SNP Alliance 13th Annual Leadership Forum Washington, DC The Role of Nursing Facilities in Serving Enrollees in Special Needs Plans SNP Alliance 13th Annual Leadership Forum Washington, DC November 2, 2017 James M. Verdier Senior Fellow Mathematica Policy Research

Overview of Main Points Medicare short-term skilled nursing facilities (SNFs) and Medicaid long-term nursing facilities (NFs) play major roles in providing care for Medicare and Medicaid beneficiaries SNF and NF care in the fee-for-service (FFS) system is not well coordinated with other services or provided in the most cost-effective way Medicare Special Needs Plans (SNPs) have opportunities to improve SNF and NF care and reduce costs Dual Eligible Special Needs Plans (D-SNPs) have broader opportunities to improve nursing facility care than Institutional SNPs (I-SNPs), since D-SNPs also have varying degrees of responsibility for Medicaid long-term supports and services (LTSS) I-SNPs can provide a greater focus on improving short-term Medicare SNF care and coordinating that care with hospital and physician care and other Medicare services SNP tools to improve care and reduce costs include care coordinators, information exchange systems, selective contracting, and value-based purchasing (VBP) Use of these tools should be informed and supported by quality and performance measurement SNPs can build on measurement and improvement initiatives that already exist in the FFS system

Medicare and Medicaid Nursing Facility Spending and Utilization Medicaid and Medicare paid for more than half of all nursing facility care in 2015 Medicaid – 32% Medicare – 24% Over 90 percent of all nursing facilities provide both Medicaid and Medicare services NFs accounted for 50% of all FFS Medicaid spending on full benefit dually eligible beneficiaries in 2012, and SNFs accounted for 13% of Medicare FFS spending on full duals 10% of full-benefit dual eligibles used FFS Medicare SNF services in 2012 (vs. 4% of Medicare-only beneficiaries) 21% of full-benefit dual eligibles used FFS Medicaid NF services in 2012 SOURCE: ICRC Working with Medicare webinar, “Medicare and Medicaid Nursing Facility Benefits: The Basics and Opportunities for Integrated Care,” April 27, 2017. Available at: http://www.integratedcareresourcecenter.com/PDFs/ Slides%20WWM%20on%20SNF%20NF%20Benefits%20%20(Final)%20for%20508%20review.pdf

Enrollment in Medicare-Medicaid Plans, PACE, FIDE SNPs, Integrated D-SNP/MLTSS Plans, and I-SNPs

Current Aligned Enrollment in Integrated Plans* Plan Type 2017 Aligned Enrollment States Medicare-Medicaid Plans (MMPs) 408,934 CA, IL, MA, MI, NY, OH, RI, SC, TX, and VA PACE 40,379 31 states FIDE SNPs 151,437 AZ, CA, MA, MN, ID, NJ, NY, and WI Non-FIDE SNP Integrated D-SNP/MLTSS Plans 67,043 CA, MN, TN, and TX *Aligned enrollment refers to the number of dually eligible enrollees who are obtaining both Medicare and Medicaid services from the same plan, or from companion plans operated by the same company in the same geographic area. Enrollment is for October, except for Non-FIDE SNP Integrated D-SNP/MLTSS Plans, which is for July.

I-SNP Enrollment by State, October 2017 Number of I-SNP Plans Total I-SNP Enrollment New York 11 18,525 Florida 8 5,190 Pennsylvania 7 4,797 Georgia 3 3,368 Connecticut 2 3,280 Colorado 3,181 North Carolina 3,007 Arizona 4 2,744 California 2,615 New Jersey 2,388 Wisconsin 2,230 Washington 1,783 Rhode Island 1,758 Virginia 5 1,680 Ohio 1,637 Indiana 1,422 Maryland 1,223 Oregon 6 Washington, D.C. 927 Delaware Illinois 920 Nevada 1 646 SOURCE: CMS SNP Comprehensive Report, October 2017. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data-Items/SNP-Comprehensive- Report-2017-10.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending

I-SNP Enrollment by State, October 2017 Number of I-SNP Plans Total I-SNP Enrollment Texas 2 344 Oklahoma 1 197 Kentucky 193 Tennessee 177 Maine 149 New Hampshire Massachusetts 121 South Carolina 43 Kansas 25 Michigan TOTAL1 106 68,237 1 Ten plans spanned across multiple states. In this table, we divided the number of enrollees in those plans evenly across the states and added the plan to each state’s total number of D-SNP Plans. The total excludes 18 enrollees in plans with fewer than 11 enrollees

United and Other I-SNP Enrollment, October 2017 Note: United HealthCare I-SNP enrollment includes Care Improvement Plus, Oxford Health Plans, and Sierra Health and Life. SOURCE: CMS SNP Comprehensive Report, October 2017. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Special-Needs-Plan-SNP-Data-Items/SNP-Comprehensive-Report-2017-10.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending

Special Needs Plan Opportunities to Improve Care and Reduce Costs in Nursing Facilities

ICRC TA Briefs Reducing Avoidable Hospitalizations for Medicare-Medicaid Enrollees in Nursing Facilities: Issues and Options for States (April 2015) Available at: http://www.integratedcareresourcecenter.com/PDFs/ICRCReducingAvoidableH ospitalizations%20508%20complete.pdf Value-Based Payment in Nursing Facilities: Options and Lessons for States and Managed Care Plans (October 2017) Will be posted shortly on ICRC web site: http://www.integratedcareresourcecenter.com/ MACPAC identified 23 states that were using VBP programs to improve quality in nursing facilities in 2014 ICRC interviewed state officials and managed care plans in 6 of those states for the TA brief Arizona, Indiana, Minnesota, Ohio, Tennessee, and Texas Appendices provide detailed information on VBP program structure and quality/performance measures used in the 6 states

Strategies to Reduce Avoidable Hospitalizations in NFs: Findings from a CMS Initiative CMS demonstration selected organizations in seven states (AL, IN, MO, NE, NV, NY, and PA) to work with nursing facilities to reduce avoidable hospitalizations of long-stay residents in FFS Results from evaluation covering 2014-2016 Decline in all-cause hospitalizations (all 7 states) Decline in Medicare expenditures (6 states) Strategies of most successful models (IN, MO, and PA): Strong role of Initiative-funded nurses Consistent, hands-on clinical care led to changes in facility culture, support for reducing avoidable hospitalizations, and buy-in from facility staff Importance of building relationships Strong relationships between nurses and staff, and between nurses and primary care providers Most sustainable initiative components INTERACT tools, medication review focused on reducing antipsychotic medications, quality improvement efforts to reduce avoidable admissions, and use of advance care planning/advance directives Potential challenges to implementation Staff turnover, consistent buy-in among physicians, pressure from family for hospitalizations, difficulty with new technology, facility leadership support, time of initiative implementation For health plans: limited resident count could impact NF willingness to participate Next phase of the initiative will begin using payment as an additional tool SOURCE: ICRC e-alert. “Spotlight: Latest Evaluation Results from the CMS Initiative to Reduce Avoidable Nursing Facility Hospitalizations.” March 29, 2017. Available at: http://www.integratedcareresourcecenter.com/PDFs/2017%2003%2027%20Integrated%20Care%20Update.pdf.

Medicare SNF FFS Payments: Recent Trends High and sustained Medicare SNF margins (difference between Medicare payments and provider costs) Over 10% for 16 years in a row 12.6% in 2015 In 2015, 9% of facilities (1,007) with relatively low-cost and high-quality care had median Medicare margins of 19.4% Costs varied widely among facilities Variation in costs based on ownership and coding practices Variation not attributable to case mix Medicare Advantage pays considerably less than FFS Medicare FFS daily payments received in 2016 by four large nursing home companies averaged 23% higher than Medicare Advantage rates May be due to lower payment rates and/or stricter rules than FFS for SNF admissions, lengths of stay, therapies, etc. SOURCE: Medicare Payment Advisory Commission (MedPAC). “Report to the Congress on Medicare Payment Policy.” Chapter 8: Skilled Nursing Facility Services. March 2017: http://www.medpac.gov/docs/default-source/reports/mar17_medpac_ch8.pdf

Transitions From Hospitals to SNFs In FFS, Medicare beneficiaries who are discharged from a hospital with a need for post-acute SNF care receive little or no assistance in choosing a SNF Some hospitals have sought to establish preferred networks of SNFs to reduce future readmissions, with limited success See John P. McHugh, et al. “Reducing Hospital Readmissions Through Preferred Networks of Skilled Nursing Facilities,” Health Affairs, September 2017, vol. 36, no. 9, pp. 1591-1598 Health plans that are at risk for both hospital and SNF costs have greater incentives to use such preferred SNF networks, and may have greater leverage with SNFs

Measuring Nursing Facility Quality and Performance

Available Quality/Performance Measures Nursing Home Compare Basic source of CMS measures for Medicaid and Medicare nursing facilities Includes measures for both short-stay and long-stay residents For more information, see: https://www.medicare.gov/NursingHomeCompare/About/howcannhchelp.html SNF Quality Reporting Program (QRP) Starting in FY 2018, payment penalties for failure to report specified measures SNF Value-Based Purchasing Program (VBP) Begins in FY 2019 Payment penalties and incentives based on SNF all-cause 30-day readmission measure For more information on QRP and VBP, see: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network- MLN/MLNProducts/downloads/snfprospaymtfctsht.pdf https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet- items/2017-07-31.html

Mathematica Policy Research E-Mail: jverdier@mathematica-mpr.com Contact Information James M. Verdier Senior Fellow Mathematica Policy Research 1100 1st Street, NE, 12th Floor Washington, DC 20002-4221 Phone: (202) 484-4520 E-Mail: jverdier@mathematica-mpr.com