The ALF Explosion

The ALF ExplosionThe ALF Explosion

Stephen R. La PierreStephen R. La Pierre

Senior Vice PresidentSenior Vice President

Claim/Case Management & Policyholder ServicesClaim/Case Management & Policyholder Services

Penn Treaty Network AmericaPenn Treaty Network America

slapierre@penntreaty.comslapierre@penntreaty.com

For a copy of my letter to the Editor, email:

slapierre@penntreaty.com

Facility Providers . . .Facility Providers . . .

Industry Claims Advisory Work Group FocusIndustry Claims Advisory Work Group Focus

Evolving Facility Provider IndustryEvolving Facility Provider Industry Use of nursing homes changingUse of nursing homes changing

Still primarily long termStill primarily long term

in discharge ratesin discharge rates Explosion in Assisted Living Facility growthExplosion in Assisted Living Facility growth

NumberNumber

VarietyVariety

Challenge for claim staff/ Tools for AdjudicationChallenge for claim staff/ Tools for Adjudication

The BasicsThe Basics

Nursing Homes Nursing Homes

vs. vs.

Assisted Living FacilitiesAssisted Living Facilities

Nursing Homes a/k/aNursing Homes a/k/a

NFNF

SNFSNF

SCFSCF

SLTCFSLTCF

SNRCSNRC

ICFICF

CCCCCC

Nursing FacilityNursing Facility

Skilled Nursing FacilitySkilled Nursing Facility

Skilled Care FacilitySkilled Care Facility

Skilled Long Term Care FacilitySkilled Long Term Care Facility

Skilled Nursing & Rehabilitation CenterSkilled Nursing & Rehabilitation Center

Intermediate Care FacilityIntermediate Care Facility

Convalescent Care CenterConvalescent Care Center

Assisted Living Facility a/k/aAssisted Living Facility a/k/a

ALFALF

RCFRCF

CBRFCBRF

CCRCCCRC

PCFPCF

AFHAFH

• C O N F U S I N G

Assisted Living FacilityAssisted Living Facility

Residential Care FacilityResidential Care Facility

Community Based Residential Care FacilityCommunity Based Residential Care Facility

Continuing Care Retirement CommunityContinuing Care Retirement Community

Personal Care HomePersonal Care Home

Adult Foster HomeAdult Foster Home

“ “Any attempt to understand assisted living Any attempt to understand assisted living and its role in providing long-term care to and its role in providing long-term care to the frail elderly is hindered by the lack of a the frail elderly is hindered by the lack of a common definition of ‘assisted living’.”common definition of ‘assisted living’.”

U.S. Department of Health and Human ServicesU.S. Department of Health and Human ServicesA National Study of Assisted Living for the Frail Elderly: Final Summary ReportA National Study of Assisted Living for the Frail Elderly: Final Summary Report

Catherine Hawes, Ph.D. and Charles D. Phillips, Ph.D., M.P.H.Catherine Hawes, Ph.D. and Charles D. Phillips, Ph.D., M.P.H.Texas A&M University System Health Science CenterTexas A&M University System Health Science Center

Miriam Rose, M.Ed.Miriam Rose, M.Ed.Myers Research InstituteMyers Research Institute

November 2000November 2000

Assisted Living FacilitiesAssisted Living Facilities

Nursing HomesNursing HomesFederal/State regulationsFederal/State regulationsHigh medical orientationHigh medical orientationMD order for admissionMD order for admissionMedical records requiredMedical records requiredFrequency of MD review mandatedFrequency of MD review mandatedQuarterly care plan conferences mandatedQuarterly care plan conferences mandated24 hour licensed staff required24 hour licensed staff requiredStringent staffing requirementsStringent staffing requirementsFull range of therapy servicesFull range of therapy servicesLittle question about personal/provider eligibilityLittle question about personal/provider eligibility

Assisted Living FacilitiesAssisted Living Facilities

Less medically orientedLess medically oriented

Lightly regulatedLightly regulated

Staffing requirements less stringentStaffing requirements less stringent 24 hour staff “that is awake”24 hour staff “that is awake” Staff continuing education not mandatedStaff continuing education not mandated

Functional range from very independent to Functional range from very independent to occasional assist with ADLsoccasional assist with ADLs

Eligibility is a moving targetEligibility is a moving target

Nursing Home - PastNursing Home - Past

Only alternativeOnly alternative

Long term placementLong term placement

Low discharge rateLow discharge rate

Family guilt/ reluctant to admitFamily guilt/ reluctant to admit

Negative stigmaNegative stigma

Assisted Living Facilities - PastAssisted Living Facilities - PastEvolved from Board & Care homesEvolved from Board & Care homesLooked like a nicely decorated Nursing HomeLooked like a nicely decorated Nursing HomeEmergency call systems in all roomsEmergency call systems in all roomsRecreational and social programmingRecreational and social programmingThree meals per day – special dietsThree meals per day – special dietsDid not serve high acuityDid not serve high acuity

Nurse supervision on at least 2 of 3 shiftsNurse supervision on at least 2 of 3 shifts Nursing assistantNursing assistant

Call lightsCall lightsOccasional ADL assistanceOccasional ADL assistanceDining assistanceDining assistance

Many ALFs would discharge clients who became Many ALFs would discharge clients who became cognitively impaired, incontinent or required constant cognitively impaired, incontinent or required constant ADL assistanceADL assistance

Nursing Homes - TodayNursing Homes - Today

Primarily long term stayPrimarily long term stay

Increase in discharge ratesIncrease in discharge rates MedicareMedicare Hospital transitional careHospital transitional care

Remain Highly regulatedRemain Highly regulated

Stagnant facility growthStagnant facility growth19951995 16,700 homes16,700 homes

19991999 18,000 homes18,000 homes

20042004 16,100 homes16,100 homes

20072007 <16,000<16,000

600011500

18000

36000

0

10000

20000

30000

40000

1990 2000

Years Measured

ALF Explosion

Number of ALFs

2007

36,000 strong36,000 strong

Broadening target market/continuumBroadening target market/continuum ILF, ALF, Cognitive UnitILF, ALF, Cognitive Unit

Hotel / Resort-like marketingHotel / Resort-like marketing

More palatable option for kids/parentsMore palatable option for kids/parents

Blurring the line between Independent & Blurring the line between Independent & Assisted livingAssisted living

Assisted Living Facilities - Assisted Living Facilities - TodayToday

Assisted Living Facilities - TodayAssisted Living Facilities - Today

Measured by Service & PrivacyMeasured by Service & Privacy

High ServiceHigh Service1 FT RN on staff1 FT RN on staff

Nursing care by facilityNursing care by facility

Plus low service listPlus low service list

Low ServiceLow Service24 hr supervision 24 hr supervision

HousekeepingHousekeeping

2 meals/day2 meals/day

Personal Care w/Meds, Personal Care w/Meds, bathing, dressingbathing, dressing

High PrivacyHigh Privacy>80% private rooms>80% private rooms

[Large growth today][Large growth today]

11%11%

18%18%

Low PrivacyLow Privacy<80% private rooms<80% private rooms

12%12%

59%59%

1998 study – first ever empirical nationwide data

Determining Provider EligibilityDetermining Provider Eligibility

Changing Utilization PatternsChanging Utilization Patterns

What does this all mean to LTCi What does this all mean to LTCi claim operations?claim operations?

The Challenge:

Provider Eligibility ChallengeProvider Eligibility Challenge

Older policy languageOlder policy language Detailed & specific?Detailed & specific? Not detailed & specificNot detailed & specific

Do your policies specifically exclude ALFs?Do your policies specifically exclude ALFs?Do ALFs qualify as NHs under your policies?Do ALFs qualify as NHs under your policies? LicensureLicensure Staffing [levels/inhouse/contracted]Staffing [levels/inhouse/contracted] Services/recordsServices/records

Is the facility standalone/distinct partIs the facility standalone/distinct part /shared area?/shared area?

Utilization Pattern ChallengeUtilization Pattern Challenge

ALFs more attractive / palatableALFs more attractive / palatable

Has it become easier for children to place their Has it become easier for children to place their parents in a facility earlier than in the past?parents in a facility earlier than in the past?

Is this placement for convenience or need?Is this placement for convenience or need?

People sell home and move in expecting to be People sell home and move in expecting to be eligibleeligible

Non-eligible spouse moves in with eligible Non-eligible spouse moves in with eligible spousespouse

Bundled charges [covered & non-covered]Bundled charges [covered & non-covered]

Tools For Adjudication

Tools for AdjudicationTools for Adjudication

Policy LanguagePolicy Language

Facility LicenseFacility License

Facility Marketing Material/web-siteFacility Marketing Material/web-site

Facility Floor PlanFacility Floor Plan

Resident AgreementResident Agreement

Telephone inquiry / Facility AssessmentTelephone inquiry / Facility Assessment Staffing[nurses/cna/unskilled]Staffing[nurses/cna/unskilled] Level of services [by staff or contracted]Level of services [by staff or contracted] Medical Director [on staff or contracted]Medical Director [on staff or contracted]

Let policy be your guideLet policy be your guide

Nursing Facility:Nursing Facility: A home, residence or institution, other than a hospital, which A home, residence or institution, other than a hospital, which is primarily engaged in providing nursing care and related services on an is primarily engaged in providing nursing care and related services on an inpatient basis under a license issued by the appropriate licensing agency. It inpatient basis under a license issued by the appropriate licensing agency. It may be a freestanding facility including the following:may be a freestanding facility including the following:

(a) Nursing Facility;(a) Nursing Facility;(b) Skilled nursing home;(b) Skilled nursing home;(c) intermediate nursing care home; (c) intermediate nursing care home; (d) (d) Assisted Living Care FacilityAssisted Living Care Facility; ; (e) Residential Health Care Facility; or(e) Residential Health Care Facility; or(f) Alzheimer's care facility(f) Alzheimer's care facility

Comprehensive definition . . . Comprehensive definition . . . AnAn Assisted Living Facility Assisted Living Facility will also be considered a will also be considered a Nursing HomeNursing Home and eligible for and eligible for the Policy’s full Nursing Home benefit ifthe Policy’s full Nursing Home benefit if it is licensed by the appropriate federal or it is licensed by the appropriate federal or state agency to engage primarily in providing care and unscheduled services to state agency to engage primarily in providing care and unscheduled services to resident inpatients and it:resident inpatients and it:

1.)1.) provides twenty-four (24) hour a day care and services sufficient provides twenty-four (24) hour a day care and services sufficient to support needs resulting from inability to perform Activities of Daily Living and/or to support needs resulting from inability to perform Activities of Daily Living and/or Cognitive Impairment;Cognitive Impairment;

2.)2.) has a trained and ready to respond employee on duty at all times has a trained and ready to respond employee on duty at all times to provide care and services;to provide care and services;

3.)3.) provides three (3) meals a day and accommodates special provides three (3) meals a day and accommodates special dietary needs; anddietary needs; and

4.)4.) has the appropriate methods and procedures to provide has the appropriate methods and procedures to provide necessary assistance to residents in the management of prescribed medications.necessary assistance to residents in the management of prescribed medications.An Assisted Living Facility may sometimes be called a Residential Care Facility or an An Assisted Living Facility may sometimes be called a Residential Care Facility or an Adult Congregate Living Facility. Any facility, or section thereof, known by one of Adult Congregate Living Facility. Any facility, or section thereof, known by one of these names, or any other name, will be considered eligible if it meets the Policy these names, or any other name, will be considered eligible if it meets the Policy definition of an Assisted Living Facility.definition of an Assisted Living Facility.If a facility or institution (such as a congregate care facility or life care community) has If a facility or institution (such as a congregate care facility or life care community) has multiple licenses and/or multiple purposes, only the section, wing, ward or unit multiple licenses and/or multiple purposes, only the section, wing, ward or unit (including a separate room or apartment) that specifically qualifies as a Nursing (including a separate room or apartment) that specifically qualifies as a Nursing Home or an Assisted Living Facility will be eligible for benefits.Home or an Assisted Living Facility will be eligible for benefits.

Excludes ALFsExcludes ALFs"Nursing Care Facility""Nursing Care Facility" means a facility that: means a facility that:

(a) is licensed or certified by the state to provide nursing care as its main function; (a) is licensed or certified by the state to provide nursing care as its main function; (b) provides continuous room and board for at least 3 people;(b) provides continuous room and board for at least 3 people;(c ) provides supervised care by an on-duty RN or LPN; (c ) provides supervised care by an on-duty RN or LPN; (d) maintains daily medical records; and (d) maintains daily medical records; and (e) maintains control and records of medications given.(e) maintains control and records of medications given.

A Nursing Care Facility does not includeA Nursing Care Facility does not include: (a) rest homes; (b) homes for the aged; : (a) rest homes; (b) homes for the aged; (c ) retirement homes; (d) community living centers; (c ) retirement homes; (d) community living centers; (e) Assisted Living Facilities(e) Assisted Living Facilities;; (f) adult day care or educational care facilities; (f) adult day care or educational care facilities;

(g) residential sections or wings of Nursing Care Facilities; or (g) residential sections or wings of Nursing Care Facilities; or (h) places used primarily for the care and treatment of alcoholism,(h) places used primarily for the care and treatment of alcoholism,drug addiction or mental or nervous disorders.drug addiction or mental or nervous disorders.

Less definitiveLess definitive

""Nursing Care Facility" Nursing Care Facility" means a facility that:means a facility that:

(a) is licensed or certified by the state to provide nursing care as (a) is licensed or certified by the state to provide nursing care as its main function;its main function;(b) provides continuous room and board for at least 3 people;(b) provides continuous room and board for at least 3 people;(c ) provides supervised care by an on-duty RN or LPN; (c ) provides supervised care by an on-duty RN or LPN; (d) maintains daily medical records; and (d) maintains daily medical records; and (e) maintains control and records for medication.(e) maintains control and records for medication.

Covered / Non-covered ?

Look to the LicenseLook to the License

Marketing MaterialsMarketing Materials

BrochuresBrochures

Web-sitesWeb-sites

Resident AgreementsResident Agreements

But First!!!But First!!!

LegLeg

CheeseCheese

TentTent

MotorMotor

FlowerFlower

StampStamp

CupCup

KingKing

ForestForest

Menu Menu

Resident AgreementResident Agreement

Details on nature of chargesDetails on nature of charges CoveredCovered Non-coveredNon-covered

Description of level of services providedDescription of level of services provided

Room Rate$139/day

Level of Care Fees

$10/day

Medication Administration

Fees

Community Fee

Take out Paper and PencilTake out Paper and Pencil

Write down as many Write down as many of the 10 words as of the 10 words as you can rememberyou can remember

Don’t look at your neighbors paper!!Don’t look at your neighbors paper!!

LegLeg

CheeseCheese

TentTent

MotorMotor

FlowerFlower

StampStamp

CupCup

KingKing

ForestForest

Menu Menu

Facility AssessmentFacility Assessment

StaffingStaffing RatiosRatios CredentialsCredentials Employed / ContractedEmployed / Contracted

ProgrammingProgramming RecreationalRecreational SocialSocial

Levels of CareLevels of Care Define levels availableDefine levels available Identify physical location/levelIdentify physical location/level

Contracted ServicesContracted Services Medical DirectorMedical Director Pharmacy/PharmacistPharmacy/Pharmacist DietaryDietary TherapyTherapy

Hybrid ScenariosHybrid ScenariosILF- “pseudo-ALF” offering assistance through contracts with ILF- “pseudo-ALF” offering assistance through contracts with HHAHHA

ILF does not qualify as an ALFILF does not qualify as an ALF Will ALF policy cover ?Will ALF policy cover ? Policyholders home is ILF?, will HHC policy pay for care?Policyholders home is ILF?, will HHC policy pay for care?

Continuing Care CampusContinuing Care Campus Policyholder “buys in” at time of admissionPolicyholder “buys in” at time of admission Guaranteed services in SNF/ALF/HHC on campusGuaranteed services in SNF/ALF/HHC on campus Question: How to calculate benefits at time of need?Question: How to calculate benefits at time of need?

ILF apartments dually licensed as ALF ILF apartments dually licensed as ALF Policyholder receives intermittent IADL/ADL assistancePolicyholder receives intermittent IADL/ADL assistance What charges are eligible? R & B? Service only? All? Nothing?What charges are eligible? R & B? Service only? All? Nothing?

SummarySummaryALF category is explodingALF category is explodingMore attractive for retirementMore attractive for retirementBlurring the line of eligibilityBlurring the line of eligibility Enter independentEnter independent Receive intermittent servicesReceive intermittent services

Use the tools of adjudicationUse the tools of adjudicationHistoric actuarial assumptions for Historic actuarial assumptions for utilizationutilizationConsider this evolution in new product Consider this evolution in new product developmentdevelopment

Grand Prize Question