Ilene Henshaw

1
NURSING HOME Pay for Performance Strategies

• Ilene Henshaw
• Senior Legislative Representative
• State Affairs, Government Relations and Advocacy

2
Goals

• Provide Background on Nursing Home Pay for
  Performance
• Outline State Approaches
• Discuss CMS P4P Demonstration Program
• Identify Issues to Consider in Developing a P4P
  Program

3
Background

• GAO 2005 Decline in homes cited for serious
  deficiencies yet serious quality problems remain
  unacceptably high (1 in 6 homes actual harm or
  more serious deficiencies)
• GAO January 2006 Inspections are inconsistent
  and often understate serious quality problems
• Currently, little incentive for facilities to
  improve
• Belief that financial incentives might be
  effective in reducing noncompliance and
  improving quality

4
Background

• Support for Nursing Home Pay for Performance
• IOM in 2001 called for identification, testing
  and evaluating options for better aligning
  payment methods with quality improvement goals
• AAHSA called for demonstration project to develop
  and test a method of paying bonuses to facilities
  that achieve high ratings
• Alliance has supported payment incentives for
  facilities with better performance scores

5
Background

• Concerns About Nursing Home P4P
• Appropriateness of Incentives to Reward Quality
• Gaming the System
• Lack of Data on Appropriate Measures
• Lack of Evidence on Effectiveness
• Impact on Certain Facilities and their Residents

6
Using Current Medicaid Payment Policies to
Incentivize Quality

• Incentives for spending on direct care costs
• Higher ceilings for direct care costs
• Exemption of direct resident costs from
  efficiency incentives
• Add-on payments for wage or benefit enhancements
  for direct care staff

7
STATE EXPERIENCES WITH NURSING HOME P4P

• Early approaches IL, CO, TX
• Financial Incentives- KS, IA, MN
• Non-monetary Incentives- NC, VT, WI

8
Illinois (QUIP)- early 1980s

• Extra reimbursement for achievement of 6 quality
  measures
• Improvement from 1star to 6 stars 100,000 year
• Total bonuses in 1989 20 million
• Evaluation
• More facilities applied for and qualified to
  receive bonuses
• Validity of measures and relationship between the
  QUIP standards and quality of care was not firmly
  established
• Program ended after passage of OBRA 87
• Dead Fish

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Quality Incentive Add on Payments

• CO- 3million in FY 96/97 repealed in 2002 when
  state lifted a cap on allowable cost increases
• TX- Performance Based Add on Payments FY 01/02
  (compliance with fed/state regs and clinical
  outcomes)

10
Kansas PEAK- (2002-ongoing)

• Support development of non-traditional models of
  care
• Recognize nhs pursuing progressive models of care
• Provide education to nhs on instituting change
• Monetary awards for achievements in
• Direct care staffing
• Direct care turnover
• Operating costs
• Staff retention
• Total occupancy Medicaid occupancy
• Survey results

11
Kansas PEAK (contd)

• In 2006, 7 facilities were chosen to receive
  awards
• Kansas Dept of Aging Study
• More PEAK homes (63) receive awards compared to
  non-PEAK (36)
• Incentives ranged from 1 to 3 per resident day

12
Iowa Accountability Measures Incentive Program
(2002- ongoing)

• Voluntary system awards points
• Ten accountability measures
• Deficiency free survey
• Substantial Compliance survey
• Staff Hours
• High occupancy rate
• High staff retention rate
• High resident council resolution rate
• High resident satisfaction scores
• Low Administrative costs
• Special Dementia Unit
• High Medicaid Utilization
• FY05 87 received enhanced payments

13
Iowa (contd)

• No formal evaluation, but small increase in
  deficiency free surveys (13-17)
• Fairly easy/inexpensive to administer
• No data to indicate if staffing related measures
  have improved
• General satisfaction by providers with totality
  of measures
• Sufficiency of incentives to motivate new
  investments (i.e. dementia units)

14
Minnesota

• Nursing Facility Performance Based Incentive
  Payments effective July 06
• Rewards efficiency and quality (up to 5 of
  operating payment rate)

15
Minnesota (contd)

• Facilities rated on 8 components, including
• How well the proposal addresses goals of program
  (Improved quality and efficiency and rebalancing
  of ltc system)
• Whether the proposal addresses a priority issue
• New and innovative concepts and strategies
• Broad based applicability
• Prospective/sustainable goals
• Feasibility

16
Minnesota (contd)

• State expects most incentives to begin 10/07
• Incentives can be a rate increase or supplemental
  payment
• For FY ending 6/30/08 1.2 million (state share)
  is available for up to 40 awards
• For FY 09 and beyond, 6.7million will be
  available for up to 140 awards

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North CarolinaNC NOVA

• In effect January 1, 2007
• Reduce turnover of direct care workers
• Special licensure designation for nhs that meet
  voluntary standards for workplace culture
• Independent reviewer determines if standards are
  met
• Standards address workplace, training, career
  development and balanced workloads

18
Vermont

• (2005-ongoing)
• Gold Star designation program
• Collaboration between state and provider
  association
• Survey results Efficient operation resident
  satisfaction zero resident complaints

19
Wisconsin

• 2007 Nursing Home Recognition for Performance
  Quality Initiative (R4P)
• Quality Index composed of 5 items
• Staff retention 30 pts
• Hours of nursing service- 30 pts
• Administrator and DON retention- 10pts
• Private rooms- 10 pts
• Survey results- 20 pts

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CMS Nursing Home P4P Demonstration

• Initially scheduled to begin in 06 or early 07,
  now planned for sometime in 07
• Project expected to include about 50 homes per
  state, 4 or 5 states
• Voluntary participation by nursing homes
• Includes all residents regardless of payer

21
CMS Nursing Home P4P Demonstration (contd)

• Evaluate impact of performance based incentives
  in Medicare on nh quality
• CMS has contracted with Abt to conduct evaluation
• Medicare savings reinvested into incentive
  payment pool
• Goals Reward better performers, increase good
  performance, reduce poor performance

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CMS Nursing Home P4P Demonstration (contd)

• Recommended Performance Measures
• Staffing (30)
• Potentially avoidable hospitalizations (30)
• MDS based resident outcomes (20)
• Survey inspections (20)

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KEY DESIGN CONSIDERATIONS FOR NURSINGHOME P4P
PROGRAMS

• Linking performance to incentive payment
• Establishing size of the incentive payment
• Selecting measures

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Linking Performance to Incentive Payments

• Which residents to include?
• Incentives for each performance factor or overall
  performance?
• Relative performance or absolute performance?
• Reward Improvement?
• Some hybrid?

25
Establishing Size of Performance Payments

• Incentive must be large enough to motivate
  providers to make needed changes
• Incentive must be greater than the expected costs
  of achieving the goal

26
Selecting MeasuresDirect Care Staffing Measures
as a starting point for state P4P

• IOM 1996 incentives could be used to increase
  staffing levels
• IOM 2001, 2004 abundant evidence showing
  quality of care depends largely on the
  performance of the caregiving workforce

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Selecting MeasuresDirect Care Staffing Measures
(contd)

• Compelling reasons to choose staffing measures
• General consensus among stakeholders
• General belief that staffing indicators are more
  measurable and reliable than MDS indicators
• General comfort level that staffing investments
  and workforce related outcomes are more within
  provider control than many other measures

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Selecting MeasuresDirect Care Staffing Measures
(contd)

• Already posted on Nursing Home Compare
• Most stakeholders recommend using staffing
  numbers along with retention, staff competencies
  and training
• Turnover
• Staff empowerment?
• Staff Satisfaction?

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What Else Needs to be Done?

• Improve Enforcement and Monitoring
• Reduce Predictability of Surveys
• Increase Transparency
• Increase Scrutiny of Chronically non- compliant
  or yo-yo compliant facilities
• Close down facilities that consistently provide
  poor care/harm residents

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Conclusion

• P4P programs for nursing homes are in their
  infancy
• Lack of research on whether P4P improves quality
  of care
• States should proceed with caution, starting with
  demonstration programs
• Staffing measures may serve as a foundation
• Include strong evaluation component

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Any questions?

• Contact
• Ilene Henshaw
• ihenshaw_at_aarp.org