Liquidity Ratios• Cost Per Visit• Days Sales

Outstanding

• Case Weight Mix• Episode Distribution• Reimbursement per

Episode• Cost Per Episode• Indirect Cost as a

Percentage of Revenue

7

Integrating Clinical & Financial Management

How does this relate back to Clinical?

How do I share this data?

Where do I begin?

8


July 28, 2013

5

STEP #1

Dive Into The Data

• Maximize your EMR system?• Do we truly understand all of the reports?• What reports are the Clinical

Director/Supervisors currently using?Are they meeting their needs?What information could they use?

• Can we do a data Dump? Is this the only way?

10


July 28, 2013

6

Dive Into The Data

• Understand your businessWhat makes up your revenue?How are we providing services?Does the data tell/confirm the story?

Do we truly understand what is happening?

11

Dive Into The Data - Episodic Payers

• Can we determine the following?# of Episodes per admission

• Can we determine outliers?– Try and understand the reasons

# of visits per Episode by type of Episode• How/Does this change for subsequent episodes?• How/Does this change by diagnosis?• Duals vs. Regular admissions

12


July 28, 2013

7

Life Of An AdmissionColumn LabelsCount of SOC/Re-Cert

Row Labels 1 2 3 4 5 6 7January-12 72 30 10 3February-12 60 25 5 2March-12 55 17 9 6 4 2 2April-12 73 29 8 2May-12 72 22 6 1June-12 78 25 7 1July-12 57 17 3August-12 72 12 1 1September-12 70 17 4 1October-12 69 15 1November-12 58 14 3 1December-12 51 13January-13 40 4February-13 43 2March-13 24April-13 7Grand Total 901 242 57 18 4 2 2

13

Life of an Admission - Visits Per EpisodeCarrier Medicare/OHActive/D/C D/C5/1/2013 (All)

Average of Tot Visits Column LabelRow Labels 1 2 3 4 5 6 7 Grand TotalJanuary-12 25.31 22.27 15.90 14.67 23.42 February-12 24.18 17.92 14.80 5.50 21.57 March-12 23.98 21.00 21.44 17.83 14.00 21.50 13.50 22.13 April-12 21.10 15.90 12.50 9.50 18.93 May-12 20.06 14.00 16.67 1.00 18.35 June-12 22.05 16.24 16.14 10.00 20.26 July-12 18.53 14.06 7.33 17.10 August-12 16.97 14.50 30.00 20.00 16.81 September-12 19.67 19.53 18.25 3.00 19.40 October-12 20.16 11.87 4.00 18.51 November-12 17.47 20.36 20.67 1.00 17.91 December-12 19.02 11.15 17.42 Grand Total 20.74 16.95 16.32 12.00 14.00 21.50 13.50 19.53

14


July 28, 2013

8

Life of an Admission - Therapy VisitsCarrier Medicare/OHActive/D/C D/C5/1/2013 (All)

Average of Tot Ther Column LabelRow Labels 1 2 3 4 5 6 7 Grand TotalJanuary-12 11.72 8.70 2.50 5.33 9.97 February-12 11.50 3.92 - - 8.57 March-12 10.11 8.76 5.78 6.17 1.00 - 0.50 8.41 April-12 8.88 3.66 1.38 4.00 6.90 May-12 8.36 4.68 4.17 - 7.23 June-12 9.13 2.80 1.00 - 7.11 July-12 7.47 3.47 - 6.30 August-12 7.00 3.67 20.00 11.00 6.73 September-12 7.81 2.59 2.00 - 6.51 October-12 8.83 2.20 - 7.55 November-12 7.28 3.50 - - 6.20 December-12 8.61 2.00 7.27 Grand Total 8.89 4.42 2.60 4.00 1.00 - 0.50 7.47

15

Life of an Admission (cont’d)

Carrier Medicare/OHActive/D/C D/C5/1/2013 (All)

Column LabelAverage of RAP_HHRG$

Row Labels 1 2 3 4 5 6 7January-12 2,559.62$ 2,903.91$ 2,064.69$ 1,500.42$ February-12 2,646.29$ 2,402.44$ 1,762.56$ 2,381.42$ March-12 2,374.75$ 2,865.41$ 2,567.85$ 2,828.32$ 2,049.48$ 2,212.65$ 1,928.71$ April-12 2,666.44$ 2,235.19$ 1,819.60$ 1,968.26$ May-12 2,539.27$ 2,578.12$ 2,651.51$ 2,191.38$ June-12 2,646.97$ 2,407.64$ 2,135.56$ 1,519.37$ July-12 2,537.08$ 2,354.05$ 1,922.95$ August-12 2,500.09$ 2,243.65$ 1,382.59$ 5,021.68$ September-12 2,642.28$ 2,173.58$ 1,995.42$ 1,930.76$ October-12 2,749.82$ 2,127.41$ 2,246.49$ November-12 2,715.61$ 2,492.54$ 1,959.17$ December-12 2,674.99$ 2,354.92$ Grand Total 2,606.21$ 2,453.11$ 2,127.06$ 2,401.98$ 2,049.48$ 2,212.65$ 1,928.71$

16


July 28, 2013

9

Life of an Admission (cont’d)

Carrier Medicare/OHActive/D/C D/C5/1/2013 (All)

Average of Final$ Column LabelRow Labels 1 2 3 4 5 6 7 Grand TotalJanuary-12 3,519.29$ 2,946.86$ 1,740.26$ 2,052.73$ 3,174.00$ February-12 3,469.40$ 2,208.85$ 1,466.77$ 1,546.77$ 2,976.23$ March-12 3,280.92$ 3,096.30$ 2,606.69$ 2,200.32$ 2,054.67$ 2,324.32$ 2,112.23$ 3,033.96$ April-12 3,074.99$ 2,216.64$ 1,774.89$ 1,639.72$ 2,731.17$ May-12 2,888.30$ 2,426.47$ 2,290.80$ 107.92$ 2,724.68$ June-12 3,192.65$ 2,196.92$ 2,129.69$ 1,527.34$ 2,886.35$ July-12 2,780.47$ 2,226.55$ 1,444.45$ 2,606.12$ August-12 2,756.39$ 2,119.28$ 3,055.33$ 2,669.96$ September-12 2,811.06$ 2,278.84$ 2,151.45$ 439.73$ 2,663.83$ October-12 3,037.20$ 2,028.13$ 439.73$ 2,838.10$ November-12 2,582.81$ 2,516.43$ 1,745.18$ 2,561.40$ December-12 2,908.78$ 1,567.54$ 2,724.69$ Grand Total 3,031.03$ 2,378.97$ 1,962.66$ 1,815.49$ 2,054.67$ 2,324.32$ 2,112.23$ 2,818.32$

17

Dive into the Data - Other Payers

• Look at the visit volumeDo we know visits per admissionDoes this differ by Payer

• Can we drill down to the diagnosis?• What is the trend?

Medicaid volume• Duals• Traditional• Move to Managed – What does this mean?

18


July 28, 2013

10

Dive into the Data - Other Payers

• What is our censusNeed to know by payer

• Do we have patients with no visits within the last 30 days?

• Are we tracking admission by payer, by month, by referral source?Grow Market Share through strategic

alliancesIs there a trend? How should we react?

19

Dive into the Data - Episodic Payers

• Meet with staff to understand what is happeningWhat is the storyIs it helpful

• Why is this important to understand the dataFinancialClinical

20


July 28, 2013

11

STEP #2

Staffing

• Understand how admissions and Episodes equate to staffingDirectIndirect

• Develop Productivity expectations throughout the organizationProductivity should be consistent and

measurable

22


July 28, 2013

12

Methodology Options - Weighted Calculation

• Weight types of visits based on length of visits and documentation timeSOCResumptionsRecertificationsDischargeHigh mileageHigh tech/high skill

• Weighted visits not consistent in the industry -difficult to compare

23

Methodology Options - Direct Calculation

# Visits/Day# visits in a given time

# FTE’s x # Days

24


July 28, 2013

13

Methodology Options - Direct Calculation

# of visits# FTE’s x # Days # Visits/Day

• Number of visits In a given time (week, month)By individualBy discipline (RN include LPN, PT include PTA)By team

• Number of FTE’sSum of full time equivalents NOT employees

• Number of days available to workAfter benefit and meeting time

25

Number of Days Available to Work - Example

• In order to meet national productivity benchmarks, staff must have at least 80 - 85% of their time available to visit.

Example Hours Days %

Payroll Time Paid Time Off

2,080 240

260 30

100% 11.5%

Time Available to work 1,840 230 88% Mandatory In-Service/Education Required Staff Meetings

12 72

1.5 9

0.5% 3.5%

Total Time Available to Visit 1,756 219.5 84%

26


July 28, 2013

14

Productivity Forces• MotivationEconomicCareer developmentManagement practices

• Impact of culture, conflicts and trust

• EfficiencyEffective toolsSkills developmentEducation and training

• UtilityMeasure of satisfaction or impact the work

27

Factors Impacting Productivity

• Average miles per visit• Time available to visit• Agency Patient-Related Characteristics Casper

Report• Prior conditions• Hospitalization risks• Needs help with ADL’s/IADL’s but none is available• Stage IV pressure ulcers• Significant differences in

– Acute Conditions– Chronic Conditions– Home Care Diagnosis

28


July 28, 2013

15

Staff Collaboration

• Setting expectations• Historical performance• Performance reports and feedback• Team productivityTeam building activitiesTrust and collaborationSuccess of the unit vs. success of the individual

29

BALANCING ACT

Patient Expectations

Patient Needs

Optimal Outcomes

Productivity Expectations

30


July 28, 2013

16

Financial & Clinical Reporting

• How do I compare my metrics?Internal Data

• Trending• Locations• Teams• Providers

External Data• Benchmarks

– National– Regional – State– Agency Attributes

31


• How can I measure my performance?Key IndicatorsDashboardsBenchmarks

• What performance indicators should I use?Agency must evaluate what is important

• Revenue Drivers• Cost Drivers• Quality Drivers

• How often should I be reporting my performance?

32


July 28, 2013

17

Financial Reporting

• Internal DataTrack through dashboard for each locationTrending data (weekly, monthly, quarterly)Financial Statements

• Operating Revenue• Operating Expenses• General and Administrative Expenses

Gross Margin• Operating Revenue minus Operating Expenses• Operating Margin

33

Example of Dashboard

YTD Budgeted YTD

2/28/13 Budget Variance 1/31/13 12/31/12 11/30/12 10/31/12 9/30/12 8/30/12 Totals Totals

Admissions Home Health 1

Medicare 139 145 (6) 139 130 139 143 137 135 962 1,015 Medicaid 50 40 10 50 50 50 50 50 50 350 280 Blue Cross 25 20 5 25 25 25 25 25 25 175 140 Private Insurance 35 40 (5) 35 35 35 35 35 35 245 280 Other 15 10 5 15 15 15 15 15 15 105 70

Grand Total 264 255 9 264 255 264 268 262 260 1,837 1,785

Visits Home Health 1

Medicare 2,453 2,559 (106) 2,453 2,295 2,453 2,524 2,418 2,383 16,979 17,915 Medicaid 750 600 150 750 750 750 750 750 750 5,250 4,200 Blue Cross 200 160 40 200 200 200 200 200 200 1,400 1,120 Private Insurance 280 320 (40) 280 280 280 280 280 280 1,960 2,240 Other 120 80 40 120 120 120 120 120 120 840 560

Grand Total 3,803 3,719 84 3,803 3,645 3,803 3,874 3,768 3,733 26,429 26,035

Monthly Admissions Report for Billing Date: Thursday, February 28, 2013

ADMISSIONS AND DISCHARGESLast 5 Months

34


July 28, 2013

18


Year to Date

2/28/13 1/31/13 12/31/12 11/30/12 10/31/12 9/30/12 8/30/12 Totals

Episodes

Beginning 166 154 171 162 161 161 180 1,155 Ending 150 152 166 152 170 163 158 1,111

Average Visits Per Episode 2/28/13 Budget Variance YTD Average

Budgeted

YTD

Skilled Nursing 7.20 7.00 0.20 6.30 6.80 6.80 7.20 6.40 6.50 6.74 7.00 Physicakl Therapy 4.90 5.00 (0.10) 5.20 5.10 5.70 5.20 4.70 5.10 5.13 5.00 Occupational Therapy 0.70 0.75 (0.05) 0.70 0.70 0.90 0.90 0.80 0.50 0.74 0.75 Speech Therapy 0.20 0.15 0.05 0.20 0.20 0.10 0.10 0.30 0.10 0.17 0.15 Medical Social Service 0.10 0.10 - 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Home Health Aide 1.90 1.50 0.40 1.80 1.10 1.90 1.60 1.70 1.50 1.64 1.50

Grand Total 15.00 14.50 0.50 14.30 14.00 15.50 15.10 14.00 13.80 14.53 14.50

Episodes Ending YTD Average

LUPA 20 18 20 18 21 22 32 22 PEP 2 2 2 2 3 1 3 2 Outlier 2 - - - - 1 1 1 Therapy Downcode 33 48 51 34 44 33 39 40 Therapy Upcode 46 38 43 39 50 52 39 44 Unadjusted 47 46 50 59 52 54 44 50

Grand Total 150 152 166 152 170 163 158 159

Case Mix 2/28/13 Budget Variance YTD Average Budgeted

1.2000 1.1900 0.0100 1.1800 1.1900 1.3200 1.2500 1.3300 1.1844 1.2363 1.2000

PPS SUMMARYLast 5 Months

35


Budgeted

2/28/13 Budget Variance 1/31/13 12/31/12 11/30/12 10/31/12 9/30/12 8/30/12 YTD

Revenue

Medicare 425,788 425,788 - 425,788 425,788 425,788 425,788 425,788 425,788 11Medicaid 63,750 51,000 12,750 63,750 63,750 63,750 63,750 63,750 63,750 11Blue Cross 2,625 2,100 525 2,625 2,625 2,625 2,625 2,625 2,625 10Private Insurance 4,375 5,000 (625) 4,375 4,375 4,375 4,375 4,375 4,375 1Other 1,500 1,000 500 1,500 1,500 1,500 1,500 1,500 1,500 0

Total Revenue 498,038$ 6$ 498,032$ 498,038$ 498,038$ 498,038$ 498,038$ 498,038$ 498,038$ 35

Gross Margin

Home Health 1 42.00% 43.00% -1.00% 43.00% 42.00% 40.00% 45.00% 45.00% 40.00% 42.43% 43.00%

Net Margin

Home Health 1 10.00% 10.00% 0.00% 8.00% 9.00% 9.00% 10.00% 10.00% 10.00% 9.43% 10.00%

Last 5 Months

Financial Summary

36


July 28, 2013

19


DSO

Medicare 54 49 5 54 54 54 54 54 54 Medicaid 68 64 4 68 68 68 68 68 68 Blue Cross 70 66 4 70 70 70 70 70 70 Private Insurance 75 58 17 75 75 75 75 75 75 Other 75 58 17 75 75 75 75 75 75

Total DSO 65 55 10 65 65 65 65 65 65

Claims YTD Total YTD BudgetDay to RAP 8 6 2 6 6 6 6 6 6 6 6 Days to Final 15 15 - 14 18 17 14 15 16 16 15

Orders

Days Orders Outstanding 20 20 - 20 22 25 21 21 21 21 20 Days F2F Outstanding 25 25 - 22 24 23 20 21 25 23 25

Financial Summary

37


YTD Budgeted

2/28/13 Budget Variance 1/31/13 12/31/12 11/30/12 10/31/12 9/30/12 8/30/12 Totals YTD

Skilled Nursing 4.50 5.00 (0.50) 4.50 4.50 4.50 4.50 4.50 4.50 4.50 5.00 Physical Therapy 5.25 5.00 0.25 5.00 5.00 5.00 5.00 5.00 5.00 5.04 5.00 Occupational Therapy 5.00 5.00 - 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Speech Therapy 5.00 5.00 - 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Medical Social Service 4.00 4.00 - 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Home Health Aide 3.00 4.00 (1.00) 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00

Clinical ProductivityLast 5 Months

38


July 28, 2013

20


• External Benchmark DataCompare to changes in industry

• Reimbursement changes• State legislative changes• Clinical performance measures

Monitor performance and goals• Use benchmarks as goals• Evaluate management and staff performance on

constant basis• Evaluate whether weakness is an internal issue or

industry issue• Ability to make better business decisions

39

Financial Reporting

• Break out Direct Cost vs. Indirect CostsDirect - Patient CostsIndirect - Support Costs

• Gross MarginOperating Revenue minus Operating ExpensesOperating Margin

• Net MarginOperating Revenue minus Direct Expenses and

General and Administrative Expenses

40


July 28, 2013

21

Things To Consider

• Revenue Rate per Episode, Visit, Hour or Day is lower than

what you budgeted Shift in utilization of services Home Health Aide vs. Nursing Visits Payer Shift Per Visit vs. Per Episode Lower Rates

• Anticipated increases in volume did not occur

41

Things To Consider

• Productivity not in line with budget• Staffing Capacity - Over/Under Staffed• Transportation/Mileage Expense

Eliminate paying from Home to First VisitRate

• Medical SuppliesCloset vs. Drop Ship

• Service UtilizationFrequency of visitsTypes of visits per Episode

• Schedule Based on Location of Patient42


July 28, 2013

22

Things To Consider

• Hiring restrictions based on CaseloadRN Case Managers - 25 to 30 CasesOne Team Per 350-375 Patients 10 -15 RN Case Managers Per TeamOne Clinical Supervisor Per TeamOne Clinical Assistant Per Team

• Increase CompetitionLoss of Market ShareMergers/AcquisitionsReferral Sources getting into Home Care and Hospice

43

Things To Consider

• SEMI-VARIABLE EXPENSES

• Staff Home Care Coordinators/Liaison Nurse Intake Nurse Billing/Collectors Clinical Supervisor Clinical Assistant Insurance Case Manage Administrative Assistants

• Develop and Monitor Staffing Ratios

• Develop and monitor Key Performance Indicators

44


July 28, 2013

23

PROPERTY OF SIMIONE HEALTHCARE CONSULTANTS45

SIMIONE.COM

Simione™ Healthcare Consultants provides solutions for your core homecare and hospice challenges – organizational, financial, sales & marketing,technology, and mergers & acquisitions. Over 1000 organizations use ourpractical insight and tools to reduce costs, mitigate risk and improveefficiencies to steward the way they conduct business.

William J. Simione, III4130 Whitney AvenueHamden, CT 06518

203.287.9288800.949.0388

[email protected]

Pre-Conference 2701. Home Health Summer Camp 2013Feasibility Analysis Practices

July 28, 2013

1

2013 Financial Management Conference

Home Health Summer Camp 2013

William J. Simione, IIIPrincipal Simione Healthcare Consultants, LLC

UNDERSTAND YOUR MARKET


July 28, 2013

2

Elements of a Feasibility Study

A. Understand your market① ACO Developments Who is forming ACO’s in your Market

Health Systems / Hospitals Physicians

Are we in a position organizationally and financially to accept risk and/or integrate with these organizations?

② Alignment of care Mergers and Acquisitions Activity

Health Systems / Hospitals Physician Practices Long Term Care (SNF, ALF, ILF) Home Health Etc.

3


A. Understand your market③ Population Health Management④ Who’s entering into risk share contracts Medicaid Dually Eligible Bundling

⑤ Health Transitions

4


July 28, 2013

3


A. Understand your market - What questions do we need to answer?

1. Who will be our key Partners?2. How do we get a seat at the table?

“C” Suite to “C” Suite3. What will be our value proposition?

What value can we provide to our partner? How will we solve our partner’s problems?

What is important? What is your Strategy?

4. How do we get and keep our partners? Customer Relations

5. Revenue Stream What value are our partner’s willing to pay

5

DEVELOP THE FEASIBILITY STUDY


July 28, 2013

4

Understand Revenue

• Know the measurable indicators that build RevenueHome Health

• Episodes Per Month• Visits - FFS

Hospice• Days by Level of Care

Private Duty• Hours

7

Understand Revenue

• Know what Indicators drive revenueHome Health

• Episodes Per Month– Admissions– Re-Certifications

• Types of Episodes– Full– LUPA– Outliers

• Visits Per Episode– By Type of Episode

Other Payers• Visits by Discipline• Revenue by Discipline

8


July 28, 2013

5

How to Develop - Revenue

• Each indicator should be automatedEasy to useEasy to obtainReliable

• Information Technology and Finance should Partner to ensure Success

• Resources need to be available • All Indicators need to have an audit trail• Who will be responsible to:

GenerateSummarize

• What will be the timing of the reports

9

How to Develop - Net Income

• Can the budget be built by team or location• Make sure everyone’s aware of their expectations• MOST IMPORTANT

MAKE SURE YOU HAVE BUY IN

• Revenue should be the driver of all ExpensesDirectIndirect

10


July 28, 2013

6

How to Develop - Revenue

• Know your Information SystemStandard ReportsCustomOutside Package

11

Medicare Episodes

• Total Episodes 1,653• Recertification Rate 21% 347• Admissions 79% 1,306

Increase /

Regular LUPA Outlier Total Based Decrease by Total Regular LUPA OutlierMonth # Days 86.23% 13.77% 0.00% Episodes Episodes Episodes 86.23% 13.77% 0.00%

January 31 108 17 - 125 136 - 136 117 19 - February 30 102 16 - 118 136 - 136 117 19 - March 31 106 17 - 123 136 - 136 117 19 - April 31 108 17 - 125 136 1 137 118 19 - May 28 113 18 - 131 136 1 137 118 19 - June 31 113 18 - 131 136 1 137 118 19 - July 30 119 19 - 138 136 2 138 119 19 - August 31 122 20 - 142 136 2 138 119 19 - September 30 116 19 - 135 136 2 138 119 19 - October 31 116 19 - 135 136 4 140 121 19 - November 31 119 19 - 138 136 4 140 121 19 - December 30 117 19 - 136 136 4 140 121 19 - Total 365 1,360 217 - 1,577 1,632 21 1,653 1,425 228 -

4.82%

Medicare PPS StatisticsMedicare Episodes

Projected FY 2012 EpisodesCurrent Year FY 2011 Annualized Episodes

12


July 28, 2013

7

Medicare Visits Per Episode

• Important to know where you are today• Make your assumptions realistic

Budgeted Actaul FY 11 Current Targeted Actaul FY 11 Current Targeted Actaul FY 11

DisciplineAnnual Visits

Visits Per Episode

Visits Per Episode

Visits Per Episode

Visits Per Episode

Visits Per Episode

Visits Per Episode

Visits Per Episode

Visits Per Episode

SN 13,028 9.14 9.14 501 2.20 2.16 - - - PT 5,431 3.81 3.81 75 0.33 0.33 - - - OT 1,596 1.12 1.12 9 0.04 0.04 - - - ST 71 0.05 0.05 - - - - - - MSW 442 0.31 0.31 5 0.02 0.02 - - - HHA 2,894 2.03 2.03 7 0.03 0.20 - - -

Total 23,462 16.46 16.46 596 2.62 2.75 - - -

Regular LUPA Outliers

Medicare Visits

13

Medicare Visits

Discipline

Skilled Nursing

Physical Therapy

Occupational Therapy

Speech Therapy

Medical Social

ServicesHome Health

Aide Total VisitsSkilled Nursing

Physical Therapy


Speech Therapy

Medical Social

ServicesHome Health

Aide Total Visits

January 1,072 447 131 6 36 238 1,930 41 6 1 - 0 1 49 February 1,072 447 131 6 36 238 1,930 41 6 1 - 0 1 49 March 1,072 447 131 6 36 238 1,930 41 6 1 - 0 1 49 April 1,080 450 132 6 37 240 1,945 42 6 1 - 0 1 49 May 1,080 450 132 6 37 240 1,945 42 6 1 - 0 1 49 June 1,080 450 132 6 37 240 1,945 42 6 1 - 0 1 49 July 1,088 453 133 6 37 242 1,959 42 6 1 - 0 1 50 August 1,088 453 133 6 37 242 1,959 42 6 1 - 0 1 50 September 1,088 453 133 6 37 242 1,959 42 6 1 - 0 1 50 October 1,103 460 135 6 37 245 1,987 42 6 1 - 0 1 51 November 1,103 460 135 6 37 245 1,987 42 6 1 - 0 1 51 December 1,103 460 135 6 37 245 1,987 42 6 1 - 0 1 51 Total 13,028 5,431 1,596 71 442 2,894 23,462 501 75 9 - 5 7 596

July

Skilled Nursing

Physical Therapy


Speech Therapy

Medical Social

ServicesHome Health

Aide Total Visits

January 1,113 453 132 6 37 239 1,979 February 1,113 453 132 6 37 239 1,979 March 1,113 453 132 6 37 239 1,979 April 1,121 456 133 6 37 240 1,994 May 1,121 456 133 6 37 240 1,994 June 1,121 456 133 6 37 240 1,994 July 1,129 460 134 6 37 242 2,008 August 1,129 460 134 6 37 242 2,008 September 1,129 460 134 6 37 242 2,008 October 1,146 466 136 6 38 246 2,038 November 1,146 466 136 6 38 246 2,038 December 1,146 466 136 6 38 246 2,038 Total 13,529 5,506 1,606 71 446 2,900 24,058

LUPA EpisodesFull Episodes

Total Visits

14


July 28, 2013

8

Medicare Revenue

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12CBSA Code

CY 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 Budget 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800 1.2800

CBSA CODE

CBSA Code SN PT OT ST MSW HHA

Localized National Rate 2,514.85$ 132.74$ 145.15$ 146.13$ 157.72$ 212.81$ 60.13$ Targeted Rate 3,219.01$ Avg. per Day Unadjusted for CM 41.91$

Method 60 days

Revenue Recognition:

Medicare Case Mix Weight

All episodes will be assumed to begin on the 15th of the month.

15

Medicare Revenue

• Revenue CalculationMedicare Episodes 138 (Daily Rate x Case Mix)X Episodic Base Rate Daily 53.65 ($41.91 x 1.2800)X Total Days in the Month 16= Medicare Revenue $118,460

# Episodes Case Mix

Beginning Weight Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12Nov-11 138 1.2800 118,460 229,516 96,248 - - - - - Dec-11 136 1.2800 - 124,039 226,189 87,557 - - - - Jan-12 136 1.2800 - - 124,039 211,596 102,150 - - - Feb-12 136 1.2800 - - - 109,446 226,189 102,150 - - Mar-12 136 1.2800 - - - - 124,039 218,893 94,854 - Apr-12 137 1.2800 - - - - - 117,601 227,852 95,551 May-12 137 1.2800 - - - - - - 124,951 220,502 Jun-12 137 1.2800 - - - - - - - 117,601 Jul-12 138 1.2800 - - - - - - - - Aug-12 138 1.2800 - - - - - - - - Sep-12 138 1.2800 - - - - - - - - Oct-12 140 1.2800 - - - - - - - - Nov-12 140 1.2800 - - - - - - - - Dec-12 140 1.2800 - - - - - - - - Jan-13Feb-13

Total 446,477 408,600 452,378 438,644 447,657 433,655

Epi

sode

Sta

rt D

ate

(15t

h of

mon

th)

Full Medicare EpisodesRevenue Recgonized in Period

16


July 28, 2013

9

Medicaid Revenue

31 31 30 31 30 312011 Actual Visits Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Skilled Nursing 70.53% 406 406 406 406 406 406 Physical Therapy 18.98% 109 109 109 109 109 109 Occupational Therapy 4.10% 24 24 24 24 24 24 Speech Therapy 0.20% 1 1 1 1 1 1 Medical Social Service 0.00% - - - - - - Home Health Aide 6.18% 36 36 36 36 36 36

100.00% 576 576 576 576 576 576

2012 Budgeted Visits

Budgeted Increase Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Skilled Nursing 0.00% 426 426 426 426 426 426 Physical Therapy 0.00% 115 115 115 115 115 115 Occupational Therapy 0.00% 25 25 25 25 25 25 Speech Therapy 0.00% 1 1 1 1 1 1 Medical Social Service 0.00% - - - - - - Home Health Aide 0.00% 37 37 37 37 37 37 Total Visits 604 604 604 604 604 604

Current Trend

Budgeted Increase

Total Monthly Visits

Mnthly Avg 576 5% 604

Medicaid Visits & Revenue

17

Medicaid Revenue

2012 Budgeted Visits

Adjustments to

Distribution Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12Skilled Nursing 0.00% 426 426 426 426 426 426 Physical Therapy 0.00% 115 115 115 115 115 115 Occupational Therapy 0.00% 25 25 25 25 25 25 Speech Therapy 0.00% 1 1 1 1 1 1 Medical Social Service 0.00% - - - - - - Home Health Aide 0.00% 37 37 37 37 37 37 Total Visits 604 604 604 604 604 604

Revenue

Net Skilled Nursing 86.99$ 37,076$ 37,076$ 37,076$ 37,076$ 37,076$ 37,076$ Physical Therapy 68.30$ 7,835 7,835 7,835 7,835 7,835 7,835 Occupational Therapy 71.20$ 1,763 1,763 1,763 1,763 1,763 1,763 Speech Therapy 72.88$ 89 89 89 89 89 89 Medical Social Service -$ - - - - - - Home Health Aide 25.38$ 948 948 948 948 948 948

Net Medicaid Revenue 47,712$ 47,712$ 47,712$ 47,712$ 47,712$ 47,712$

Medicaid Visits & Revenue

18


July 28, 2013

10

SN Staffing Requirements

Normal Work Week Paid Time Off (PTO) Days % Productivity SN Visit SN AdmitNumber of hours worked per year 2,080 Sick Days 20 Hours per Visit - - Number of hours in work week 40.00 Vacation Days 20 Visits per Day 5.00 Number of hours worked per day 8.00 Admin 6 Miles per Visit 7.00 Number of days worked per week 5.00 Holidays 5 Admin Time per Day (hours) - Full Time Hourly Staff - Overtime Rate 2.50% Total PTO Days 51 20% Admin Time per Days (hours) - Per Visit Staff -

Estimated PTO %

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• Productivity Calculation Days Available to Work 22 Daily Productivity 5 Gross Productivity 110 PTO % 80% Productivity Net 88

Year Expectations Gross1,310 Year Expectations Net 1,053

Total Days Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12Total Days in Month 31 29 31 30 31 30

Non-Work Days 9 8 9 9 8 9 Workdays 22 21 22 21 23 21

FTE Hours per Month 176 168 176 168 184 168

Total Visits Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12

Grand Total Visits 2,771 2,771 2,771 2,793 2,793 2,793

Productivity Expectations - Gross 110 105 110 105 115 105 Productivity Expectations - Net 88 84 88 84 92 84

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• FTE Calculation Visits 2,771 Visits Per FTE 88 Needed FTE’s 31.33

Skilled Nursing Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12Visits - by Location

Full Time StaffLocation #1 1,801 1,801 1,801 1,815 1,815 1,815 Location #2 970 970 970 977 977 977

2,771 2,771 2,771 2,793 2,793 2,793

Full Time Staff Needed- By LocationFull Time Staff

Location #1 20.37 21.34 20.37 21.51 19.64 21.51 Location #2 10.97 11.49 10.97 11.58 10.57 11.58

31.33 32.82 31.33 33.09 30.21 33.09

Full Time Staff FTEs - By LocationFull Time StaffLocation #1 15.27 15.27 15.27 15.27 15.27 15.27 Location #2 8.22 8.22 8.22 8.22 8.22 8.22

23.50 23.50 23.50 23.50 23.50 23.50

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• Per Diem Calculation FTE’s Required 31.33 Current FTE’s 23.50 Per Diem Need 7.83 Visits Per FTE 88 Per Diem Visits 693

Per Diem Staff Visits - By LocationFull Time Staff

Location #1 450 512 450 526 403 526 Location #2 242 275 242 283 217 283

693 787 693 809 620 809

Skilled Nursing Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12Per Diem Rate 55.00$

Full Time StaffLocation #1 24,762 28,138 24,762 28,934 22,181 28,934 Location #2 13,333 15,151 13,333 15,580 11,944 15,580

38,095 43,290 38,095 44,515 34,125 44,515

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Budgeting

• Visits Should drive Medical Supply and Transportation CostsMedical Supply cost per Visit# of Miles Per Visit Times Reimbursement Per Mile

• Revenue Indicators will drive Indirect FTE requirementsExamples

• Clinical Supervisor• Patient Accounting• Performance Improvement• Intake• Coding• Etc.

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Budgeting

• Monitor current results to budgeted expectationsShare these results each month with the stakeholdersKnow what the variances mean

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Documents

Pre-Conference 2 701. Home Health Summer Camp 2013 · Pre-Conference 2 701. Home Health Summer Camp 2013 Medicare Cost Report July 28, 2013 3 NAHC Cost Report Data Compendium (All