TO:  AHCA Leadership & Constituency Groups
FROM: Governor Mark Parkinson, President & CEO
RE:  The SNF PPS Announcement
DATE: April 28, 2011

Late Thursday afternoon, CMS released the annual Skilled Nursing Facility Prospective Payment System Rule for FY 2012.  The proposed rule provides for two different scenarios and seeks input as CMS decides which to implement on October 1.
  
The first proposal would be debilitating.  The second we can live with. It is possible that CMS will implement one or the other in their entirety, or implement a completely different rule that is a blend of the two.  Our reimbursement team will send you a complete analysis of the proposed rule shortly.  What I will do here is provide you a very general overview and then our plan for achieving the best possible result. 

Option One
In option one, CMS attempts to adjust for the unanticipated impact of RUGS-IV. But it does so in a way that goes far beyond the actual impact.  In a nutshell, the rule states that to make RUGS IV revenue neutral, CMS must cut reimbursement rates by approximately 12.8%.  After factoring in the 1.5% market basket increase, the net impact would be an 11.3% rate reduction effective October 1 of this year.

CMS proposed this drastic cut, but acknowledges that its base of information on RUGS IV payments is limited. It only had first quarter data available to make its determination of an alleged “overpayment.”  The rule itself states:
“However, it is also possible that the apparent magnitude of the overpayments may itself represent a temporary aberrance resulting from the limited FY 2011 data that are available at this point in time.”

Option Two

Option two is simple.  CMS would update the market basket index for FY 2012 by 2.7 percent.  We would then take a 1.2 percent productivity adjustment as a result of the Affordable Care Act.  The net result is that we would gain 1.5% or a total of $530 million in Medicare reimbursement.
We will conduct an independent analysis of the market basket calculation to determine if it is correct, but this option is typical of what happens year-to-year and in line with what we expected.

AHCA's Course of Action

There is now a comment period where we and others have an opportunity to submit information to CMS.  To say that we will take full advantage of this opportunity is a gross understatement.  For obvious reasons this will be our primary focus.
We will be doing the following:
1.  Gathering the data and rechecking the CMS calculations to determine the alleged “overpayment” from RUGS-IV, if any.  While it is possible that CMS missed revenue neutrality with the implementation of RUGS-IV, it is critical that it not overshoot in an attempt to remedy that miss.  I have spoken with many members about their reimbursement rates since October 1, and I am confident that there was no 12.8% so-called overpayment.  We will make sure that CMS has data that truly reflects what is taking place.

2.  Officials at CMS have indicated a willingness to talk with us to discuss these approaches and their impacts.  Among other arguments, we will discuss the debilitating impact the overreach the first approach would have to nursing homes across the country, particularly at a time when many face huge Medicaid challenges.

3.  At the appropriate time, we will ask our membership and others who are friendly to our sector to reach out to CMS and others.  While I won’t outline our strategy in a written document, we will aggressively pursue the interest of our members, their businesses, employees, patients and families. 

Final Thoughts

I totally understand that this proposed rule is news you neither need nor deserve.  There are many challenges that you face every day, even in the best of times.  The Medicaid crisis has made these times especially more difficult. 

We all knew that CMS would respond to the RUGS-IV rates.  What we can’t accept is an over response.  We will work hard to do everything we can to keep that from happening.
 Part of that will be continual communication with you about our progress and information that we need from you to best make our case.  I continue to believe that if we stay united, then we can defeat the many challenges we face.

The American Health Care Association is nearing the completion of its 2010 Nursing Facility Staffing Survey.  If you have not completed the survey, please take the time to complete it for receipt by Friday, April 29, 2011.  The goal of this survey is to provide statistics on retention, and turnover for advocacy purposes.  If the response rate for each state is sufficient, AHCA will be able to generate these statistics on a state level basis.  Please note that individual results will not be disclosed to any party.

A PDF version of the survey may be found at:
http://www.ahcancal.org/research_data/staffing/Pages/default.aspx

Here are a few hints for completing the survey.  In Column A, the data for the total number of current employees as of December 31, 2010 can be obtained from the payroll report that includes the date of December 31, 2010.  In Column B, the total number of vacant positions as of December 31, 2010 can be obtained from your Human Resource records.  In Column C, the number of employees who had worked in the facility for 1 year or longer can be obtained from year-end payroll records for 2010. These records may include the date of hire. If the individual was employed in the last payroll report for 2010 (or on December 31, 2010) and had a hire date prior to January 1, 2010, then he/she would be included in the number provided in Column C.  In Column D, the total number of employees (whether full-time or part-time) during Calendar Year 2010 can be obtained from the year-end payroll records for 2010.

Any questions regarding the completion of this survey may be directed to Mr. Jeffrey Liu at 202-898-2818, Ms. Lisa Matthews-Martin at 202-898-2824 or Mr. Bill Hartung at 202-898-2841.

Nursing homes and assisted living facilities are once again exempt from paying movie-licensing fees, thanks to an agreement with the Motion Picture Licensing Corporation.

While nursing homes and assisted living facilities are free from paying video licensing fees, the agreement states communities with independent living units must acquire a license based on the number of individual apartments in the community. Additionally, any senior community that has a closed circuit television system (such as an in-house channel) playing videos also needs a license. The American Health Care Association/National Center for Assisted Living and LeadingAge brokered the agreement, which also includes a 10% discount on MPLC rates for some facilities with continuing care.

The issue of nursing homes paying licensing fees is not new. In the 1990s, Congress worked with the LTC industry to set guidelines for exempting facilities from paying movie licensing fees. But that agreement ended in 2000. Few instances were pursued by the licensing agency due to an established “pattern of practice” with the profession, according to a statement from providers. Some operators remained confused, however, and providers said when the issue came up again in recent years, they sought clarity.

 Specialty products for this year’s National Nursing Home® Week are going fast! There is still time to place your order and receive your items before May 8, but you need to hurry! Some of our inventory is getting low and all product may not be available for much longer. Spend $125 or more and get FREE shipping. Shop online and enter Discount Code: NNHW or mention the code when placing your order by phone, 800-231-0343. This offer is valid through May 2, 2011.     
 

The Kansas State Fire Marshal's Office has resumed regularly scheduled quarterly meetings with KHCA/kcal and other provider groups. During these meetings, a variety of topics are discussed from CMS and Lafe Safety Code interpretation to the top ten most frequestly cited deficiencies for LSC in the  state. Click here to see the notes from that meeting. Click here to views the top tem deficiencies. Click here for the Quarterly Prevention News from the Fire Marshal's office.

The 2011 Kansas Legislature passed House Bill 2134 bringing the first significant reform to the state’s work comp laws in nearly 20 years. HB 2134 was the result of negotiations between business and labor groups in late 2010.

Employers across the state do not want to miss this presentation by Tony Andersen, Fred Greenbaum and Lyndsay Spiking with McAnany, Van Cleave & Phillips, P.A., attorneys from the negotiating team representing businesses across Kansas.

This seminar will be held in four locations across the state- Wichita, Topeka, Salina and Kansas City.

Space is limited to 75 people per location.
Please register at least 7 days before the event for the location you select.

Registration Fee: $75 for KS Chamber, KS SHRM and KSIA members. $125 for non-members.

Return this form to Kansas Chamber of Commerce - 835 S.W. Topeka Blvd., Topeka, KS 66612
or fax to 785-357-4732

For assistance please contact the Kansas Chamber at (785) 357-6321

Please note - KHCA/kcal is not handling registrations for this event. Click here for more information.

CMS invites you to participate in a 90 minute national forum for individuals and organizations that wish to learn more about the CMS Community-Based Care Transitions Program (CCTP) on Thursday, May 5 at 12:00pm Central Daylight Time.

The CCTP, mandated by Section 3026 of the Affordable Care Act, is specifically designed to encourage the development of strong partnerships between hospitals with high readmission rates and community based organizations (CBOs).  These partners are encouraged to implement evidence-based interventions targeting high-risk beneficiaries from their communities who would most benefit from the proposed interventions.  The specific goals of the CCTP are to:
*Improve transitions of beneficiaries from the inpatient hospital setting to other care settings;
*Improve quality of care for Medicare beneficiaries;
*Reduce avoidable hospital readmissions for high-risk beneficiaries; and
*Document measureable savings to the Medicare program.

This Open Door Forum will provide an overview of the program, answers to many previously-received inquiries, and the opportunity for questions.  Speakers will include:
* James Hester, Senior Advisor, Innovation Center, CMS
* Joe McCannon, Senior Advisor to the Administrator and Group Director, Learning and Diffusion, Innovation Center, CMS
* Juliana Tiongson, Social Science Research Analyst, Innovation Center, CMS

Moderators: Bill McQueeney (CMS Office of External Affairs and Beneficiary Services Forum Leader) and Linda Magno (Director of the Medicare Demonstrations Program Group in the CMS Innovation Center).

Agenda (Subject to change) Times Show in Eastern Daylight:
1-1:10pm – Joe McCannon will outline the Partnerships for Patients initiative and the opportunities available for all to participate
1:10-1:20pm – James Hester will provide background information on the role of care transitions in improving patient safety
1:20-1:30pm – Juliana Tiongson will give an overview of the program and the resources available, and answer many frequently asked questions
1:30-2:30pm – Question and Answer session

Presentation slides will be posted before the call at http://www.CMS.gov/DemoProjectsEvalRpts/MD/itemdetail.asp?itemID=CMS1239313.  You may ask questions on the call, or submit questions in advance to mailto:CareTransitions@cms.hhs.gov.

Participation Instructions:
To register for this audio-only streaming webcast, visit http://www.CMS.gov/apps/events/event.asp?id=637.
To ask a question during this Forum, call 800-837-1935 and use Conference ID #62519672.  A limited number of lines are also available for people who have technical problems with the streaming audio.
For TTY Communications Relay Services, dial 711 or 800-855-2880 for help.
Live captioning and a transcript of the captioning will be available at http://www.FEDRCC.us//Enter.aspx?EventID=1744782&CustomerID=321.
Mobile phone apps are commercially available to use the Ustream player.

If You Miss the Forum:
An Encore recording of this Forum will be available Mon May 9 through Wed May 11.  To hear this recording, call 800-642-1487 (Conference ID #62519672).
An archived stream of this forum will be available for 90 days at http://www.Ustream.tv/channel/cms-public-events.
An mp3 recording and official transcript will also be available on Fri May 13 at http://www.CMS.gov/OpenDoorForums/05_ODF_SpecialODF.asp.