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2011 Annual Meeting Want To Improve Your Financial Outcomes – Manage Smarter!. Presented by: Lynda Laff Pat Laff. Managing Smarter. Efficient Home Care Means… Less care? Fewer staff? Cut middle management? Eliminate PI programs? Hiring freeze?

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2011 Annual Meeting

Want To Improve Your

Financial Outcomes –

Manage Smarter!

Presented by:

Lynda Laff

Pat Laff

Laff Associates 2011

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Managing Smarter

  • Efficient Home Care Means…

    • Less care?

    • Fewer staff?

    • Cut middle management?

    • Eliminate PI programs?

    • Hiring freeze?

    • Eliminate all educational travel?

    • No IT system upgrades???

    • No “tools”?


Laff Associates 2011

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How Did We Get Here?

  • Escalating health care costs – all sectors of the delivery system

  • CMS identified home care “behavioral changes” to influence payment

  • Practice variation among providers

  • Continued potentially avoidable events

  • Slow outcomes improvement

  • Continued re-hospitalization

Laff Associates 2011

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Continued Increase In Home Health Care Utilization

Laff Associates 2011

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Costs Increase But… Outcomes Do Not Improve

  • Costs continue to escalate with little improvement in outcomes

  • Major variations in the cost of care delivery vs. patient outcomes

  • No substantial improvement in re-hospitalization rates

  • High numbers of potentially avoidable events

  • Inadequate communication and coordination of patient care

Laff Associates 2011

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Cost Savings

Laff Associates 2011

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Statistics Don’t Lie

Laff Associates 2011

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MedPAC Findings

  • Volume of services continued to rise

  • Beneficiaries without a prior hospitalization account for a rising share of episodes *

  • Changes in therapy distribution

    • “Providers target therapy visit thresholds used to adjust home health payments”.

    • “Volume changes since implementation of PPS provide evidence of providers targeting the ranges that appear most profitable”.

  • Conclusion: overutilization and inadequate care

    FYI- Check out your coding process and marketing strategies!

Laff Associates 2011

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MedPAC Recommendations

  • Increased medical review in counties with aberrant home health utilization; suspend payment and limit provider enrollment.

  • Establish a per episode co-pay for home health episodes that are not preceded by hospitalization or post-acute care use.

  • Begin a two-year rebasing of home health rates in 2011 for implementation in 2014

  • Modify the home health payment system to protect beneficiaries from stinting or lower quality of care in response to rebasing..

Laff Associates 2011

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CMS Proposed Rule 2012

  • Base rate reduction of to $2,112.37 from $2,192.07 ($79.70 or 3.64%)

  • Revise the case weight structure to decrease emphasis on therapy thresholds and misuse of HTN codes

    • Eliminate HTN codes 401.1, 401.9 from case mix

    • Redistribute dollars/weights for clinical and functional levels

    • Remove weighting of therapy thresholds

    • Decelerate therapy resources with higher weights

Laff Associates 2011

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Manage Smarter

  • To be profitable management must:

    • Know what it costs to provide services — by discipline

    • Monitor and manage ALLaspects of agency operations from intake to billing

    • Createappropriate efficiencies

    • Prevent redundancy and unnecessary hand-offs

    • Promote standardization for entire agency

Laff Associates 2011

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Manage Smarter

  • Clinical Management Information

    • Key Indicators

    • Routine Reports

  • Education

    • Clinical assessment

    • OASIS Accuracy

  • Supervision & Oversight

    • Documentation Timeliness

    • Care Plan Development

    • Clinical Quality - Accuracy

  • Continuity

    • Case management

    • Clinical model

  • Accountability/ Responsibility

    • Reward / incentive

    • Corrective Action

Laff Associates 2011

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Smart Moves

  • Patient Centered Care

    • Patient Outcomes at or above state and national averages

      • End result outcomes

      • Process measures

      • HHCAPS

    • Best Practice implementation

    • “Right-size”

      • May or may not add or eliminate positions

      • Focus on function and responsibility

      • Invest in people

        • Right person for the position

        • Invest in education

Laff Associates 2011

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Smart Moves

  • Eliminate “warm body syndrome”

    • Stop “fixing”

  • Implement and integrate Telehealth

    • Increase focus on preventing emergent care

    • Increase focus on timely intervention and preventing Potentially Avoidable Events

    • Increase efficiency by increasing case capacity of case manager

    • Decrease unnecessary utilization

Laff Associates 2011

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Management Reports / Statistics

  • Case Weight

    • Case weight variance – SOC to EOE less than 2%

    • EOE case weight - (NOT SOC) is the case weight to “hang your hat on”

  • % of re-certifications and LOS

    • Worry if you have a LOS over 60 days!

  • Visit Utilization Averages

    • Ratio nursing/therapy - shoot for 5-7 SN vs. 3-4 therapy

  • Average visits per episode

    • Worry if average total visits per episode is over 17

    • Be aware that it must be improved if average IS 17

Laff Associates 2011

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Management Reports / Statistics

  • Actual Revenue versus Anticipated Revenues

    • Downcodes

    • Actual revenue = EOE

  • Timeliness of RAP Submission

    • Set a standard of 7-14 days

  • % of Therapy Visits per Threshold

    • Look for therapy threshold “clusters” (will likely disappear in 2012)

Laff Associates 2011

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Management Reports / Statistics

  • Productivity by discipline

    • Actual # of patients visited (not weighted)

  • Cases Managed per Clinician

    • Goal of 20 – 25 (without telehealth)

    • Goal of 25-30 (with telehealth)


  • OASIS Errors by Clinician

    • You cannot afford repeated errors!

Laff Associates 2011

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Smartest Moves

  • Productivity expectations

    • SN -Minimum average of 5 actual visits per day – 6 – 6.25 weighted visits

    • PT – Minimum average of 5.5 actual visits per day – 6.5 weighted visits

    • Supervisor/Manager – 1 per 5-7 FTEs (depends on function)

    • OASIS Reviewer – w/data manager - 75 - 85 patients

  • Adequate OASIS review process

    • Data management tool to decrease review time and increase accuracy

Laff Associates 2011

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Management Statistics

  • OASIS Corrections Completed

    • Do you ask for justification when errors not corrected?

  • Outcomes Improvement

    • Patient Declines – actual or documentation?

    • Potentially Avoidable Events

    • 2011 Surveyor Guidelines

      • Tier I PAEs

        • Emergent care for injury caused by a fall at home

        • Emergent care for wound infections, deteriorating wound status.

Laff Associates 2011

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Potentially Avoidable Events

  • Tier 2 PAEs

    • Emergent Care for Improper Medication Administration, Medication Side Effects

    • Emergent Care for Hypo/Hyperglycemia

    • Substantial Decline in ≥ Three Activities of Daily Living

    • Discharged to the Community Needing Wound Care or Medication Assistance

    • Discharged to the Community Needing Toileting Assistance

    • Discharged to the Community with Behavioral Problems

    • Have you audited each of them?

    • Are your audits documented?

    • What have you done to prevent them in the future?

Laff Associates 2011

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You May Be At Risk If….

  • A review of operations and records indicates presence of one or all of the following;

    • Many OASIS item inconsistencies

    • Large variance in SOC/EOE

    • DX Coding errors

    • Very low average EOE case weight - 1.100

    • High LUPA rate – over 12%

    • Higher than average therapy utilization

    • LOS average over 60 days / multiple re-certifications

    • Multiple recertifications per patient with “rotating primary DX”

    • Skilled service provided to large % of patients is “Observation & Assessment”

Laff Associates 2011

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  • Primary case management –

    • Clinician – with patient contact

    • May be RN or PT

    • Must be accountable for patient and financial outcomes

    • Accurate assessment

    • Appropriate care plan

    • Constant knowledge of;

      • Goals of care

      • Projected visits vs. actual

      • Team performance – Therapists must be included in the team

      • Patient response to care

      • Need for change in plan

Laff Associates 2011

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Smart Moves

  • OASIS Accuracy

    • Who is reviewing the OASIS?

      • Is that a primary function?

      • Is that individual qualified? - RN COS-C

    • Manual review or Data Scrubber?

    • Duplicative functions

    • Corrections versus consequence….

    • Management oversight

Laff Associates 2011

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Smart Moves

  • Adequate education

  • Validate and reinforce

    • How do you know?

    • What checks are in place?

    • How long does it take?

    • Who is validating what?

    • Were the suggested corrections actually made?

    • What “tools” do you use?

    • Are there repeated errors? If so – WHY?

      • Repeated errors cost money

Laff Associates 2011

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Do You EverHave Enough Staff?

  • How do you know????

  • It depends……..

    • Clinical Model

    • Agency Size and Scope

      • Geography

      • Volume

    • Paper or Point of Care

    • Clerical versus Clinical Function

Laff Associates 2011

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When is Enough Enough?

  • The Clinical Director comes to you and says “I don’t have enough nurses to see all these new patients. What’s the first thing you do?

    • Call a temp agency

    • Put an add in the paper

    • Review statistics

Laff Associates 2011

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Need More Staff???

  • Review Statistics!!!

    • Validate Need Before You Jump the Gun!

    • Must ensure you are adequately staffed…but not over staffed!!!

      • Management

      • Field Staff

Laff Associates 2011

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Staffing-Statistics to Review

  • Number of ACTIVE patients on your census list

    • “Clean” census list

    • All discharges removed at least weekly

    • Identify why “old” patients remain – someone is not “managing” well…

  • Expectations for staff productivity

    • Visits per day, per week

  • Actual performance of staff – how many actualun-weighted visits per day did they perform last week?

  • Identify “weakest links” and investigate why….

Laff Associates 2011

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Standardize Productivity

  • Do you expect the same level performance from each clinician?

    • If not – why not?

  • Are your expectations per clinician met?

    • Are they reasonable? Maybe too reasonable???

  • Do you use remote monitoring?

  • Do you supervise, monitor and enforce the expectations?

    • Or are you using the “warm body approach?”

  • Is there a consequence for non-performance?

Laff Associates 2011

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Set Realistic Expectations

  • Number of visits per day is dependent upon your clinical model;

    • Do your field nurses case manage a census of patients”

    • If so – is the number consistent among your staff?

    • Do you have admission nurses?

    • Do you use a point of care documentation system?

    • How many miles does a clinician average per day/week?

    • How are they compensated?

    • How often are the patients’ care case conferenced?

Laff Associates 2011

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Smartest Moves…It Depends…

  • Primary Care Case Management

    • Clinician manages – 20 – 25 patients…it depends….

      • Effective use of Telehealth will increase clinician case capacity

    • Responsible for entire episode of care

    • Responsible for patient and financial outcomes

    • Don’t come into the office to get NRS

  • Adequate supervision

    • Supervision – primary responsibility

    • Ability to enforce process and policy for productivity, OASIS corrections, appropriate care delivery

Laff Associates 2011

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Achieving Positive Financial Outcomes

Let’s talk about controlling costs….

  • Direct Cost per Visit by Discipline

    • Compensation methodology and incentives

    • Productivity and efficiency of staff

    • Case Capacity

    • Outcome achievement

  • Consider a Weekender Program!

  • Appropriate utilization of services and supplies

    • Frequencies and durations

    • Provision of supplies

  • Clinical oversight

Laff Associates 2011

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Achieving Positive Financial Outcomes

  • Gross profit issues – Control the Direct Cost/Visit & NRS

    • Direct Costs are the majority of agency’s total operating expenses

    • The majority of the direct cost/visit is compensation and related taxes (staff and direct supervision)

    • The cost/visit of premium-based fringes is directly proportional to visits made

    • The cost of mileage/auto reimbursement is directly related to geographically sequential patient scheduling, the size of the territory and a global vision of the entire week

    • An agency specific formulary and trunk supply protocol, electronic ordering with independent oversight and patient specific direct delivery reduces costs and increases productivity

Laff Associates 2011

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Weekender Program

  • Begins Friday at noon..ends Monday at noon

    • Friday admissions – patients with weekend follow-up visits

    • Monday morning conference call with weekday RNs

  • Converts Agency from 5 days/ week plus weekends to 7 days/week

  • Frequencies spread over 7 days, not just 5 days

  • Do all weekend visits

  • Takes weekend on-call

  • Eliminates weekday staff weekend rotation and compensatory time

Laff Associates 2011

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Weekender Program

  • Shares case management responsibilities with weekday RN – patients with weekend frequencies

  • Weekend differentials apply

  • Considered full-time for Fringe Benefits

Laff Associates 2011

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Achieving Positive Financial Outcomes

Who owns the patient?

  • Using a combination of Admission and Visit RNs /LPNs challenges both good clinical and financial outcomes

    • Lacks care consistency and continuity

    • Limited, if any, patient care oversight

    • Cause of patient dissatisfaction

  • Primary Care Case Management achieves all of the desired patient care outcome goals and is the best approach towards best financial outcomes

    • Completely integrates with incentive compensation for both the field clinician and their immediate supervisor!

Laff Associates 2011

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Achieving Positive Financial Outcomes

  • Align Clinical and Case Conference Modelswith Compensation!

  • Incentive Compensation…

    • Determines ownership of the patient, resource utilization and care oversight and outcomes achieved

    • Matches clinician responsibilities and achievements

      • Not based upon the length of time or just a fixed salary to accomplish their patient needs

    • Reinforces consistency and continuity of patient care

    • Reduces the direct cost of care for those disciplines

Laff Associates 2011

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Achieving Positive Financial Outcomes

Key Ingredients!

  • Effective Clinical Management (Supervisory) staff

  • Primary Case Management

  • Case Conference Model – Controls visit utilization

    • Every Patient…Every 14 days from SOC date!

      • Reviews prior 14 days utilization and outcome achievement

      • Plans next 14 days utilization and outcome goals

  • Tools for efficiency

    • Laptops with power cords to car power source and air-cards

    • Smart cell phones

    • Patient specific electronic ordering and delivery of NRS

Laff Associates 2011

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Achieving Positive Financial Outcomes

Primary Care Case Managers are responsible for the:

  • Case Management of their patients

  • Primary visits, including admission, resumptions and recerts, most follow-ups and the discharge.

  • Achieve the desired patient outcomes and HH-CAHPs results

  • Self scheduling!

    • Places responsibility where it belongs

    • Provides for more autonomy and control of clinician’s day…

    • Eliminates the cost of schedulers

Laff Associates 2011

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Incentive Based Compensation

  • Compensates the staff for what they do, not for how long it takes them to complete what they do!

  • Rewards efficiency, productivity, capacity and clinical (HH-CAHP) outcomes achievement

  • Improves team chemistry…Encourages under-performing staff to improve or seek a successful career elsewhere

  • Assures that clinicians meet and exceed individual productivity and case capacity goals

  • Applies to Weekender staff


Laff Associates 2011

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Incentive Based Compensation

  • Can apply to all disciplines, depending upon patient census and discipline demand

  • Exempt status does not apply to LPNs, PTAs, COTAs and HHAs (FLSA)

  • Most effective for RNs, PTs and OTs

    • Supervisory responsibility

    • Visits are Unique

    • No portion of compensation is based on time (Hourly)

Laff Associates 2011

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Visit Weights

  • Visit weighting – Based the Requirements and Complexities of completing OASIS C

    • Admission (evaluation) Visit1.90

    • Non-OASIS Evaluation Visit - mainly therapy1.60

    • Resumption Visit1.30

    • Recertification Visit1.20

    • Discharge Visit1.25

    • Follow-up Visit1.00

    • Virtual Telephone Visit (Telehealth) 0.25

Laff Associates 2011

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Questions Often Asked( Visit Weight – Time Equivalents Based upon OASIS C)

Laff Associates 2011

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Incentive Based Compensation

  • Bonus structure for Primary Care Case Managers

    • Calendar quarter or 12 week period (based upon payroll periods)

      • Accumulated Visit Weights = $ per hands-on visit for every visit

      • Total Cases Managed = % of earnings for the measured period

      • Outcomes Achieved = % of earnings for the measured period

  • Bonus structure for their immediate “supervisors”

    • Same as above, plus

    • Other to address problem areas, such as

      • OASIS error rates

      • Timeliness of corrections, etc.

      • Time to RAP and EOE billing

Laff Associates 2011

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Case StudyAlterna-Care Home Health Agency

  • Located in Central Illinois

  • Main office located in Springfield, IL with branches in Jacksonville, and Litchfield, IL

  • Serves over 2000 patients annually in 31 contiguous counties

  • Free-standing for profit agency

  • Over 50 employees

Laff Associates 2011

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Benefits of Incentive Compensation

  • Lost a nurse and didn’t have to be replaced

  • Improved communication with nurses and supervisor

  • Documentation is timely and better quality

  • Telehealth is being used more consistently and the telephone follow up visits are visit weighted

  • Incentive compensation has improved ER and Hospital outcomes

Laff Associates 2011

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Incentive Compensation Results

  • Nursing productivity increased

  • Timeliness of documentation improved. For the first time anyone can remember, all nurses notes were completed within 24 hours.

  • MD verbal orders and recertifications were completed on time

  • Visit frequency orders were accurate

  • Case loads increased per nurse

  • Nurses made more visits per day and made more money

  • Monitors were in patient homes and no longer on the shelves

Laff Associates 2011

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Average Patient Caseload 2009 vs. 2010

  • 2009 -7.5 nurses with an average monthly case load of 36.3 (unduplicated patients)

  • 2010 -6.5 nurses with an average monthly case load of 44.9 (unduplicated patients)

    (excludes PT only patients)

Laff Associates 2011

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Visit ProductivityAverage Visits Per Nurse

Laff Associates 2011

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Laff Associates 2011

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Average Nurse 11 Month Salary

  • 2009 - Average 11 month comp. was $ 38,412

  • 2010 - Average 11 month comp. was $ 46,362

    • Increase of $ 7,950 = 20.69%

  • 2009 - Total Per Diem comp was $ 31,022

  • 2010 - Total Per Diem comp was $ 10,119

  • Reduction of $ 20,903 = 67.38%

  • 2009 - Direct Cost per Nursing Visit - $ 79.71

  • 2010 - Direct Cost per Nursing Visit - $ 63.90

  • Reduction of $ 15.81 = 19.83%

Laff Associates 2011

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Incentive Compensation Results

  • Nurses did not complain!

  • Comments:

    • “I’m really working hard”

    • “It’s difficult to get your paperwork done with this many patients”

    • “But, I’m not complaining”

    • Supervisor states nurses are content

    • No problem getting nurses to see patients on weekends!!!

    • No push back when given a new admission in their territory!

Laff Associates 2011

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Incentive CompensationThe Results

  • The Direct and Total Cost per Visit were substantially reduced!

  • Visits per episode were effectively reduced

  • Incentive compensation increased efficiency throughout the entire organization

  • Quality of patient care was positively impacted

  • Accounting department is able to bill timely

  • Clinical staff are rewarded for their hard work

  • Communication with clinical managers improved

  • Telehealth being utilized to its fullest capabilities

Laff Associates 2011

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Effective Episode Management

  • Reduces episode cost, increases efficiency and communication, and improves clinical and financial outcomes

  • Integrates:

    • Clinical Supervisory Management and Oversight

    • Primary Care Case Management

    • Goals and Performance

  • Can enhance compensation and reward excellent performance

Laff Associates 2011

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Contact Information

Lynda Laff, RN, COS-C Pat Laff, CPA

Laff Associates

Consultants in Home Care & Hospice

Phone: (843) 671-4170




Laff Associates 2011

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