CMS Approves Indiana’s Nursing Facility State Plan Amendment

On May 23rd, 2012, CMS provided notice to Indiana Medicaid that CMS had approved the State Plan Amendment (SPA) submitted by the State in October of 2011.  The SPA was submitted as a result of the 2011 State Budget bill that called for maximization of Indiana’s Nursing Facility Quality Assessment Fee (QAF).  IHCA supported the effort to maximize the QAF in order to increase reimbursement to nursing facilities and to fund Phase III of the nursing facility quality add-on that will move away from sole dependence on the Report Card Score to a Value Based Purchasing methodology comprised of 12 quality metrics.

IHCA is working to obtain details on the implementation plan for the SPA, specifically to ensure that re-processing of the entire fiscal year’s claims is done correctly and to avoid creation of cash flow issues to nursing facilities.  Due to the State having submitted the SPA after October 1, 2011, many of the benefits from the SPA impact claims made as of October 1, 2011 and forward.  This means that while the QAF will be increased retroactive to July 1, 2011, benefits will not be seen in claims from that first quarter of the fiscal year.

The benefits that will be realized in State Fiscal Year 2012 from the approved SPA include an increase to the Quality Assessment Add-on (by virtue of the increase in the QAF), an increased maximum Report Card Score Add-on, a 75-cent add-on to the Administrative Component to recognize a portion of previously disallowed costs related to direct patient care and patient care supports, and a separate increases to the Administrative Component to 110% in 2012 and 108% in 2013.

In addition, starting July 1, 2012 (State Fiscal Year 2013), the approved SPA will permit reimbursement for the following previously disallowed costs:
• Educational seminars for administrative, direct and indirect care staff
• Support license fees for general and administrative software and hardware
• Support and license fees for software used in hands-on resident care
• Rental costs for low air loss mattresses and pressure support devices and oxygen concentrators up to $1.50 PPD
• Denture replacement costs that exceed current Medicaid expenditure limitations
• Legend and non-legend sterile water for any purpose
• Cable or satellite TV
• Pets, pet supplies, maintenance and vet expenses
• Costs related to non-ambulance travel and transportation of residents

The approved SPA will also increase the capitalization threshold from $500 to $1,000.
As details become available regarding implementation of the SPA and retroactive adjustment of claims from State Fiscal Year 2012, IHCA will update member facilities.

If you have questions, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

Changes to Nursing Home Compare & 5-Star Expected This Year

AHCA recently notified State Affiliates of a meeting between CMS and stakeholder groups regarding upcoming changes to Nursing Home Compare and the 5-Star Rating.  AHCA reported the following:

Upcoming changes to the Nursing Home Compare website, expected to be implemented this summer, in addition to updating the look, feel and some functionalities of the website,  include:

•    Posting of survey deficiency reports (2567 forms), beginning for surveys conducted in calendar year 2011.  Until CMS has access to Plans of Correction electronically, anticipated in 2014, this information will not be reflected on the website.
•    Reporting on the new MDS 3.0-based quality measures, including 2 new measures of off-label use of antipsychotic drugs (long-stay prevalence and short-stay incidence)
•    Inclusion of ownership information.
•    Reporting on physical therapist staffing levels.

Longer-term considerations for future enhancements currently in the early phases of exploration include reporting on special capabilities and services offered by facilities to better support consumer identification of facilities that can meet specialized needs and reporting of consumer satisfaction information.  No information was provided as to the expected timeline for potential incorporation of these data.


The Five-Star Rating system will also be modified this summer to incorporate the new quality measures and adjust expected staffing calculations based on MDS 3.0 data.  The approach to revising these measures and calculations has been designed to transition with minimal change to the overall distribution of ratings. CMS also reported that overall trends in Five-Star ratings since the debut of the system in 2008 have shown improvement, with an increasing proportion of facilities receiving 4- and 5-star ratings and fewer receiving 1-star ratings.

IHCA will continue to provide updates as CMS shares additional information and firms up their timeline for rolling out these changes.  Provider preview reports are currently available via the CASPER system.

Smoking Ban Guidance

House Enrolled Act 1149, Indiana’s Statewide Smoking Ban, becomes effective on July 1, 2012. The ban applies to most places of employment and public places, including nursing homes and assisted living facilities.  IHCA has developed a guidance document for members’ reference when implementing changes to their smoking policies in light of the new law. Click on the link to the Members Only section of the IHCA website to view this document.

Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 for additional information or with questions.

CMS Issues Inpatient Hospital and LTCH Proposed Rules

The Centers for Medicare & Medicaid Services has issued a proposed rule that would update Medicare payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS), and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System. 

In the proposed rule,  CMS projects that general acute care hospital payment rates will increase by 2.3 percent in FY 2013.  The 2.3 percent is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes.   Payments for IPPS hospitals are expected to increase by approximately 0.9 percent or $904 million in FY 2013.  CMS also projects that LTCH payments will increase by approximately $100 million or 1.9 percent.

The proposed rule makes a number of changes to payment policies and rates, including:

• Adding the Medicare spending per beneficiary measure to the Hospital VBP Program, which would affect all Part A and Part B payments beginning in FY 2015;

• Establishing a new methodology and the payment adjustment factors for excess readmissions for heart attack, heart failure and pneumonia, and

• Several changes to the LTCH payment system that would:
oExtend the existing moratorium on the “25 percent threshold” policy for one year;

o Apply a 1.3 percent reduction to the first year of a proposed three-year phase-in of a budget neutrality adjustment, so that the proposed adjustment will not apply to discharges occurring on or before Dec. 28, 2012; and,

o Include the IPPS comparable amount payment option for discharges occurring on or after Dec. 29, 2012 in Medicare payments for very short stays in LTCHs.  

To read the press release and fact sheets, go to:  http://www.cms.gov/Newsroom/Newsroom-Center.html.

The proposed rule can be downloaded from the Federal Register at: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.

CMS will not require independent LTC pharmacists

by Ruta Kadonoff, Vice President, Quality & Regulatory Affairs, American Health Care Association

In a welcome response to comments submitted by AHCA and other stakeholder groups, The Centers for Medicare and Medicaid Services (CMS) reported on April 2 that they will not move forward in the immediate term with a proposal to require LTC facilities to hire independent consultant pharmacists, while reserving the possibility of doing so in the future if reductions in “inappropriate prescribing,” including the off-label use of antipsychotic drugs, are not observed. This decision was reflected in a final rule with comment period for the Medicare Advantage and prescription drug benefits programs for Calendar Year 2013.

In an October, 2011 Federal Register Notice, CMS discussed a potential new requirement for LTC consultant pharmacists to be independent of any affiliations with the facility's pharmacies, pharmaceutical manufacturers and distributors, or any affiliates of these entities. CMS reasoned that such a requirement was necessary to ensure that consultant pharmacist decisions were objective, unbiased, and in the best interest of nursing home residents. CMS now indicates that, “From comments received on this issue, we now believe a more targeted and less disruptive approach is warranted.”

In December 2011, AHCA submitted comments to CMS on this proposal, which the AHCA Pharmacy Workgroup was instrumental in shaping. In those comments, AHCA agreed that it is important to minimize the potential for a conflict of interest on the part of the consultant pharmacist and argued that current regulations and Guidance to Surveyors provides adequate support for CMS to deal with potential conflicts. AHCA also provided 6 alternative suggestions to minimize potential conflict of interest, provided data from the one state that requires an independent pharmacist that suggests “independence” does not necessarily result in reduction of use of antipsychotics and listed (with supporting information) advantages to having the consultant pharmacist associated with the dispensing pharmacy.

CMS is now soliciting additional comments to help determine a more comprehensive approach to eliminate overprescribing and reduce the use of antipsychotic drugs in LTC. CMS also strongly encourages the LTC industry to voluntarily adopt the following changes to increase transparency:

• Separate LTC consultant contracting for dispensing and other pharmacy services;

• Pay fair market rates for consultant pharmacist services; and

• Disclose to LTC facilities any affiliations of consultant pharmacists that pose potential conflicts of interest (this may include the execution of consultant pharmacist integrity agreements.)

CMS adds that if the expected improvements in prescribing behavior and antipsychotic drug use do not occur through voluntary practice changes, they will use a future notice and comment rulemaking to propose requirements to comprehensively address these concerns.

The AHCA/NCAL Quality Initiative

Long term and post-acute care leadership from the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) have announced a multi-year initiative to meet new quality goals, including reducing hospital readmission rates and improving staff retention.

The Quality Initiative focuses on four goals designed to improve quality of care in America's skilled nursing centers and assisted living communities.

1. Reduce Hospital Readmissions: By March 2015, reduce the number of hospital readmissions within 30 days during a SNF stay by 15 percent.
2. Increase Staff Stability: By March 2015, reduce turnover among nursing staff (RN, LVN, CNA) by 15 percent.
3. Reduce the Off-Label Use of Antipsychotics: By December 2012, reduce the off-label use of antipsychotics by 15 percent.
4. Increase Customer Satisfaction: By March 2015, increase the number of customers who would recommend the facility to others up to 90 percent.
(Please note: NCAL is currently developing its specific measures and targets.)

The Quality Initiative goals have been defined for the next three years to foster sustainable change and set specific benchmarks for the long term and post-acute care profession to build upon. AHCA/NCAL is challenging its membership to hold itself accountable in ensuring a higher quality, lower cost health care system.

"The quality initiatives goals set forth by the AHCA compliment our efforts in Indiana as we move towards the most robust value-based purchasing program in the country," said Scott Tittle, President of the Indiana Health Care Association. "The combined focus of these measures and those in the VBP program relating to reducing employee turnover, improving staff retention, and achieving high marks in employee, resident, and family satisfaction should result in improving the experiences of residents and staff in our member facilities.  Indiana members want to thank the AHCA for taking this very important step and being the leader nationally in improving resident care."

Reaching the targets set in each goal in the Quality Initiative will improve the health of thousands of seniors and people with disabilities, while at the same time driving down health care costs. When AHCA members achieve the goal of reducing hospital readmissions by 15 percent, 26,000 fewer people will go back to the hospital each year. Improving staff satisfaction will result in more consistent staffing in long term and post-acute care settings, keeping more than 615,000 in their jobs.  Less off-label use of antipsychotic medications will help patients avoid the health complications that come with the drugs. More satisfied residents and families means that AHCA member facilities are fulfilling the mission of providing quality care.

AHCA/NCAL has created a volunteer-led Quality Cabinet to coordinate and monitor the progress of the Quality Initiative. More information about the Initiative is available online at qualityinitiative.ahcancal.org.

GAO Issues Study on Implementation of the Quality Indicator Survey

by Lyn Bentley, AHCA Senior Director of Regulatory Services

This week the GAO issued a study:  Nursing Home Quality: CMS Should Improve Efforts to Monitor Implementation of the Quality Indicator Survey.  The study states that CMS has not done an adequate job of monitoring the implementation of the Quality Indicator Survey (QIS).   While CMS has taken some steps to monitor implementation progress of the QIS, the monitoring has not been systematic nor is it consistent with federal internal control standards.

Of particular interest is the GAO position that “In the case of the QIS-based routine survey process, information collected through performance goals and measures could help CMS routinely monitor the extent to which the objectives of the QIS are being achieved.  This information could also inform future efforts by CMS to modify and improve the QIS process as needed.”  CMS agreed with the need for certain performance measures – particularly with regard to examining the effect of the QIS on surveyor consistency.

GAO Recommendations to CMS
• Develop a means – such as performance goals and measures – to routinely monitor the extent to which CMS is making progress in meeting the objectives established for the QIS;

• Develop and implement a systematic methodology to track state survey agencies’ progress with implementation activities; and

• Develop and implement a systematic method for obtaining, compiling, and sharing information from state survey agencies about their implementation experiences.

CMS Responses to the GAO Recommendations
CMS concurred with these recommendations and intends to:

• Establish new or modify existing measures or processes to more effectively monitor CMS’s progress towards meeting QIS goals and objectives.  CMS is already reviewing available data related to the QIS (for example, data on survey workload, survey deficiencies, and the number of surveys performed) to more effectively monitor the QIS and guide improvement efforts.

• Formalize the data collection method used to track states’ progress with QIS implementation activities.  CMS will institute an automated process to obtain updated information on states’ progress with training surveyors which, when combined with existing data, could provide a more accurate assessment of implementation activities in any state.

• Enhance existing and add new methods of sharing information on the QIS with states.  CMS plans to expand existing information sharing opportunities (for example, quarterly calls and presentations at annual meetings) to be available to all states, not just those in the process of implementing the QIS.  CMS is also considering using a web-based capability to facilitate sharing information on QIS implementation.