ZIMMET HEALTHCARE

SERVICES GROUP, LLC

www.zhealthcare.com MANAGED CARE

CASE MANAGEMENT

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Medicare Payment (2018)

35.0%

32.5%

32.5%

MA

Traditional FFS

APM

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MA Program: Key Facts

▪ Almost 18 million beneficiaries (~33%)

▪ Plans are paid on a predetermined per

member rate, based on enrollee’s risk score

▪ Bonus payments for high quality

▪ Bonus payments to plans with 4 or more stars

▪ 41% of plans are rated as 4 stars or higher

▪ 10% of beneficiaries changed MA plan

▪ 2% of MA enrollees left for Medicare FFS

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MA vs. FFS

▪ Patient Characteristics

▪ Choice of Healthcare Providers

▪ Administrative Costs

▪ Payment Flexibility

▪ Variability vs. Universality

▪ Incentive to Coordinate Care and Modify

Care Delivery

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MA vs. FFS

FFS

Medicare

MA

(100% RUG)

MA

(Levels)

Per Diem Rate $550 $550 $385

Receipt of Payment (days) 14 30 - 45 30 - 45

ALOS (days) 28 14 14

Revenue (per admit) $15,400 $7,700 $5,390

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MA vs. FFS

MEDICARE

PAYMENT

SNF FFS MA %

Diversicare $457 $388 17.8%

Ensign Group $581 $425 36.7%

Kindred $513 $464 10.6%

Genesis $577 $464 24.4%

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TOP 12 ISSUES:

MANAGED CARE CASE MANAGEMENT

I. Administratively Taxing

II. Fragmented Process

III. Contract Ignorance

IV. Contract Ambiguity

V. Authorization of Appropriate Level

VI. Outdated Rate Structures

VII. Inefficient Therapy Treatment

VIII.Capturing Exclusions

IX. Complex Billing Requirements

X. Denials Not Appealed

XI. Securing Part B Payments

XII. Bad Debt

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Administratively Taxing

▪ Obtaining Prior Authorization

▪ Frequency of required authorizations varies from

contract to contract

▪ Different methods of obtaining (e.g., telephone,

email, fax)

▪ Fighting for appropriate level

▪ Authorization and billing of exclusions

▪ Shift non-clinical tasks to clerks

▪ Conduct cost analysis

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Fragmented Process

SNF

MCOHOSPITAL

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CASE MANAGEMENT

NURSING REHAB BILLINGSOCIAL

SERVICESMDS PHARMACY

DISCHARGE PLANNING

MEDICAL RECORDS ADMISSIONS

Fragmented Process

Admissions

MDS

Nursing

Rehab

Social Services

Medical Records

Billing

Discharge Planning

ADMISSIONS

Contract Review,

Levels, Rates, Contract

Exclusions, Clinical

Criteria

CASE

MANAGEMENT? MCO

MCO

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Contract Ignorance

▪ Rate Confusion

▪ Contracted vs. billed vs. paid

▪ Level Confusion

▪ Outliers / Exclusions

▪ Create “cheat sheet”

▪ Include during UR meeting

NOT TO BE DISCUSSED WITH ANYONE

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Contract Ambiguity

▪ Antiquated contracts with misleading or

conflicting language

▪ Unscheduled assessment completion?

▪ “Adhere to Medicare guidelines”

▪ “At least 2 to 3 hours of rehab per day”

▪ 0.5 – 1.5 hours (level I); 2 – 3 hours (level II)

▪ 90% of the RUG rate – sequestration?

▪ Be as compliant as possible

▪ Contact insurance company

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Authorization of Appropriate Level

LEVEL IBasic

Skilled Nursing

• General nursing care and observation up to3 hours/day

• Assessment of vitals & body systems 1-2 times/day

• Respite Care

• Insulin dependent diabetic care

• Colostomy and ileostomy care

• Bowel and bladder training

• Wound care(Stage I & II)

• Routine oxygen and medication administration

LEVEL II Skilled Nursing

and Rehab

• Rehab: up to 90

mins/day, up to 7

days/week

• Assessment of vitals &

body systems 2-3

times/day

• IV therapy

• Enteral therapy

LEVEL IIISubacute Skilled

Nursing and Rehab

• Rehab: up to 3 hours/day, up to 7 days/week

• Skilled nursing services greater than 3 hours/day

• Assessment of vitals & body systems 3-4 times/day

• Orthopedic & amputation rehab cases

• Aneurysm

• TPN therapy

• Wound care (stage-III and IV)

• Blood transfusion

• X-rays

LEVEL IVIntensive Subacute

Skilled Nursing

• Ventilator care

• Tracheostomy care

• Assessment of vitals &

body systems 4-6

times/day

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Authorization of Appropriate Level

What we’ve seen:

▪ Level II (stage-II ulcer); documentation supports

level III (stage-III ulcer) $4,000

▪ Level III (intensive subacute), but tracheostomy

care provided (Level IV) $13,000

▪ ADL miscoding (RUG-based contracts) $3,000

▪ COT OMRA strategy (RUG-based contracts)

$1,500

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Outdated Rate Structures

▪ Average age of contract > 5 years

▪ Unlike FFS, no annual rate increases

▪ Importance of scale

▪ Trouble getting to the table

▪ Data

▪ Low re-hospitalization

▪ Reduced LOS

▪ Episodic cost

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Inefficient Therapy Treatment

▪ Treatment in excess of the level authorized by the MA

plan; contracts often indicate “up to”

▪ One-on-one treatment provided

▪ Not using concurrent & group treatment

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Assumptions: $50/hour salary; average 7 patients per day; 1 hour of treatment per resident; 5 treatment days per week

Mode of TX Hours of TX

Staffing Costs

(Per Day)

Staffing Costs

(Per Month)

Individual 7 $350 $7,000

Concurrent 3.5 $175 $3,500

Group 2 $100 $2,000

Capturing Exclusions

INCLUSIONS

Primary physician fees, Administration of drugs and biologicals, Semi private room, meals, 24-hour nursing care, assistance with ADLs, medical supplies, routine radiology, routine dental services, routine laboratory, therapy, oral medications daily (up to $50) per drug per day, TPN administration, initial psychiatric consultations, recreational therapies, routine medical/surgical supplies & standard DMR, discharge planning, discharge planning, case management, isolation supplies, IV supplies, social services, maintenance of patient room cleanliness, blood draws, diets (special or religious), respiratory therapy

EXCLUSIONS

Medical transportation, Customized DME, specialty consults, home infusion therapy, drugs > $50 per drug per day, 3rd generation antibiotics, HIV medication, blood and blood supplies, MRI and CT scans, oxygen over 28% concentration, medication not included in facility formulary, out of facility services, parenteral nutrition supplies and solutions, MD visits, oral chemotherapy

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Capturing Exclusions

▪ Items not included in authorized level

▪ Often must receive prior authorization or

acquire from an ‘approved vendor’ list

▪ “Pre-certified by case manager or designated

representative”

▪ “Drugs exceeding $50/day on average must be

purchased through the MCO’s designated

pharmacy network or contracted provider of

infusion therapy”

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Complex Billing Requirements

▪ Like FFS, must submit UB-04 (but to the insurer, not the MAC)

▪ Billed rate vs. contracted rate (MA will pay the lesser of the two)

▪ Different revenue codes match different levels

▪ Authorization Codes

▪ Timely Submission

▪ Denial Notice Issuance

▪ Diagnosis coding/ICD-10 for data analytics?

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Denials Not Appealed

▪ Well-established appeals system for all MA

denials

▪ MA plan must offer the same benefits as the

FFS program

▪ Pre-admission denials

▪ Increasing trend of denials for issues that we

commonly equate with FFS (technical items)

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Securing Part B Payments

▪ Remember: MA is a “full replacement”

product

▪ Part B Services: Therapy, MD Services,

Wound Care, etc.

▪ Prior Authorization

▪ Failure to Receive Payment

▪ What Rate?

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Bad Debt

▪ Unlike FFS, MA bad debt may not be

claimed on the Medicare cost report

▪ Co-pays range significantly

▪ The co-pay often represents a significant

portion of the margin

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Outsourced Case Management

▪ Who is responsible for case management?

▪ When do you outsource?

▪ Value Proposition

▪ Exchanging a portion of your per diem rate for

centralized management and expert/specialized

case management

▪ Fully Integrated EMR

▪ Automated Process

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Innovation & Technology

What Are You Doing

To Improve Care Coordination and Reduce Costs?

Case Management

Care Management

Care Transitions

Data Analytics

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Data Analytics

▪ What data should you use?

▪ Determine episodic & per diem cost of

providing care

▪ Re-hospitalization, functional improvement,

LOS, transition to lower cost settings –

organize data by diagnosis

▪ Identify and mitigate risk

▪ Leverage favorable data

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Data Analytics

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Hospital Name Medicare Pmts # of Referrals % of Referrals

Hospital 1 $7,457,715 379 42.3%

Hospital 2 $3,698,326 177 19.7%

Hospital 3 $1,288,092 62 6.9%

Hospital 4 $944,149 53 5.9%

Hospital 5 $733,111 38 4.2%

Hospital 6 $666,156 31 3.5%

Hospital 7 $357,870 20 2.2%

Hospital 8 $253,024 14 1.6%

Hospital 9 $242,060 12 1.3%

Hospital 10 $447,851 11 1.2%

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Data Analytics

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SNF ALOS Avg. Rate Episodic Cost 5 Star Re-hosp (%)

Facility 379 20.9% 27.2 $672 $18,265 ***** 18.0%

Competitor SNF 311 17.2% 34.9 $685 $23,907 ***** 22.3%

Competitor SNF 84 4.6% 33.7 $648 $21,825 ***** 18.4%

Competitor SNF 73 4.0% 29.4 $699 $20,551 ***** 25.2%

Competitor SNF 69 3.8% 35.8 $685 $24,514 *** 23.8%

Competitor SNF 41 2.3% 28.6 $647 $18,494 ***** 21.0%

Competitor SNF 40 2.2% 32.2 $719 $23,156 **** 17.1%

Competitor SNF 38 2.1% 29.8 $662 $19,729 ***** 16.8%

Competitor SNF 34 1.9% 28.7 $685 $19,673 * 15.0%

Competitor SNF 31 1.7% 31.2 $702 $21,908 **** 22.6%

Hospital 1

Referrals

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Data Analytics

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Clinical Episodes

Facility

Episodes

(#)

Facility

Episodic

Cost

Competitor

Episodes

(#)

Competitor

Episodic

Cost

Sepsis 202 $17,258 59 $22,958

CHF 124 $16,730 49 $20,219

Orthopedic 107 $23,121 62 $33,778

Stroke 75 $25,835 27 $31,116

UTI 66 $20,966 23 $25,652

Pneumonia 51 $16,369 35 $17,684

Other respiratory 50 $19,169 12 $17,352

Syncope and collapse 44 $23,092 11 $29,640

Renal failure 39 $22,415 11 $16,207

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Data Analytics

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Facility Name Facility Type Episodes Cost per Episode Readmission Rate

Facility 1 Hosp 248 $31,174 10.3%

Facility 2 HHA 146 $18,154 2.7%

Facility SNF 128 $36,076 6.5%

Facility 4 HHA 70 $33,861 1.4%

Facility 5 HHA 48 $19,068 2.0%

Facility 6 Hosp 41 $26,230 11.0%

Facility 7 SNF 31 $29,950 2.9%

Facility 8 SNF 31 $30,336 9.1%

Facility 9 Renal Dialysis 22 $50,453 10.2%

Facility 10 Hosp 19 $59,279 4.4%

Hospital 1

Sepsis; PAC only; 90 days

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Data Analytics

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Short Stay Residents Facility %NY

Average

National

AveragePoints

Physical function improved 79.6% 65.6% 63.3% 80

Moderate to severe pain 2.2% 12.0% 16.4% 100

Pressure ulcers 1.3% 1.1% 1.2% 50

Newly received antipsychotic 1.1% 2.0% 2.1% 60

Re-hospitalization 18.0% 21.4% 22.6% 80

ED visit 7.1% 10.2% 12.1% 80

Successful d/c 63.9% 56.7% 56.9% 80

Long Stay Residents Facility %NY

Average

National

AveragePoints

Move independently worsened 6.2% 16.7% 18.2% 100

Injurious falls 2.0% 2.9% 3.3% 20

UTIs 2.8% 4.1% 4.6% 80

Moderate to severe pain 5.7% 5.1% 7.8% 60

Pressure ulcers 6.0% 7.4% 5.8% 60

Inserted catheter 0.4% 2.3% 2.8% 100

Physically restrained 0.2% 1.1% 0.7% 100

ADL worsened 12.1% 14.1% 15.3% 80

Received antipsychotic 9.9% 15.2% 16.9% 80

Total 1210

Stars *****

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“Real Time” Data Analytics

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Clinical Episodes Episodes Episodic

CostALOS Re-Hosp

Successful

D/C

Average

NTA Costs

Sepsis 49 $15,998 23.8 6.1% 61.2% $1,565

CHF 33 $14,992 22.3 6.0% 60.6% $1,398

Orthopedic 24 $21,575 32.1 4.2% 75.0% $2,109

Stroke 19 $23,444 34.9 10.5% 52.6% $2,227

UTI 17 $17,936 26.7 0.0% 70.6% $1,499

Pneumonia 14 $16,112 24.0 7.1% 71.4% $1,376

Other respiratory 13 $18,751 27.9 7.7% 69.2% $1,575

Syncope and collapse 12 $19,873 29.4 0.0% 58.3% $1,276

Renal failure 8 $16,981 25.3 12.5% 62.5% $1,288

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Next Steps

▪ Review your contracts

▪ Incorporate takeaways

▪ Cost benefit analysis for outsourcing

▪ Make decisions on data and start collecting

▪ Diagnosis specific

▪ Outcomes

▪ Episodic spend

▪ Costs

▪ Historical and Real Time

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