TRANSITIONS IN

CARE -

A NEW HOME H

EALTH CARE

PRODUCT L

INE

OPPORTU

NITY

NAHC ANNUAL MEET

ING -

2012

P A T L A F F – L Y N D A L A F F – WA L T B O R G I N I S - B A R B A R A

R O S E N B L U M

TALKING POINTS1. The ingredients of Transitions in Care (TIC)

a. The opportunity for home healthb. Does your hospitalization & readmit rate get you a seat at the table?c. Does the hospital/health system have significant exposure to the TIC

penaltiesd. Does the hospital/health system have significant costs associated

with Emergency Department and Vacated Days for re-hospitalized patients within 30 days of their discharge?

e. Is data available to analyze?I. Patient rehospitalizationsII. Post acute referrals, if any III. Number of vacated days and ED incidents leading to readmissionsIV. Average cost per bed day and ED incidentV. Outcomes and HHCAHPS

TALKING POINTS2. Identify the services to be included to meet the goals of reduced ED

incidents and re-hospitalizations of the non-post acute referred patientsa. Development of patient identification criteria protocols to be

implemented by the hospital/health systemb. Development of the service components for a 35 day program

a. Skilled nursing assessmentb. Social service component to identify and engage community

support agenciesc. Telehealth for patients with at-risk diagnosed. Medical Record Requirements

3. Identify the Direct Costs related to the desired services and developing

price points (Gross Profit Margins) for selling these services

TRANSITIONS IN CARE – THE ISSUESThe ACA provisions for Transitions in Care take effect

in 2013 Provides for penalties to hospitals whose re-hospitalization

rates exceed levels as determined by CMSoRe-admissions are above national average for AMI,

Heart Failure and Pneumonia beginning with discharges on or after Oct. 1, 2012.

oThe penalties are 1%, 2%, and 3% of Medicare payments graduated from 2013 to 2015

oThe penalties are separate from the lost revenue from vacated days due to re-hospitalizations within 30 days of discharge

oMany hospitals have an exposureoCMS has stated that “64% of re-hospitalizations are

patients discharged without a post acute referral”

TRANSITIONS IN CARE – THE HOSPITALS’ ISSUES

Inadequate discharge planning for significant numbers of patients Budget constraints – appropriate staffingo Inability to identify all “at risk” patients, regardless of

“homebound statuso Appropriate clinical and social service staffing componentso Protocols

Late day discharges by physicians without notification Lack of a post acute service component to prevent re-

hospitalizations with 30 days of dischargeo Can not provide free care to a patient using hospital

employees Violation of the “Stark” laws

TRANSITIONS IN CARE – HOME CARE’S OPPORTUNITIES

A non-hospital-based agency can provide services to non-homebound

patients paid for by the hospital Who gets a seat at the table?

• Excellent Home Health Compare and HH-CAHPS scores• Avoidance of Adverse Events (drivers of hospitalization)• Low re-hospitalization and ED incidents• Patient transition protocols• Service plan design, including technology with the right

pricing

Getting a Seat at the TableDoes your agency stand out?

DO YOU DESERVE A SEAT AT THE TABLE?• Excellent Outcomes and Low Hospital and Emergent

Care Usage Compare scores

Source: SHP National Database. Provider: VNA of Cape Cod

DEMONSTRATING SOUND BUSINESS PRACTICES

Source: SHP National Database. Provider: VNA of Cape Cod

DO YOU DESERVE A SEAT AT THE TABLE?• Demonstrating beneficiary satisfaction (excellent HHCAHPS results

Source: SHP National Database. Provider: VNA of Cape Cod

BRINGING TRANSPARENCY TO THE TABLE• Hospitals want to see detailed data• Although it’s helpful to show risk-adjusted scores,

they’re oftentimes more interested in raw numbers• Hospitals find benchmarks interesting, and local

benchmarks even more interesting

DO YOU DESERVE A SEAT AT THE TABLE?

Source: SHP National Database.

WHEN DO MOST OF YOUR READMISSIONS OCCUR?

WHY RAW COUNTS ARE IMPORTANT

DEMONSTRATING TRENDS

ARE YOU GETTING ADMISSIONS THAT ARE HIGHLY LIKELY TO RE-HOSPITALIZE?

HOME HEALTH NEEDS TO IMPROVE INTERVENTIONS TO KEEP HIGH RISK PATIENTS FROM READMITTING

Communities that have a high hospital utilization rate also have higher readmit rates.

THE TRANSITIONS IN CARE SERVICE PROGRAM

THE “TRANSITIONS IN CARE”SERVICE PROGRAM

• Pure transitions patients – are not Medicare eligible• May not be homebound• May not have Medicare benefits• May not meet Medicare qualifying criteria• Always validate the criteria before enrollment!

• Create a separate “transitions” service/program within your organization

• The patient is an agency patient/client – not in certified home care program.

• This patient/client becomes part of the “Transitions Program or Transitions Service Line

WRITTEN CONTRACT • Must have a written agreement with hospital• Include written purpose and scope of transitions program

• Specific responsibilities of both the hospital and the agency• Responsible parties

• Contact information • Hours of availability

• Agreed upon payment rates• Include rates for all functions with inclusion of

differentials and mileage (if indicted)

WRITTEN CONTRACT • Basic requirements of participation in the program

• Physician participation and orders required• Clients must be willing and able to participate• Specify inclusion of Tele-monitoring or Telephone contact• Frequency and type of contact – focus of care is “contact”

not in-home visit• Specify (few) circumstances that may require in-home

visit• Patient/client education materials/teaching/follow-up

• Agreement must specify that the program is for a minimum patient service period of 35 days from hospital discharge at no charge to the patient

TRANSITIONS IN CARE• Must include complete referral information;

• Patient name• Address• Telephone and emergency contact• Hospital diagnoses• History and physical• Signed patient consent and willingness to participate• Responsible physician and transition services

agreement (participation in transitions program)

NURSING ASSESSMENT VISIT• Non-OASIS clinical assessment RN visit• Complete necessary intake and clinical assessment

information to manage (and monitor) the patient • Identify social service needs and safety issues that may

require a PT, OT or Social Work evaluation • Perform a complete/thorough Medication reconciliation• Verify current medication orders• Schedule a physician follow-up appointment if not

already scheduled• Verify vital sign parameters and when to notify

physician• Review disease management education with

patient/client• Reaffirm willingness of patient/client to participate in

program

THE “TRANSITIONS IN CARE”SERVICE PROGRAM – TELE-MONITORING

• Monitoring via ongoing remote monitoring of vital signs via tele-health, as ordered

• Must have a process for monitor removal• Performance of necessary telephone contact with patient

and attending physician• Vital sign alerts• Other signs or symptoms indicating a potential problem

• Follow-up visit(s) not anticipated unless specifically ordered by attending physician and included in written contract

• Transitions program must be included in agency’s quality and performance

improvement process

THE “TRANSITIONS IN CARE”SERVICE PROGRAM – TELEPHONE CONTACT

• Performance of necessary telephone contact with patient and attending physician

• Establish appropriate frequency for contacts• Set goals for each call• May include teaching patient to take and record vital

signs daily• Identification of other signs or symptoms indicating a

potential problem• Review of medications, response and potential side

effects• Follow-up visit(s) not anticipated unless specifically ordered

by attending physician and included in written contract• Transitions program must be included in agency’s quality

and performance improvement process

THE “TRANSITIONS IN CARE”SERVICE PROGRAM

• Identify patient enrollment exclusions:• Strong history of non-compliance with meds, diet and

physician appointments• Evidence of unsafe/inadequate home environment – patient

not safe at home• Attending physician must agree to manage the patient

care with shared goals:• To maintain and improve patients health• To prevent unnecessary re-hospitalizations and emergency

room visits• To provide patient education ands support/mentoring

regarding symptom and medication management• To promote compliance with appropriate disease

management principles• Teach self care and independence to patients and

families/caregivers

PRICE POINT DEVELOPMENT

PRICE POINT DEVELOPMENTVisit Pricing to be developed:1. Nursing visits- initial and follow up2. Physical Therapy3. Occupational Therapy4. Social Work

PRICE POINT DEVELOPMENTConsideration---Should you price at full cost including allocated overhead or do

you default to managed care visit prices? Do your managed care prices per visit constitute a floor for

pricing of this model? Should you use the visit costs that your Medicare cost report

show on Worksheet C Part I? Is a specific cost finding more appropriate?

PRICE POINT DEVELOPMENTCalculation of cost of an initial and follow up nursing visit:Direct cost per RN visit averages $77.76 per visit overall. Total visits were 9,249. Total direct costs were $719,202.Here is how to isolate the cost per type of RN visit: RN visits Time Visit Weight % Direct cost

Per VisitAdmissions 1,214 1.60 1942.40 18.9% $135,881

$112Discharges 1,214 1.25 1517.50 14.8 106,157

87Follow up 6,821 1.00 6821.00 66.3 477,164

70Using 120% of direct cost to in order to account for overhead,

your visit price would be $135 Initial Visit , $84 Follow Up Visit and $21 for a Telephone Follow-up.

PRICE POINT DEVELOPMENTWhat cost do you use for pricing an RN visit?Medicare cost report: $138Specific cost finding: Initial $ 135 Follow up $84 Telephone

Follow-up $21Largest managed care contract rate: $119 Is this your lowest price?

PRICE POINT DEVELOPMENTCalculation of PT/OT Visit costs:Using fully allocated costs per cost report, since all visits are

equal:PT $132OT $133Use $135 per visit.Note: costs include employees and contracted staff combined

and are derived from Worksheet C Part I of the cost report modified to reflect managed care division costs.

PRICE POINT DEVELOPMENT• Calculation of Cost for a Social Work Visit:• Social work costs from the cost report are greatly distorted

due to fewer actual visit being made--- much of the cost reflects telephone time.

• Need to do a cost finding on actual cost per visit:• We looked at our hospice data due to larger staff and more

in-person visits.• We estimated that 60% of total direct costs relate to in-

person visits.• Total direct costs were $493,781. Visits were 3,096.• As a result, direct costs were $97 per visit. Indirect costs

were $58 per visit.• Overall cost per visit is $155.

PRICE POINT DEVELOPMENTEstimate for Telemonitoring costs:All monitoring equipment is fully depreciated at this point.Costs involve person assigned to pick up and deliver devices to

the home and to on call charges for weekend monitoring of results

Based upon total monthly costs divided by average number of monitors in use, we have a monthly charge of $70.

Applying 120% of direct cost formula to account for overhead, we arrive at a monthly charge of $84.

PRICE POINT DEVELOPMENTRecap of per visit costs:Nursing—Initial $135Nursing ---Follow up 84PT 135OT 135MSW 155

Telemonitoring- per month 84

PRICE POINT DEVELOPMENTReal life example of implementation:Large Medicare Advantage plan contract provides for a bonus

to reduce readmissions:Base line readmission rate of 22%Bonus based upon savings in hospital costs at $8,000 per

admission times the difference between actual readmissions and the base line readmissions (22% of hospital discharges assigned to us).

Bonus equals cost of hospital readmissions avoided times:15% if readmission rate drops by 11 to 20%25% if readmission rate drops by 21 to 30%30% if readmission rate drops by over 30%

COST / BENEFIT TO THE HOSPITAL

COST / BENEFIT TO THE HOSPITAL• Large 500 bed teaching hospital in the Philadelphia

metropolitan area Total of 4,627 Medicare Fee for Service discharges in fiscal

year 2011 1,074 (23.21%) discharged patients referred to Homecare 1,079 (23.32%) discharged patients referred to other post acute

settings 162 (3.50%) discharged patients expired 2,312 (49.97%) discharged patients not referred to any post

acute settings ! Hospital does not track its re-admission data! Hospital’s variable cost per Bed Day is $1,130 and likely a

$1,950 total cost Hospital’s variable cost of an Emergency Room visit is

$124.30 and likely a $ 214.31 total cost Hospital’s re-admission rate on Hospital Compare is above

the national average for all reported measured diagnoses! Hospital’s H-CAHP scores are all below national averages!

COST / BENEFIT TO THE HOSPITAL• The Hospital’s 2011 Medicare revenue was

$101,000,000.• If this was 2013, the Hospital’s 1% penalty risk is

$1,010,000• The Vacated Days and ER visits are estimated:

• Assuming an average of 3 re-hospitalized days for each patient and a 50% patient usage of an emergency room visit (actual data unknown)

• Estimated variable cost:2,312 patients discharged x 23.07% readmission rate =

533 patientsx 3 re-hospitalized days = 1599 days @ $1,130 =

$1,806,87050% of 533 patient admitted through ER @ 124.30 =

33,126

$1,839,996

COST / BENEFIT TO THE HOSPITALVARIATION AND COSTS OF SERVICES FOR 35 DAYS:

PatientVariation

RNAssessme

nt

RNFollow-up

Calls

Social Service

Visit

OT VISIT

Tele-healthMonitoring

Total Cost Per

patientRN Only $ 135 (4)

$84 $ 219

Monitoring

$ 135 (4) $84

(35) $98 $ 317

OT $ 135 (4) $84

$ 133 (35) $98 $ 450

Soc. Work

$ 135 (4) $84

$ 155 $ 133 (35) $98 $ 605

COST / BENEFIT TO THE HOSPITAL• Assumed cost of Vacated Days and ER Visit Costs $

1,839,996

• Cost of Services – 2,312 patients• 30% RN only 694 @ $219 = $ 151,986• 25% RN & Monitoring 578 @ $317 = 183,226• 20% RN, Monitoring and OT 462 @ $450 = 207,900• 25% RN, Monitoring OT & SS 578 @ $605 = 349,690

892,802• Net Savings to Hospital

$ 947,194

HOSPITAL READMISSION STUDY WITHIN THE 30-DAY DRG PERIOD

HOSPITAL READMISSION STUDYWITHIN THE 30-DAY DRG PERIODLarge Regional Medical Center in a Western State

680 Readmits (single and multiple)of Medicare Patients within the DRG Period resulted in 8,214 inpatient days for FY 2003

23.53% re-admission rate (2,890 Medicare discharges)!

12.08 average days per readmitted patient! Loss of $15,072,700 @ $ 1,835 per Bed Day Cost

Not including ER or any other Department Costs Only 80 of the Readmitted Patients had ever been

Referred to Home Care Tele-health was not available at the Hospital-based

Home Health Agency

HOSPITAL READMISSION STUDYWITHIN THE 30-DAY DRG PERIODExternal Review of Readmission DRGs

231 Readmitted Patients (34%) should have been in Home Care

Only 34 of the Readmitted patient were referred to home care

Potential Savings to Hospital of 2,752 days (33.50%) @ $1,835 = $5,049,900

Additional Revenue to Home Care Agency = $482,650 Estimated 197 Episodes @ $2,450

HOSPITAL READMISSION STUDYWITHIN THE 30-DAY DRG PERIODExternal Review of Readmission DRGs 449 Readmitted Patients (66%) should not have been

referred to Home Care Could have been eligible for a “Transitions in Care”

program Potential savings of a significant portion of the

$10,022,800 in vacated days cost!

Pat Laff, Managing Principal, Laff AssociatesLynda Laff, Principal, Laff AssociatesWalt Borginis, Executive Vice President/CFO, VNA of

PhiladelphiaBarbara Rosenblum, Founder and CEO of Strategic Healthcare

Programs (SHP)