long term care policy in flux: provider and payer perspectives on the future carol raphael senior...

Long Term Care Policy In Flux:

Provider and Payer Perspectives on the Future

Carol RaphaelSenior AdvisorManatt Health

New York Academy of MedicineJune 11th, 2015

2Agenda

1. Long-Term Care: The Basics

2. Why is LTC Policy in Flux?a. Need and Demand Are on the Riseb. Predictable Coverage is Lackingc. Delivery System: Fragmented and Difficult to Accessd. Workforce Pressures are Increasinge. Quality is Variable and Difficult to Measure

3. What Challenges Do Payers Face?

4. What Challenges Do Providers Face?

5. Where Do We Go From Here?

6. Q&A

Long Term Care Policy In Flux | Manatt Health

31) Long-Term Care: The Basics

A range of services and supports an individual needs to meet personal care and daily routine needs

Mostly non-medical assistance with:• Activities of daily living

(bathing, dressing, etc.)• Instrumental Activities of Daily

Living (Housework, personal finances, groceries, etc.)

A range of medical services that support an individual’s continued recovery from illness or management of a chronic illness

Medical care includes:• Home health• Skilled nursing• Inpatient/Outpatient Rehab• Long-term acute care• Hospice/palliative care

Post-Acute CareLong-Term Care

Long-Term Care is provided on an ongoing basis and helps patients with chronic conditions, diseases, disabilities and functional impairments live independently.


4

In total, over 12 million Americans rely on LTSS; 70% of people turning age 65 can expect to use long-term care during their lives and 8% of individuals between 40-50 years of age have a disability that may

require long-term care.

1) Long-Term Care: The Basics

Data Source: LTC Services in the US: 2013 Overview, CDC

Adult Day Service

s Center

Home Health Agency

Hospice

Nursing Home

Residential C

are Community

36.5%17.6%

5.5% 14.9% 6.7%

19.4%

24.6%

16.4%14.9%

10.4%

27.2%32.2%

31.1%27.9%

32.4%

16.9% 25.5%46.8% 42.3% 50.5%

Percent Distribution of LTC Services Providers, by Provider Type and Age Group (2011-2012)

85+75-8465-74Under 65


Duals

There are over 9.5 million dual-eligible

beneficiaries (eligible for both

Medicare and Medicaid), and 2 in 5 is under age 65.

In 2010, they accounted for over

$284 billion in spending.

5

By 2050, 20% of total population will be 65+ and 4% of the population will be 85+ (up from 12% and 1.5% respectively in 2000).

In addition, it is estimated that over 27 million people will need LTC by 2050.

2a) The Need and Demand for LTC is on the Rise


Data Source: Commission on Long-Term Care, “Report to the Congress,” September 2013.

12 million

27 million

2010

2050

Number of Americans Needing Long-Term Care

62a) The Need and Demand for LTC is on the Rise

Advances in medical research, new medical treatments, and new technologies enable patients to live longer lives with chronic diseases. LTC users often need assistance with non-medical care, as well.

0-1 2-3 4-5 6+

47%28%

17% 9%

37%

34%

20%

9%

23%

33%

27%

18%

17%29%

29%

25%

Percentage of Medicare FFS Beneficiaries by Number of Chronic Condi-tions and Age (2010)

85+75-8465-74<65

Number of Chronic Conditions

Data Source: Chronic Conditions Among Medicare Beneficiaries Chartbook, CMS, 2012


72b) Predictable Coverage is Lacking

51%

21%

19%

8%

Private Insurance

Out-of-pocket

Other Public

Medicaid

A recent RAND study estimated that informal

caregivers for the elderly account for over

$500 billion annually

Total National LTSS Spending = $310 B

Share of LTSS Spending, by Payer (2013)

Data Source: Kaiser Family Foundation

In 2013, Medicaid covered over half of all LTSS expenditures.


8

Enrollees Expenditures

93.6% 55.5%

3.1%

19.2%

13.0%

9.1%

Medicaid Enrollment and Benefit Spending by LTSS Users, FY 2011

No LTSS

Non-institutional LTSS only, with no services via HCBS wavier

Non-institutional LTSS only, with some services via HCBS wavier

Institutional LTSS only

Institutional & non-institutional LTSS

While LTSS users account for a relatively small proportion of the overall Medicaid population, they account for close to half of all expenditures.

2.2%

1.9%

2.0%0.3%

LTSS Users = 44.5%

($171.8 B)

Data Source: MACPAC analysis of Medicaid Statistical Information System (MSIS) data and CMS-64 Financial Management Report (FMR) net expenditure data from CMS as of February 2014



9

Nursing Facility Home Health Aide Adult Day Care

$87,600

$45,760

$16,900

Data Source: Kaiser Family Foundation – All costs are from 2014

From 2002-2012, the cost of a private

nursing room home grew an average of

4% annually…

…the cost of a Home Health

Aide grew 1.6% annually… …and the cost of

Adult Day Care services grew 2.8% annually

from 2007-2012.

Over half of all individuals who spent down assets and qualified for Medicaid did so paying for LTSS.

100% FPL for a family/household

of three, 2014

$19,790



10

1990 1995 2000 2005 2010 $0

$500

$1,000

$1,500

$2,000

$2,500 Individual LTC Insurance Average Premium by YearLTC Insurance take-up is not very

high and it is not very attractive to consumers due to:1. High premiums2. Limited benefits3. Costs in the short-term for a

distant and not guaranteed need

4. Poor education and awareness

Data Source: Who Buys Long-Term Care Insurance in 2010-2011, AHIP

Roughly 13% of single individuals purchase long-term care insurance, even though roughly 30-40% of elderly individuals should optimally purchase such coverage.

Coverage levels have fallen as premiums have risen:

Genworth Old Policy: $200 per day x 4 years = ~$300,000 maximum coverageGenworth New Policy: $137 per day x 3.4 years = ~$170,000 max coverage



112c) Delivery System: Fragmented and Difficult to Access


Lacks coordination and communication across providers

Can be expensive and inefficient

Quality is variable and hard to measure

Often crisis-driven and hard to navigate

Providers have been late in adopting EHRs and therefore interoperability remains an aspiration

122d) Workforce Pressures are Increasing

The LTC system faces major workforce shortages for both direct service workers and informal caregivers.

Formal Workforce• Includes nurses, physical and occupational therapists as well as direct care workers such as home health

aides (HHAs) and certified nursing assistants (CNAs).

• Direct care CNAs and HHAs have significant job turnover, with almost half of workers employed at more than one job in a 2-year period.

o Personal Care Aides and HHAs are the second and third fasting-growing occupations in the country and both are projected to grow by nearly 50% by 2022.

o Wages remain low – the lowest on the list of 30 fastest-growing jobs:

$19,910 annually/$9.57 an hour for personal care aides

$20,820 annually/$10.01 an hour for HHAs

o On average, home care workers only work 34 hours a week and 1 in 5 is a single mother.

• In 2014, it was estimated that over 1 million new workers personal care aides, HHAs, and CNAs will be needed to meet demand over the next decade as the population ages.


13

Informal Workforce• Informal caregivers are often family members or friends and account for over $500 billion in

care for the elderly, alone.

• Over 75% of adults with LTC needs depend on family or friends as their only source of care

• Providing care takes a physical, emotional, and financial toll on caregivers

o 83% say they would feel obligated to provide assistance to a parent, if needed.

o 47% of caregivers feel high emotional stress

o Caregivers who leave the workforce to care for a parent, average wage and benefit losses of over $300,000 over their lifetime.

• This workforce is declining with the decrease in family size, increase in women (65% of which are the primary caregivers) in the workforce, and geographic dispersion of families.

o In 2010, the ratio of potential family caregivers to those 80+ years old was 7:1. This ratio is expected to drop to 4:1 by 2030 and less than 3:1 by 2050.

The LTC system faces major workforce shortages for both direct service workers and informal caregivers.

2d) Workforce Pressures are Increasing


14

The Star Quality Rating System was a start, but continues to produce concerns; more than 40% of nursing homes in 11 states received low quality ratings. Nursing homes are

self-reporting quality ratings.

22%11%

28%12%

23%

23%

21%

32%

19%

23%

18% 31%

20%23%

20%14%

16% 20%13% 10%

Share of Nursing Homes by Star Rating (2015)

1 Star

2 Stars

3 Stars

4 Stars

5 Stars


Percent of Nursing Homes with 1 or 2 Stars, by State (2015)

>40%

31-39%

<30%


11 states

18 states

21 states + DC

2e) Quality Is Variable and Difficult to Measure


15

LTSS quality measurement is in its nascent stages.

2e) Quality Is Variable and Difficult to Measure

The challenge to create meaningful, accepted quality measures remains.

Multiple provider types with varying payment structures and different requirements for Medicare and Medicaid.

Use of multiple assessment tools to capture similar information.

Measures must include clinical and non-clinical measures.

Measures should be standardized and allow for variation.

Measures should connect to current efforts in hospital admissions and population health.

Patients and caregivers should be involved in measure development.

“Quality” should extend to include organizational capacity, incentives, and preparation of workforce.


16

What Challenges Do Payers Face?


17LTC Financing Largely Untouched by ACA

The ACA included the Community Living Assistance Services and Supports (CLASS) Act, but it was repealed not long after.

The CLASS Act established a government run long-term care insurance program Voluntary payroll deductions would fund

the program. Those that participated would need to pay

into the system for 5 years before they would be eligible for benefit

The program would provide at least $50 cash per day for eligible beneficiaries.

In 2013, the CLASS Act was repealed after HHS determined that the program could not be implemented in an actuarially sound manner. The repeal also

established the national Commission on Long-Term Care.


18

LTSS account for over one-third of Medicaid spending and spending on Home and Community-Based Services (HCBS) is rapidly rising.

In 2011, 80% of nonelderly and 50% of older Medicaid beneficiaries with disabilities used HCBS.

Issues Facing Medicaid: Rebalancing

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

-10%

0%

10%

20%

30%

40%

50%

60%Medicaid Expenditures, FFY 1995-2012

LTSS as % of Total Medicaid Expen-ditures

Medicaid HCBS Spending as % of Total Medicaid LTSS Spending

Data Source: Medicaid Expenditures for Long-term Services and Supports in FFY 2012, CMS, April 2014


19Issues Facing Medicaid: Rebalancing

By The Numbers

In 2011, 1.45 million Medicaid beneficiaries accessed HCBS through 291 different 1915(c) waivers, totaling $38.9 billion in spending.

Today, there are 300 individual waivers in 47 states and DC.

In 2013, over 536,000 individuals in 29 states were on a waiting list

Medicaid State Plan

Some states cover a limited set of HCBS as optional Medicaid state plan services

Historically, states must offer HCBS to all Medicaid beneficiaries and cannot impose enrollment caps

Since 1994, HCBS waivers have enabled states to shift LTSS utilization and spending from institutional settings to the community.

1915(c) or HCBS Waivers

1915(c) waivers allow states to target HCBS services to certain populations or income levels

States can implement financial and functional eligibility standards, enrollment caps, and waiting lists to manage costs.


20Issues Facing Medicaid

The ACA provides new opportunities to

improve access to community-based

LTSS


Money Follows the Person Demonstration (44 states + DC)

Balancing Incentive Program (23 states)

Health Home Option (19 states, 26 models)

Home and Community-Based Services Option (16 states)

Duals Demonstration (12 states)

1915(k) Community First Choice Option (4 states)

Medically Frail Accessing LTSS Through State Plan or ABP

1

2

3

4

5

6

7

21

Issues Facing Medicaid: Payment & Delivery System Reform

NJCT

MI

CA

NV

OR

WA

AZ

UT

ID

MT

WY

CO

NM

NE

MEVT

NY

NC

GASC

ALMS

LATX

OK

PA

WI

MN

ND

OH WV

SD

AR

KS

IA

IL IN

AK

HI

TN

KY

DE

NH

VA MD

RI

DC

FL

MA

MO

MLTSS Programs (2014)

Current MLTSS program

MLTSS being planned or implemented (2015 and beyond)

Duals demo only

Data Source: NASUAD – November 2014.

Over half the county has or is planning to implement Managed Medicaid LTSS.


22



Setting rates and risk adjuster that pay for value while containing costs.

Determining the future of institutional options in the continuum of care

Providing consumer education, choice, and continuity of care

Defining “appropriate” placement and utilization where support needs to be on-going

Establishing meaningful, parsimonious quality measures that include patient and family goals and experience

States face a number of challenges as they shift payment and delivery system models.

23


Comprehensive Benefit Packages

1. Program of All-Inclusive Care for the Elderly (PACE) Operate adult day health centers where enrollees go regularly

and receive many services

2. Medicaid Advantage Plus (MAP) Newer program to provide long-term and acute care services to

duals

3. Fully Integrated Duals Advantage Program (FIDA) Newest program to provide long-term and acute care services

to duals Single, blended capitation rate to cover Medicare and Medicaid

services

NY’s Mandatory Managed Long Term Care (MLTC) enrollment began in the Summer of 2012 in New York City and expanded to suburban and Upstate counties over the course of three years. There are limited and

comprehensive benefit packages available to individuals with LTC needs.

1985 2000 2011 2012

PHSP Authorizing Legislation is Enacted

Mandatory MMC Enrollment Begins

Mandatory MLTC Enrollment Is

Approved

Mandatory MLTC

Enrollment Begins in NYC

2015

Statewide Rollout and Transition of Populations into

MLTC is Complete.

Limited Benefit Packages

1. Managed Long Term Care (MLTC) Does not cover acute care

hospital and physician services but provides care coordination for all health benefits for members


244) Issues Facing Providers


Determining risk levels of population and true costs of meeting requirements in order to negotiate viable contracts

Navigating how not-for-profits can successfully compete with national for-profits, while keeping a community presence

Expanding service portfolios and retooling institutional providers

Preparing staff for new roles, practice, and interdisciplinary teams

Migrating to a more competent and committed workforce and absorbing the costs to do so

Developing transition programs that enable smooth hand-offs and bi-directional communication

Building an infrastructure for quality and data analytics

Meeting increased levels of monitoring

25

5) Where Do We Go From Here: The Commission on LTC

The Commission was established as part of the American Taxpayer Relief Act of 2012 in early 2013.

On September 30, 2013, the Commission completed its work and submitted its Final Report to Congress, recommending:

The creation of a public/private financing system;

That each patient has a point person no matter where they are in the system;

A uniform assessment to be used by all to ensure patients are receiving the right care at the right place;

Sustaining and building on family caregiving;

Setting standards and investing in a well trained formal workforce; and,

Adopting innovative technology to better integrate LTC into health care and human service systems and meet people’s needs.


The Commission’s goals included:

Continuing the national dialogue to educate leaders and the public

Getting ahead of the demographic challenge

Enabling independence and choice – to the fullest extent possible

long term care policy in flux: provider and payer perspectives on the future carol raphael senior...

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