State Trends in Nursing Home Pay

for Performance

Washington Health Care Association

Annual Convention 2010 Spokane, WA.

Leslie Hendrickson
Hendrickson Development
www.hendricksondevelopment.biz
leslie.c.hendrickson@gmail.com
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 Goals Depends on Point of View
• Individual -- Want to learn something
interesting about Pay for Performance.
• Building -- Want to understand what changes
I should encourage in my building.
• State -- Identify issues to consider in
encouraging state to adopt a P4P program.
State organizing and lobbying effort.

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 Takeaways Individual Level
• Fifteen states, eight stable ones, three are
project based.
• Culture change hard to get at in uniform way.
Easier measures are CMS MDS quality of care
measures, survey results, staffing data and
occupancy from cost reports.
• Medicare may or may not use pay for
performance. Will use it, if use of P4P reduces
hospital expenditures.
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 Takeaways Building Level
• Staff retention key variable in all states.
• Medicaid occupancy frequently used.
• Emphasis on quality of life, culture change,
self-direction and their reporting is increasing.
• Colorado using very interesting measures:
dining, bathing, consistent staffing, staff input in
care planning, community involvement and
volunteers, neighborhoods.
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 Takeaways State Level
• 2008 Task Force Recommendations
• How P4P is funded is major determinant of
success. If it comes out of current rate don’t
bother, e.g. Ohio difficulties. If it is new $ on top
of current rate, then worthwhile to do. See 2008
Tim Graves Texas comments.
• Project based approaches Minnesota, Vermont,
Utah good way to go.
• Voluntary or collect data on all homes.
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 CMS Value Based Purchasing
• A three-year demonstration beginning in
summer 2009.
• As of March 1, 2010 Demonstration states:
Arizona 38 homes, New York 78 homes, and
Wisconsin 61 homes.
• Nursing homes within these states were
solicited to participate in the demonstration.

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 CMS Value Based
Purchasing
– Aim 1: To examine the organizational characteristics and patient
demographic and clinical characteristics of treatment and control
group nursing homes.
– Aim 2: To analyze the organizational and patient demographic and
clinical characteristics of nursing homes eligible for performance
payments, the amount of performance payments received, and
subsequent impacts on nursing homes’ quality improvement and
financial status.
– Aim 3: To examine the impact of the demonstration on incidence of
avoidable hospitalization and quality of care levels in participating
nursing homes.
– Aim 4: To assess the impact of the demonstration on nursing home
management, organization, delivery of services and financial status.
– Aim 5: To assess the impact of the demonstration, Medicare and
Medicaid program expenditures and savings, and evaluate the cost-
effectiveness of the demonstration.

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 CMS Evaluation Activities

Longitudinal Nursing Home Interviews

Evaluation Findings:
Literature Nursing Home Site Visits Structure, Process, Cost
Review and Quality Outcomes

Merged Data Set Analysis (MDS,

OSCAR, Medicare/Medicaid Claims, etc.)

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 How CMS will Measure Cost
Effectiveness
• CMS will compare risk-adjusted Medicare Part A
and B expenditures between the demonstration
and comparison groups in each State. CMS will
calculate the difference between the
demonstration group’s actual Medicare
expenditures and the “target” expenditures (i.e.,
what we would expect Medicare expenditures
for beneficiaries in demonstration homes to be
in the absence of the demonstration).

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 How CMS will Measure Cost
Effectiveness #2
• The target expenditures will be calculated using
base year expenditures for the demonstration
group and the rate of change in expenditures
for the comparison group since the base year.
• Stingy savings, basically must be in the 80th
percentile and above to qualify for payment
from the state savings pool.
• Unlike state efforts this is not culture change.

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 New Federal Requirements
in H.R. 3590
• H.R. 3590 can get text at www.thomas.gov
• Nursing Home Transparency Title I Part 1 Sections
6101 through 6107.
• Sec. 6101. Required disclosure of ownership and
additional disclosable parties information.
• Sec. 6102. Accountability requirements for skilled
nursing facilities and nursing facilities.
• Sec. 6103. Nursing home compare Medicare
website.
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 New Federal Requirements
in H.R. 3590 #2
• Sec. 6104. Reporting of expenditures.
• Sec. 6105. Standardized complaint form.
• Sec. 6106. Ensuring staffing accountability.
• Sec. 6107. GAO study and report on Five-Star
Quality Rating System.

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 Where is Medicare Going?
Title III Section 3006 of H.R. 3590
• Next step P4P step is in sight.
• Requires Federal Health and Human Services
to develop a pay for performance plan.
• Report plan to Congress by October 1, 2011.
• “The ongoing development, selection, and
modification to the extent feasible and
practicable, of all dimensions of quality and
efficiency in skilled nursing facilities.”

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 Section 6102 of H.R. 3590
• Not later than December 31, 2011, the
Secretary shall establish and implement a
quality assurance and performance
improvement program shall establish
standards relating to quality assurance and
performance improvement with respect to
facilities and provide technical assistance to
facilities on the development of best practices
in order to meet such standards.
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Medicaid and Pay for Performance
• Best stats are from Kuhmerker 2007
Commonwealth Fund study
• 50% of states used P4P, 85% will by 2012.
• 70% of uses are in managed care and primary
care case management (PCCM)
• Used in pay for participation in health
information technology (HIT) programs
• Unlike CMS, state focus is often on improving
quality, not reducing cost
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 Pay for Performance Themes
• Staffing
– Retention, Turnover, and Consistency
• Quality of Care
– Survey Data
– Nursing Home Compare Data
• Culture Change
• Medicaid Occupancy
• Surveys of staff, residents and families

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 Summary Comments
Roughly Fifteen States
• Arizona, funding on hold
• California largest P4P in country but doesn’t know it.
(labor driven operating allocation)
• Colorado, stable, new $
• Georgia, stable, new $
• Iowa- stable, $ in base
• Kansas stable, new $
• Maryland, supposed to be new $, but isn’t, being
phased in.
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 Summary Comments
Roughly Fifteen States # 2
• Massachusetts in limbo now,
• Minnesota, stable, $ in base, project based
• Ohio, not new $, cap limits receipt of incentive
• Oklahoma, stable
• Texas, out for bid, 72,000 interviews required
• Utah stable, two programs one reimburses costs,
other is project based
• Vermont stable, phased in, project based
• Virginia – discussed in 2007, dead now
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 Colorado 2010 P4P Application
• Really interesting. Well worth looking at
• http://www.colorado.gov/cs/Satellite/HCPF/H
CPF/1219400774885

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 2009 P4P Studies
• 2009 State of Colorado Nursing Facility Pay-for-
Performance Application Review (For
Applications Submitted 1/31/09) at
http://www.colorado.gov/cs/Satellite/HCPF/HC
PF/1219400774885
• Spring 2009 Pay-for-Performance in Nursing
Homes HCFA article at
http://www.cms.hhs.gov/HealthCareFinancing
Review/downloads/09Springpg1.pdf
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2009 P4P Studies #2

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 2009 P4P Studies Slide #3
• 2009 Oklahoma Focus On Excellence
Independent Evaluation Easiest way to get this
is to Google it. Hard to find on Oklahoma and
Pacific Health Group site.
• 2009 article in Medical Care Review “State
Adoption of Nursing Home Pay-for-
Performance”. Ask Rachel Werner lead author
for copy at rwerner@mail.med.upenn.edu.

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2009 P4P Studies #4

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 2008 P4P Studies #1
• Bailit 2008 study of P4P for TX at
http://www.hhsc.state.tx.us/reports/Pay-for-
Performance_0209.pdf
• Testimony of Tim Graves on Behalf of The
Texas Health Care Association House Human
Services Committee May 1, 2008 at
http://www.txhca.org/testimony/FINAL
%20House%20050108%20TG%201.pdf

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2008 P4P Studies #2

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 Washington
http://www.leg.wa.gov/jo
intcommittees/LTCRFP
S/Pages/default.aspx

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 Voluntary or Mandatory
Voluntary Mandatory
• Kansas • Iowa
• Oklahoma-survey part is • Georgia
voluntary • Ohio –calculated for everybody
• Minnesota
• Colorado
• Utah

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 Three States use Project Funding
• Vermont’s Gold Star Program
• Minnesota’s
• Utah

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 Vermont Gold Star Employer
Improvement Program
• Homes get Gold Stars
• The best practices were identified in seven
different areas: staff recruitment, orientation,
staffing levels and work hours, professional
development and advancement, supervision
training and practices, team approaches and
staff recognition and support. Uses workbook
with application instruction.

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 Vermont Gold Star Employer
Improvement Program Slide #2
• To win a Gold Star, nursing homes must conduct a
self-assessment, select a best practice area and
develop a work plan. After one year, a council
review team reviews the nursing facility’s progress
through site visits and telephone interviews. The
council awards Gold Star Employer Recognition
based on achievement of designated goals or
achievement of unanticipated goals that have
measurable quality outcome improvements.

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Vermont Quality Incentive Awards
#3
• Five of the state’s forty homes can get award of
up to $25,000 each year.
• 1. The most recent health survey report
resulted in a score of five or less, no deficiency
with a scope and severity greater than AD@
level, with no more than two AD@ level
deficiencies in the general categories of Quality
of Care, Quality of Life, or Resident Rights.

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Vermont Quality Incentive Awards
#4
• 2. No substantiated complaints in previous 12
months related to quality of care, quality of
life, or residents= rights.

• 3. Designated Gold Star Provider.

• 4. Resident satisfaction survey results above

the statewide average
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 Minnesota
Performance-based Incentive
Payments
• Each Fall the State issues an RFP. Homes can
get up to a 5% increase in per diem.
• Improve the quality of care and quality of life
in a measurable way.
• Deliver good quality care more efficiently.
• Rebalance long-term care and make more
efficient and effective use of resources.
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 Minnesota Slide Quality Add-on
Program
Minnesota had quality “add-ons” in 2006 and
2007 which made payments based on 24 risk-
adjusted quality indicators, for example:
• Prevalence of Indwelling Catheters
• Prevalence of Urinary Tract Infection
• Prevalence of Infections
• Prevalence of Residents who Have Fallen
• Prevalence of Burns, Skin Tears or Cuts
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 Minnesota Quality Add-on
Program #2
• Quality Indicators were complicated used risk
adjustments/weights. Four other measures.
• Direct care staff turnover;
• Direct care staff retention;
• Temporary staff usage; and
• State inspection findings.
• In 2007 did resident quality of life surveys.
• Were not funded after 2007. It was a choice of
funding the Add Ons or funding the COLA.
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 Utah Quality Incentives

• $1,000,000 paid out of provider tax.

• If you spend the money you get some back.
• In 2010 can get additional funds for nine costs: for
example, nurse call systems, patient lift systems,
electronic records, HVAC, van and van equipment,
resident enhancing activities, dining improvements.
• http://health.utah.gov/medicaid/stplan/NursingHom
es/UHCA%202009-04%20Revised
%20Presentation.pdf

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 Arizona
• Arizona has 134 licensed nursing homes
contracted with the AHCCCS program.
• Pay $50,000 to the top 40% based on one or
two performance measures such as pressure
ulcers or use of restraints.
• Total $2.7 million plus $500,000 additional
administrative costs--$3.2 million.

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Colorado

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Colorado

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 Georgia
Nursing Home Quality Initiative
• First Phase
• Nursing Home Quality Initiative in 2003.
Training needs identified and paid for from
Civil Monetary Penalties (CMP).
• Next phase started in 2007.

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 Georgia’s
Quality Incentive Rate System
• % of high risk long-stay residents pressure sores;
• % of long-stay residents physically restrained;
• % of long-stay residents moderate to severe pain;
• % of short-stay residents moderate to severe
pain;
• % of residents who received influenza vaccine;
and
• % of low risk long-stay residents pressure sores.

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 Georgia’s
Quality Incentive Rate System #2
• Exceeding the threshold of 85 percent or higher
of “good” or “excellent” ratings on the family
satisfaction question “would you recommend
this facility?”
• Participation in the employee satisfaction survey.
• Above the state average on either RN/LPN
stability or certified nursing assistant stability.
• In 2007, 78% of homes received payments

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 Iowa
Significant Change in 2009
• Added Culture Change as reported in “self
certification” form showing measures of
Person Directed Care.
• Added three Nationally Reported Quality
Measures of quality of care:
– High-Risk Pressure Ulcer
– Physical Restraints
– Chronic Care Pain

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 Iowa Nursing Facility Pay-for-
Performance Program
• Quality of life.
– Person-Directed Care, Resident Satisfaction
• Quality of care.
– Survey, Staffing, Nationally Reported Quality Measures
• Access. Efficiency.
• Most providers are only eligible for 1-3% increase.
It is hard to get the full 5%. $1.40 a day to $1.50 a
day is average add on that homes get.

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 Kansas Changes in 2009
• Deemphasized focus on efficiency
• Added culture change but doesn’t pay much for it
• Eliminated
– Operating expenses
– Staff retention but still keeps heavy emphasis on
number of staff per se and staff turnover
– Total occupancy
– Survey outcomes now used as “gate keeper” rather
than measure

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Kansas 2009

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 Massachusetts
• Initiated by the state
• Is on hold because of budget problems
• The last published document on
Massachusetts P4P was the MassHealth
Nursing Facility Bulletin 129 December 2008.
• http://www.mass.gov/Eeohhs2/docs/masshea
lth/bull_2008/nf-129.pdf

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 Ohio Quality Incentive Program
• Deficiency free on the most survey results.
• Resident and family satisfaction surveys are
above the statewide average.
• Number of hours nurses are employed is
above the statewide average;
• Employee retention rate is above the average
• Occupancy rate, Medicaid utilization and case
mix are above the statewide average.
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Ohio 2009 Results #1

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 Ohio 2009
Results and Context #3
• 3,409 total points divided into amount of
money allocated for P4P came out to .80 per
day per point.
• P4P not paid for out of provider tax although
Ohio has a provider tax.
• State in multi-year transition from cost-based
reimbursement to price-based reimbursement
with rate reductions.

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 Oklahoma
Focus on Excellence
• Well documented effort because of Pacific
Health Group study.
• Focus on Excellence has two components – an
incentive payment methodology and a five star
rating system published on a website.
• Significant disadvantage is that money for FOE
comes out of existing reimbursement and is not
new dollars. Homes facing 6.9% reduction in
remainder of FY 10 and 10% in FY 2011.
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 Oklahoma #2
• 1. Quality of Life.
• 2. Resident/Family Satisfaction.
• 3. Employee Satisfaction.
• 4. System-wide Culture Change.
• 5. Certified Nursing Assistant/Nursing Assistant
Turnover and Retention.
• 6. Nurse Turnover and Retention.
• 7. State Survey Compliance.
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 Oklahoma #3
• 8. Clinical Measures. Residents without: falls,
acquired catheters, acquired physical restraints,
unplanned weight loss/gain, and acquired
pressure ulcers.
• 9. Nursing Staffing per Patient Day;
• 10. Overall Occupancy (used on website only);
and SoonerCare (Medicaid) Occupancy and
Medicare Utilization (used in incentive payment
methodology only)
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 Companies
• Georgia and Oklahoma using My Innerview to
collect family and resident interview.
Oklahoma pays $646,000 a year to My
InnnerView.
• Minnesota and Ohio used Vital Research to do
resident interviews.
• In last two months, both Colorado and Texas
issued RFPs for contractors.

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