Wednesday, October 10, 2007

PPS - An Inside Perspective on the Data

Tuesday afternoon, I attended a session by Amanda Twiss, CEO of Outcome Concept Systems on the impact of the new PPS from a data perspective. We've been working withOCS on their Private Duty Benchmarking project, and I wanted to hear what Amanda had to say about PPS and the data.

She began by giving us an overview of the PPS changes, including a graph showing the average case weight mix for each of the last seven years. Starting at about 1.3 in 2000, Case Weights dipped during 2001, 2002, and 2003 and then trended upward beyond the starting point. This graph shows the data points that led to the concern for "Case Mix Creep" that we heard Bill Dombi talking about. CMS has written a rule that will reduce home health payments by 2.75% to account for this "creep" in case mix.

Amanda then went on to talk about the industry impact of the new PPS based on that available data and some practices that OCS has identified.

Looking at the projected case weight by agency type and translating that into dollars, she was able to project the following financial changes per episode:
  • Urban Agencies - +$28
  • Rural Agencies - -$131
  • Not For Profit - +$99
  • For Profit - -$93
  • Free Standing - -$22
  • Facility Based - +$63

The overall range of the impact will be plus or minus 5%, but there will extremes where agencies see a swing of plus or minus 30%.

Some Snappy Facts:

  • 50% of agencies will do better
  • Large, Not For Profits have the greatest magnitude of positive change
  • Organizations with the most positive change have increased management and staff stability
  • Organizations with the most positive change have disease management programs and point of care in place
  • Organizations with the mose positive change are more likely to have case management in place

The Impact on Sales & Marketing

I was very interested to hear Amanda's comments on how these changes will affect sales and marketing in successful home health care organizations. Since the beginning of PPS, we've been saying that your agency could increase its case mix weight and revenue by focusing your sales and marketing efforts. To do that, you need to understand and apply the principles that drive the PPS reimbursement system.

Amanda made several points throughout here presentation the show the increased need to focus your sales efforts:

  • One of the attributes of home health organizations with the highest profitability is that they have a formal marketing department
  • In adjusting to the new PPS, successful companies will revise their sales and marketing plans to identify what patients and referral sources to target
  • Industry leaders interviewed by OCS are planning a number of additional strategies, including changing their marketing focus.

If you would like some assistance in refocusing your sales and marketing plans and training your sales team to go after the right target patients and referral sources, give us a call at Leading Home Care at 502-339-0653, or send an email to Stephen at leadinghomecare.com

Go Put Your Strengths to Work

The highlight of Tuesday's opening general session at the 2006 National Association for Home Care and Hospice annual meeting was Marcus Buckingham, author of the new book, Go Put Your Strengths to Work. Using research from the Gallup Organization and information from their famous Gallup Poll, Marcus has written two previous books. First, Break All the Rules; What theWorld's Greatest Managers Do Differently; and Now, Discover Your Strengths.

I've been a huge fan of Marcus Buckingham since my wife Elizabeth spoke at a conference with him several years ago, and came back with a signed copy of his first book. She raved about the content of his message, the eloquence of his speaking style, and the fact the he's "really good looking." I'm not sure if it was his message, his delightful British accent and humorous speaking style, or the fact that he's "really good looking," but the women ( and a guy or two) at NAHC were lined up for an hour to talk with him and get his book signed.

Here are some highlights from his speech that I think you'll find very interesting.

Marcus begins with a statement:

"Build on your strengths and manage around your weaknesses."

Most people don't believe that. The Gallup Organizations asked thousands of people in six countries this question:

"Which do you think will help you be most successful; Building on your strenghts, or fixing your weaknesses?"

In the year 2000, people said:
  • United States - Build on Strengths - 41%, Fix Weaknesses - 59%.
  • Canada - 38% - Build, 62% Fix
  • Great Britain - 38% Build, 62% Fix
  • France - 35% Build, 65% Fix
  • Japan - 24% Build, 76% Fix
  • China - 24% Build, 76% Fix

The idea in our world is that to promote excellence, we find weaknesses and try to fix them.

Buckingham says, "You don't learn about excellence by studying failures." His mission is to start a "Strengths Revolution."

Some other key points:

We live in a deeply remedial world

Women age 34 - 45 are far more remedial - 73% want to fix weaknesses

(When I heard that statistic, I thought of some home care nurses and managers I know. This point explains a lot about how they think, act, make decisions and manage. More about this later.)

You've heard the old addage spoken by corporate CEO's,

" People are our greatest asset."

NO!

"People's strengths are our greatest asset."

What % of people in your organization say they spend most of their time playing on their strenths?

A study in the U.S. showed that in 2005, the number was 17%, in 2006 it was 14%, and in 2007 it was 12%. Fewer and fewer people in the workplace say they are spending most of their time using their strengths. How about in your home care company?

The whole point of Marcus Buckingham's speech to the leaders in the home health industry gathered at NAHC is that we need to find the right people, and then we need to help them spend most of their day doing what they do best, and what they like to do.

We need to focus our attention on building their strengths.

I'd suggest you go to his web site and purchase a copy of the book, Go Put Your Strengths to Work. Begin by applying these principles to yourself. I'm working on that right now for myself.

Then examine how you can help every member of your home care team go put their strengths to work.

Tuesday, October 09, 2007

Profitable Niches in Private Duty Home Care

We had a lively group for my presentation on Profitable Niches in Private Duty Home Care yesterday at the NAHC convention in Denver.

The purpose of this presentation was to look at three niches that you focus on in order to grow your PDHC company profitably. The three niches are:

  1. Niche by Referral Source
  2. Niche by Programs & Services
  3. Niche by Geography

They key to "niching" is to gather data to know where you Private Duty business is coming from, and how much revenue is coming from each type of client or referral source.

For example, I shared a case study in which one Private Duty company got 16.25% of their referrals from hospitals, and averaged $526.25 per week in revenue per client. They received 6.88 % of their referrals from Geriatric Care Managers, and averaged $1,472 per week in revenue.

The sources of your referrals and the average amount of revenue from each client will be influenced by how you focus your marketing efforts.

Sharing this data generated many questions and much discussion during the presentation and in the hallway afterwards.

If you would like a copy of the handout from this presentation, send an email to Stephen at leadinghomecare.com.

To talk more about ho.w you can grow your PDHC company by focusing on "Profitable Niches," give us a call at 502-339-0653

Mary St. Pierre on PPS Revisions

Mary St. Pierre, Vice President for Regulatory Affairs, gave us a great update on some of the details of the new PPS formula and it's impact on agencies. It's pretty clear that much education will be required to help your home care team understand the implications of this new system, and how their decisions will have financial implications.

As Mary Described it, PPS will use a "four equation mode" to determine your payment for a given episode.

  • Early Episodes - first or second
  • Late Episodes - third and beyone
  • Low Therapy - 0 - 13 therapy visits
  • High Therapy - 14 or more therapy visits

There will also be a big bump in payments for episodes with more than 20 therapy visits.

The new formula for determining the payment for an episode will be based on capturing 45 clinical variables that will result in 153 Case-mix groups or HHRGs. This will be applied to five categories of episodes:

  • Early Episode ( 1-2) Low Therapy (0 - 13)
  • Early Episode (1-2) High Therapy (14 - 19)
  • Late Episode (3 +) Low Therapy (0-13)
  • Late Episode (3+) High Therapy (14 - 19)
  • All Episodes over 20 Therapy visits

The details of this revised system point to the importance of having trained, competent coders on your home care team.

Another important comment that Mary made reinforced what we always say, "What gets measured get managed." Using research results from Abt Associates, the proposed CMS rule for PPS was written using 2003 data, and the final rule was written using 2005 data.

It appears that there are problems in the some providers did not provide complete and accurate data in their reporting. Thus, the new rule was written using questionable data.

As a home health care leader, it is important for you to stress to your team the importance of capturing data accurately and completely and reporting in correctly. In my experience looking at date, it's clear that many agencies do not do a good job capturing data at intake, at the point of care, or in other transactions. Part of home health care quality is accurate data.

It's also important to participate in industry research and surveys so that we have the data to guide good decisions that will benefit our industry, our agencies, and our patients.

What do you think about the revise PPS? Give us your comments below.

Bill Dombi on the Revised PPS System

Bill Dombi, Vice President for Law at NAHC, and Mary St. Pierre, Vice President for Regulatory Affairs, give us a great update on the new PPS revisions that are taking effect in January.

Bill said a couple of things that I think are significant:

"We've only begun to introduce you to confusion today." These revisions have many confusing features, and it will take a while for us to understand the changes and their implications for our home health agencies.

And, he made it cleear:

"Don't be worried. Be Attentive.
Pay attention. Get ready.
If you survived IPS, this will be a cake walk."
Bills words confirmed for me what I had been observing all along. These changes are significant, but many people have been making much more of them that is needed. I remember being the Interim President and CEO of a $25 million home care company that lost $2.75 million in 1998. We were able to turn that ship and survive. Two years after the roll out of PPS, that agency was making more money that the hospital it is part of.

Bill did give us a "Weather Report" for the coming impact of the revised PPS based on CMS projections.

  • Voluntary non-profits (VNAs), facility based agencies, and government agencies will gain. Free standing for-profits will lose. The main reason is therapy thresholds.
  • Urban agencies ill gain slightly and rural agencies will lose.
  • Agencies in the north will gain and agencies in the South will lose. ( A friend from New Orleans leaned over to me and whispered, "We did lose the civil war, after all.")
  • Agencies in New England and Mid-Atlantic will gain and agencies in the West South Central will lose.
  • Smaller agencies are at greater risk than larger agencies.

But remember, how accurate is the weatherman in your town?

Did you hear Bills message? What do you think about the impact of the PPS revisions? Give us your comments below.

Senator Susan Collins to introduce the Home Health Care Protection ACT in the U.S. Senate

Senator Susan Collins of Maine spoke during the opening general session at the NAHC convention in Denver. A strong advocate for home health care, Senator Collins is introducing this bill to prevent drastic cuts to home care that are looming in the congress and at CMS. She was particularly critical of the U.S. House of Representatives for the approach to the SCHIP bill that President Bush recently vetoed. This bill would have taken $2.5 Billion from home care over five years to pay for SCHIP.

Senator Collins also discussed proposed CMS administrative cuts of $6 Billion over five years to account for "Case Mix Creep," the perported "gaming" of the system to increase billing by increasing the acuity level of OASIS assessments at the start of care. Rather than artificially inflating acuity, there is evidence to show that home care patients are in fact more acutely ill than when PPS started in 2000.

Senator Collins asked us to do four things to address this issue:

1. Urge your Senator to sign onto the letter to the Senate Finace Committee urging them to take issue with the CMS cuts. So far, 60 Senators have signed on. We need 67.

2. Write or call your Senators and Congressmen to support the Home Health Care Protection Act when it is introduced. Senator Collins will introduce it in the Senate, and Congressman Jim McGovern will introduce it in the House of Representatives.

3. Invite your Senator and Members of Congress to make a home visit. Senator Collins became a passionate advocate for home care after making home visits in her state.

4. Get involved personally in the political process. Go visit members. Vote. Contribute. Volunteer.

How the Age Wave will Transform Home Care

I've heard Ken Dychtwald speak several times, and I read his book, Age Wave, when it came out. For three decades, Ken has been studying, speaking, and writing about the impact of an aging population, and particularly the aging Baby Boomers.

Ken was the opening keynote speaker on Monday morning at the NAHC annual meeting in Denver. His message was more relevant and his presentation more powerful than ever before. Using stories, pictures, facts and data, he painted a clear picture of the power of the aging population and the impact it will have on all of our lives. He also created a clear focus for the influence of home health care on the healthcare system of the future.

Ken described for us "Four Powerful Engines of Change," and how these four engines will affect our future. Here are his four points, and some words of wisdom I heard in his presentation.

1. The Longevity Revolution.

"Two thirds of all people in the history of the world who have lived past age 65 are still alive today." Wow!

"With live expectancy going up 2 1/2 years each decade, the probably of people living to 85 or 105 will be commonplace."

2. From Baby Boom to Age Wave

"Demography is De$tiny." Using graphics showing the increase in the number of people in each age cohort over time, we could see clearly the proverbial "pig in the python" of the baby boomers moving through the decades.

Seeing this group of boomers coming through time, we could predict many of the things that we are experiencing in our country today. For example, When the 76 million kids born between 1946 and 1964 were groing up, why were school districts surprised when they arrived in overcrowded schools. They had 13 years to prepare for it.

Why are we so surprised that our healthcare system is overtaxed. We've had decades to prepare for it. I like what he said about the critics of our healthcare system.

"We wait for the elephant to pass, and then we shoot it in the butt with arrows. We should be digging a pit ahead of it and trapping it."

3. Transforming Adulthood.

Ken played a video clip of Billy Crystal in the movie "City Slickers" describing life. Then he described "The Linear Life Plan." Learn - Love - Work - Relax - Die.
Because of that linear plan, with work ending at age 65 and relaxation starting then, we find that longevity is the extension of old age.

In the "Cyclic Life Plan" of the future, people will learn, work, relax, learn some more, work in a different role, play differently, go back to school, work in a new calling.

He gave us Webster's definition of "retire": To diappear, to do away, to withdraw.

His new definition of "Retire": To be connected, to re-invent, freedom.

4. Searching for the Fountain of Health

This section was most powerful as he talked about the shift from acute illness to chronic disease and the impact on our health care system.

"The future of healthcare is NOT the hospital."

The future is home and community based care. We're seeing this already with the explosive growth of self-pay non-medical home care. Boomers are very clear that they fear going into a nursing home three times more than they fear dieing.

Ken's Solutions for the future of Healthcare:

1. No more political Band Aids
2. Mandate "Geriatric Competency"
3. Preventive Science
4. Re-orient to focus on the contiuum of care
5. Palliative care for end of life.

Were you there for Ken's presentation? What do you think? Give us your comments below.

Sunday, October 07, 2007

Technology and Private Duty Dominate NAHC Expo

The first evening of the NAHC convention, I begin by taking a quick walk through the exhibit hall to see what's new in our industry. Looking at the exhibit booths and talking with the exhibitors gives me a sense of the changes taking place in our industry. This is one of the ways that I track the trends.

This evening in my first quick walk through, I found two things catching my attention. First, the information system company booths are bigger and brigher than ever before. The IT companies must be doing well, and their trade show budgets are growing. And there are more software venders that ever.

Also, I noticed the increasing number of telehealth and PERS vendors.

Second, there's Private Duty. We've been on the leading Edge of Private Duty Home Care for the past five years, and I've never seen so many vendors and consultants promoting their services. I suspect some of it has to do with the start up of NAHC's Private Duty Home Care Association, and the inclusion of a Private Duty track in this conference.

(I'll be speaking tomorrow on "Profitable Niches in Private Duty Home Care." If you'd like a copy of my presentation, drop me a note. )

For more on our work with Private Duty Home Care, visit our other web site at www.privatedutytoday.com.

Congressman Jim McGovern Opens NAHC Annual Meeting

The opening keynote speaker at the 2006 annual NAHC convention in Denver was the Honorable James P. McGovern, member of the U.S. House of Representatives from Massachusetts. Representative McGovern has been a strong advocate for home care, and is introducing a new bill into the congress to protect home health care from harmful cuts in reimbursement that could devastate the industry.

Congressman McGovern made specific referrence to the huge cuts created by the Balanced Budget Act of 1997, and told us that Congress did not intend to cut the home health program to the extent that is was cut. McGovern's bill in the House will be closely related to a bill being introduced in the Senate by Senator Susan Collins of Maine. Senator Collins will be speaking tomorrow, and we'll bring you a report on her speech.

Congressman McGovern urged all NAHC members present to go directly to the internet cafe here in the convention center, and send a messasge to their congressman and senators encouraging them to support these upcoming bills to protect home health care.

NAHC Kicks Off 26th Annual Meeting In Denver

The National Association for Home Care & Hospice kicked off its 26th annual conference and expo at the Colorado Convention Center in Denver. President Val Halamandaris and Chairman Elaine Stephens welcomed members and guests to the opening general session.

Bob Fazzi of Fazzi Associates gave us a quick overview on the National Telehealth Study conducted by Fazzi, NAHC, and Philips corporation. I'll give you more details on the study in a later posting.

As always, the NAHC leadership team did a great job of giving us an update on what's going on in the industry. Here are some highlights, with more to follow:

Theresa Forster, Vice President for Policy, Yvonne Santa Anna, Director of Government Affirst for the U.S. House, and Jeff Kincheloe, Director of Government Affairs for the U.S. Senate, gave us updates on the legislative issues they are addressing. The big concerns are proposed cuts in Medicare Reimbursement. According to Jeff, if the proposed cuts are passed, by 2011 over 50% of home health agencies in the country will be losing money on their Medicare patients.

One concern had been the SCHIP program which President Bush just vetoed. It sounds like the House and Senate are working 0n a new bill that would use an increase in Cigarette taxes to fund SCHIP instead of taking money away from other healthcare providers. We'll watch to see where this goes.

Janet Neigh,Vice President for Hospice Programs, told us that there are no reimbursement cuts on the horizon for Hospice, but the sector is in the crosshairs of congress because of the rapid growth of hospice, and because of the increase in the number of Hospice patients with longer lengths of service. MEDPAC wants to gather more data from Hospices about the costs of providing care. NAHC has proposed a pilot study to determine what data to gather, and the processe by which Hospices can reasonably gather the data.

Janet also discussed a QAPI project involving a patient and family member satisfaction tool being developed in conjunction with the Yale University School of Public Health. NAHC will be collecting this satisfaction data and creating industry benchmarks.

Mary St. Pierre, Vice President of Regulatory Affairs told us that as of January 1, 2008, all home health agencies will need to be using their NPI - National Provider Identifier. Also, CMS has written regulations requiring agencies to pay a provider fee when it is necessary for the Medicare Surveyor from your state to make a re-survey visit. Ror Off-site resurvey's, the fee will be $168 for ll providers. For on-site re-survey visits, the fee will be $1613 for home health agencies, and $1736 for Hospice.

Amanda Thomas, Director of Research, introduced us to some new reasearch projects that NAHC is conducting to support our legislative work. There will also be additional research information made available to members online. I'd like to encourage all of you who are reading this to participate in research projects when requested. The more data we have available, the more we can do to influence good decisions and sound policy for home health care and hospice.

Bill Dombi, Esq, Vice President for Law, gave us updates on three major issues he's working on:

1. Oversight and Enforcement.

There are four major efforts here.

  • Home Health Agency re-enrollment in Houston and Los Angeles. Because of the huge proliferation of new agencies, CMS is going back and requiring all agencies in these two areas to go through the Medicare enrollment process again.
  • HomeHealth Outlier payments in Miami. Data from CMS shows that a huge percentage of all outlier payments made to home health agencies are made to agencies in Miami/Dade county in Florida.
  • Home Infusion demonstration project in Florida
  • Claims oversight by Program Safeguard Contractors.

2. Overtime Compensation.

NAHC filed a brief with the U.S. Supreme Court in the Long Island Home Care v. Coke case. The Court rule 9-0 in favor of Long Island Home Care, saying that home care aides are exempt from overtime under the federal companion exemption. Now, we're seeing new litigation at the state level, and the SEIU is working to change state laws on overtime.

3. Case Mix Creep

CMS is taking action to control what they are calling "Case Mix Creep", and NAHC is preparing a law suit to address the issue, contending that is not what congress intended when they wrote the current law. More on this to follow.

Stay tuned to this site as we send you continuing updates from the NAHC conference.