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The Pulse: July 11, 2012


The PULSE is reserved for policy and regulatory information and updates. This introduction you may think is misplaced as we highlight the 4-part Educational Series being facilitated by Health Dimensions Group.  We are starting The PULSE this month with this message because it identifies the significant change that will affect our home, hospice and palliative care industries. Three broad elements are driving future reimbursement models: performance based payment, implementation of accountable care / integrated systems, and pressures to control Medicaid expenditures.  All three of these elements are hitting Ohio in some degree now and will expand in the near future.

Don’t be left out! Understanding how these changes will affect your business is critical! Planning for change takes time, as careful evaluation and strategic development is considered.  MCA’s educational arm has put together a four-part series detailing the essential components that one will face as the environment changes.  How should you strategically position your organization for change in Ohio’s healthcare landscape?  Join us and formulate your plan!

Click here for more information! Part 1- Webinar is scheduled for July 19th!

Affordable Care Act Stands – Now What?

June’s U.S. Supreme Court decision affirming the Patient Protection and Affordable Care Act (ACA), except for the provision mandating states to expand Medicaid eligibility, has implications in Ohio. Some of these implications include our state’s movement to incorporate Managed Care Organizations (MCOs) into Medicaid case management; Medicaid waiver programs either already in place or seeking approval from the federal government that mirror provisions of the ACA; and while the Medicaid Dual-Eligible project moves forward, it is difficult to predict if Ohio will expand eligibility as previously required under the ACA.

The primary impact of the decision is to ensure that the federal government will not roll back existing Medicaid programs in states for lack of compliance with the ACA. The decision also effectively limits the broad expansion of Medicaid to more recipients. Otherwise, the law was largely left intact, and providers should expect to see more in coming months on the following initiatives as they are implemented:

  • Collaboration with Accountable Care Organizations (ACOs);
  • A post-acute bundling pilot;
  • Broad innovation initiatives from the Centers for Medicare and Medicaid Innovation (CMMI);
  • Rebasing (reduction) of home health rates over 4 years starting in 2014;
  • Reduced payments-both in decreased market basket updates and productivity adjustments;
  • The Independent Payment Advisory Board (IPAB), to push MedPAC directive.

However, the decision also brings to the forefront some interesting questions:

  • Going forward there is still likely to be a significant uninsured population, since states may choose not to participate in the expanded Medicaid program. If states do opt in, Medicaid rolls are likely to significantly increase.  Will sufficient funds follow such increases?
  • How will private insurers deal with new enrollees under the Act’s provisions?  How will states review and monitor insurer rates and compliance? The burden is now on both insurers and regulators to act quickly under the Act.
  • From an employer perspective, the waiting game is over – and now compliance is a coming issue.  Will we see more litigation as a result? Also, a portion of the ACA requires unionized employers to recognize bargaining rights rather than unilaterally implementing new policies, creating new points for bargaining sessions.
  • Politically, all is dependent now on the fall election – depending on who wins will tell us what to expect in 2013 and beyond!

We will continue forward on our advocacy efforts on the state and federal level, knowing more clearly what the parameters of our overriding issues are. Stay tuned for more updates via Alerts, The Source, and The Pulse.

For questions or comments about Midwest Care Alliance’s advocacy efforts, contact Jeff Lycan at (614) 545-9016 or or Katie Rogers Colgan at (614) 545-9032 or

Ohio Medicaid Releases ICDS Plan Scores

Late last week, Ohio Medicaid released Request for Application (RFA) scoring results of the Integrated Care Delivery Systems (ICDS) for individuals dually eligible for both Medicare and Medicaid.  To view a copy of the scoring results, please click here.

The scoring indicates the following plans as the top in each of Ohio’s seven planned regions: Aetna, Molina, United and CareSource. Though the scoring was released last week, plans will have until July 13 to submit protests to the Ohio Department of Jobs and Family Services (ODJFS), and if warranted scores could be adjusted.

In addition, the following updated timeline of implementation was released:

  • August 6, 2012 – Selection meeting for plans to choose the markets in which they will operate.
  • August 7, 2012 – Final tentative selection of ICDS health plans.
  • August 14, 2012 – Estimated start of readiness review of selected ICDS health plans.
  • October 2, 2012 – CMS, Medicaid, and ICDS health plans will sign three-way provider agreement.
  • April 1, 2013 – Enrollment will begin.

We will continue to keep members informed as information and updates are released. For questions, contact Jeff Lycan at or (614) 545-9016, or  Katie R. Colgan at or (614) 545-9032.

Kasich Administration Prepares Zero Gain Budget

As the state prepares for FY13 to begin July 1, the Office of Budget and Management (OBM) released guidance for state agencies to begin prepping for the FY14/15 budget, telling General Revenue Fund (GRF) agencies to submit scenarios for flat funding from FY13 allocations, as well as for a 10 percent reduction.

"Agencies must demonstrate that any non-GRF revenue sources have long-term stability and also must demonstrate that extended program budget requests reduce the agency’s dependence on the GRF," the OBM guidance said.

OBM Director Tim Keen said the two requested scenarios are an exercise in setting priorities and not based on potential funding scenarios. "The idea is to show how you would prioritize resources if you received less than FY13 levels," he said. Keen said this will be the administration's first budget process where all of its people will be in place and will have the entire budget process to work together, rather than the shortened timeline that comes from being a first-time governor. He said they will also have the advantage of being able to build on the successes of the first budget and the recent Mid-Biennium Review.

According to the guidance, non-cabinet agency budget and language requests are due to OBM by 5 p.m. Sept. 17. Cabinet agency budget and language requests are due to OBM by 5 p.m. Oct. 1. Legislative and judicial agencies and constitutional officeholders are required to submit requests by 5 p.m. Nov. 1.

In addition, because the Affordable Care Act was upheld by the U.S. Supreme Court, Ohio Medicaid may be challenged by expanding eligibility to thousands of Ohioans not currently enrolled in Medicaid.

While the state prepares these budget scenarios, Midwest Care Alliance will continue to advocate for quality services for member organizations, clients, and families. While the biennial budget process technically occurs every two years, advocacy is a never-ending, ongoing process.

If you have any advocacy or policy questions, please contact Katie Rogers Colgan at or 614-545-9032.

Health Policy Institute of Ohio on Medicaid Eligibility

The Health Policy Institute of Ohio released “Modernizing Medicaid Eligibility: A review of Ohio's proposal.” This policy brief summarizes the Governor's Office of Health Transformation's "Medicaid Eligibility Modernization Project," a Section 1115 Demonstration Waiver request that would change eligibility for Medicaid in Ohio.

Released on June 6, the proposed waiver request has several components:

  • Simplify Medicaid eligibility categories, from the current 150+ categories to three;
  • Procure and implement a new eligibility and enrollment system to replace the 30-year old Client Registry Information System-Enhanced (CRIS-E). (This system will handle eligibility, enrollment and renewals for Medicaid and other primary public assistance programs.);
  • Streamline state and local responsibility for eligibility determination.

For more information on the waiver, or Medicaid Eligibility, contact Katie Rogers Colgan at or 614-545-9032.


Click here for a list of key legislation Midwest Care Alliance is monitoring and its status, as well as news from around the state that affects legislation, regulations, and policy. Please note that the legislative news has not changed since the last issue of The Pulse because legislators are not in session, but the statehouse news is updated.


The Supreme Court Ruling: Implications for Post-Acute and Long-Term Care Providers

Craig Abbott, Chief Executive Officer, Health Dimensions Group
Sarah Katz, Senior Consultant, Health Dimensions Group

As the dust settles from the Supreme Court's decision to uphold the individual mandate through Congress's taxing authority-and as an extension the majority of the Affordable Care Act (ACA), health care providers are readjusting to a familiar but now accelerating landscape of care delivery transformation. There certainly aren't as many implications to consider had the mandate been struck down and the remainder of the bill ruled to be inseverable.

However, Health Dimensions Group would like to share a few initial observations from the rule directly relevant to post-acute and long-term care providers:

  1. Performance based payment is here to stay: The shift from fee-for-service to value based payment for Medicare providers outlined in the ACA remains intact. Starting in Fiscal Year 2013, hospitals will be subject to CMS's Value Based Purchasing Program, under which a percentage of reimbursement funds will be withheld and then rewarded to high performing providers. Similar programs for skilled nursing facilities (SNFs), Medicare certified home health agencies (HHAs), and hospice providers are in the works and expected to launch over the next several years. In addition, the Re-admissions Reduction Program will move ahead as intended, with the bottom quartile of hospitals receiving financial penalties starting in FY2013 and the widespread expectation that SNFs will be subject to similar penalties in the near future.  These moves to penalize subpar operational performance come on top of additional cuts to Medicare payment in the ACA. In sum, providers must achieve high level operational performance to simply maintain already razor thin margins. 
  2. Adoption of accountable care driven payment models will accelerate: Hospitals that have been waiting on the sidelines for the constitutionality of the ACA to play out in the Supreme Court are now entering a game of catch up to prepare for accountable care driven payment and care delivery models. Though the 2012 Presidential election casts some uncertainty on the future of the ACA, significant movement toward accountable care in the private sector combined with the court's ruling, yield a promising future for payment models such as shared savings and episodic bundling. The simple fact is that hospitals and post-acute providers will not be able to break even on Medicare payments through incremental cost cutting. The coming wave of baby boomers and financial insolvency of the Medicare trust fund necessitates dramatic moves toward cost control. We anticipate that CMS will continue to cut rates on the fee-for-service side and provide increasing options for accountable care driven payment in a two-pronged effort to reduce costs. Ultimately, rate cuts will be unsustainable and to break even on Medicare patients, providers will need to adopt such risk-sharing arrangements that reward high quality and low costs. Markets that have not yet experienced a substantial amount of accountable care activity will likely do so soon, and with it develop tightly formed networks of high quality, low cost post-acute providers that are the preferred provider of choice for hospitals, ACOs, and physician practices. Post-acute providers who are unable to demonstrate their quality or willingness to go at-risk may be shut out of these networks and lose a profitable referral stream of Medicare patients. 
  3. Medicaid expansion, and with it the size of the dual eligible population, will vary by state: In its decision, the court ruled it unconstitutional for the federal government to withhold all Medicaid funds from states that refuse to expand Medicaid eligibility to 133% of the federal poverty level (FPL). Though Federal matching for the expanded Medicaid population is generous --100% through 2020 and 90% thereafter--tight state budgets and the opportunity for Republican governors to take a political stand against the ACA remain. Despite the fact that Medicaid reimbursement rarely cover costs, it is undoubtedly superior to no-pay patients and we anticipate heavy lobbying from post-acute and long-term care provider groups in the coming months to accept federal funds for Medicaid expansion. Post-acute and especially long-term care providers should track these debates closely to anticipate projected changes in the size of the dual eligible and Medicaid population.

In sum, the court's decision did not change the health care landscape as dramatically as it could have, but it will intensify the efforts of post-acute and long-term care providers to prepare for a new world of payment and care delivery. As providers alter internal operations and cross-continuum relationships to prepare for these changes, we look forward to sharing further analysis of the court's decision against the backdrop of the 2012 presidential election.

Health Dimensions Group offers industry leading expertise in consulting and management services to hospitals, health systems, long-term care and senior living providers across the country. For more information visit our website at or e-mail:

Inspector General Report: Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice

On June 28, the Office of Inspector General released a report on a nationwide review of prescription drugs for beneficiaries in hospice for the period January 1 through December 31, 2009. This report underscores the need for hospice providers to be prudent and specific in their determination of what is or isn’t related to the terminal illness and the specific documentation that supports their decision.  As well, it underscores the need for hospice’s to educate their patients and families that the desire to continue certain medications may or may not be covered by another payer and they may be individually held liable for the cost of those medications.

The top two paragraphs on page ii of the summary outline the OIG’s perspective on what is related to terminal illness.  The report identifies four common categories of prescription drugs that are typical to address symptoms for hospice patients: analgesics, laxatives, antinauseants, and antianxiety medications.  The report also identified common medications used in treating two specific diagnoses, COPD and ALS.

The OIG recommendations to the Centers for Medicare and Medicaid Services are to:

  1. Educate hospices and related entities working with hospices about what is appropriately related to the terminal illness and hospice care;
  2. Monitor Part D for medications not related;
  3. Require controls to prevent Part D from covering related medications.

Click here to read the full report.