House Appropriations Subcommittee Article II April 4, 2018 Interim - - PDF document

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House Appropriations – Subcommittee Article II

April 4, 2018 – Interim Hearing LeadingAge Texas represents the full continuum of mission-driven, not-for-profit aging services providers in Texas. We appreciate the opportunity to provide testimony to members of the House Appropriations Article II Subcommittee on Interim Charge 12: Review the state's readiness to care for aging Texans by reviewing the reimbursement methodologies for nursing homes and assisted living facilities, including supplemental payments, Medicaid add-on payments, and availability of alternative methods of finance. Identify methodologies to adequately finance Medicaid rates for long-term care facilities under managed care capitation, support high-quality care for Texas seniors, accommodate new models of care, and encourage care coordination to treat higher incidence of complex conditions.

Current Payment Models in Nursing Homes

Quality Incentive Payment Program in Nursing Homes (QIPP) LeadingAge Texas applauds the Texas Legislature and HHSC in the development and continued support of QIPP. In FY18, 517 of 1,228 (42%) licensed nursing facilities participate in the

• program. QIPP provides an opportunity for participants to earn additional Medicaid funding when

established quality benchmarks are achieved. Recommendations: As the program evolves, LeadingAge Texas recommends options be explored to eliminate unnecessary barriers to participation and expand access to QIPP for nursing homes that do not currently qualify but achieve high-levels of quality. We support the inclusion of a direct-care staff component in future program years to reward and encourage adequate staffing levels, and staff retention efforts. Lastly, we encourage the legislature and HHSC to consider the current Medicaid shortfall in nursing homes and increase the dollars available in QIPP to further improve funding with a focus on quality. Managed Care Incentive-Based Payment Programs STAR+PLUS health plans have developed incentive-based payment programs aimed at rewarding both efficiency and quality in Texas nursing homes (Tex. Gov. Code §533.00251(c)(6)(B) and UMCC 8.1.4.8.3 Nursing Facility Incentives). To date, two of five STAR+PLUS health plans have fully implemented these programs in nursing homes (see Attachment 1). Recommendations: Incentive-based payment programs are valuable in their ability to incentivize and improve quality, and distinguish high performing nursing home providers based on quality outcomes achieved for their residents. However, a major barrier to participation exists as, in order to be eligible, nursing homes must have a certain number of health plan members residing in the facility. A health plan member minimum threshold should not restrict a facility from receiving incentive payments when they achieve quality outcomes for individual residents. LeadingAge Texas recommends the health

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plans remove these thresholds or only apply them to program features that benefit all residents of the facility. Also, these minimum thresholds raise a potential conflict of interest for nursing home providers by creating a financial incentive to influence MCO selection for their residents, which is strictly prohibited. Direct-Care Staff Rate Enhancement Program (Rider 37 – 76th) Implemented in 2000, the program was designed to reward an increase in direct-care staffing, and increase wages and benefits paid to direct-care staff. Participation in the program is optional. Once participation is approved by HHSC, enhanced payments are made through the base reimbursement

• rate. Minimum staffing levels and spending requirements must be maintained for the program year.

Payments are recouped if the requirements are not met as shown through Medicaid cost reports. Due to a lack of funds and the program’s funding methodology participation is limited. Nursing homes that staff above Level 27, currently the highest level of the program, are restricted from receiving the appropriate rate enhancement for their actual level of staffing. Furthermore, nursing homes may only apply to move up three levels for a single program year. Recommendations: It is well known that adequate staffing levels are the number one indicator of quality-care in nursing homes. Inadequate staffing and high turnover rates contribute to Texas’ quality problems and increase Medicaid expenditures both directly and indirectly. The current reimbursement system does little to distinguish high-quality facilities from poor performers. Currently, this is the

• nly program that directly ties Medicaid dollars to direct-care expenditures. LeadingAge Texas

recommends HHSC and STAR+PLUS health plans explore ways to emphasize the importance of adequate staffing levels through existing programs like QIPP, quality-incentive programs and value-based purchasing arrangements. Value-Based Contracting Arrangements in Nursing Homes STAR+PLUS health plans are required to enter into VBP arrangements with 25% of contracted providers in FY19, and 75% of contracted providers in FY20. According to HHSC, MCOs may use their Nursing Facility QI programs as their VBP program if those programs meet the VBP requirement as outlined in 8.1.7.8.2 of the Uniform Managed Care Contract. MCOs also have the flexibility to develop a unique VBP program separate from their QI program. Recommendations: LeadingAge Texas recommends that the measures included in VBP programs look similar to those in Nursing Facility QI programs for reporting efficiency and clarity. As VBP programs develop, nursing homes should be included in these arrangements for FY19 and FY20. Quality measures must be aligned for both the STAR+PLUS health plans and nursing homes to incentivize contract arrangements that differentiate high-quality providers. In addition to reductions in preventable acute care costs, HHSC should also consider MCO performance using certain CMS Five Star long- stay measures, which are specific to the nursing home population.

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Innovative Models to Support Quality Care for Aging Texans

Advanced Practice Registered Nurses (APRNs) in Nursing Homes Evidence has shown that APRNs who work in nursing homes have improved resident care and

• utcomes compared to facilities without APRNs by decreasing preventable, adverse events such

as re-hospitalizations, trips to the emergency room, pressure ulcers, and a deterioration in a resident’s ability to perform activities of daily living (ADLs). A report to the Secretary of the Department of Health, Education, and Welfare noted that in a nursing home setting, nurses with additional training beyond their initial licensure could assess the physical status of patients at a more sophisticated level than is now common in nursing practice in Texas (see Attachment 2). Recommendations: LeadingAge Texas encourages support of a pilot to test the addition of a full-time APRN in Texas nursing homes. Current regulations allow for implementation of this model. In the future, nursing homes that implement this model of care and achieve quality outcomes for residents should be incentivized and rewarded through add-on payment opportunities. Affordable Housing Plus Services for Older Adults The rapid growth in Texas’ aging population is contributing to a dramatic rise in healthcare

• costs. According to Kaiser Family Foundation, 61% of nursing home residents in Texas rely on
• Medicaid1. Impactful services provided in senior housing is proven to promote aging in place

and prevent relocation to costlier settings. Senior housing communities can serve as a platform for the coordination and delivery of health and long-term services and supports, which can help residents better manage their health, maintain independence, and avoid unnecessary use of the ER, acute care services, and institutional settings. “Affordable Senior Housing Plus Services: What’s the Value?” released by the LeadingAge Center for Housing Plus Services found:

• the presence of a service coordinator was found to decrease the odds of having at least
• ne acute inpatient admission by 18%.
• Medication management was associated with a lower average Medicaid monthly payment

by 21% compared to properties without this service.

• Health education services were also associated with a decrease of 8% in Medicare Part D

payments per enrolled month. Recommendations: Several states have been successful in implementing supportive housing programs for seniors and other populations through the Medicaid 1115 Waiver. These programs are designed to create community collaboratives where managed care organizations in the Dual Eligible and Medicaid managed care programs partner with community-based providers, including senior housing. Both

1 “Medicaid's Role in Nursing Home Care.” The Henry J. Kaiser Family Foundation, 6 July 2017,

www.kff.org/infographic/medicaids-role-in-nursing-home-care/.

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the state and managed care organizations are incentivized to support on-site service coordinators, certain health and wellness programs, and preventative services like medication management, well-checks, and home modifications so residents may avoid costlier health care interventions and institutional care settings. LeadingAge Texas recommends Texas explore supportive housing models for low-income seniors and pursue a pilot project to test an appropriate model in Texas through the Medicaid 1115 Waiver. Leveraging the Long-Term Care Insurance Market The rate at which Texas’ population is aging resembles national trends. Medicaid has become the single largest component of state spending. Nationally, 70% of LTSS expenditures are funded through governmental programs, 24% is funded privately, and 6 % is funded through private

• insurance. In the future, 70% of people 65 and over will need some form of LTSS in their
• lifetime. LTSS financing is unsustainable, in order to slow cost growth, Texas must take steps to

address LTSS financing and improve private coverage options for people (see Attachment 3). Recommendations: LeadingAge Texas recommends the legislature examine opportunities to leverage and promote the long-term care insurance market and incentivize individuals to invest in private coverage through tax incentives or other means. Additionally, we should work to identify existing barriers to coverage, i.e. high cost and lack of education. The Long-Term Care Partnership Program (www.ownyourfuturetexas.org) is a joint effort between private insurers and the state of Texas. Insurance companies must follow state and federal guidelines, and agents must be licensed and complete training to sell partnership policies. Partnership policies are tax-qualified plans that also include an asset disregard benefit and inflation protection. Programs like the partnership and

• ther Long-Term Care insurance products should be advertised, promoted and offered to

individuals through various mechanisms like ERS and TRS. Contact: Alyse R. Meyer Director of Public Policy alyse@leadingagetexas.org 512-467-2242 ext. 105