Impact of Health Care Reform on the Senior Living Field Sequoia Region Meeting May 9, 2010

1. Impact of Health Care Reform on the Senior Living Field SequoiaRegion Meeting May 9, 2010 Joanne Handy, President & CEO Aging Services of California

2. How Will Things be Different? • Members as Employers • Members as Resident Advocates • Members as Providers

3. Members as Employers • >50 employees • Must offer health insurance • Offer vouchers to those <400% FPL • Have <30 day waiting period for benefits • Coverage less than 60% of cost of benefits qualifies for Exchange or tax credit

4. Members as Resident Advocates • Fills the doughnut hole • Expands preventative services with no cost-sharing • More assistance for low income • Increase payments for primary care providers • Reduce overpayment to Medicare Advantage Plans • Encourage more care coordination • Extend solvency of the Medicare Trust Fund

5. Members as Service Providers • CLASS Act • Value-based Medicare payments • Bundling post-acute services • More funding for home and community based services • Funding for care coordination and transition management • Reduce SNF and HHA market basket increases • Transparency requirements for SNF

6. Phase-In Timeline • 9/10 • Cannot drop a sick enrollee • Kids stay on parent’s insurance ‘til 26 • $250 more in doughnut hole • 1/11 • 85% of premiums must be spent on benefits • No cost-sharing for Medicare preventative care

7. Phase-In Timeline • 2012 • CLASS Act plan established • 50% brand name drugs covered in the doughnut hole • 2014 • Individual mandate in effect • End to annual and lifetime limits on benefits • 2018 – Tax on “Cadillac” health plans • 2020 – Donut hole fully closed

8. What if . . . • CLASS Act passes (it has!!)? • Post-acute care is bundled? • All dual-eligibles are in managed care plans? • Medicare pays for transition services? • What if we ruled the world?

9. Class Act CLASS CLASS is now a reality! Will be implemented in 2012 and requires 5 years of contributions to vest. Therefore, 2017 is the first year that benefits could begin.

10. Impact • Source of private funds for nursing home, assisted living, home care, and other HCBS • Benefit expected to be $50-$100 per day for life, as long as ADL impairment of 2-4 ADLs • The form is a cash benefit to the consumer, not reimbursement to the provider

11. Positioning • Educate consumers to participate • Provide home care – by affiliation or ownership • Strengthen marketing effort direct to consumers

12. Bundling Post-acute care is bundled for 30 days and acute care hospital holds the $$

13. Impact • Hospitals only refers to contracted SNF/HHA • SNF/HHA referrals have higher acute care needs • Incentive to use lowest cost post-acute sites

14. Positioning • SCPs become part of hospital networks • Outcome scores key to obtaining contracts • Must negotiate acuity-based rates • What’s the case for SNF/HHA controlling the bundle?

15. Dual Eligibles All dually eligible patients in California are enrolled in a Managed Care Plan (MCO). This is proposed as part of the new 1115 waiver.

16. Impact • MCP becomes the payer for most long stay skilled nursing residents • MCPs pay less than Medi-cal • More payment delays and billing hassles • MCP incentivized to keep members out of nursing homes

17. Positioning • PACE programs expand to manage less frail dually eligibles • Offer enhanced assisted living as an alternative to skilled • Develop a rate and contract negotiation strategy

18. Transition Benefit Medicare pays for transition services from acute care to SNF, AL, independent living, and community. Starts in 2011. Evidence derived from Naylor, Coleman, and Boult transition models

19. Impact Payment available for transition services to prevent acute care readmissions. Existing models utilize nurses, social worker, or a team.

20. Positioning • Do you want to be a transition provider? • Develop your intervention strategy in your program now

21. The Cheese is Moving . . .