June 28, 2005

Long Term Care Becomes Focus of Medicaid Reform

Health care, and particularly Medicaid, has become a focal point of politics as its portion of the federal budget has increased. The New York Times recently published an article here detailing a number of reforms to make on the system to help keep the budget from spiraling out of control. Specifically, law and policy makers have began to target long term care as an area that offers the most potential for reform.

Long term care accounts for nearly a quarter of Medicaid's $321 billion that is budgeted for this year, making it an attractive target for reform. Add to that the fact that nearly 78 million baby boomers will be entering into the demographic needing long term care, and you can see why governors, Congress and the President have all decided to focus on reforming the system.

Under the current system, Medicaid pays for approximately two-thirds of the nation's 1.6 million nursing home residents, many of whom are not the impoverished individuals the program was intended to cover. A number of proposals that are likely to be enacted are just quick fixes to stem the program growth from going out of control. These proposals include:
- extending the lookback period from 3 to 5 years, preventing individuals from dumping assets right before they go into long term care;
- requiring reverse mortgages on family homes to pay for nursing home costs;
- having states place liens on homes after residents die to reimburse the state for medical costs;
- encouraging long term care insurance by offering tax benefits; and
- closing loopholes allowing the elderly to protect certain assets.

All these changes would have just a modest impact on the overall cost of nursing home care, which is likely to see the number of residents enrolled triple by 2050.

June 27, 2005

Nursing Homes Get a New Look

As National Public Radio (NPR) reported here last week, several nursing home reformers are pushing for a new look for nursing homes, one that emphasizes a home-like atmosphere over institutional efficiency. One project that is receiving praise is the Green House Project, lead by Dr. William Thomas. His hope is that older people will thrive and live happier lives in smaller facilities that resemble the homes they lived in their whole lives. While others in the past have tried to make existing facilities more home-like, Thomas believes that we need to start over from scratch.

Thomas is in favor of nursing homes that are individual units, that blend into the community that surrounds them, whether it be high rise apartment buildings or suburban neighborhoods. Each unit would have 6-10 residents each with a private bedroom, a common area and a kitchen dining area where they would share their meals. The design is intended to give residents more privacy and control of their lives, where they decide when and what to eat and how to decorate their living areas. The focus of the new homes will be to improve the quality of life of elders by restoring their dignity and individuality.

One of the focuses of the new projects is to make the homes blend in with the surrounding community. Current nursing homes have been designed and built to maximize their efficiency at providing medical services to large groups of people. The fact that the long-term health care system is currently stretched to capacity has only served to reinforce their emphasis on institutional efficiency. Green Houses would be furnished by the residents with items from their old homes. They would all have private rooms, to promote privacy. The center of the residence would be a common area where residents would share their meals. There would be no central nursing station, since the residents would keep their pills in their own rooms. Nurses would come by as needed but would not have a permanent presence in the home.

Another core element in a Green House would be an emphasis on meal time as an opportunity for residents to bond and nourish their bodies as well as their souls. Current facilities must struggle with the logistical difficulties of large scale food service, which often depersonalizes the dining experience. A meal in the Green House would take much longer, but would be intended to be a social as well as nutritional experience.

All of the changes proposed by Dr. Thomas would serve to increase the amount of affection that elders receive. Thomas believes that aging should not be viewed as a medical problem, to be treated with professional distance, but rather a stage of life to be embraced. He believes that the residents should be allowed to befriend those who care for them, and that that affection will increase their quality of life.

June 22, 2005

Rural Nursing Homes Worried Over Death of "Granny Tax"

Many rural nursing homes are afraid of potential bankruptcies or closures due to the death of the so-called "granny tax" in the state Senate this session. The tax, which is technically called the quality assurance fee, was a proposed $7 a day fee placed on a nursing home bed that was privately funded that was estimated to generate around $1 billion in Medicaid reimbursements.

Many nursing home providers feel that they lose money on Medicaid patients. On average, about 30% of the beds at a given facility are private pay. In rural areas however, only about half that pay their own way, with the remaining 85% Medicaid recipients. As the cost of health care, including drugs, services and overhead costs, has increased, the amount paid out by Medicaid has not.

Many in the industry were hoping that this tax on private beds would alleviate some of the cost. The state estimated that the tax would generate $440 million in payments from nursing homes, leading to an additional $525 million in federal funding, all filtered back into Medicaid recipients. Governor Perry thought this tax was unfair to patients who pay their own way, who would bear the burden of the tax without seeing any increase in their services.

It appears that any increases in the pay rate for Medicaid beds will have to wait a couple years. While no cut has been proposed, the state did cut $92 million from its budget for Medicaid in anticipation of the passage of this tax. State officials promise no cut will be made, and the state will have to find the money somewhere to make up the deficit.

Click here for a full article.

June 21, 2005

Provider Letter Update: HCS Survey by DADS

A recent provider letter outlined what Home and Community Support Services Agencies (HCSSA) can expect during a DADS survey.

Entrance Conference
The survey will begin with an entrance conference with the survey administrator, the supervising nurse and an authorized agency representative. At this time the survey process will be fully explained. During the course of the survey a minimum of 11 clinical records will be reviewed, and at least 3 home visits conducted. Also, the surveyor will examine the following systems:
- administrative records;
- complaint tracking system;
- quality assurance plan;
- policies and procedures; and
- employee records and qualifications.

During the survey the surveyor will require copies of all documents reviewed to assist in determining any findings.

Exit Conference
After the conclusion of the survey, an exit conference will be conducted on site with agency representatives. At this point, any preliminary findings will be explained and all in attendance will be required to sign an attendance sheet.

Statement of Deficiencies
A statement of deficiencies will be mailed to your agency following the exit interview. Licenced agencies will receive a statement within 10 business days, Medicare-certified facilities within 10 calendar days.

Plan for Corrections
If deficiencies are cited, your agency will have 10 calendar days to return a Plan of Correction (PoC) to the DADS Regional HCSSA manager addressing the deficiencies and estimated correction dates.

Informal Review of Deficiencies Process (IRoD)
If you disagree with any cited deficiencies, you may submit an IRoD form. This must be submitted on agency letterhead, and a PoC must still be submitted for each deficiency, regardless of whether you file an IRoD. You also have 10 calendar days from the receipt of the statement of deficiencies to submit this form.

June 20, 2005

Arbitration Agreements--Good Case!

The Texas Supreme Court has issued a favorable ruling for Medicare providers who use arbitration agreements. In a case involving a Texas nursing home, the Court ruled that the trial court should have compelled arbitration. You can find the case by clicking here.

The Court considered the question as to whether the Federal Arbitration Act should apply in the case or the Texas Arbitration Act. The Texas Act is not as favorable to providers as the Federal Act is because the Texas Act requires that the resident's attorney must sign the Arbitration Agreement.

How many residents have attorneys representing them upon admission to nursing homes and how many would be willing to retain one for the purpose of signing such an agreement. Furthermore, wouldn't most attorney's tell their clients not to sign such an agreement--especially if the attorney makes a living suing nursing homes?

Fortunately, in this case, the Texas Supreme Court recognizes that because of Medicare, these agreements involve interstate commerce and are preempted by Federal law. Thus, the federal statute applies and an attorney's signature is not required by the Federal Arbitration Act.

There is no mention of what happens if the resident is on Medicaid. However, the same reasoning should apply since federal monies are involved in that program as well.

Update on Quality of Care Study by OIG

A recent OIG study concluded that while the majority of consecutive inpatient stays at acute care hospitals (rehab units, psychiatric units and skilled nursing swing beds) were medically necessary, approximately 20% of the sequences were associated with poor care or fragmented services leading to multiple admissions. The expenditures due to these sequences to Medicare is estimated to be $267 million.

Quality of care problems include:
- failure to treat patients in a timely manner;
- inadequate planning; and
- inadequate monitoring and treatment.
In addition to quality of care issues for multiple stays, the OIG estimates that 10% of individual stays involves problems with the quality of care. An additional 3% of admissions are thought to involve inappropriate admissions and treatment, improper treatment facility or premature discharge.

Unnecessary fragmentation of services involves giving services that are medically necessary but in a manner that leads to an increased number of stays.

The OIG recommends that CMS take the following actions to address the aforementioned issues:
1. Direct Quality Improvement Organizations (QIOs) to monitor the quality of inpatient services provided within a sequence at these types of facilities.
2. Instruct QIOs and fiscal intermediaries to monitor medical necessity of these stays during consecutive sequences.
3. Reinforce efforts to educate providers about the proper uses of skilled nursing swing beds.

The CMS agreed with the findings of the study, but believed that existing systems already covered most of the OIG's recommendations. CMS will put together an article that will address the OIG's third recommendation for increased education on the appropriate uses of skilled nursing swing beds.

We can only hope that the OIG doesn't change the requirements again.

June 08, 2005

CMS Instructs State Survey Agencies On Compliance Dates

A State or two in Region VI appear to be confused about what compliance date to assign when a facility clears on a revisit. Thus, CMS sent a recent Regional Survey And Certification Letter to all State Survey Agencies to clarify the issue. Click here to see the letter.

It is suspected that the letter was prompted by a conversation between CMS and the unamed State Survey agencies that went something like this:

"If you find deficiencies on an initial or annual visit, you are to send the facility the 2567 by the tenth business day after you exit the facility. Got it little buddy?"

"Got it Skipper. After the exit, I am to leave the facility and then to get the 2567 back to them within 65 days."

"No! No! No! You are to get the 2567 back to them within 10 business days."

"Okay. Okay. I've got it. I am to wait until 10 days before DPNA goes into effect to get them the 2567."


"Let's go on to something else for the moment. If the facility clears on the first revisit, you are to assign the compliance date as the date the facility says it corrected if the facility provides documentation to verify continued compliance after correction was achieved. If the facility has no correction-monitoring data--but is in compliance--the correction date will be the last date on the plan of correction submitted by the facility. Understand?"


"If the facility clears on the second revisit and the facility has collected data showing correction and verifying continued compliance--the date proven by that data is to be the compliance date. If they have no data, the date of the revisit is the compliance date."

"I think I get it! When we go back in after the initial survey, if the facility clears--the compliance date is the date of our revisit. Right, Skipper?"


("What did I do to deserve this?")


If you have a bad survey, it is important that you:

  • Thoroughly document what you actually did to correct--not just your plan,
  • Collect monitoring data that will prove that the correction was effective. (e.g. collect data demonstrating that your staff is doing things correctly and demonstrating competency)
  • Record the monitoring data in an understandable way so that you can prove to the re-survey team that compliance was achieved on your preferred date.
  • Have this data handy for the revisit
If you live in the unamed State(s) that are not getting your 2567 to you in a timely manner and causing you to go into DPNA because of insufficent time to get things together:

  • Begin your correction the second the surveyors exit.
  • Consider writing letters to CMS documenting the violations of procedure
  • Contact your attorney for assistence.

June 07, 2005

Updates on Letters to Providers

Ipecac Requirements (Assisted Living and Adult Day Care Facilities)

In a Provider letter Texas DADS tackles the issue of facilities stocking Ipecac for use as treatment for poisoning by inducing vomiting. Apparently, some in the Medical Field question its use and whether on not it should be removed from first aid kits. The letter notes that the use of Ipecac is currently being investigated by the FDA--though it is still available.

The provider letter notes that the Texas Poison Center, however, recommends only using it in the most dire of circumstances and only after contacting a physician or the Poison Center at 1-800-222-1222. Click here to see the letter.

The letter goes on to say:"DADS will accept the immediate availability of the poison center phone number listed above and Ipecac, if the facility chooses to stock and maintain it, as meeting TAC requirements. "

The letter definitely strikes a cautionary note and places the burden on the facility to take steps to determine if the use of Ipecac is appropriate for the particular situation at issue. So always call the Texas Poison Center before administering it.

New Requirements for Reporting Deaths for Licensed Adult Care Facilities

As you know, the Texas Office of the Attorney General (OAG) recently implemented new requirements mandated by Senate Bill 826 that require, under certain circumstances, that a general manager of a facility must report the death to the OAG within 24 hours. Additionally, the general manager must submit a resident death form within 72 hours. Now DADS has sent a provider letter to Adult Day Care Facilities clarifying that the requirement applies to them as well. Click here for a copy of the letter. A justice of the peace must be notified if either:

  • the physician is unable to certify the cause of death, or
  • the death occured in a county without a medical examiner's office or not part of a medical examiner's district.

Medicare Proposes Rule to Improve Hospice

A proposed rule change by the Centers for Medicare and Medicaid Service (CMS) is expected to ease regulations on Hospice providers, allowing for increased levels of care and an increase in the approximately 700,000 current Hospice beneficiaries.

CMS Administrator Mark B. McClellan, M.D., Ph.D. believes that this proposal will help move CMS closer to their "overall goal of high quality for all Medicare beneficiaries."

The proposed rule will have the following changes:

- adding patient assessment procedures that allow for more timely identification of patient needs;
- amending the quality assurance requirement to be more comprehensive and more accurately tailor the care to the patient;
- allows Hospice to contract for some services (such as highly specialized and infrequently needed nursing services);
- replaces requirement of having an RN to provide 24-hour service with an outcome-oriented requirement that focuses on the results of care provided to patients and families;
- provides guidance for hospices that provide care for nursing home facilities.

The proposed rule would adopt contemporary standards of care and would take recommendations from the Secretary's Advisory Committee on Regulatory Reform, the OIG, the Office of Disability, Aging and Long-term Care Policy and the public.

To view the proposed rules click here.

Texas Adopts Amendment to Reimbursement Methodology for ICF/MR

Clarification (note: some of the categories are similar and confusing, pay close attention to the repayment periods):
The Texas Health and Human Services Commission (HHSC) adopted an amendment to the reimbursement methodology applied to Intermediate Care Facilities for individuals with mental retardation (ICF/MR).

The amendment includes several changes in references from MHMR to DADS to reflect the changes in structure of the Health and Human Service Agencies. For example, 1 TAC § 355.457 (c)(2)(B) and (C) both change the agency that facilities are required to pay from MHMR to DADS.

For Fiscal Accountability Repayments Made Between April 5, 1998 and January 1, 1999.
The amendment also reinstates language that was inadvertently omitted from a previous amended version of the adopted text. The relevant clarifications include repayment requirements for providers spending between 85 and 90% of direct service revenues will pay DADS 50% of the difference between direct service costs and 90% of direct service revenues. § 355.457 (c)(2)(D)

For Fiscal Accountability Repayments Made After January 1, 1999.
The language of § 355.457 (c)(3) now provides, that for all fiscal accountability repayments for a providers fiscal year that begins on or after January 1, 1999:
- That the total direct service revenue is equal to the direct service portion of the rates multiplied by the number of allowable units paid for services provided during the reporting period:
- Providers whose direct service costs are 90% or more are not subject to repayment under this section § 355.457 (c)(3)(A);
- Providers whose direct service costs are less than 85% of direct service revenues will be required to pay DADS the difference between direct service costs and 95% of direct service revenues § 355.457 (c)(3)(B); and
- Providers whose direct service costs are between 85 and 90% of direct service revenues are required to pay DADS 75% of the difference between the direct service costs and 90% of the direct service revenues § 355.457 (c)(3)(C).

For a line by line reading of the text click here.