The Science of Data Reporting

Presented by:

James Budd, CPA- Partner Brian Lee, CPA, MBA- Partner HMM, CPAs LLP

Intercounty Health Facilities Association December 1, 2016

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AGENDA

Your Data Story Evolution of Facility Data Reporting Multiple Reports, Same Data Reimbursement and Regulatory Implication of Data Reporting Evaluating Data Reporting Decisions Key Conclusions from Today’s Presentation

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Your Data Story

FINANCE… speaks DATA

understands REPORTS

knows how to ANALYZE 4

Your Data Story

FINANCE… processes PAYROLL

pays INVOICES drops CLAIMS

develops BUDGETS

Necessary Evil

VALUE

The new language of healthcare • Metrics • Numerator • Denominator • Data elements • Cut points • Quintile • Statistics • Root cause analysis

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Your Data Story

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Your Data Story

Finance speaks DATA, hence can help with telling your data story • Multi purpose data • Conditional data • Overlapping data • Data from many angles • Different timeframes

Your data tells people about you. Managing your data story is critical. Finance can help! • Five Star • Quality Measures • Survey • Staffing/Turnover • Rehospitalization Rates • Patient Satisfaction

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Managing Your Data Story

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Evolution of Facility Data Reporting

• Long Term Post Acute Care (LTPAC) Facilities report data to a variety of stakeholders for a plethora of purposes.

• As the operating environment changes, existing data reporting is repurposed for new initiatives.

• This evolution of data reporting can occur prospectively or retroactively.

• Data reporting includes financial and quality metrics.

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Evolution of Facility Data Reporting

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Pepper

eFINDS

QAPI

eMedNY

CMS 5 Star Rating

A&I Reporting

PBJ

MDS 3.0

Claims Clearing House

Therapy

CQM

eMAR

RHCF

HIE CPOE

Immunizations

NHQI

Current Data Collection Initiatives Current Data Collection Initiatives

• New York State Department of Health (NYS DOH) Introduces Schedule P in 2009 RHCF-4 Software, designed to track staff turnover.

• For the 2015-16 and 2016-17 State Fiscal Years, the executive budget includes $46 Million for an Advanced Training Initiative (ATI).

• NYS DOH repurposes Schedule P as a measure to determine eligibility for the ATI Funds.

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Case Example: Staff Turnover

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Multiple Reports, Same Data

• LTPAC Stakeholders require providers to report data on multiple platforms.

• In many instances, the same data is being reported on multiple platforms.

• How and Why data is reported on each platform can have quality, regulatory, and financial impacts.

• Providers need to identify potential consequences in their data reporting.

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Multiple Reports, Same Data

• RN (and LPN) Nurses in LTPAC Facilities can have Patient Care and/or Administrative Responsibilities.

• Classification of these positions on data reporting can have large impacts: – Quality Metrics: CMS 5 Star, NHQI – Regulatory: PBJ, Survey, OMIG – Financial: Workers Compensation Insurance,

Union Collective Bargaining Agreements

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Case Example: RN Staffing

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Reimbursement and Regulatory Implications

of Data Reporting

Reimbursement and Regulatory Implications

• Data Reporting specifically impacts several regulatory and reimbursement initiatives, including: • Executive Order 38 • NYS Equity Withdrawal • Universal Settlement • OMIG • Changes in ownership / sponsorship

• LTPAC Providers should be aware of the data reported to these initiatives.

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Executive Order 38 - Background

Governor Cuomo's Executive Order #38 "prevents(s) public funds from being diverted to excessive compensation and unnecessary administrative costs, and ... ensure(s) that taxpayer dollars are being used to help New Yorkers in need" (Governor Andrew Cuomo, Executive Order #38).

17 Source: http://executiveorder38.ny.gov/

• Regulations effective July 1, 2013 • Applies to many agencies including DOH • Currently does not apply to Nassau County • Initial exemption for State, County or local governmental unit entities • Filing deadline for RHCF’s no later than RHCF cost report due date • Filing exemptions are not common

Executive Order 38 General Rules

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• Covered Provider Determination (must meet all) – Provided Program Services during CRP – Received > $500k SF/SAP (average of CRP and

period immediately proceeding the CRP) – 30% + SF/SAP (in both CRP and period

immediately preceding the CRP) • Note: EO 38 calculations should use same accounting

method entity uses in production of annual financial reports

Executive Order 38 General Rules

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• Executive Compensation – $199k limit (salary and non-routine fringe)

AND – $199k from SF/SAP – Salary Survey (ie: Guidestar) – Waiver Request Available – Compensation generally for “services rendered”

• Administrative Expenses – Excludes Capital and Assessment

AND – 25% (2015) CRP, then 20% (2016), then 15%

(2017)

Executive Order 38 - Application Salary 185,000$ Non-routine fringe 13,000$ Total 198,000$

Not in excess of $199k limitNo waiver required

Salary 200,000$ Non-routine fringe 13,000$ Total 213,000$ SF/SAP % 95%SF/SAP $ 202,350$

In excess of $199k limitSF/SAP in excess of $199k limitIs within the 75th percentileWaiver required

Salary 200,000$ Non-routine fringe 13,000$ Total 213,000$ SF/SAP % 80%SF/SAP $ 170,400$

In excess of $199k limitSF/SAP not in excess of $199k limitIs within the 75th percentileNo waiver required

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Executive Order 38 – Application (2014 CRP examples)

Expenses 20,000,000$ Less, capital (1,000,000)$ Less, assessment (950,000)$ Covered expenses 18,050,000$

Program expenses 16,000,000$ 89%Administrative expenses 2,050,000$ 11%

Under 25% cap, no waiver needed

Expenses 20,000,000$ Less, capital (1,000,000)$ Less, assessment (950,000)$ Covered expenses 18,050,000$

Program expenses 13,000,000$ 72%Administrative expenses 5,050,000$ 28%

Over 25% cap, waiver required

Covered Reporting

Period (CRP)

Maximum Administrative

Expense Percentage

2014 25%2015 20%2016 15%

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Executive Order 38 General Rules

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• All covered providers must file via their Grants Gateway account on an annual basis. – The due date for SNF’s is generally the RHCF due date.

• Filing is required even if waivers aren’t being requested.

• Providers who determine they are not ‘Covered Providers’ need only keep their determination worksheet in their records for production upon request.

• ALL documentation used in determination and in preparing your EO-38 responses should be kept on file

Withdrawal of Equity and Transfer of Assets

Background • Section 400.19 dates back to 1989 • 2009 DAL and form, 3% of PY Medicaid revenues • 4/1/2010, no new form, 3% of PY reported revenues • Intended to ensure revenues received for care are

spent on care • Applies to non-public RHCF’s

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Withdrawal of Equity and Transfer of Assets

General Rules • Income Taxes and reasonable salary are outside of the

3% cap • Excess withdrawals are allowed at the Commissioner’s

discretion • Must submit written request in a form “acceptable to the

department” via certified/registered mail • Decisions based on financial condition, quality of care and

“other factors” deemed appropriate • Cannot create or increase negative equity • Must be current with DOH liabilities • Cannot have IJ or substandard quality of care

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Withdrawal of Equity and Transfer of Assets

General Rules • Violators have the opportunity for a hearing • Commissioner may require replacement of excessive

withdrawal • Commissioner may impose a penalty of up to 10% of

amount withdrawn without prior approval

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Withdrawal of Equity and Transfer of Assets - Application

PY REVENUE 10,000,000$ 3% CAP 300,000$

OWNER SALARY 150,000$ W/D FOR INCOME TAXES 300,000$ OTHER W/D 250,000$

TOTAL W/D 700,000$ LESS, ITEMS O/S OF CAP

OWNER SALARY (150,000)$ W/D FOR INCOME TAXES (300,000)$

NET W/D 250,000$ CAP 300,000$ RESULT NO REQUEST

REQUIRED

PY REVENUE 10,000,000$ 3% CAP 300,000$

OWNER SALARY 150,000$ W/D FOR INCOME TAXES 300,000$ OTHER W/D 325,000$

TOTAL W/D 775,000$ LESS, ITEMS O/S OF CAP

OWNER SALARY (150,000)$ W/D FOR INCOME TAXES (300,000)$

NET W/D 325,000$ CAP 300,000$ RESULT REQUEST

REQUIRED26

Withdrawal of Equity and Transfer of Assets

DOH Update 11/8/2016 • Governor’s office requests that DOH review data from

2014 / 2015 RHCF cost reports to determine compliance with regulations!

• Operators should be certain to keep all documentation. • Calculations of withdrawals vs. allowable • Requests for excessive withdrawals • Responses to requests • Legal opinions

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Temporary Funding Awareness Universal Settlement

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• Rate Appeals, Litigation & Audits – Eliminated Thousands of rate appeals and litigation,

facility financial impacts were both + and - – Appeals not accrued for = no financial statement

impact – For accrued appeals, financial statement impact should

be present (one-time adjustment +/-) – Appeals not eliminated will eventually be processed – Certain ongoing audits both + and – were eliminated – Financial statement impact if accruals had been made – Many audits not covered by US were temporarily

halted but have recently restarted

Temporary Funding Awareness Universal Settlement

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• Settlement Funding – $850 million in 5 annual installments beginning in

early 2016, subject to global budgetary constraints

– Old owner / current owner issues – Contingent fees (attorneys/consultants) – Assessable – .8% assessment tax remains in place to fund

approx. 41% of US

OMIG Rate Audits

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• Capital – Capital rate audits have resumed – Scope is rate years 2012 forward (cost years 2010

forward), Universal Settlement blocks audit of years prior.

– NEW: For some audits of multiple rate years, OMIG said they are using a sample of 1 of those years, if no issues are noted in that sample year, no adjustments are made in any of the years being audited.

– NEW: We’re being told that audits must be completed timely (around 3 months) and can no longer drag out a year or more.

OMIG Rate Audits

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• Capital – Be aware of ‘catch up’ adjustments – Be aware of clerical and other errors (OMIG is only

human!) – Autos must be documented by logs for patient use – Crime insurance is being disallowed as non-property – Be sure to report data in the correct spot on the RHCF

and to have adequate documentation to produce upon audit.

– Appeals: OMIG is apparently no longer authorized to process appeals as part of their audits. The legality of this position is unclear.

Temporary Funding Awareness Other Considerations

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• Statewide Pricing Transition ends in 2017 • Transition adjustments (+/-) cease • Managed care in full effect

• CMI 5% Cap • If CMI changes by more than 5% from one

measurement period to the next, the adjustment is capped at 5% until such time OMIG audits and approves the change

• Audits rate caps are currently many rate periods in arrears

• Facilities may or may not have accrued for the capped amounts (both + and -)

Temporary Funding Awareness Other Considerations

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• Retroactive Rate Changes – Results when changes for a prior year become known

or are processed and/or paid and recorded in the current year

– Are generally non-recurring in nature but in today’s reimbursement environment we do see these frequently

• Advanced Training Initiative – $46 million of funding that mostly will be re-routed to

the union(s) – Nominal financial impact to providers – Is subject to Cash Receipts Assessment

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Change in Ownership / Sponsorship - Medicaid Capital Reimbursement

• Building Historical Costs Reimbursed over 40 years • Proprietary owners receive residual reimbursement after

40 years • Non-profit and Public Owners receive additional

reimbursement based on depreciation • No additional historical costs for sale of facility • Enhancements/Improvements reimbursed based on

Historical Costs & AHA Useful Life Guide. • Managed Care Transition guarantees current capital

reimbursement methodology until 2018

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Change in Ownership / Sponsorship - Medicaid Capital Reimbursement

Voluntary Proprietary ChangeBuilding Depreciation 600,000$ -$ (600,000)$ Mortgage Interest 700,000$ -$ (700,000)$ Return of Equity -$ 200,000$ 200,000$ Other (RE Taxes) -$ 400,000$ 400,000$ Mortgage Insurance 50,000$ -$ (50,000)$ Total 1,350,000$ 600,000$ (750,000)$ Days 45,000 45,000 45,000 Per Diem 30.00$ 13.33$ (16.67)$ % Change -55.56%

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Change in Ownership / Sponsorship - Medicaid Capital Reimbursement

• It is important to evaluate and understand the capital reimbursement implications of changing ownership/sponsorship, especially when considering the volume of Voluntary and Public homes that have come to market.

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Evaluating Data Reporting Decisions

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Evaluating Data Reporting Decisions

–Understand the Reporting Requirements

–Map out data sources –Pinpoint financial, regulatory, and

quality impacts of financial reporting

You won’t get the right answer if you don’t ask the right question. • Inclusions and Exclusions • Parameters

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Understanding the Reporting Requirements

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Information at risk when clinical and financial software not bi-directionally integrated or using a single database

• Which system's data will you rely on? • Which do you give to the OMIG, RAC, other auditors? • How do you avoid data DRIFT

Information at Risk Demographic Name, DOB, Social, Medical Record #

Financial

Payers - different payers have different requirements Authorizations – All staff need access to this

Census

Usually admission interface only, discharges have to be done independently in both systems

Contacts Emergency and ordering, notes by social workers, etc.

Level of Care Clinical determination, changes with condition of patient

MDS Missing, corrections, in-activations

Diagnosis

Increasing importance on accuracy and maintenance for payment bundles and staffing (PBJ)

Analytics/Stats

Which system's data will you rely on? Discrepancies will need to be investigated

Map Out Data Sources

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Pinpoint Impacts of Financial Reporting

–In the current operating environment, each decision has 3 components: • Quality • Regulatory • Financial

–In many instances, these 3 components are interrelated.

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Clinical and Financial are the

SAME DATA Quality = Payment

Not getting paid for the service, getting paid for the outcome

Pinpoint Impacts of Financial Reporting

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Key Conclusions from Today’s Presentation

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Key Conclusions from Today’s Presentation

–Data reporting has evolved and now includes utilizing existing reporting for new purposes.

–Critical to ensure high quality, consistent reporting over all platforms.

–When in doubt, don’t be afraid to ask for help.

Questions?

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Thank You

HMM, CPAs LLP 527 Townline Rd, Suite 203

Hauppauge, NY 11788 (631)-265-6289

James Budd, CPA JBudd@HoranMM.com

Brian Lee, CPA, MBA BLee@HoranMM.com

Contact Information

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