January 17

Shopping for nursing homes more tricky in Trump era

By Mark Miller via Reuters.com

CHICAGO (Reuters) – Finding a safe, high-quality nursing home for a loved one is never an easy task. Complicated decisions often are made at a moment of emotional crisis and reliable guidance can be difficult to come by.

And it is going to get more difficult. The Trump administration is moving quickly to deregulate nursing homes, complying with a wish list submitted by industry lobbying groups. Consumer advocates worry that the changes will lead to deterioration in safety and the quality of care delivered to some of the most vulnerable Americans.

Just before the holidays, news broke that the Trump administration is curtailing the use of penalties against nursing homes that harm their residents or put them at risk of injury.

The story, first reported in the New York Times (nyti.ms/2EcObyR), is just the latest in a series of rapid-fire moves by the Centers for Medicare & Medicaid Services (CMS) to loosen, delay or strip away regulation of nursing homes.

In November, CMS exempted nursing homes that violate new patient safety rules from financial penalties for 18 months. In June, it proposed to reverse an Obama administration rule prohibiting clauses in residents’ contracts requiring them to use arbitration to settle disputes rather than go to court.

“The industry sees this administration as a real golden opportunity to get what it wants,” said Toby Edelman, senior policy attorney at the Center for Medicare Advocacy (CMA), a nonprofit group that provides Medicare-related education, advocacy and legal assistance to seniors.

CMS has broad authority to regulate nursing homes that accept patients covered by Medicare and Medicaid – virtually all nursing homes in the United States. Its recent moves will take an industry where enforcement of rules has been weak, and make it weaker still, Edelman argues.

Nursing homes subject to the Obama penalty rules generally were limited to those suspected of harming residents or placing them in immediate jeopardy. The repeal of CMS guidance in this area will leave even these nursing facilities facing looser regulation.

Nursing home choices often are made during stressful times for families, when a patient’s hospital stay is ending and the shift to a skilled nursing facility is imminent. That leaves the door open to rapid, emotion-driven decision making. “So don’t do that,” urged Robyn Grant, director of public policy and advocacy at the National Consumer Voice for Quality Long-Term Care.

“It’s really a good idea to do a little research before a crisis emerges,” she said. “If something happened to me or a family member, where do I want to go?”

Unfortunately, information rating the quality of nursing homes is spotty. A good starting point is Medicare’s system for rating nursing homes for quality of care and staffing levels, called Nursing Home Compare (bit.ly/1CHwbuM). The system rates nursing homes on a scale of 1 to 5 and is considered the industry authority.

But much of the data that determines ratings is self-reported by nursing homes, and the ratings do not take into account negative information such as fines and enforcement actions by states. And reviews of this system have found numerous cases of facilities attempting to “game” the system.

One study published last year of California nursing homes between 2009 and 2013 found inflated star ratings. Forty percent of the facilities received four or five stars in 2009, but that had risen to 60 percent in 2013. The researchers found little correlation between the ratings and actual health inspections by state regulators.

Nursing home shoppers also should consult Nursing Home Inspect, an online database created and maintained by ProPublica, the nonprofit investigative news service (bit.ly/2mh8SCC). The database contains state-by-state breakdowns displaying fines and deficiencies turned up by inspections, and it flags nursing homes with histories of serious quality issues.

Grant recommends checking on any facility you are considering with your state’s long-term care ombudsman, a program administered by the Administration on Aging. Consumer Voice offers a directory of state ombudsmen on its website (bit.ly/1I1SgDp).

A trusted physician also can be a good resource, she said. “Ask them about experience with facilities. Ask a trusted doctor, ‘What facilities would you go into if you needed one?’”

She also recommends checking with friends who have had experience with facilities under consideration. Geriatric care managers – human service professionals who help coordinate care for the elderly and their families – also can help navigate the nursing home maze.

But consumer vigilance is an incomplete response to the rollback of regulatory protections now under way. “We’re talking about one of the most vulnerable populations in the country – many don’t have family living nearby or don’t have family members at all who can look out for them,” Grant said. And CMS data shows that 61 percent of nursing home residents in 2014 suffered from moderate or severe cognitive impairment, which means many will struggle to look out for their own interests.

“If you are concerned about the quality of care in nursing homes now, you have no idea what will happen if we take away these protections.”

January 16

Real Help for Medicare and the Deficit

By the Center for Medicare Advocacy

Once again the House of Representatives’ leadership are proposing to change Medicare into a private voucher system. Their proposals would have severe repercussions for Medicare beneficiaries and their families.[1] Sound solutions that would preserve Medicare coverage while reducing costs are still not being seriously addressed. With the President on record as recommending that we lower Medicare’s drug costs, perhaps now is the time.

The Center for Medicare Advocacy’s recommendations do not shift costs to beneficiaries or completely restructure the Medicare program. They are good for beneficiaries and for the economy. They promote choice and competition while shoring up the solvency of Medicare. Adopting these recommendations would be a responsible step towards reducing our deficit the right way.

1. Bring Down the Costs of Prescription Drugs

Extend Medicaid Drug Rebates to Low-Income Medicare Beneficiaries

Medicare should benefit from the same discounts for prescription drugs as Medicaid. Low-income dually eligible people (people eligible for both Medicare and Medicaid) comprise one-fourth of all Medicare drug users, and are among the most costly beneficiaries. Because Medicare, rather than Medicaid, covers most of their drugs and because Medicare cannot negotiate drug prices, these drugs are not eligible for the same rebates as they were, and would be, under the Medicaid program. Extending Medicaid rebates for dually eligibles and other low-income people could save more than $145 billion over ten years.[2] Extending drug rebates to all Medicare beneficiaries would yield even more savings.

Negotiate Drug Prices with Pharmaceutical Companies

The Medicare prescription drug law, passed in 2003, prohibits the Secretary of Health and Human Services from negotiating prices with pharmaceutical companies. These companies gained millions of potential customers when Medicare began covering prescription drugs, but they did not have to adjust their prices in return. Requiring the Secretary to negotiate drug prices for Medicare could help address rising prescription drug costs.[3] Taxpayers currently pay nearly 70% more for drugs in the Medicare program than through the Veteran’s Administration, which has direct negotiating power.[4] Savings realized from reducing Medicare drug costs could be used to improve benefits for beneficiaries and reduce the deficit.

Include a Drug Benefit in Traditional Medicare

Offering a drug benefit in traditional Medicare would give beneficiaries a choice they do not have now, encourage people to stay in traditional Medicare, and save money for taxpayers. It would also provide an alternative to private Part D and MA-PD plans that leave many with unexpected high out-of-pocket costs. A drug benefit in traditional Medicare would protect beneficiaries against expensive and sometimes inappropriate marketing practices. Further, traditional Medicare’s lower administrative costs could free up money for quality care, and could result in lower drug prices for beneficiaries.

2. Stop Paying Private Medicare Plans Anything More Than Traditional Medicare

Prior to the Affordable Care Act (ACA), payments to private Medicare Advantage (MA) plans averaged as much as 114% of the rate the traditional Medicare program spent on a comparable individual. The ACA attempted to rein in these overpayments and bring MA costs more in line with costs under traditional Medicare. Despite these changes, though, various factors prevent more equitable and accurate payment to MA plans, resulting in inflated and wasteful payments.[5]

Most egregious among such wasteful payments is the practice of MA “upcoding” – when an MA plan inappropriately reports an enrollee as being more sick than they actually are in order to obtain a higher risk-adjusted payment from the Medicare program. According to the Medicare Payment Advisory Commission (MedPAC), “after accounting for all coding adjustments, payments to MA plans were about 4 percent higher than Medicare payments would have been if MA enrollees had been treated in [traditional] Medicare.”[6] By some estimates, this practice wastes billions of dollars a year.[7]

These inappropriate payments occur amid a growing body of evidence that MA plans might not serve sicker beneficiaries as well as healthier people, including findings that those who are sicker tend to disenroll from MA plans at disproportionately higher rates than other enrollees and tend to rate traditional Medicare more favorably than MA plans for quality and access.[8]

Achieving more accurate MA payments will increase the solvency of the Medicare program and curb costs for taxpayers. In short, private plans should not be paid any more than traditional Medicare.

3. Lower, Don’t Raise, the Age of Medicare Eligibility

Some proposals to reduce the national deficit would increase the age of eligibility for Medicare from 65 to 67, or even higher. This would “save money” for the federal government by shifting costs to beneficiaries, employers and states. It would also eventually increase health care and Medicare costs, as older people go without insurance, go without needed care, and come into Medicare with more health care needs.[9]

In fact, a common sense approach to insurance argues for lowering the age of Medicare eligibility, thereby decreasing the needs and costs of those in the Medicare risk pool, increasing revenues paid into the program, and reducing overall Medicare costs.[10]

4. Let the Affordable Care Act Do Its Job

The Affordable Care Act includes many measures to control costs as well as models for reform that will increase the solvency of the Medicare program and lower the deficit while protecting Medicare’s guaranteed benefits. The Congressional Budget Office estimates that repealing or defunding ACA would add billions to the deficit while ignoring the real issue of rising overall health care costs, which contribute heavily to the growing national debt. ACA includes strong measures to allow CMS to combat fraud, waste, and abuse that will bring down costs, as well as a variety of pilot and demonstration projects that aim to bring better care and quality to beneficiaries. Allowing the ACA to do its job will improve care and hold down costs for taxpayers.


“Protecting Medicare” by shifting costs from the federal government to beneficiaries and their families – whether through a voucher program, spending caps, new co-payments, or other draconian measures – distorts Medicare’s original intent: to protect older people and their families from illness and financial ruin due to health care costs. The Center for Medicare Advocacy’s recommendations promote the fiscal welfare of Medicare and the country, and the health and economic security of older and disabled people. We can keep Medicare’s promise for current and future generations. There is a way if there is the will.

January 16

New estate tax law gives an enormous gift to rich families

By Jeanne Sahadi via CNN Money

It’s always good to inherit money, whatever the tax consequences. But for the lucky few, it will be especially lucrative and tax free over the next eight years.

That’s because the new federal tax law doubles the amount of money that’s automatically exempt from the federal estate tax — to roughly $11 million of an estate for someone who was unmarried, or $22 million if they were married.

The provision remains in effect through the end of 2025, unless Congress extends it.

As it is, it’s not like many estates have been hit with the federal estate tax over the past several years.

Even if the old exemption levels remained in place — at $5.5 million per person ($11 million if married) — fewer than 11,500 estates would have to file an estate tax return, and of those only 5,500 or so would end up owing any tax at all, according to estimates from the Tax Policy Center.

Those numbers drop sharply under the new law. Less than 4,000 estates will have to file every year, and 1,800 or fewer will end up owing any money, the TPC estimates.

There’s even more profitable news for those who stand to inherit a serious batch.

Despite the doubling of exemption levels, the new tax law does not curtail what has been one of the most generous tax-free provisions for heirs: The step-up-in-basis rule.

The step-up rule basically lets you inherit a valuable asset without ever having to pay a capital gains tax on all the appreciation in the value of that asset that occurred before it became yours.

That’s because your capital gains basis is the value of the asset the day the person bequeathing it to you dies, rather than its value the day it was first acquired.

Effectively that means that those years of gains prior to your inheritance will remain untaxed forever.

No need to die to take full advantage of new rules

Should the new estate tax provisions expire as scheduled after 2025, the exemption levels will revert to where they would have been if the federal tax overhaul never passed. So, after accounting for inflation, that likely means they’ll be somewhere around $6 million for individuals and $12 million for married couples.

But if you’re wealthy and have no intention of dying in the next eight years, there’s still good news for your heirs.

“One does not need to die before 2026 to take advantage of this increased exemption since it can be used for lifetime gifts,” said Beth Kaufman, an estate tax lawyer at Caplin & Drysdale and former associate tax legislative counsel at the Treasury Department.

That’s because you’re allowed to give away money while you’re alive, tax free, up to the amount of the estate tax exemption. But what you give in life will reduce your exemption at death.

Until last year, you could only give away $5.5 million (or $11 million as a couple) in your lifetime. But under the new law, you may give away up to twice those amounts without owing taxes.

Even if you die after 2025, the legislation makes clear that the gifts you make under today’s higher exemption levels will retain their benefit even if the estate tax exemption level falls in the future, Kaufman said.

Here’s a simple example: Say you’re a wealthy widower who expects to live a long time. Today you have an $11 million exemption level. After 2025, it’s likely to fall to $6 million.

By giving your kids an $11 million gift today, you effectively get to give them $5 million more tax free than you would otherwise if you waited until you die after 2025 to bequeath it to them.

January 16

Hospitals Nationally Hit Hard By Medicare’s Safety Penalties

By Jordan Rau via NPR.org

As the federal government penalizes 751 hospitals for having too many infections and patient injuries, some states are feeling the cuts in Medicare payments more than others.

This year’s punishments landed the hardest in Connecticut and Delaware, where Medicare penalized half of the evaluated hospitals, federal records show. In New York and Nevada, 4 in 10 hospitals were penalized. A third were punished in Rhode Island and Georgia. (These figures do not include specialty hospitals automatically exempted from penalties: those serving veterans, children and psychiatric patients, and “critical access” hospitals that are the only institutions in their area.)

While every state except Maryland — which is excluded because it has a different Medicare payment system — had at least one hospital punished, some got off comparatively lightly. Of hospitals in Alabama, Kansas, Massachusetts, Missouri, Ohio, Texas and nine other states, 16 percent or fewer of the institutions were punished. (State summaries can be found at the bottom of this post; a searchable list of individual hospitals penalized is here.)

The penalties — now in their fourth year — were created by the Affordable Care Act to drive hospitals to improve the quality of their care. Each year, hundreds of hospitals lose 1 percent of their Medicare payments through the Hospital-Acquired Conditions Reduction Program.

The program’s design is stern: Out of the roughly 3,300 general hospitals that are evaluated each year, Medicare must punish the worst-performing quarter of them — even if they have reduced their number of potentially avoidable mishaps from the previous evaluation period.

“I have seen with my own eyes the improvement,” says Dr. Amy Boutwell, a quality-improvement consultant in Massachusetts. “I hear hospitals say straight up, ‘We don’t want to be in the lowest quartile; we want to get out of the penalty zone.’ “

The conditions Medicare considers include rates of infections from colon surgeries, hysterectomies, urinary tract catheters and central line tubes inserted into veins. Medicare also examines rates of methicillin-resistant Staphylococcus aureus, or MRSA, and Clostridium difficile, known as C-diff. The frequency of 10 types of in-hospital injuries — including bedsores, hip fractures, blood clots, sepsis and post-surgical wound ruptures — are also assessed. All these types of potentially avoidable events are known as hospital-acquired conditions, or HACs.

A mix of factors contributes to why more hospitals are punished in certain states. The penalties fall more frequently on teaching hospitals and on facilities with large portions of low-income patients. There are more of those in some states than in others. Some penalty recipients say Medicare isn’t adequately taking into account differences in patients, since those who are frailer are more susceptible to HACs.

There is also some element of statistical chance, since the number of reported conditions in one hospital on the edge of the bottom quartile might just have one or two more incidents than a hospital that narrowly escapes that designation.

“It’s a ‘HACidental’ payment policy,” says Nancy Foster, vice president for quality and patient safety at the American Hospital Association.

Some repeatedly penalized hospitals, such as Northwestern Memorial Hospital in Chicago, say the program is flawed by what researchers call surveillance bias: The hospitals that are most diligent in testing and treating infections and injuries are going to appear to have more such incidents than relatively lackadaisical institutions. The hospitals are responsible for reporting incidents to the federal government.

Medicare says it performs spot checks, but Dr. Karl Bilimoria, director of the Surgical Outcomes and Quality Improvement Center at the Northwestern University Feinberg School of Medicine, says more policing is needed for the rates to be credible.

“In no other industry would this pass, where a program without an audit and [with] voluntary data reporting would be considered valid,” Bilimoria says. “We know guys are gaming.”

Still, many hospitals that have large numbers of sicker and low-income patients, or that handle more complex cases, have avoided the penalties. Medicare issued no punishments this year to Cedars-Sinai Medical Center in Los Angeles; the Cleveland Clinic; Intermountain Medical Center in Murray, Utah; Massachusetts General Hospital in Boston or New York-Presbyterian Hospital in Manhattan.

While safety-net hospitals and teaching hospitals were penalized at a higher rate than other institutions, two-thirds of each group escaped penalties this year.

Dr. Kevin Kavanagh, board chairman of Health Watch USA, a patient advocacy group, says that most hospitals are reducing their HACs each year, in part because of the penalties.

“That’s really the bottom line that everyone should support,” he says. “No system is perfect.”

January 11

How States Are Helping People Get Medicaid At Home

By Richard Eisenberg via Forbes.com

Survey after survey shows that people want to continue living in their homes as they age, rather than moving to a nursing home or an assisted living facility. (In a recent Nationwide Insurance survey of Americans 50 and older, 61% said they’d rather die than live in a nursing home.) But whether you or your parents will be able to receive long-term care benefits at home through Medicaid — assuming Medicaid-eligibility — is an open question.

That’s because state rules vary enormously regarding whether Medicaid — the leading payer of long-term care in America — will pay for a person’s long-term care at home. But a new report from the Center for Health Care Strategies (a nonprofit health policy resource center focused on low-income Americans) and Manatt Health (a health policy and business strategy advisory subsidiary of the Manatt, Phelps & Phillips law firm) aims to broaden the availability of Medicaid at home and in community-based settings.

A Toolkit for Medicaid at Home

Strengthening Medicaid Long-Term Services and Supports in an Evolving Policy Environment: A Toolkit for States describes innovative state programs that other states might replicate to serve their older residents. It was funded by The SCAN Foundation (a funder of Next Avenue, too) and the Milbank Memorial Fund.

“There’s a lot of innovation going on, but it can be a little dizzying in some respects,” said Cindy Mann, a partner at Manatt Health who worked on the report. “We wanted to present options that states might consider.”

Currently — and this may surprise you — more Medicaid money for long-term care services and supports is spent on home- and community-based services than in nursing facilities. That’s a welcome change. In 1995, only 18% of Medicaid long-term care spending supported home- and community-based services; today, 55% does.

Why not even more? “It’s hard, for a number of reasons,” says Dr. Bruce Chernof, president and CEO of The SCAN Foundation. “States want to make changes cautiously. They don’t want to start a program they might have to pull back on.”

The Medicaid Toolkit report featured three strategies states can adopt, and how certain states have already have done so. The strategies:

1. Developing the infrastructure to promote greater access to home- and community-based services.

“When someone is in need of long-term care services, figuring out where to go and how to get the services can be difficult,” said Alexandra Kruse, senior program officer at the Center for Health Care Strategies.

But Massachusetts, the report notes, has a nifty, free, one-stop information and referral network (a website and call center called MassOptions) to help residents understand how, or whether, they can get Medicaid reimbursement at home.

Even allowing people to provide long-term care at home through Medicaid is critically important. California, the report says, has implemented paid family leave to support family members providing long-term care for loved ones. “It’s hard to take time for caregiving without getting paid,” said Mann. “Paid family leave is a really terrific advance.”

2. Helping nursing facility residents return to, and remain in, communities.

“A lot of people in nursing homes could be getting care and services in the community and outside of the nursing home,” said Mann.

Problem is: Medicaid doesn’t pay for housing. “But there are opportunities for states to pull down funding from other programs to help reestablish somebody in the community,” said Mann. Arizona and Texas, the report said, are already providing housing supports to help nursing facility residents remain in their communities.

“And some health plans help families secure housing because it’s likely to be less expensive supporting them in the community than in a nursing home,” noted Mann.

In fact, a June 2017 report from the U.S. Department of Health and Human Services (HHS) said a program to bring nursing home residents back to their communities has shown significant cost savings to Medicaid.

On average, per-beneficiary, per-month expenditures declined by $1,840 (23%) among older adults transitioning from nursing homes through state pilots of the Money Follows the Person Rebalancing Demonstration program. Translation: average cost savings for Medicaid and Medicare programs of $22,080 per beneficiary during the first year after the transition. By the end of 2015, states had transitioned 63,337 Medicaid beneficiaries from long-term institutional care to community-based care.

Texas’ pilot Money Follows the Person program resulted in 68% of participants remaining in the community, saving $24.5 million in Medicaid funds.

The overall Money Follows the Person program, the HHS report added, “provides strong evidence of success at improving the quality of life of participants.” These people experienced “the highest levels of satisfaction with their living arrangements” and nearly all liked where they lived one year after community living — a 32 percentage point increase compared to when they were in institutional care. Their care didn’t suffer, either, after leaving the nursing homes, the HHS report noted.

3. Expanding access to home- and community-based services for “pre-Medicaid” individuals to prevent or delay nursing facility use.

Few older people suddenly need long-term care; typically, their health gradually devolves. That’s why it’s useful for states to offer access to home- and community-based services before someone will apply for full Medicaid.

“Washington and Vermont are looking to invest in some services for people who may not need a very significant amount of long-term care supports and services but may need moderate or light help,” said Mann. “If they’re provided that help, they may be able to avoid or postpone needing long-term services.”

In Vermont’s Choices for Care program, people are divided into three groups, including those who could benefit from in-home care, but aren’t infirm enough for Medicaid. Satisfaction with this pre-Medicaid program, the toolkit report said, “is very high.” Washington offers support to caregivers assisting state residents who don’t yet qualify for full Medicaid benefits.

An obvious question: If Congress cuts Medicaid, as seems increasingly likely, will that inhibit these types of state initiatives?

“It’s a serious concern,” said Chernof, who chaired the federal Commission on Long-Term Care in 2013. “You can’t take enormous bites out of Medicaid and Medicare and serve the same number of people with the same needs. Substantial cuts to either program will put people at risk.”

That said, Chernof added, “what’s interesting is there is bipartisan agreement that there ought to be better care at lower cost.” He’s hopeful the new toolkit “will help states make well-informed decisions.”

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