1. T03: Keep it Simple…ICF-IID Update & Strategies for the Future Presented by: John P. Fleischer, CPA, Principal Rosemary Orlando, CPA, Principal OHCA/OCAL/OCID 2014 Long-Term Care Convention & Expo Columbus, Convention Center April 29, 2014

2. Ohio Overview National & State Trends HB 59 Provisions ICF/IID DODD - Stakeholder Agreement: 3/15/2013 Downsizing/Capital Considerations CY2011 Audits 12/31/13 IAF Exception Reviews 2 H What We Will Cover

3. Discuss agreement reached on ICF/IID Direct Care Ceiling Analyze payment system and related strategies for ICFs/DD for FY 2015 and beyond, including measurement tool implications and upcoming reimbursement changes Discuss possible downsizing strategies and opportunities within department’s rebalancing framework Describe strategies for capital improvement and replacement projects impacting and enhancing reimbursement Update on department’s progress reaching “Grand Bargain” downsizing/conversation goals 3 Objectives

4. “Life itself is simple… it’s just not easy” -Steve Maraboli 4

5. 5 H Overview

6. Ashtabula N 3 P 4 Geauga N 1 Lorain N 13 P5 Cuyahoga Medina N 9 P 13 Wood N 8 Lake N 3 P 5 Washington P 3 Morgan Pickaway Fayette Madison N 1 p 1 Ross Hamilton N 8 P 12 Morrow P 2 Highland N 3 Henry N 1 P 1 Defiance Columbiana P 2 Scioto Perry N 2 Richland N 7 P 2 Ashland P 1 Van Wert Union Tuscarawas N1 P 4 Vinton Jefferson N 3 Athens N 2 Meigs Auglaize P 1 Lucas N 17 DC 1 Ottawa N 1 Erie Fulton N 1 Williams NP 2 Trumbull N 3 P 1 Sandusky P 4 Summit N 10 P 3 Portage N 7 Huron Seneca N 3 DC 1 Paulding Putnam P 2 Hancock N 1 Mahoning N 14 P 4 DC 1 Crawford Wyandot Wayne Stark N 6 P 13 Allen N 1 Hardin Carroll N 1 P 1 Mercer N 1 Marion P 3 Holmes P 1 Knox P 1 DC 1 Logan N 4 Shelby P 1 Coshocton N 6 Delaware Harrison N 1 Darke P 1 Licking P 5 Champaign N 5 Guernsey DC 1 Miami Belmont N 17 Muskingum Franklin N 19 P 11 DC 1 Clark N 3 P 3 Noble Fairfield P 6 Montgomery N 3 P 5 DC 1 Preble P 3 Monroe Greene N 5 Hocking N 3 Butler N 3 P 2 Warren N 2 P 5 Clinton Clermont N 4 P 6 DC 1 Brown Jackson N 1 Pike N 1 P 3 Adams Gallia N 3 DC 1 Lawrence N 2 N 62 P 3 DC 1 Not for Profit (N)277 For Profit (P)143 Developmental Center (DC)10 * Total 430 *@ 4/21/14 952 DC Beds NUMBER OF OHIO ICF-IIDs BY COUNTY 2012 DODD MEDICAID DATABASE

7. 7 Ho Overview

8. 8 S ummarized from state-wide averages from 2012 DODD Medicaid Cost Report Database Overview

9. 420 ICF/DDs 5,839 beds 2,033,042 days 9,800 FTEs 9 H Overview

10. National Trends Downsizing dictated in Mississippi Michigan has eliminated all ICF beds National Rebalancing Initiative Ohio FY14 – 5,787 (certified) ICF beds, 952 DCs @ 4/21/14 Arizona operates no ICF’s or state operated institutions University of Minnesota Study Residential Services For Persons with Developmental Disabilities: Status and Trends through 2011 www.rtc.umn.edu/risp/reports/ 10 H National Statistics

11. States with the largest number of persons living in facilities of 16 or more residents as of June, 2011 11 Ohio 4,543 CA 3,691 NJ 3,955 IL 5,073 TX 4,585 National Statistics

12. States operating the largest number of STATE DD Facilities (16+) in 2011 12 H TX - 13 NY & OH - 10 MI - 9 IL - 8 NJ - 7 National Statistics

13. States with Highest Number of ICF/IID Residents receiving HCBS Waiver Funded Supports 13 H PA 32,824 FL 29,661 NY 92,661 OH 29,227 National Statistics

14. States with Greatest Number of People with ICF/IID in Nursing Homes 14 H NC 4,238 TX 2,888 NY 2,123 OH 2,104 National Statistics

15. Most ICF/IID Facilities (89.5%) on June 30, 2011 had 15 or fewer residents 61.2% had 6 or fewer residents States with Largest Numbers of ICF/IID Residents 15 H TX 9,626 CA 8,907 IL 8,460 NY 7,432 OH 7,125 National Statistics

16. States with Greatest Increase of HCBS waiver participants between 2001 and 2011 16 H District Of Columbia 543.8% Kentucky 483.5% Ohio 416.3% Indiana 364.2% Texas 241.4% National Statistics

17. As of June 30, 2011 ten states serving more than 1,000 people in large Public Facilities CA IL MS NJ NY NC OH TX PA VA 17 National Statistics

18. DODD / Stakeholder Agreement 3/15/13 Agreement to work toward downsizing 500-600 ICF beds and converting another 500-600 to waiver funding in the next 5 years. Targeted date is July 1, 2018 Waives large facility efficiency incentive changes for FY15 for any facility submitting an approved downsizing plan over next 5 years (must be approved by June 1, 2014) No new non-extensive renovations for large facilities (> 8 beds) permitted after July 1, 2013 unless approved by DODD prior to July 1, 2013 or the renovations are tied directly to an approved downsizing plan 18 Grand Bargain

19. DODD / Stakeholder Agreement 3/15/13 To set FY15 rates continue using average of all 4 quarters for both numerator and denominator: March, June, September, and December Stakeholders work collaboratively with DODD on plan and will identify any potential barriers Allows filing of 90 day cost reports for facilities participating in downsizing/conversions with retroactive rate adjustments. DODD set aside $2.5 million to pay for this 19 H Grand Bargain

20. Cost based formula still in statute with various parameters in temporary law FY14 rollback was 1.47% FY15 goal is “NO” rollback Eliminate rollback by reducing ceilings 20 HB 59 Provisions….As Enacted

21. Franchise Permit Fee FY14$18.24 FY15$18.17 Non-payment of bed tax will result in held vendors 21 H. HB 59 Provisions….As Enacted

22. Targeted Statewide Average Caps FY13$282.92 FY14$282.84 FY15$282.77 22 H HB 59 Provisions….As Enacted

23. ”Appropriation Mid-Biennium Review” DODD provisions Regulatory provisions agreed by DODD and Provider Group 1) NO ROLLBACK 2) Statewide average will be $282.77 3) 7/1/14 Direct Care ceilings are left open in statute 23 H House Bill (HB) 483/Senate Amendment

24. Regulatory (continued) 4) Will use the new 6 class RAC IAF groups Likely small ceiling will be higher than large FY14 Large $114.37, Small $109.09 5) Will use 2013 Cost Report Data 6) May, 2014 Medicaid days 7) Ceilings will be set at same levels to cover approximately same percentage of costs for the large and small peer groups 24 H House Bill (HB) 483/Senate Amendment

25. Regulatory (continued) 8 ) Ceilings will be calculated mid to late July so rates can be paid in August Six bed State Contracted ICFs Money follows the person 25 House Bill (HB) 483/Senate Amendment

26. IAF Online Submission Project Up and running 6/30/13 No longer need to submit disk Still uses OMA (JFS) Software Effective 9/30/13 providers only have 45 days to make corrections to final scores 26 H IAF Update

27. IAF 2014 Upcoming Enhancements Reporting will be on-line (no longer use JFS software) Goal: Go live date 9/5/14 Effective 9/30/14 27 H. IAF Update

28. IAF 2014 Upcoming Enhancements (continued) Two new components 1) Roster Real time admissions/discharges Training – late Aug/early Sept 2) Assessment Training – last Sept/early Oct Will include exception review data No further issues with computer crashes/restoring data 28 IAF Update

29. ICD Reimbursement Moves to Six RAC Classes Increase to six RAC classes from four Wage data was updated (CY 10-12) Effective 07/01/14 Rates Two additional classes created by subdividing class 3 Class 1, 2, & 4 ( which was renumbered as class 6) will remain the same No changes in the IAF questions No change to statute required 29 IAF Update

30. RAC 4RAC 4 with Wage UpdateRAC 6 Prior to 01/01/20134 Recalc. CY10-12 Wage Data6 Recalc. CY10-12 Wage Data 1. 2.17621. 2.0888 2. 2.03112. 1.9206 3. 1.72743. 1.70843. 1.8935 4. 1.0000 4. 1.3593 5. 1.7434 6. 1.0000 30 IAF Update

31. 31 H IAF Update

32. 32 H IAF Update

33. IAF Exception Review – 5123:2-7-30 Started quarter ended 12/31/13 10 providers – approximately 50 individuals 2 day prior notification required Department shall hold an exit conference Written summary of findings Can file rate reconsideration 33 IAF Update

34. IAF Exception Review-5123:2-7-30 (continued) Must complete by 6/1/14 Future target 25-35 providers Will impact annual scores & CPCMU Selection criteria Dec ’13 vs. Mar ’13 variance Similar score for entire population Certification/licensure survey findings Target questions, not all 32 34 H IAF Update

35. Auditor of State is conducting Audits Ohio Department of Medicaid (formerly JFS) will adjudicate the results 25 homes were selected Audits to be conducted 2013-2014 Audits are taking much longer than expected Five audits complete – reports posted on auditor website https://OhioAuditor.gov/auditsearch/search.aspx Careful – Salvage Value Issue!! 35 H ICF CY2011 Audits

36. 36 H Filing Date Audit Deadline Settlement Deadline CY08 4/13/094/13/124/13/14 CY09 4/14/104/14/134/14/15 CY10 4/14/114/14/144/14/16 CY11 4/14/124/14/154/14/17 Audit / Settlements

37. OAC 5123-2-3-26 (D) 1-8 Provisions More Onerous for Providers Encourage Downsizing Beds shall not exceed 8 for ICF, 4 for waiver Encourage Non-Campus Settings Removes Grandfather Provision IMPORTANT to get project approved by both the County and DODD 37 H Capital/Downsizing/Conversion

38. Development Proposal Process DODD will review projects on a case by case basis Proposal must be in writing Describe proposal accurately & completely No clear guidance Department has a lot of discretion Approval must be received prior to 06/01/14 for reimbursement changes not to apply to large peer group 38 H Capital/Downsizing/Conversion

39. Summary of DODD Approved Downsizing & Conversion Plans (7/1/13 – 4/14) 39 H CONVERSIONDOWNSIZING NUMBER OF BEDS APPROVED *121159 NUMBER OF BEDS COMPLETED 35 37 *98 enrolled as of 4/21/14 Capital/Downsizing/Conversion

40. Definition per HB 59 - "Downsized ICF/IID means an ICF/IID that permanently reduced its medicaid-certified capacity pursuant to a plan approved by the department of developmental disabilities under section 5123.042 of the Revised Code” Facility must submit and receive DODD approval for downsizing plan Approval is conditioned on downsizing being completed not later than July 1, 2018 Director has ability to waive development rule criteria Facilities downsized after July 1,2011 but prior to July 1, 2013 would qualify for exemption from large group reimbursement changes, but not for further non- extensive renovations 40 H Capital/Downsizing

41. Downsizing Incentives Ability to file 90 day Cost Report Available to original ICF/IID and new ICF/IID Facility Applies to facilities certified after 7/1/13 At least 10% less MCD certified Bed Capacity OR At least 5 less Certified Bed Capacity Due 90 days after the end of the Period Retroactive rate adjustment to the certification date for new facility 41 H Capital/Downsizing

42. 42 Capital/Downsizing

43. Additional Strategies: Downsize beds with lowest COO Ceiling Request increase in Base COO Ceiling at existing facility Conversion timing – Bed Tax May 1st Assessment Date Full Conversion – 1st quarter Partial Conversion – 2nd quarter 43 H Capital/Downsizing

44. Policy change to encourage Downsizing Reduce by 50% the Indirect Efficiency Incentive for large ICFs in FY15 Reduce Cost of Ownership Efficiency Incentive for large ICFs in FY15 Eliminate Non-Extensive Renovation for large ICFs 44 H Capital/Downsizing

45. Funding and Housing Accessibility Availability of Credit No payment during waiting period before home is certified Slow Certification Process Lot sizes HUD Financing – will they allow release of collateral Aging issues/Nursing needs 45. Capital/Downsizing/Conversion Barriers

46. No Capital Funds for downsized facilities Repurposing Downsized Building Providers with on-site day program can’t service folks on waiver Lose Franchise Fee on converted funds Capital Investment doesn’t follow the person Loss of specific services (younger individuals) 46. Capital/Downsizing/Conversion Barriers

47. Issued by DODD to assist providers opening ICF’s: Complete the following: Development Application New Medicaid provider agreement in MITS Schedule feasibility study for licensure survey Submit readiness letter to ODH Schedule ODH Certification Survey Setup Vendor Account with Ohio Shared Services Complete New Level of Care (JFS 3697) 47 H Downsizing Checklist

48. DODD Six-Bed ICF Development Project Up to 19 six beds 15 year Agreement Move resident out of State operated DCs DODD controls Admission/Discharge Qualifies for $50 per day add-on Creates a new peer group Separate bucket of funds Won’t pull fund from private ICF Program No Direct Care Ceiling, but overall rate is limited to average DC rate (currently $505) 48 H. Capital Development Opportunities

49. 49 H. COUNTY# Of 6-Bed ICFs Guernsey2 Gallia4 Montgomery2 Knox3 Lucas3 Seneca3 Mahoning2 Capital Development Opportunities

50. Department Resources: Ann L. Weisent/DODD Review Manager  Ann.Weisent@dodd.ohio.gov Ann.Weisent@dodd.ohio.gov  614-949-8792 Biljana.Manev@medicaid.ohio.govBiljana.Manev@medicaid.ohio.gov (Bibi)  ODM (formerly ODJFS)  614-752-3573 Josh Anderson  Josh.Anderson@dodd.ohio.gov Josh.Anderson@dodd.ohio.gov  614-387-0576 Ashley Rupejko  Ashley.Rupejko@dodd.ohio.gov Ashley.Rupejko@dodd.ohio.gov  614-644-7596 50 o. Contacts

51. 51. 2012201120102009200820072000 Number of Facilities420415418413417416385 Nursing Salaries $ 98.71 $ 98.75 $ 99.97 $ 99.72 $ 98.61 $ 97.78 $ 80.90 Therapies 3.28 3.48 3.27 2.87 2.69 3.00 3.50 Social Service 1.06 1.07 1.09 1.07 1.32 1.19 1.42 Activities 1.25 1.26 1.43 1.46 1.70 1.71 1.51 Payroll Taxes & Fringe Benefits 32.71 33.81 33.21 33.67 32.76 32.99 24.09 Off-Site Active Treatment 38.21 38.97 37.63 37.65 36.18 31.63 - Franchise Permit Fees 18.41 15.99 14.34 13.39 11.01 9.67 9.88 Utilities 5.04 5.43 5.54 5.50 5.62 5.23 3.75 Dietary Wages & Dietician 4.30 4.29 4.38 4.47 4.56 4.53 4.38 Dietary Food & Enterals 7.17 7.00 6.95 7.01 7.21 6.84 5.91 Program & Other Supplies 2.71 2.69 2.66 2.68 2.67 2.89 2.04 Administrator 3.04 3.02 3.10 3.04 2.90 3.02 2.29 Other Administrative Personnel 3.80 3.79 3.72 3.71 3.73 4.08 Consulting & Management Fees 3.20 3.47 2.57 2.90 2.59 3.34 2.56 Laundry & Linen 1.65 1.70 1.67 1.86 1.90 1.82 Housekeeping 3.17 3.29 3.45 3.50 3.70 3.75 3.26 Legal & Accounting 1.39 1.48 1.62 1.48 1.59 1.93 1.76 Insurance 1.70 1.63 1.90 1.74 1.66 1.83 0.99 Home Office Costs 25.37 24.03 22.80 24.09 22.72 13.12 Maintenance Expenses 6.27 6.38 6.34 5.99 6.49 6.15 5.00 Capital Costs 16.55 16.70 16.81 16.63 15.61 15.25 12.51 Other Non-Reimbursable 3.75 4.07 4.02 4.50 3.64 3.69 1.65 Other 14.81 14.94 16.77 16.55 17.40 17.23 15.04 Grand Total Expenses $ 297.55 $ 297.24 $ 295.24 $ 295.49 $ 289.61 $ 281.92 $ 201.47 Expense per Diem

52. 52 H. Average Hourly Wage by Position

53. 53 o. Average Hours per Resident Day by Position

54. Published January 16, 2014 Effective March 17, 2014 Final Rule applies to programs under Sections 1915 (c), 1915 (i) and 1915 (k) of Medicaid 1915 (c) - HCBS Waivers 1915 (i) – State Plan HCBS 1915 (k) – Community First Choice Defines HCB (Home and Community Based) Setting Guidance on Person Centered Planning Streamline Waiver for great application 54 H. Home and Community Based Final Rule-CMS 2249-F-2296-F

55. What they are Integrated in the community Full access to the community Individual selection of setting Individual makes own life choices Individual choice of services and provider of services 55 o. Home and Community Based Settings

56. Provider-Owned or Controlled Housing Individual provided rights and protections through a signed lease or other legal document Physically Accessible Privacy Roommate Choice Individual sets schedule Individual has ability to receive visitors at his/her discretion “Landlord” can provide other support services as selected by individual Unmet Requirements MUST be justified and documented in Service Plan 56 H. Home and Community Based Settings

57. What they are not Setting that provide Inpatient Services Same grounds or adjacent to public institution ICF Hospital Mental Health Institution Transition Existing 1915 (c) and 1915 (i) waivers will work with CMS on a plan to come into compliance CMS may approve plans with transition periods up to 5 years 57 H. Home and Community Based Settings

58. Person-Centered Plans Apply to services under 1915 (c) and 1915 (i) Address long term supports and needs and health Directed by the Individual Defined outcome in the most integrated community setting Service delivery as preferred by the individual Considers overall health and welfare 58 H Home and Community Based Settings

59. Waiver Reimbursement Rates frozen since 2005 Effective 7/1/14 three percent increase in waiver rate (approximately.20/hour ) Employment First New Adult Services Rule 5123-2-1-06 MyCareOhio – (formerly ICDS) Does not include ICF or Waiver Residents 7 demonstration multi-county regions NE Ohio Region effective 5/1/14 Health homes (care coordination) 59 H Omnibus Issues

60. MITS Issues/9400 Processing Patient Liability Issue Defect in System Facility responsibility to notify JFS/file 9400 Help Desk/614-466-7575 Lisa Durben (Rasmussen) – Lisa.Durben@medicaid.ohio.govLisa.Durben@medicaid.ohio.gov 60 H Program Administration

61. Cleveland + Columbus | hwco.com Thank You! John P. Fleischer, CPA fleischer@hwco.com Rosemary Orlando, CPA orlando@hwco.com HW&Co. 23240 Chagrin Boulevard, Suite 700 Cleveland, OH 44122 216.831.1200 216.831.1842 (fax) 460 Polaris Parkway, Suite 300 Westerville, OH 43082 614.794.8710 614.794.8712 (fax) 877.FOR.HWCO 8800 Tyler Blvd. Mentor, OH 44060 440.951.1777 440.951.2143 (fax)