WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING

Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

LeadingAge Arizona May, 2018

CMS Data Complexity – Can You Manage It?

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Outline

Data provided to CMS and data sources

5 Star Quality Rating (most data ends up here)

5 Star domains and improving performance

Managing 5 Star data

Stepping Back from the Detail and Complexity

2

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Multiple data sources provided to CMS

MDS process – MDS 3.0

Billing process – UB04

Annual health survey – CMS 2567

Payroll Based Journal Entry – PBJ section of CASPER

Medicare Cost Reports

OSCAR and CASPER systems OSCAR – Online Survey Certification and Reporting

CASPER – Certification and Survey Provider Enhanced Reports

3

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Who uses the data

Very small percentage of consumers use the information on NH compare and they often do not know how to interpret it Hospitals

ACO’s

Competitors

Attorneys

Media

Insurance companies

4

Aggregated Data Sources

Nursing Home Compare

Nursing Home Data Compendium

Individual SNF Data Sources

CASPER system

PEPPER Report Program for Evaluating Payment Patterns

Electronic Report

PS&R report Provider Statistical and Reimbursement

System

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PS&R Report – Medicare Reimbursements

5

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PS&R Report – Medicare Reimbursements

6

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PS&R Report – Medicare Reimbursements

7

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PEPPER Report – Investigate Outliers

8

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PEPPER Report – Investigate Outliers

9

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PEPPER Report – Investigate Outliers

10

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PEPPER Report – Investigate Outliers

11

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

PEPPER Report – Investigate Outliers

12

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

5 Star Rating- Why should you care

Majority of aggregated data provided resides here –Data collection and parsing by CMS will continue

Medicare payment is shifting from PPS (prospective payment system) to value based reimbursement 90% of all fee for service (FFS) to be tied to quality by 2018 (not just long term care FFS)

2% withholding on SNF PPS rates begins 10/1/18 – redistribute 50-70% to top SNFs

CMS goals Improve health care

Reduce spending

Improve care experience for the consumer

Bundled and alternative payment programs require minimum of 3 star rating

Quality + Value SNF Bed Reduction

13

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

History

2008 Five-Star Nursing Home Quality Rating System added to the Nursing Home Compare website.

January 2013 Bundled Care Payment Initiatives Announced

August 2014 NY Times Article “Medicare Star Ratings Allow Nursing Home to Game the System”

October 2014 CMS made announcement about changes to Staffing and Quality Measure domains of Five-Star

February 2015 Implementation of those changes announced in 2014

July 2016 5 New Quality Measures added to Five-Star Rating including claims based ratings

November 2016 Payroll Based Journal Entry submission required with an early 2018 roll into 5 star rating expected

14

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

5 Star Rating Components

Health Inspection Measures based on outcomes from State health inspections

Staffing Measures based on nursing home staffing levels

Quality Measures Measures based on resident-level quality measures (QM’s)

Overall The rating system features an overall quality rating of one to five-stars based on facility

performance in the 3 domains mentioned above. Each domain has its own five-star rating and they are calculated together for an overall rating.

15

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

5 Star Calculation

Step 1

Start with the health inspection (survey) five-star rating

Step 2

Add one star to Step 1 if the Staffing rating is four or five stars AND greater than the health inspection rating

Subtract one star if Staffing rating is one star

The overall rating cannot be more than 5 stars or less than one star

16

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Calculation continued

Step 3 Add one star to Step 2 if Quality Measure rating is five stars

Subtract one star if Quality Measure rating is one star

The overall rating cannot be more than five stars or less than one star

Step 4 If the health inspection rating is one star, then the overall quality

rating cannot be upgraded by more than one star based on the staffing and quality measures.

Step 5 If the nursing home is a special focus facility (SFF) that has not

graduated, the maximum overall quality rating is three stars.

17

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Understanding the 5 star calculationCalculate the 5 Star Rating

Health Inspection rating is 3 Stars

Staffing Rating is 5 stars

Quality Measures Rating is 3 stars

What is the overall star rating?

What is the rating if Quality Measure rating is 4 stars and Staffing Rating is 4 stars?

18

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Five star sample comparison

19

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

How and When does the data change

Health Inspection

New surveys and complaint visits – CMS 2567

2 year “Aging of Data” on an annual basis (frozen until 11/18

Staffing

CMS 671 and 672 – at annual survey in the past

PBJ – 45 days after end of fiscal quarter

Quality Measure data

MDS and UB04

Available Monthly in CASPER

Quarterly changes to Nursing Home Compare

20

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Surveyors already know where your trouble areas are

Understand resident issues that they are going to look for in specific charts

Facility can review issues ahead of time - you have access to all the same data they have in preparation for health inspection

Survey team knows how to dig deep into data, so you need to become skilled at this as well!

Data that survey team reviews prior to onsite visit comes directly from the MDS (Section F on Preferences and Section GG on Functional Abilities and Goals, for instance)

Foundation of the overall rating

Only non self reported domain

Star cut points updated monthly

Health Inspection Data

21

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Health Inspection Domain

All nursing homes that participate in a Medicare and/or Medicaid program are subject to an annual inspection.

This inspection occurs anywhere from 9-15 months from the exit of the last inspection (unannounced)

The health inspection rating is based on the two most recent standard surveys, results from any complaint investigations during the most recent two-year period, and any repeat visits needed to verify that required corrections have brought the facility back into compliance.

More recent surveys are weighted more heavily than older surveys

Change in Methodology Most recent survey cycle (cycle 1) has a weighting factor of 60%

The previous period (cycle 2) has a weighting factor of 40%

22

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Health Inspection Domain

Scored based on number of deficiencies tagged with a severity score

23

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Health Inspection Domain

CMS Five-Star health inspection ratings are based on the relative performance of facilities within a state

CMS compares facilities to each other within each state to help control for variation among states in the process

Facility survey rankings are determined as follows in each state

(moving target or “grade on the curve”!) 5 Stars only top 10% of facilities per state

4 Stars 23.33% of facilities per state

3 Stars 23.33% of facilities per state

2 Stars 23.33% of facilities per state

1 Star 20% of facilities per state

24

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Case Study – Health Survey

25

State Cut Points - Health

Survey Score (Mar 2017) Number

Arizona 145 >60.667 38.667 23.333 9.333 <9.333

Delaware 45 >102.853 74 52 23.333 <23.333

Texas 1198 >153.167 76.667 44.667 16.000 <16.000

One bad survey is likely to take at least two years to resolve (still much better than previous 3 year weighting process)

A score of 23.332 in is 3 stars in TX, almost 2 stars in Arizona and is 5 stars in Delaware

Note variation and spread in each state and changing monthly which will raise the bar once again

SNF 2017 2016

Total

Weighted

Score

2018 Score

20 points

2018 Score

0 points

#1 0 90 36 12 0

#2 300 30 192 132 120

#3 100 390 216 52 40

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Case Study – Health Survey

26

Ultimately the key is how you compare to your peers and market In some markets, CMS is more aggressive with deficiencies How many deficiencies are based on reported complaints? Be survey ready at all times and review with all staff

Group Rank

Deficiencies

2016 Score 2016

Deficiencies

2015 Score 2015

Deficiencies

2014 Score 2014

Weighted

Average

Score

Health

Inspection

Star Rating

Nursing Home 1 803 15 510 16 628 9 48 472.333 1

Average Peer Group 449.6 5.8 60 4.2 40.8 7.4 51.2 52.1334 3.2

City Average 783.0 10.21 252.83 10.65 171.67 13.41 159.14 214.73 2.18

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Improving Health Inspection Domain

Don’t wait for your survey “window” to open

Should be survey ready at all times

Mock surveys

Outside consultants to review nursing notes, MDS process, and interview residents

Teach all staff about survey expectations

Review previous survey results to determine patterns or facility weaknesses

Determine how long it will take to improve

New survey process still being adjusted

27

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Staffing Domain

There is evidence of a relationship between nursing home staffing levels and quality of resident outcomes. Expected hours – STRIVE study (2007) - previously CMS time study (1997)

Staffing domain based on two components Registered Nurse (RN) hours per resident day

Total staffing hours (RN+LPN+Nurse aide) hours per resident day

CMS 671 in past – now PBJ submission and quarterly change

Staffing rating is determined based on Reported hours/Expected hours*National Averages = Adjusted hours Reported hours is data from PBJ submissions

Assign a RUGs group to all MDS for residents in beds on last day of quarter

Sum the expected nursing times from the STRIVE staffing study

National average hours as determined by CMS (most recent is from April 2018 – may change quarterly)

Reported hours divided by expected hours times national average hours

28

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Staffing hours data source

Staffing data used to come from CMS forms 671 and 672

Filled out during your annual health inspection

PBJ will be used going forward

Who handles this and how is it checked for accuracy?

29

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Staffing by Title – Form 671

30

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Payroll Based Journal Entry (PBJ)

Major Change in staffing data collection implemented

31

• Final Rule published August 4, 2015 in the Federal Register

• Section 6106 of the Affordable Care Act requires facilities to electronically submit direct care staffing information (including agency and contract staff) based on payroll and other auditable data

• Latest Release of PBJ Manual 2.4 on 9-26-17

• Data submitted, when combined with census information, is to be reported on the level of staff in each nursing home (different from the previous process using CMS-671 and CMS-672 forms)

• Originally required to report data to compute employee turnover and tenure – a new item (changed as of 3/19/17 to optional)

• Intent is to link daily payroll records to the CMS five star rating system

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

• Staffing levels

• Turnover

• Tenure

• More in depth reporting

• Data must be verifiable and auditable

• Data collected more often than 671 / 672 forms

PBJ Key Objectives

32

• From payroll data for employees

• From contracts / invoices for non-employees

• CMS may audit your data

• Tracked daily and uploaded quarterly to new PBJ system

• 671 / 672 still in place after PBJ starts

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Census Computed by CMS

33

CMS is calculating your census based on MDS’s submitted Census is calculated daily, summed and averaged for the quarter

If there’s no Discharge assessment, CMS will count a resident in your facility for 150 days after the last MDS assessment - then exclude them

Inflated census will lower your HPRD, which may lower your Staffing Five Star rating

Studies have shown a correlation between missing Discharge Assessments and lower reported staffing HPRD

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Staffing Cut-points – National CURRENT

• One star rating given for the next quarter if:• Fail to submit PBJ data by deadline• Greater than 7 days in quarter reported with 0 RN staffing hours• Audit request is ignored or if major discrepancies found in audit

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Staffing Cut-points – Comparison to Previous

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Distribution of 5 Star Staffing Ratings

36

• Overall distribution of Five Star Staffing Ratings will be approximately the same using PBJ data as it was prior

• Average National Hours Per Resident Day for Risk Adjusted Calculation

Previous New

– RN .7472 .3804– Total 4.0309 3.2285

• Significant change in calculation

– RN and LPN Administrative hours split

– Averages from latest PBJ data

– STRIVE time study breaks out LPN and RN hours differently so expected hours ratio is different

– RUGS distribution has likely changed recently

March 2018 Staffing Five Star Distribution:

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Comparison from Public Use Files

37

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Case Study #1 - Staffing

38

HPPD Adjusted = HPPD Reported/HPPD Expected * National Average

Previous

Current

HPPD Reported Expected Adjusted

RN HPPD 0.90 1.30 0.52

LPN HPPD 1.40 1.10 NA

CNA HPPD 2.20 2.40 NA

Total HPPD 4.50 4.80 3.78

Star Rating 5 4

HPPD Reported Expected Adjusted

RN HPPD 0.55 0.70 0.30

LPN HPPD 1.75 1.50 NA

CNA HPPD 2.20 2.40 NA

Total HPPD 4.50 4.60 3.16

Star Rating 4 1

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Case Study #2 - Staffing

39

What is the cost of each structure? Example: Can you increase by 1 star level if you replace one LPN with an RN?

Previous

Current

HPPD Reported Expected Adjusted

RN HPPD 0.51 0.51 0.75

LPN HPPD 1.00 1.00 NA

CNA HPPD 2.40 2.40 NA

Total HPPD 3.91 3.91 4.03

Star Rating 3 4

HPPD Reported Expected Adjusted

RN HPPD 0.40 0.40 0.38

LPN HPPD 1.20 1.20 NA

CNA HPPD 2.40 2.40 NA

Total HPPD 4.00 4.00 3.23

Star Rating 3 2

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Improving your Staffing Domain

PBJ vs CMS 671

RN hours – what is the cost of increasing these to reach the next star level? Or cost savings to decrease one level?

Direct care hours overall – how much will you benefit from changes in staffing mix at each level?

Review Public Use Files to verify census computed by CMS

Review MDS process and CASPER reports to ensure that assessments are appropriate and timely

40

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Data from Quality Measure domain

Comes directly from MDS and UB-04 (claims)

MDS coordination and scoring consistency

Review analytics periodically with various staff

MDS controls a large amount of results

Money

Quality

Survey

Staffing

41

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Quality Measure Domain

Facility ratings for the quality measures are based on performance on 16 of the 24 QM’s that CMS posts on the Nursing Home Compare website

The QM’s use data from the Minimum Data Set (MDS), which each nursing home must submit as part of a federally mandated process for clinical assessment of all residents in Medicare or Medicaid certified nursing homes

These measures address a broad range of functioning and health status in multiple care areas

For each measure points are assigned based on facility performance

Points range from 20-100 points per measure (325 – 1600 total range currently)

More points in this domain produces more stars

The QM’s are categorized according to a resident’s length of stay (short stay versus long stay (>100 days)) and according to the type of data captured on either the claim or the MDS

Claims based QM’s are all categorized in short stay measures

42

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS

Minimum data set Manual is 1330 pages of instruction on how to code it

Part of the RAI process Care Area Assessments (CAA)

Care Area Trigger (CAT)

MDS

Care plans

Over 1000 data points

25% error rate is standard

IDT

43

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS – Face Sheet

44

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS – Quality Measures Referenced

45

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS – Falls – How is a fall defined?

46

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS – Pain Assessment – Time dependent

47

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS - Mood

48

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS – RUGS and Depression

49

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

UB-04

Claims based data comes from CMS form UB-04This is your bill for traditional Medicare part A services – both SNF and Hospital

The SNF does not submit all of the data to calculate Claims Based data

50

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Quality Measure Scoring

• Measures are Percentages of residents

• Imputed data if not enough for a specific SNF

• Rules related to scaling if some SNFs do not have all of the QMs

• Separate Technical Manual

• National targets for individual QM changes quarterly for point distributions based on rolling four quarters

• Point Total cuts may change annually (January 2017)

• Currently 325 – 1600 points available for the 16 measures (20/25 to 100 points per measure)

51

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Quality Measure Scoring

52

Measure Type Number Scoring Method

Long Stay - Original 6         20 points per quintile

Short Stay - Original 1         20 points per quintile

Long Stay Physical Restraint 1         Top 3 quintiles – 100 points

        4th

quintile – 60 points

        5th quintile – 20 points

Short Stay Pressure Ulcer 1         Top 1/3 – 100 points

        3 even lower groups - 25, 50 and 75 points

Long Stay Feb-15 2         Top 10% - 100 points

        Middle 70% - 40, 60 and 80 points

        Lowest 20% - 20 points

Short Stay Feb-15 1 Same as above

Short Stay Antipsychotic 1         20 points per quintile

Claims Based 3         20 points per quintile

Quality Measures Scoring Template (16 current measures over rolling 4 quarters)

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Case Study – Quality Measures

53

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Improving QM domain

Segregate the patterns of QM issues across all your units and/or facilities

Review others in your primary market area

Use technology

Accuracy? CASPER reports – current trending data

Nursing Home Compare – older data

QAPI

Correct staff who are well trained?

New Protocols to be designed and implemented

Understand how the QM’s are risk adjusted with covariates

54

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Managing your 5 Star Rating

Understand where the data is coming from Self reported

Adjusted

Understand how to interpret the data

Identify the accuracy of the data Is the data on the website correct?

If not, can it be managed and fixed?

If yes, do root cause analysis to determine source of incorrect data

Determine what is actionable data What should priority be for making changes to protocols and training

Understand when and how fast you can make changes to your data

55

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Stepping Back from the Detail and Complexity

CMS value based measures are here to stay The 5 star rating will remain as the basis for reducing SNF beds

Data, Data, Data Analyzing and managing your data in real time is critical to future success

CMS will continue to require data to be electronically delivered

Patterns and outliers are key

CMS will continue to increase data collection Expect more new measures, new scoring, new segregation of star ratings

An increasing number of users will view your data Post acute services - most variable healthcare area in terms of cost and quality

More readily available data will raise the bar for post acute providers

Know what other users know about your organization

56

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Questions?

57

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

MDS- is part of the U.S federally mandated clinical assessment of all residents in a Medicare or Medicaid certified nursing home. The process provides a comprehensive assessment of each resident’s functional capabilities and helps nursing home staff identify health problems

OBRA- omnibus reconciliation act of 1987. Changed the way nursing homes operated and have to report data to state and federal government. Driven by poor quality in nursing homes in Texas in the early 80’s

QM’s- quality measures. An item set from MDS data and Medicare claims data that measures standards of quality of care in nursing homes.

Short stay QM- an episode with cumulative days in the facility less than or equal to 100 days at the end of the target period

Long stay QM- an episode with cumulative days in the facility greater than or equal to 101 days at the end of the target period

CMS – Centers for Medicare and Medicaid Services

PBJ – Payroll Based Journal Entry used to collect staffing data for SNFs on a quarterly basis

ACO – Accountable care organizations are groups of doctors, hospitals, and other health care providers who come together voluntarily to give coordinated high quality care to their Medicare patients (CMS Jan 2015)

UB-04- Medicare claim form for facility and ancillary billing for Medicare services

RAI – Is a comprehensive, standardized tool to assess residents in long-term care setting

QAPI- Quality Assurance (QA) is the process of meeting quality standards and assuring that care reaches an acceptable level. Performance improvement (PI) is continuously analyzing your performance and developing systematic efforts to improve it. (AHCA)

CASPER and OSCAR – systems used for statistical reporting by CMS

PEPPER report – Program for Evaluating Payment Patterns Electronic Report used to identify outlier areas of Medicare payments which may indicate errors

PS&R report – Provider Statistical and Reimbursement report used by SNF management to assess accuracy and completeness of RUGs days billed and Medicare reimbursements received for a given time period (also used in Medicare cost reporting)

Glossary of Terms

58

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

Nursing Home Compare website

https://www.medicare.gov/nursinghomecompare/search.html?

MDS 3.0 users manual

https://downloads.cms.gov/files/MDS-30-RAI-Manual-V114-October-2016.pdf

5 Star Rating Technical User’s Guide

http://www.cms.gov/Medicare/Provider-Enrollment-and-certification/certificantandcompliance/FSQRS.html

Payroll Based Journal Long Term Facility Policy Manual (subject to v. 2.3 change)

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/Downloads/PBJ-Policy-Manual-Final-V22.pdf

MDS 3.0 Quality Measures User’s Manual

https://www.cms.gov/Medicare/Quality-initiatives-patient-assessment-instruments/nursinghomequalityinits/downloads/MDS-30-QM-User’s-Manual-V80.pdf

State Operations Manual appendix PP

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_pp_guidelines_ltcf.pdf

QAPI at a glance

https://www.cms.gov/Medicare/Provider-enrollment-and-certification/QAPI/downloads/QAPIataglance.pdf

Resources and References

59

twitter.com/CLAconnectfacebook.com/cliftonlarsonallen

linkedin.com/company/cliftonlarsonallen

©2

01

8 C

lifto

nLa

rso

nA

llen

LLP

CLAconnect.com

youtube.com/CliftonLarsonAllen

Carl Moellenkamp, CPA, LNHADirector – Consulting, HealthcareCliftonLarsonAllen, LLP630-954-8112carl.moellenkamp@CLAConnect.com