national state of the industry report - … report 2016 (002...national state of the industry report...

for Home Health and Hospice

NATIONAL STATEOF THEINDUSTRY REPORT

2016-2017

Fazzi Asso

study. Ou

agency le

patient sa

This is our

industry?

1. W

re

th

2. W

co

h

3. W

m

ca

Fazzi does

with this s

Dr. Rober

Why Does Fazzi Conduct the National Home Care and Hospice Study and Provide it Free to all Agencies?

ociates, in col

r intention is

aders across

atisfaction.

r fourth biann

There are th

We are indebt

esponsibility t

he country wi

We owe our c

ontinually im

elps us learn

We are dedica

make a real dif

are, hospice,

s not simply w

study is one w

rt Fazzi

For

laboration w

to provide in

the country ‐

nual study. W

hree reasons:

ted to our ind

to give back t

ith insights on

lients the late

proving our s

what works b

ated to the m

fference in he

and commun

work in the ho

way we use to

questions abvisit fazzi.co

ith our Nation

nformation an

‐‐ to help all a

Why do we un

dustry. We h

to our industr

n best practic

est best prac

services. Just

best. We inte

millions of pat

ealthcare by s

nity based ser

ome and com

o say thank yo

out this repom, email info

nal Steering C

nd insight ‐‐ d

agencies impr

ndertake and

have been in t

ry. We feel th

ces that will m

tices in all of

as this study

egrate best pr

tients and fam

strengthening

rvices. That’s

mmunity base

ou.

ort or to [email protected] o

Committee, is

derived from

rove quality, p

fund this res

this field sinc

he best way is

make them st

f our services

y helps agenci

ractice resear

milies that yo

g the quality,

s the “why” o

ed field, we ar

more about or call 800‐37

s pleased to b

in depth inte

profitability, e

earch and pro

ce 1978 and b

s to provide e

ronger and m

s. Fazzi is com

ies identify be

rch into every

ou serve. Ou

value and im

f Fazzi.

re part of it.

Fazzi, please 79‐0361.

bring you this

rviews with 7

efficiency, an

ovide it free t

believe we ha

every agency

more viable.

mmitted to

est practices,

ything we do

ur mission is t

mpact of hom

Providing you

s

751

nd

to the

ve a

in

, it

.

o

e

u

www.fazzi.com

mailto:[email protected]

Table of ContentsOur Sincere Thanks ................................................................................................................................. 1

National Steering Committee ................................................................................................................. 2

Executive Summary................................................................................................................................. 3

Back Office Technology/Billing Systems ................................................................................................. 6

Point of Care Technology........................................................................................................................ 7

Electronic Health Records....................................................................................................................... 9

Telehealth/Telemonitoring..................................................................................................................... 10

OASIS Scrubber Software........................................................................................................................ 13

HHCAHPS................................................................................................................................................. 13

Outsourced Services ............................................................................................................................... 14

Coding ........................................................................................................................................ 14

Billing.......................................................................................................................................... 16

LMS ............................................................................................................................................ 16

Operational Practices.............................................................................................................................. 17

Field Nursing Staff...................................................................................................................... 17

Productivity................................................................................................................................ 18

Caseload..................................................................................................................................... 20

Physical Therapy Staff ................................................................................................................ 20

Admission Nurse Model............................................................................................................. 21

FTE Management ....................................................................................................................... 21

Clinical Team Structure .............................................................................................................. 22

Compensation............................................................................................................................ 22

Incentive Payments.................................................................................................................... 24

Software-based Scheduling ....................................................................................................... 25

Patient Scheduling ..................................................................................................................... 25

OASIS Review ............................................................................................................................. 26

Hospice....................................................................................................................................... 27

Palliative Care ............................................................................................................................ 28

Private Duty ............................................................................................................................... 29

Workforce ............................................................................................................................................... 30

Employee Engagement ........................................................................................................................... 32

New Healthcare Reform Models............................................................................................................. 33

Financial Risk........................................................................................................................................... 35

Future Concerns...................................................................................................................................... 36

Medicare Regulations ................................................................................................................ 36

Key Concern ............................................................................................................................... 36

Future Consolidation.................................................................................................................. 37

Accreditation........................................................................................................................................... 38

Areas of Interest ..................................................................................................................................... 39

Predictive Analytics.................................................................................................................... 39

Other Counties........................................................................................................................... 40

Social Media............................................................................................................................... 40

Methodology........................................................................................................................................... 41

Quality........................................................................................................................................ 42

Profitability ................................................................................................................................ 42

Legal Status ................................................................................................................................ 43

Location...................................................................................................................................... 43

Star Ratings ................................................................................................................................ 44

Acute Care Hospitalization......................................................................................................... 44

Urgent, Unplanned Care in the Emergency Room..................................................................... 44

Chain .......................................................................................................................................... 44

Years in Operation ..................................................................................................................... 45

State Representation ................................................................................................................. 45

Representation by CMS Region ................................................................................................. 45

Notes on Statistical Analyses .................................................................................................................. 46

National State of the Industry Report for Home Health and Hospice ™ 2017 Page | 1

Our Sincere ThanksWe are pleased to provide the results of the 2016–2017 National Home Health and Hospice IndustryStudy. The goal of this study is not simply to provide information, but to help agencies improveperformance. In our over 30 years of experience, our aim has always been to help home health andhospice agencies improve quality, profitability, efficiency, and patient satisfaction. The 2016-2017National Home Health and Hospice State of the Industry Study is Fazzi’s fourth biannual research projectof its kind and the largest and most comprehensive study in the history of home care and hospice. Thestudy includes insights on the present and future use of technology, outsourced services, health carereform partnerships, operational practices for home health, hospice, and private duty.

Our sincere thanks go to the study co-sponsors. They include the National Association for Home Care &Hospice, NAHC Forum of State Associations, Accreditation Commission for Home Care (ACHC), Alliancefor Home Health Quality and Innovation (AHHQI), Community Health Accreditation Program (CHAP), TheJoint Commission, LeadingAge, and The Visiting Nurse Associations of America (VNAA). These groupshave had a long history of supporting the efforts of home care and hospice programs to better servemillions of patients throughout the country. We are indebted to this long history of commitment anddeeply appreciative to their incredible support of this effort.

We would like to express our appreciation to two other groups. First, to our National SteeringCommittee who helped guide and shape the focus of this study. Their input and guidance clearly helpedto ensure that we focused on the issues that matter most to agency leaders. Second, to the agencyleaders that participated in this study! If there was anything that stood out in this study it was that weare blessed by agency leaders who are not only committed to their agency, but are open, willing, andcommitted to sharing their knowledge in the hopes that it would help other agencies better servepatients and their families.

Finally, we would like to thank the incredible staff from Fazzi. They are bright, interesting, inquisitive,and committed to having the highest standards in research and report presentation. To each of themwe would like to express my sincere thanks.

Dr. Robert Fazzi, Founder and Managing PartnerTim Ashe, Partner and Chief Operating Officer

Fazzi Associates, Inc.

National State of the Industry Report for Home Health and Hospice ® 2017 Page | 2

National Steering Committee

Denise Altomare Care At Home, CA

Majd Alwan LeadingAge

Tim Ashe Fazzi Associates, Inc.

Richard Brennan National Association for Home Care & Hospice (NAHC)

Starr Browning Duke Home Care & Hospice

Karen Collishaw Community Health Accreditation Program (CHAP)

Dan Dietz Consolidated Health Services

Jose Domingos Accreditation Commission for Home Care (ACHC)

Bob Fazzi Fazzi Associates, Inc.

Eileen Freitag Fazzi Associates, Inc.

Mike Johnson Bayada, NJ

Pat Kelleher NAHC Forum of State Associations

Brent Korte Evergreen Health, WA

Margherita Labson The Joint Commission

Theresa Lee Alliance for Home Health Quality and Innovation (AHHQI)

Dana Madison Calvert Home Health Care, TX

Tracey Moorhead The Visiting Nurse Associations of America (VNAA)

Terry Shade Lutheran Home Care & Hospice, PA

James Summerfelt Visiting Nurse Association, NE

Brian Swartz Steward Home Health Care, MA

Mark Fiorini VNS Rochester, NY

Report Editor

Lynn Harlow Partner, Director of Business Intelligence Fazzi Associates, Inc.

And a special thanks to Madeleine Roberts for assistance with this report.


National State of the Industry Report for Home Health and Hospice

Executive Summary

The 2016-2017 National Home Health and Hospice State of the Industry Study is Fazzi’s fourth biannualresearch project on the key operational issues in the industry, and is the largest and mostcomprehensive study in the history of home care and hospice. The study includes insights on thepresent and future use of technology, outsourced services, health care reform partnerships, operationalpractices for home health care, hospice, and private duty.

The goal of this study was to give agency leaders the best practice insights needed to improveoperations, quality, financial performance, and to be more competitive in maximizing triple aimoutcomes. Improving quality and lowering costs are top priorities in our new world of value-basedpurchasing and pay-for-performance. The findings include practices and technologies and theirrelationship to higher quality and higher profitability. Additionally, the study includes trends from ourpast studies updated with results of this study. With dramatic changes in our field, we are extremelypleased to be able to provide you with this critical information.

The 2016-2017 Industry Study included 751 home health and hospice agencies. It includes an analysis ofa representative sample of the industry and extensive comparisons by size, ownership, legal status, andlocation. This project included the following phases:

Recruitment of National Steering Committee An essential part of the design of the project was that itwas overseen and guided by experts in the field. Leaders in some of the industry’s most well-known andrespected agencies, associations, and certification groups were recruited to the National SteeringCommittee.

Development of Web Survey To ensure that the study focused on the issues and questions that were ofmost importance to the industry, an internet survey was designed to provide agency leaders with theopportunity to make suggestions on questions that they would like to see addressed. We received over1,750 suggestions for topics and questions.

Development of Survey Instrument Using a highly interactive process, members of the SteeringCommittee reviewed the recommendations from the national web survey and added questions andissues that they felt needed to be addressed. Each issue was reviewed, refined, and ultimately approvedfor inclusion in the study.

Field Testing and Verifying the Survey Instrument Following the identification of a set of draft questions,researchers completed the process of structuring the questions and putting them in a survey format.The individual questions and survey instrument were then field tested with agency leaders in differentparts of the country, refined, and field tested again, until all questions met required standards forvalidity and reliability leading to consistent understanding and responses by those being interviewed.

Identification of Agencies to Be Surveyed Key to the success of the survey was ensuring that a strongrepresentation of all of the major segments of home care agencies were included in the survey. Eligibleagencies needed to have met three criteria:

Medicare-certified Revenues of $500,000 or greater


Home Health Compare scores for two or more reporting periods

Note: As in previous years, Fazzi chose to draw a “participation line” at the $500,000 level. We didnot include agencies smaller than $500,000 in the criteria due to transitions, acquisitions, and theopening and closing of agencies. The lack of stability limited ability to accurately assess theseagencies. For agencies smaller than $500,000 the findings can still be very helpful but comparisonsmay not be available.

To ensure a representation of agencies, statistical sampling technical support was provided by theDepartment of Mathematics and Statistics at University of Massachusetts, Amherst, and statisticianGladys Casas Cardoso PhD. Representation of agencies in the following categories were included:hospital-based, hospital affiliated, freestanding, urban, rural, for-profit, nonprofit, and five revenuegroupings.

Participating Agencies by Overall Revenue and Ownership

Revenue Category Hospital-based HospitalAffiliated Freestanding Government

$500,000-$2M 6.9% 4.6% 85.2% 3.3%

$2M-$5M 10.6 9.1 76.9 3.4

$5M-$10M 10.6 9.4 77.6 2.4

$10M-$20M 12.8 12.8 74.4 0.0

>$20M 9.1 18.2 72.7 0.0

Total 8.7 7.2 81.1 2.9

Survey Administration A total of 751 agency leaders across the country were interviewed in order tofulfill sampling size for statistical representation. Of survey respondents, 81 percent were executivelevel (CEO, Administrator, Executive Director). Other positions included CFO, DON, Director of HomeCare, and Director of Operations. The survey was conducted over a twelve week period beginning lateMay 2016 and concluding in early September. Average interview time per respondent was 23 minutes.

Analyzing the Findings Once the survey was completed, researchers and senior managers from FazziAssociates, along with an outside analytics researcher, began an intensive review of the data,incorporating an array of segmented analyses using a standard research analysis tool, the StatisticalPackage for the Social Sciences (SPSS). Assessment was conducted on individual agency performance tocorrelate profitability and quality with practices used.

This report provides a comprehensive summary of some of the major trends, findings, and strategiesfrom the analyses. Study participants, their revenue size, location, ownership, legal status, qualitymeasures, and chain status were reviewed. Brief overviews on criteria used in the study are below.Further definitions and statistical measures used for comparison are reported in the methodologysection. Previous studies completed by Fazzi Associates (FA) referenced in this report are noted withthe year of the study completion, i.e. (FA 2014).

Profitability ranking was determined based on agency net income as reported in the agencyrespondent’s cost report data using Medicare and overall operating costs and revenue. From lowest(negative) net income to highest (positive) net income, the quartiles for ranking profitability resulted in


the most profitable agencies in the highest 25 percent ranking and the least profitable agencies in thelowest 25 percent ranking. For some comparisons, this study ran an additional Medicare margin quartilethat separated freestanding from hospital-based agencies to avoid populating the lowest quartiles withhospital-based agencies.

Home Health Compare measures for all agencies were calculated into a composite score within a rangeof 0 (lowest quality) to 99 (highest quality). Respondents were grouped into quartiles according to theircomposite score for highest, mid-high, mid-low, and lowest score for frequency reporting. Agencieswere also given percentile scores for quality rankings using parametric tests for mean scores. See Noteson Statistical Analyses.

In addition to profitability and quality, survey responses were segmented and compared on Acute CareHospitalization (ACH) ratings, Urgent, Unplanned Care in the Hospital Emergency Room (ED Use) ratings,Star Ratings, years in operation, if part of chain, and geographic locations. Definitions and study samplecomparisons are reported in the methodology section.

Analyzing the Findings The results of this study are intended to give you a view into the trends in theindustry and how agencies are operating. This provides the opportunity to see how your agency’sexperiences or results compare to those reported. We suggest that as you review the results that youalso consider the Fazzi Strategic Management Model. It provides you with a three-phase logical meansfor analysis. The model also serves as the foundation for an array of strategic planning models.

What do we know? What are the documented findings from the survey?

What does it mean? How will those trends impact my agency? What are the regulatory,reimbursement, market, technology, and staffing trends implications to our industry and to myagency?

What should we do about it? Based on what we learned from the study and its implications toour agency, what should we consider doing? From the data you can determine what otheragencies’ approaches are, what specific practices may produce improved results. Are youhaving similar experiences, can you gain some insight about approaches to the issues?

Fazzi Strategic Management Model

What do weknow?

What does itmean?

What shouldwe do

about it?


Back Office Technology/Billing SystemsBack office software, when used effectively, can reduce costs, increase productivity, and improvequality. Software systems are available for almost all of the administrative functions including payroll,reimbursement, revenue cycle management, human resources, etc.

Of agency respondents in this study, 95percent have a financial billing and backoffice software system, an increase from90 percent in our previous study (FA2014). Of respondents with back officesoftware, 84 percent have purchased orleased from an outside vendor, and 11percent have developed their own.

While 89 percent of respondents weresomewhat or very satisfied (unchangedfrom FA 2014), 13 percent planned toreplace or upgrade their system with anew vendor within the next year.

Satisfaction with software has increased asfewer respondents planned to upgrade orpurchase new than in our previous study (23%FA 2014). The longer an agency has used aback office/billing system, the more likely it isto want to upgrade or replace its softwaresystem with a new vendor. The 61 percent ofrespondents who do plan on replacing orupgrading their software with a new vendorhave had their system for more than fiveyears.

The highest quality scores were seen withrespondents that had their system for morethan five years.

Back Office Software by Legal Status

82%

12%

89%

7%

Purchased or lease fromoutside vendor

Our agency developed

For-profit Nonprofit

Back Office Software by Length of Use and Quality

20% 21%

33%

23%

29%

18%

Less than 2 years 2 to 5 years More than 5 years

Highest Quality Lowest Quality

The longer an agency has used a backoffice software system, the more likelyit is to want to upgrade or replace itssoftware with a new vendor.


Point of Care TechnologyFor this study Point of Care (POC) technology was defined as “the use of a device (tablet/iPad,smartphone, or laptop computer) at the bedside/point of service to enter patient data and transfer thatdata by syncing via web to an office-based system.” Capturing patient information at the point of carecan assist with care coordination, risk management, and patient advocacy and satisfaction. Hardwiredbest practice behaviors for use of POC systems at the point of care is seen by many agencies as one ofthe most important uses of advancing technology.

Use of POC devices to collect patient information has expanded to 72 percent, an increase from 58percent in 2014. Of those respondents who were not currently using a POC system, 33 percent plannedon implementing a system within the next 12 months. Four in ten (40%) respondents had used theirsystem for more than five years.

More hospital affiliated agencies continue to have acquired POC systems than other ownership typeagencies. Freestanding agencies saw the largest growth of POC use with an increase of 33 percent.

Participating Agencies with Point of Care System

Ownership Type 2014 2016

Hospital-based 78.9% 81.5%

Hospital Affiliated 85.1 94.3

Freestanding 52.3 69.4

Government 56.4 59.1

Our previous studies did not suggest a significant difference in the use of POC and how profitable anagency was. From other Fazzi studies, we have found that it was not simply having a technology orusing a process that made a difference, but rather how effectively the technology or process was usedthat really made the difference.

Note: Respondents who selected the othercategory mentioned using combinations oflaptop and smartphone and/or tablet, and afew document on paper and desktops. Notsurprising, when purchasing new POChardware respondents were likely to prefer atablet/iPad (71%), followed by a laptopcomputer (17%).

Most respondents (84%) were somewhat orvery satisfied with their POC system.Nineteen percent planned on replacing orupgrading their system within the year. Longterm users were likely to considerreplacements or upgrades. Slightly over one-third (36%) of respondents said it took more

Type of Device for POC

2008 2014 2016

Laptop 70.4% 65.5% 39.7%Tablet/iPad 19.7 27.3 49.9Smartphone 4.6 3.9 6.8Other 5.4 3.3 3.5

Replacing or Upgrading POC System in One Year by Lengthof POC Use

No Yes Not Sure

Less than 2 years 87.7% 7.1% 5.3%2 to 5 years 78.4 16.8 4.8More than 5 years 65.6 28.7 5.7Total 75.3 19.4 5.3


than 4 weeks for the average clinician to be fully competent using their POC system (32% said 2 to 4weeks, and 32% said 2 weeks or less).

For the length of time for the average clinician to complete a SOC using their POC system, 59 percentsaid 2½ hours or less.

Note: There were substantial differences between POC vendors with users learning the system and thetime to complete a SOC. For example, looking at 11 vendors with 10 or more respondents, and thelength of time it took for a clinician to be fully competent in using the system, one vendor had 76percent of respondents that said it took 2 weeks or less. The same vendor had 11 percent that selectedmore than 4 weeks. Another vendor had no respondents selecting 2 weeks or less, and 75 percent oftheir users selected more than 4 weeks. Interestingly, the top three vendors that had the mostrespondents for competency time as 2 weeks or less, also were the top three vendors for the leastamount of time to complete the SOC of less than 2 hours.

28%

31%

20%

21%

Less than 2 hours

2 hours to 2½ hours

2½ hours to 3 hours

3 hours or more

Time for Clinician to Complete a SOC Using POC System


Electronic Health RecordsThe capability to receive electronic health record (EHR)information and/or transmit information to and from health careproviders who are not part of their own agency or system, wasreported by 63 percent of respondents.

Respondents that had the capability to receive EHR informationranked higher in quality than respondents that did not. Also, theaverage score (12.5) for EHR users was lower (better) for ED usethan the average score (13.1) for those that did not use EHR.

Use of EHR by Quality Quartile Rank

There was a significant difference with profitability forrespondents with the capability to receive EHR information andthe Medicare margin. EHR users had higher Medicare margins(57% in the highest and mid-highest quartiles) than non-users.

Use of EHR by Medicare Profitability Rank

30% 31%

22%17%

Highest Mid-high Mid-low Lowest

29% 28% 27%

16%


Providers who use EHRs report tangibleimprovements in their ability to makebetter decisions with more comprehensiveinformation. EHR adoption can give healthcare providers:

• Accurate and complete informationabout a patient's health.

• The ability to quickly provide care. In acrisis, EHRs provide instant access toinformation about a patient's medicalhistory, allergies, and medications.

• The ability to better coordinate thecare they give.

• A way to share information withpatients and their family caregivers.

The main goal of health IT is to improvethe quality and safety of patient care. Thepromise of fully realized EHRs is having asingle record that includes all of apatient's health information: a record thatis up to date, complete, and accurate. Thisputs providers in a better position to workwith their patients to make gooddecisions.

HealthIT.gov. Benefits of EHRs. Why AdoptEHRs? https://www.healthit.gov/providers-professionals/why-adopt-ehrs

Adoption of Electronic HealthRecords


TelehealthAccording to MedPAC, Medicare telehealth use has grown slightly.Beneficiaries using telehealth are likely to be under the age of 65,disabled, and dual eligible for Medicare and Medicaid.1

For this study we defined telehealth, or telemonitoring, in the homehealth setting as the use of technology communication systems(video or non-video) to transfer health information from the hometo a provider. Twenty-three percent of study respondents currentlyuse a telehealth/telemonitoring system.

Nonprofits continue to be more likely users of telehealth.

Telehealth Use by Legal Status

2009 2014 2016

Nonprofit 39.3% 43.1% 41.3%

For-profit 13.6 22.3 18.3

Slightly more than half, 52 percent, of respondents with telehealthprograms had their telehealth system for more than five years, with21 percent reporting that had their system less than two years.

The number of telehealth units in use on an average day hasincreased in the 75 to 100% and less than 25% categories, anddecreased in the middle categories as compared to our previousstudy (FA 2014).

Agencies with telehealth and high utilization have increased theirutilization.

Telehealth Units in Use on an Average Day

2014 2016

Less than 25% 25.2% 26.2%

25-50% 14.1 10.7

50-75% 19.6 16.7

75-100% 36.0 41.1

1 Telehealth services and the Medicare program. Medicare Payment Advisory Commission. Washington, DC. Reportto the Congress. Medicare and the Health Care Delivery System. June 2016.

Medicare spending on health caretelehealth visits (from both distant andoriginating sites) increased from about $2million in 2008 to almost $14 million in2014.

Of the Medicare beneficiaries usingtelehealth (0.2 percent) in 2014, most (61percent) were eligible for Medicarethrough disability, with the remaindereligible through age (28 percent) orthrough end-stage renal disease (1percent).

Also in 2014, telehealth use was seen inall 50 states but more so in states withlarge rural populations. Use was thehighest in South Dakota, Iowa, and NorthDakota, where more than 20 telehealthservices were provided per 1,000beneficiaries. The ten states with thelowest telehealth use collectively usedless than 1 telehealth service per 1,000beneficiaries (Rhode Island, Connecticut,Delaware, New Jersey, Massachusetts,Maryland, Utah, Washington, District ofColumbia, and Indiana).

Telehealth services and the Medicareprogram. Medicare Payment AdvisoryCommission. Washington, DC. Report to theCongress. Medicare and the Health CareDelivery System. June 2016.

Use of Telehealth


Use of telehealth is seen more in larger agencies for both Medicare and overall revenue categories.

Telehealth Use by Agency Medicare Revenue

Telehealth Use by Agency Overall Revenue

Almost all, 91 percent, use telehealth for specific patient populations, conditions, or disease states; theremainder use their system for all patients.

Respondents were asked if they experienced any impact with the use of telehealth. The largest impactwith telehealth reported by respondents was seen with an increase in overall quality (75%), followed byan increase in patient satisfaction of 63 percent, and lower unplanned hospitalizations also at 63percent. Impact was also seen in an increase in patient self-care of 60 percent, and a decrease inemergent care with 51 percent of respondents. Thirty-nine percent of respondents experienced anincrease in referrals, and 36 percent saw lower visits per episode. Only 18 percent experienced adecrease in agency costs.

Of telehealth users, less than 6 percent of respondents received a direct reimbursement for telehealthfrom either patients/families or health reform initiatives. Eight percent were reimbursed by commercialinsurance, and 11 percent were reimbursed by Medicaid. Nearly half (43%) received reimbursementfrom other sources such as grants, state programs, or medical assistance programs.

16%

33%

68%

91%

75%

$500K - $2M $2M - $5M $5M - $10M $10M-$20M $20M+

2016

18%28%

44% 47%

85%

11%23%

44%

66%71%

$500K - $2M $2M - $5M $5M - $10M $10M-$20M $20M+

2014 2016


The use of telehealth has a significantcorrelation with quality. Nearly half oftelehealth users rank in the top quartile forquality. Quality scores were also slightlyhigher for agencies that have 51 to 100telehealth units is use than agencies that hadless than 10 in use.

The majority (90%) of respondents aresomewhat or very satisfied with their systemvendor. Only 3 percent were verydissatisfied.

Half (50%) of those respondents using telehealth do not plan to make changes to their program in thenext 12 months. Close to one-third, 28 percent of respondents plan to add new units with their existingvendor while 7 percent will add units using a new vendor.

There will be some movement from one vendor to another, as 8 percent plan to replace their vendorwith a new one. Only 2 percent plan discontinue use of telehealth.

Respondents without telehealth identified costas a main factor followed by a lack ofdemonstrated value.

Of those respondents who do not have atelehealth system, 17 percent plan to start aprogram within the next 12 months and 8percent were unsure. Previously we saw 19percent of respondents who intended to starta program within one year and 18 percentwere unsure (FA 2014).

.

Reason for Not Having a Telehealth System

Respondents

Too expensive to buy/lease 42.0%

Lack of reimbursement 33.0

Have not seen evidence ofdemonstrated value 40.0

Not sure 21.5

Use of Telehealth and Quality Quartile Rank

41%

28%21%

10%

Highest Mid-highest Mid-lowest Lowest

Results show that thepresence of telehealth has asignificant correlation withquality.


OASIS ScrubberA scrubber can capture errors and inconsistencies in the OASISassessment and decrease the review time. An important piece ofthe scrubber software is accurately reflecting patient conditionsbefore and after visits to return data that will impact process ofcare measures and improve Medicare reimbursement.

Having a software program for “scrubbing” OASIS data wasreported by 78 percent of respondents, an increase from 69 percentin 2014. Roughly eight in ten of those agencies (79%) are for-profit.

The majority (87%) of users planned on keeping their existingsystem, and close to one third (30%) of those agencies with anOASIS scrubber embedded in their system have been using theirpoint of care system for more than five years.

Of respondents in the highest quartile for quality, 77 percent useOASIS scrubber software.

Of agencies that currently do not use an OASIS scrubber softwareprogram, 15 percent plan to acquire one within twelve months and5 percent are unsure.

HHCAHPS

The Consumer Assessment of Healthcare Providers and Systems(CAHPS®) Home Health Care Survey (HHCAHPS) measures theexperiences of people receiving home health care services fromMedicare-certified agencies. The likelihood of a patient or family torecommend your agency is a key measure of your agency’s success;measured in CAHPS data. Understanding what matters most to ourpatients and families yields patient-centered goals, and using thosegoals to motivate participation in a plan of care positively impactsoutcomes in both clinical quality and patient satisfaction.

Of study survey respondents, 89 percent planned to stay with theirexisting vendor, 6 percent will explore a new vendor, and 5 percentwere unsure.

OASIS Scrubber Software and Plans for Next 12 Months

2014 2016

Keeping existing system 81.7% 86.9%

Exploring an alternative 11.2 8.0

Discontinuing use 1.9 1.8

Don’t know 5.2 3.3

Stars

The quality of patient care star rating is asummary measure of agency performancebased on how well a home health agencyperforms on nine of the individual qualitymeasures reported on Home HealthCompare. The quality of patient care starratings are updated quarterly, at the sametime the data on the individual qualitymeasures are updated. This means thequality of patient care star rating for eachhome health agency may change fromone quarter to the next.

Five patient survey star ratings (HHCAHPSstar ratings) are also on Home HealthCompare: one for each of the threepublicly reported HHCAHPS compositemeasures, one for the overall rating ofcare measure, and one survey summarystar, which is a simple average of the fourHHCAHPS measure star ratings. HHCAHPSstar ratings are based on the same patientsurvey results publicly reported on HomeHealth Compare.

https://www.medicare.gov/homehealthcompare andhttps://homehealthcahps.org/GeneralInformation/StarRatingsInformation.aspx

Star Ratings

80% of respondentsin the highestquartile for overallprofitability useOASIS scrubbersoftware.


Outsourced ServicesOutsourced services (delegating services to others) is a growingreality in our industry and as well as other segments of health care.Agencies, particularly larger agencies have moved to outsourcing toreduce cost, increase sophistication for specific functions, ensure24/7 operations and avoid the growing challenges of turnover andstaff shortages. A growing number of outsourced services havebeen provided for functions ranging from HR to coding and billing,to QA management to certified on-line training to IT, web design,data entry, and other services.

This study saw an increase in the use of outsourced services,particularly with coding. Although home health use of outsourcedcoding has lagged behind that of hospitals, we expect to see moregrowth in the future.

Coding

Outsourced coding was used in the past 12 months by 29 percent ofrespondents, an increase from our 2014 study of 6 percent ofrespondents. Of respondents that do not use outsourced coding,11 percent planned to explore the use of outsourced codingservices within one year.

Agencies that used outsourced coding mainly did so tocomplete their coding function (53%). Others usedoutsourced coding to supplement coding being done byinternal staff (44%), and to cover for vacations, holidays,and other times staff are not available (12%).

Nearly a quarter of all U.S. hospitals nowoutsource some or all coding functions.Ninety percent of hospitals over 150 bedscurrently outsourcing their CDI processesreported in Q3 to have realized significant(over $1.5M minimally) in appropriaterevenue and proper reimbursementsfollowing the implementation of clinicaldocumentation improvement programs inthis past year following ICD-10 transition,according to the latest Black Book survey of907 health leaders.

“Because of this increased patientengagement, the need for proper clinicaldocumentation improvement driving qualityoutcome scores has never been moreessential,” said Doug Brown, ManagingPartner of Black Book.

Clinical documentation improvement,backburnered as a high priority prior to ICD-10, has risen to the top of 2017 budgetpriorities, whether outsourced end-to-endcoding or purchasing coding softwaresolutions by 76% of those late to adopt,according to the survey results.

An impressive 85% of hospitals confirmdocumented quality improvements andincreases in case mix index within six monthsof CDI implementation. The survey of nearly1,000 hospital technology, financial andphysician leaders found coding and clinicaldocumentation improvements are nowimperative.

“CDI solutions are the critical link in ensuringfull and timelier reimbursements frominsurers and payers, as well as avoidingcostly penalties for non-compliance, hencehospital chief financial officers have becomethe greatest advocates for outsourced end toend coding,” said Brown.

What’s the Key to Better ICD-10 Coding? AdvanceStaff. November 11, 2016.http://health-system-management.advanceweb.com/whats-the-key-to-better-icd-10-coding/

Outsourcing

Use of Outsourced Coding Growth

6%

29%

2014 2016


Agencies that used outsourced coding had significantly higherquality scores than agencies that did not. Sixty-three percent ofrespondents that used outsourced coding ranked in the top twoquartiles for quality.

Respondents gave familiarity or previous work relationship as thenumber one reason they chose their outsourced coding vendor.Comparing their outsourced coding vendor with doing codinginternally, 82 percent rated their vendor as better or same as forquality and accuracy of codes. The same amount of respondentsrated their vendor as better or same as for reporting (72%) andcommunication (72%).

More than half (62%) of those who used outsourced coding havethe capability to receive electronic health records, 30 percent havea telehealth system, and 21 percent also used outsourced billingservices.

Use of Outsourced Coding and Agency Quality Quartile Rank

32% 31%

22%

15%


Agencies that used outsourcedcoding had significantly higherquality scores than agenciesthat did not.

www.fazzi.com


Billing

Outsourced billing services were used by 15 percent of respondents in the past 12 months. Of thosethat have used the service, 64 percent find their vendor better or same as internal staff when it comesto cost; 80 percent find the vendor better or same as on quality of billing; 79 percent find the vendorbetter or same as on timeliness of claim filing; 82 percent find the vendor better or same as onacceptance rate for claims; and 76 percent find the vendor better or same as on resolution of denials.There appears to be overall satisfaction as 73 percent will keep their current vendor.

LMS

More than half of respondents, 58 percent, have an on-line training system or learning managementsystem (LMS) that provides a range of on-line trainings and reporting to staff. The majority (88%) planon keeping their existing vendor. Nearly one-quarter (24%) of users did not choose their vendor butinherited it as part of a corporate, parent, hospital, or health system. Of respondents who do notcurrently have an on-line training system, 32 percent planned on exploring the use of an LMS servicewithin the next year.

Smaller agencies tend to be greater users of on-line training, with 46 percent of all users in the $500,000to $2 million revenue category.

Users of On-line Training by Revenue Category

Geographic location does not appear to a factor as 55 percent of rural agencies and 59 percent of urbanagencies have an on-line training system.

OASIS was seen as the biggest training need reported by 38 percent of respondents, followed by coding(16%), and documentation (15%).

4%

7%

14%

29%

46%

$20M+

$10M - $20M

$5M - $10M

$2M - $5M

$500K - $2M

28% 29%

23% 21%


Use of Learning Management System and Quality Quartile Rank


Operational PracticesField Nursing

To meet field nursing requirements, as their primary staffing model, 73 percent of respondents use afull-time RN, 20 percent use a per visit/per diem RN, 4 percent use a part-time RN, and 3 percent usecontract staff. Nonprofits are more likely to use the full-time RN approach and are evenly split with thepart-time and per visit/per diem approaches. No nonprofits in the study used contract staff.

Primary Staffing Approach for Meeting Field Nursing Requirements by Legal Status

Full-timeRN

Part-timeRN

Per Visit/Per Diem RN

ContractStaff

For-profit 67.9% 4.1% 24.4% 3.6%

Nonprofit 92.3 3.8 3.8 0.0

Study findings on quality scores showed full- and part-time RN approaches have nearly one-third ofrespondents place in the highest quality quartile, followed by per visit/per diem RNs. Looking atrespondents that are in the highest quartile for both quality and profitability, 75 percent use a full-timeRN to meet field nursing requirements. Agencies using contract staff showed the lowest quality scores.

Percent in Highest and Lowest Quality Quartile by Field Nursing Approach

More visits do not always equate to better care or outcomes. How we motivate and guide clinicianbehaviors, including the method of clinician reimbursement, is key to achieving optimal value.

28% 29% 26%

5%

21% 21% 21%

57%

Full-time RN Part-time RN Per Visit/Per Diem Contract Staff

Highest Quality Quartile Lowest Quality Quartile

The primary staffing approach hasa significant statistical differenceon measures of quality.


Productivity

For nursing productivity, five to six routine visits per day are expected by over one-third of respondents,similar with our 2014 study.

Average Number of Actual Routine Visits per Day Expected from Full-time Nursing Staff

Nursing productivity expectations varied between for-profits and nonprofits, with more than half ofnonprofits (56%) expecting five routine visits per day.

Number of Actual Routine Visits (per day) Expected from Nursing Staff, For-profit and Nonprofit

7%

11%

37%

37%

9%

9%

11%

37%

32%

7%

8 visits or more

7 visits

6 visits

5 visits

4 visits or less

2014 2016

8%

32%

38%

13%8%

11%

56%

31%

1% 1%

4 visits or less 5 visits 6 visits 7 visits 8 visits or more



Agencies performing 8 or more visits per day tend have lower qualityscores than those performing 6 or 7 visits per day.

Average Number of Visits per Day and Respondents in the Highest QualityQuartile

Less than half of respondents, 46 percent, met their productivitygoal for nursing staff 90 to 100% of the time.

Percent of Time Meeting Productivity Goal

Respondents

90-100% 46.0%

75-90% 40.5

50-75% 10.6

Less than 50% 2.9

Accountability in the supporting behaviors which drive optimalproductivity is critical in today’s supervision. From consistent andaccountable scheduling processes, to POC documentation skills, theability of a clinician to achieve productivity is a reflection of theirpreparation, support, and leadership to accountability.

3%

12%

34%

41%

10%

8 or more

7

6

5

4 or less

www.fazzi.com


Caseload

There is not an average caseload for all agencies. Patientpopulations, expertise of case managers, allocations to directpatient care and management and administrative work have tobe considered to align with the caseload FTEs. Your manager(s)may have greater responsibility on caseload analysis, scheduling,and planning than on direct patient care. Ideally, the balance ishaving effective caseload management that meets the patientneeds while maintaining quality and cost. Also, the return oninvestment in managed caseload size will be reinforced with theshift from volume to value in healthcare reimbursement.

Not surprising, respondents with typical caseloads of more than 30, scored significantly lower (averagequality score of 48) on quality than respondents with caseloads of 20 to 25 (average quality score of 57).

Agencies with caseloads of more than 30 had a higher Medicare margin (average of 12.7) than agencieswith caseloads of 26 to 30 (average 8.1) and all other categories.

Physical Therapy Staff

The primary staffing approach for meeting physical therapy requirements was the use of a combinationof approaches (36%), followed by contract staff at 31 percent. Use of full-time physical therapists was23 percent, part-time physical therapist at 3 percent, and the remainder, 7 percent use a per visit/perdiem agency physical therapist.

Physical Therapist Staffing Approach by Agency Type

Hospital-based

HospitalAffiliated Freestanding Government

Full-time 43.1% 40.7% 19.6% 9.5%

Part-time 4.6 1.9 2.5 0.0

Per visit/per diem 4.6 7.4 7.3 19.0

Contract staff 18.5 16.7 32.4 61.9

Combination 29.2 33.3 38.1 9.5

Full-time staff physical therapists were expected to do five (39%) or six (40%) actual visits per day,consistent with our previous study (FA 2014). Seven actual visits were expected by 12 percent ofrespondents. Four visits or less (5%) and eight or more visits (4%) had the least expectation.

Of respondents who use full-time physical therapists, 66 percent said their productivity goal for full-timephysical therapy staff was met 90-100% of the time; 24 percent said 75-90% of the time, and 6 percentreported 50-75% of the time. One percent responded with meeting their goal less than 50% of the time,and 4 percent were unsure.

Use of physical therapist contract staff showed lower quality scores (45.0) than agencies using full-time(60.7) or part-time (59.3) physical therapists.

Number of Patients in Typical CaseloadStaff Manages at a Given Time

Caseload Respondents

19 or less 25.1%

20-25 36.0

26-30 18.3

More than 30 20.7


Admission Nurse Model

Less than half (43%) of agencies use an Admission Nurse Model (where specific nurses are responsiblefor the majority of OASIS admissions). Agencies that use the model scored lower on quality.

Admit clinician designation can represent to staff that a specialist is needed to manage OASIS at thestart of care. Our strong recommendation is to hold competence in OASIS as a key performancemeasure of success. Also, with the emphasis on integrated, individualized, and goal-oriented care,agency leaders should ensure that the entire clinical model truly supports the enhanced assessment andcare coordination described in the 2017 Conditions of Participation (CoPs).

FTE Management

Although only 5 percent of respondents have a clinical teammanager or supervisor that normally has 16 to 20 FTEs, they rankhigher on Home Health Compare quality scores. The quality scorefor agencies that responded with 16 to 20 FTEs averaged 61.7,compared to agencies with 7 to 10 FTEs to manage who averaged51.7 for a quality score.

Respondents with 16 to 20 FTEs to manage also had higher marginsfor overall profitability; averaging 7.3 compared to 7 to 10 FTEs(average of -3.4) and all other categories.

Average Number of FTEs by Overall Revenue

The lower the number of FTEs to manage, the lower (better) the ACH rate. Those with 6 or less FTEs tomanage averaged a score of 15.4, compared with an average of 16.0 for those that managed FTEs of 20or more.

51%24%

13% 3% 9%

34%

24%

16%6%

21%

21%31%

20%7%

21%

18% 13%

32%16%

21%

16% 11%26% 16% 32%

6 or less 7 - 10 11 - 15 16 - 20 20 or more

$500K - $2M $2M - $5M $5M - $10M $10M - $20M $20M+

Average Number of FTEs forClinical Team Manager

FTE Category Respondents6 or less 39.5%7-10 23.711-15 15.816 - 20 5.420 or more 15.6


Clinical Team Structure

The majority of respondents (84%) use a multidisciplinary clinical team structure where nurses andtherapists report to one supervisor.

Of study respondents, 8 percent ranked in both the highest quartile for profitability and the highestquartile for overall operating margin. Nine out of ten (90%) respondents of this group used amultidisciplinary team structure.

More than half, 56 percent, of respondents with a multidisciplinary clinical team structure have low(better) ACH scores with an average of 15.5; lower than both the national average and those that do notuse the structure (average of 16.2). ED use is also slightly lower (better) for respondents who use thestructure.

Use of a Multidisciplinary Clinical Team Structure by Revenue

With 2017 CoPs replacing the nursing supervisor with a Clinical Manager role responsible for the careplanning process, and a required interdisciplinary approach to care, we expect swift changes in clinicalteam structure in future industry studies.

Compensation

Quality and the methodology of payment for clinicians is interesting, as we learn what methodgenerates overall best practice. Most likely due to changes in regulations and a greater focus on quality,this study revealed significant differences in quality scores and compensation models not seen in ourprevious study (FA 2014).

Primary Approach to Compensate Field Staff; RNs, LPNs, and Therapists by Percentage of Respondents

Salary Per Visit Rate Hourly Rate Other

RNs 29.5% 41.3% 22.7% 6.5%

LPNs 9.7 55.0 31.1 4.2

Therapists 16.6 61.0 12.2 10.2

Consistent with a previous study (FA 2009), paying nurses with salary or per visit rate is associated withhigher Medicare profitability. Nearly three-quarters of agencies that paid RNs by salary (72%) or by pervisit (79%) showed a profit versus only half the agencies that paid the hourly rate (50%).

Agencies in the highest quartile for quality were more likely (27.6%) to use hourly than agencies in thelowest quartile (17.5%), and were less likely to use per visit (39.5% compared with 48.8%). However, the

56%

28%

11%4% 2%

35%28%

16% 13%9%

$500K-$2M $2M-$5M $5M-$10M $10M-$20M $20M+

Yes No


reverse is true of profitability; agencies with higher Medicare margins are more likely to use per visit andless likely to use hourly. Looking at agencies that rank the highest in both Medicare profitability and thelowest (best) for ACH scores, the per visit rate approach had as many respondents in the best rating asthe hourly rate had in the poorest rating. Note that other category includes a combination ofapproaches used by the agency.

Compensation Approach for Clinical Field RNs and ACH Quartiles and Medicare Profitability Quartiles

The hourly rate for RNs is used by more nonprofit agencies (59%) and agencies located in rural areas(41%). The per visit rate for RNs is used more in for-profit agencies (50%) and urban locations (44%).

Compensation Approach for Clinical Field RNs by Legal Status and Location

Salary Per Visit Rate Hourly Rate Other

For-profit 29.3% 49.6% 13.6% 7.5%

Nonprofit 30.7 8.3 58.5 2.5

Urban 30.9 44.1 17.7 7.2

Rural 24.5 30.7 41.0 3.9

The payment method for LPNs had a significant correlation with quality. The hourly rate for LPNsaveraged a quality score of 59.0 compared to the per visit rate which averaged 49.7 for quality. Thesalary approach for LPN compensation show 39 percent in the lowest (best) quartile for ED use, and 34percent in the same quartile for those using the per visit rate, compared to the hourly rate (19%) andother (15%) approaches. Agencies that used salary approach for LPNs had the highest ranking (39%) forMedicare profitability.

Use of the salary approach for therapists showed the highest quality measures, averaging 61.9compared the per visit rate which averaged 49.6 for quality. Agencies in the highest Medicareprofitability quartile (30%) used the per visit rate for therapists. More nonprofits (35%) used the hourlyrate for therapists than for profits (6%).

31%

52%

12%5%

22% 19%

50%

9%

Salary Per visit rate Hourly rate Other

Highest MedicareQuartile & Lowest ACH

Lowest Profit Quartile& Highest ACH


Incentive PaymentsOf the study respondents (38%) that do offer incentive payments for clinical staff, 61 percent of thoserespondents provide an incentive for productivity. More than half (61%) of those fall into the top twoquartiles for Home Health Compare quality, and 58 percent rate in the top two best quartiles for ED use.Incentive payments appear to be related to profitability as more than 60 percent of respondents withincentive payments are in the top two Medicare margin quartiles.

Respondents that offered an incentive payment for quality had more than half (55%) fall into the top twoquartiles for Home Health Compare quality, and over 60 percent rate in the top two best quartiles for EDuse.

Respondents that selected some other type of payment included incentives for certification of woundcare, distance from office, travel, friendliness, timeliness of clinical documentation, on-call, overtime, forreferrals, and quantity.

Use of Incentive by Type

Incentive Based On Respondents

Productivity 61.3%

Quality 39.3

Patient Satisfaction 40.9

Other 15.5

Use of Incentive Payments vs No Incentive andMedicare Margin Quartile Ranks

36%

19%23% 23%

Highest Lowest

Incentive No Incentive

Use of Incentive Payments vs No Incentive andOverall Operating Margin Quartile Ranks

29%

17%

23% 24%

Highest Lowest

Incentive No Incentive

Use of Incentive for Quality and HHC Quality QuartileRank

26%29%

25%20%

26% 27%23% 24%


Quality Incentive No Incentive


Software-based Scheduling SystemScheduling systems to track visits, referrals, and otheractivities have advanced from paper and Excel worksheetsto automated software which can be used fromcomputers and other portable devices. An accurate,transparent, and shared scheduling system addsefficiency and effectiveness to an agency. We continue tosee an increase in the use of scheduling software with 81percent of respondents in this study, up from 75 percentin 2014. Having a software-based system but not using itwas reported by 1 percent of respondents.

This study found users of a software-based schedulingsystem had lower ACH scores (average of 15.4) thanthose that did not (average of 16.3), and lower thanthose that had a system but did not use it (average of16.8). ED use rates were slightly lower with an averageof 12.3 for users. Non-users averaged an ED use rate of12.6, and those that have a system but are not using itaveraged 14.3.

Patient SchedulingMost often, a combination of staff are used for patient scheduling. Respondents that selected otherlisted Administrative Assistant, and other director or manager positions.

Position That Performs Patient Scheduling

17%21%

25%

33%

3%

Clinicians dotheir own

In-office,non-clinical staff

In-office, clinicalschedulers / supervisors

Combination Other

Use of Scheduling-based Software by Ownership

Respondents

Hospital-based 60.9%

Hospital Affiliated 83.3

Freestanding 83.2

Government 68.2

Use of Software-based Scheduling and MedicareProfitability Quartiles

29% 28%25%

19%



Position That Performs Patient Scheduling by Legal Status

OASIS Review

An expert review of OASIS can help achieve competence in optimal OASIS practices. Having the clinicalmanager directly supervising OASIS data collection behavior and interpretation, at the bedside, is of highvalue; partnered with a dedicated, quality-based review. Slightly under half (42%) of respondents useda clinical supervisor to review the Start of Care OASIS before the RAP was dropped and submitted forpayment. Twenty percent of agencies used a QI/PI clinician, followed by an RN with no otherresponsibilities (14%), and other (15%). Positions under other performing review included Director ofNursing and Team Leader positions.

Less than one percent (0.7%) of respondents did not have any type of review.

Respondents were asked how often they conduct external audits of the accuracy and quality of theOASIS assessments. Of respondents that conduct external audits on their OASIS assessments, 65percent do so annually. Less than ten percent (9%) conduct and audit every two years or more, and 26percent do not do an external review.

In terms of quality, agencies that performed an external audit at least every two years or more scoredhigher on quality scores, averaging 60.8. Agencies that did not do an external audit scored an average of56.1 for quality.

Although there was no statistically significant difference in the frequency of audits and profitability,agencies had a higher average (6.3) for the Medicare margin that performed an audit yearly or everytwo years or more. Agencies that did not do an audit averaged 2.2 for the Medicare margin.

15.3%

22.3%27.7%

31.7%

3.0%

24.7%

16.7% 16.7%

38.7%

3.3%

Clinicians do their own In-office, non-clinicalstaff

In-office, clinicalschedulers / supervisors

Combination Other



HospiceMore agencies are forming hospice programs as 22 percent ofrespondents indicated they currently have one, an increase from 18percent of respondents in our 2014 study. Change was seen infreestanding agencies with a 43 percent increase, and governmentagencies with a 39 percent decrease. Consistent with the nation,the number of for-profit agencies with hospice programs areincreasing while we’ve seen a decline in the number nonprofits. Ofthe respondents with a hospice program, just under one half (46%)were nonprofits, compared to more than half (67%) of nonprofitswith a hospice program in our previous study (FA 2014). Withinthose agencies with a hospice program, for-profit agencies (54%)showed an increase from 33 percent in our previous study (FA2014).

Also consistent with our previous study, more than half (62%) ofhospice programs contracted with a medical director versus havinga medical director employed by the program. Only 7 percent useda combination of employed and contracted.

One quarter (25%) of hospice programs had an average caseloadfor a hospice clinician of 12 to 13 patients, and one quarter (25%)had an average caseload of 9 or less patients. Respondentsselecting the other category (3%) reported hybrid approaches, thatthe caseload varied, and a range other than listed.

Average Caseload of Full Time Hospice Clinician by Percent of Respondents

26%

18%

25%

17%

12%

2%

9 or less 10-11 12-13 14-15 16 or more Other

Respondents with Hospice Program by Ownership

2014 2016

Hospital-based 39.1% 40.0%

Hospital Affiliated 39.7 38.2

Freestanding 12.6 18.0

Government 15.0 9.1

Medicare hospice spending rose to $15.8billion in 2015 and served nearly 1.4million beneficiaries. The variation inspending per hospice patient ranged from$4,683 in North Dakota to $18,106 inCalifornia.

“Regions with higher average spendingper patient often have more hospicepatients with dementia diagnoses,compared to areas with lower per patientspending. Conversely, regions with lowerspending tend to have more hospicepatients with cancer diagnoses than areaswith higher per patient spending.”

“Patients with cancer diagnoses have thefewest average days of hospice care perpatient, whereas those with dementiadiagnoses have the most average days.”

When the Centers for Medicare andMedicaid Services (CMS) publisheddementia symptom diagnoses they wouldno longer accept, hospice spending ondementia decreased.

Health Affairs, October 2016, 35:10

DATAWATCH. Medicare Hospice Spending Hit$15.8 Billion in 2015, Varied By Locale,Diagnoses by John Hargraves and NiallBrennan

DOI: 10.1377/hlth.2016.0650 HEALTH AFFAIRS35, NO. 10 (2016): 1902-1907

Medicare Hospice


The caseload for a hospice clinician varied by an agency’s legal status, particularly for 9 or less patients.

Average Caseload of Full Time Hospice Clinician by Percent of Respondents and Legal Status

The majority (45%) of respondents had 4 visits per day as the average expectation for a full time hospiceclinician. Approximately 40 percent require 5to 6 visits or more per day.

Average Visit Expectation for a Full TimeHospice Clinician

Respondents

3 or less visits per day 13.9%

4 visits per day 45.3

5 visits per day 28.3

6 or more visits per day 9.1

Other 3.4

Home health agencies with hospice programs expect to see growth in the future, consistent with our2014 study. When asked if the agency expected their hospice census to grow, 82 percent respondedyes, an increase from 77 percent in 2014’s study. While our previous study (FA 2014) showed 22percent of agencies expected to stay the same, in 2016 only 10 percent thought they would stay thesame.

Only 6 percent of agencies use telehealth with their hospice program.

Palliative CareThe continuum of health care at home is ‘learning’ how toserve advanced illness management and palliative care.Added supports to the home health team to meet thepalliative care needs require a bridge into end of life care.

This study included 24 percent of respondents thatprovided palliative care. Of those respondents, 78 percentare in an urban location and 22 are located in rural areas.

Respondents with palliative care provided through hospice had the lowest scores in ED use.

30%

20% 20%

14% 13%

3%

10%

20%

33%

26%

8%4%

9 or less 10-11 12-13 14-15 16 or more Other


Agencies with Hospice Program by Years inOperation

Respondents45 years or more 7.7%

25 to 44 years 29.2

19 to 24 years 16.7

13 to 18 years 8.9

6 to 12 years 21.4

5 years or less 16.1

Provide Palliative CareRespondents

Yes, through home health 15.6%

Yes, through hospice 6.7

Yes, partner with anoutside organization’spalliative care program

1.6


Private DutyThirty-six percent of respondents reported having a private duty program. Within nonprofits, 42percent have a private duty program, and 34 percent of for-profits do.

Most (76%) agencies that provide private duty are located in an urban area. Sixty percent ofrespondents with a private duty program also have a hospice program.

Respondents with a private duty program had a slightly higher overall profit margin than those that didnot have a program. In terms of quality, 66 percent of agencies are in the upper two quartiles for HomeHealth Compare ranking.

Sixty-six percent of respondents with private duty reported that they receive 25% or less of theirrevenues from their private pay customers. However, 22.3 percent receive 51% or more of revenuesfrom private pay customers.

Only 1.9 percent of respondents have their private duty program as part of the health reform initiativesthat they are involved in.

For respondents with a private duty program, 75 percent find it somewhat to very difficult to hire privateduty aides and 81.8 percent find it somewhat to very difficult to hire field nursing staff.

Private Duty: Average Number of Actual Routine Visits per Day Expected from Full Time Nursing Staff

The primary approach used by private duty programs to compensate field staff RNs was evenly dividedbetween salary (30.5%), per visit rate (30.5%), and hourly (30.8%). However, compensation for LPNswas most often by an hourly rate (42.9%), followed by the per visit rate (34.1%) and salary (19.8%).Nearly opposite, 48.5 percent use the per visit rate for the primary approach for physical therapists,followed by 24.3 percent using a salary approach, and 16.5 percent using an hourly rate.

Nearly half, 49 percent, of respondents with a private duty program meet their nursing productivity goal90 to 100% of the time, with 37 percent meeting their productivity goal 75 to 90% of the time. Overhalf, 56 percent also met their productivity goal for full time physical therapy staff 90 to 100% of thetime, however this is less the rate of those without a private duty program (65%).

The biggest challenge for 64 percent of respondents with private duty programs was staffing; includingrecruiting, hiring, retention, and turnover. For-profits and nonprofits both mentioned staffing as theirnumber one challenge, and they agreed on their second challenge of cost, affordability, andreimbursement.

4.1%

6.1%

42.9%

43.9%

3.1%

8 or more

7

6

5

4 or less


WorkforceThe U.S. Bureau of Labor Statistics projects 1.1 million new RNs willbe needed through 2022 as more than 500,000 RNs retire and healthcare services expand. Although all states have a projected growthrate of at least 11 percent for RNs’ employment, the fastest growth isprojected in the West and Mountain states. The slowest growth isexpected in the Northeast and Midwest.

We saw a 77 percentage increase from our 2014 study inrespondents that found hiring field nursing staff very difficult. Therewas a decrease in respondents that found hiring field nursing staffsomewhat or not difficult.

More than half therespondents from Regions2 (67%) and 10 (52%)found it very difficult tohire field nursing staff.Regions 2, 6, and 9 hadthe highest percentagesfor somewhat difficult andvery difficult combined.

Half the respondents(50%) from both Regions 1and 10 rated hiring physical therapists as very difficult. Only 29percent of respondents from Region 7 rated hiring as very difficultand 38 percent found hiring physical therapists not difficult.

Regions 8 (48%) and 10 (52%) found hiring clinical supervisors verydifficult. Only 29 percent of respondents from Region 6 and 28percent from Region 7 found it very difficult.

Senior level leaders were very difficult to hire according to 40percent of Region 8 respondents. More than half (57%) of Region 10respondents found it somewhat difficult and only 10 percent found itnot difficult to hire senior level leaders.

Only 9 percent of respondents in Region 3 found it very difficult tohire quality improvement staff, while 55 percent found in somewhatdifficult.

Private duty aides were very difficult to hire according to 44 percentof Region 5 respondents. Over half (64%) of Region 10 respondentsfound private duty aides not difficult to hire. Sixty percent of Region9 also found private duty aides not difficult to hire.

Region StatesI CT, ME, MA, NH, RI, VTII NJ, NY, PR, VIIII DE, DC, MD, PA, VA, WVIV AL, FL, GA, KY, MS, NC, SC, TNV IL, IN, MI, MN, OH, WIVI AR, LA, NM, OK, TXVII IA, KS, MO, NEVIII CO, MT, ND, SD, UT, WYIX AZ, CA, HI, NVX AK, ID, OR, WA

The efforts being led by schools ofnursing and other stakeholders toaddress the nursing shortage andmeet patient care needs areproducing results. Even thoughprogress is being made, the U.S. isstill struggling to prepare sufficientnumbers of RNs with advancededucation to meet employerdemands as new models of carecontinue to emerge.

Though the supply of RNs isprojected to increase to 3,849,000by 2025, the demand for RNs basedon current utilization patterns isonly projected to grow to3,509,000.

RN supply is projected to exceeddemand in 34 states, however, 16states will likely experience anursing shortage through 2025,including Alaska, Arizona,California, Colorado, Georgia,Hawaii, Maine, Maryland,Montana, Nevada, New Mexico,North Carolina, Oregon, RhodeIsland, South Carolina, andWashington.

American Association of Colleges ofNursing. Talking Points. HRSA Reporton Nursing Workforce Projectionsthrough 2025. Last Update: February22, 2016.

Nursing Workforce Projections


Difficulty in Hiring Staff by Position Compared to Previous Study by Percentage of Respondents

27.3

19.5

54.2

48.1

18.4

32.5FieldNursing

Staff

Not Difficult Somewhat Difficult Very Difficult

26.4

30.7

32.5

34.4

41.1

35.0PhysicalTherapists

31.2

28.1

42.2

37.6

26.6

34.3ClinicalSupervisors

33.9

30.3

38.0

35.7

28.1

34.1SeniorLevel

Leaders

37.7

42.3

31.9

30.6

30.4

27.2CertifiedCoders

40.7

42.8

40.7

41.3

18.6

15.9QualityImprovement

Staff

41.0 29.0 29.9Private

DutyAides

2016

2014

2016

2014

2016

2014

2016

2014

2016

2014

2016

2014

2016Position not surveyed in 2014


Employee EngagementOut of all survey respondents, 71 percent do an annual employeesatisfaction survey, 6 percent do a survey every two years, and 3percent do a survey every three years or more. Of the remainder, 9percent do a formal satisfaction or employee engagement program ona schedule other than above, and 11 percent do not do any type ofsurvey.

More nonprofit agencies (95%) do a formal employee satisfactionsurvey than for-profits.

Slightly more for-profits (72%) do an annual survey than nonprofits(68%).

Agency respondents who performed a formal employee engagementsurvey rated higher on Home Health Compare quality scores, with thehighest scores belonging to agency respondents that conduct a surveyevery two years or more often.

Employee Engagement Surveys and Quality Quartile Ranks

50%55%

63%58%

50%45%

38%42%

Do not do survey Each year Every two years Every three yearsor more

Highest Lowest

www.fazzi.com


New Health Care Reform ModelsThe Medicare home health care value-basedpurchasing (VBP) model began in 2016. The homehealth agencies in nine states (Arizona, Florida,Iowa, Maryland, Massachusetts, Nebraska, NorthCarolina, Tennessee, and Washington) mustimprove or maintain high quality performance toreceive a bonus payment. Agencies with lowscores or poor improvement in performance willreceive lower payments based on competitionamong all agencies in their state. By 2022,agencies in the VBP pilot will have +/- 8 percent ofMedicare payments at risk which MedPAC believes“should ensure that even agencies with relatively high margins have an incentive to maintain or improvequality.” MedPAC has also recommended to Congress that the HHVBP program focus on rewarding“attainment (or the absolute level of performance) and not improvement” as agencies with the bestquality and attainment-based scoring should receive the greatest rewards.2

As a result of the new VBP initiative which impacts nearly 100 percent of the agencies in the nine states,more agencies (58%) are involved with at least one health care reform model compared with ourprevious study (48%, FA 2014). This percentage will increase as more states begin initiating VBP efforts.Of those agencies involved in at least one health care reform model, the majority (48%) are involved inVBP, followed by the bundled payment model (47%).

The other category of health care reform involvement included Prior Authorizations for MedicarePatients, Preferred Provider Agreements, Total Joint Replacement, and other partnerships.

For agencies involved in health care reform models, 45 percent are involved in more than one model.Nearly one quarter (24%) were involved in two models.

Of the for-profits involved in health care reform models, 16 percent are involved with ACOs, and 28percent of nonprofits have partnered with an ACO. Forty-one percent of hospital-based agencies areinvolved with VBP, and 8 percent are part of a Medicare Shared Savings Program (see table below).

Participation in Health Care Reform Modes by Legal Status and Agency Type

Legal Status ACOs CJRProgram

Pt-CtrdMedicalHome

BundledPayment

Value-based

Purchasing

MedicareSharedSavings

Other

For-profit 15.9% 10.8% 4.2% 23.9% 24.3% 5.9% 2.5%Nonprofit 27.6 20.9 13.6 33.6 35.7 8.2 4.2Hospital-based 29.2 17.3 18.2 35.7 41.1 8.0 2.7Hospital Affiliated 19.7 36.0 12.3 39.1 36.3 7.4 4.4Freestanding 17.4 10.6 4.3 24.1 23.8 5.8 2.7Government 7.6 3.8 3.8 12.3 34.5 12.6 3.8

2 Home health care services: Assessing payment adequacy and updating payments. Medicare Payment AdvisoryCommission. Washington, DC. Report to the Congress. Medicare Payment Policy. March 2016.

Involvement in Health Care Reform

Model Respondents

Value-based purchasing 26.4%

Bundled payment 25.8

ACOs 18.2

CJR 12.8

Medicare shared savings 6.3

Pt centered medical home 6.0

Other 3.4


Increases in participation for the bundled payment model occurred for all agency types, whileparticipation varied for ACOs and Patient-Centered Medical Home involvement from our previous study(FA 2014).

Participation in Health Care Reform by Model, Agency Type, and Year

ACOsPatient-Centered

Medical Home Bundled Payment

Agency Type 2016 2014 2016 2014 2016 2014

Hospital-based 42.3% 20.3% 26.4% 17.3% 51.8% 6.0%Hospital Affiliated 27.7 35.8 17.3 29.9 55.2 20.1Freestanding 33.1 16.2 8.2 8.7 45.8 4.9Government 13.3 15.4 6.6 15.4 21.4 5.0

Involvement in health care reform models continues to show high quality scores. Although it is notcertain whether their involvement is due to the fact that they have higher quality, or if higher quality is aresult of involvement.

Percentage of Respondents in Health Care Reform and Quality Quartiles

Respondents were asked what they believed were the two most important selling points whichdemonstrated that their agency brings value to the partnership. Mentioned most frequently was qualityof patient care followed by lowering hospitalizations or readmissions. Second mentions included patientsatisfaction scores followed by staff (experience, quality, and retention). The top six of all responses(first and second mentions combined) are listed in the table below.

Selling Points: All Responses Combined

Respondents

Quality of patient care 21%Decreasing number of hospitalizations or admissions 16STAR Ratings 16Patient satisfaction/CAHPS scores 16Outcomes 13Staff experience, quality, retention 8

59%

74%63% 58% 58%

65%

39%27%

37% 42% 42%35%

ACOs CJR Pt MedicalHome

BundledPayment

VBP Shared Savings

Highest & Mid-High Mid-Low & Lowest


Respondents not currently involved in a health care reform model were asked why. It appears agenciesare willing to be part of a model but 60 percent haven’t had an opportunity.

Financial Risk

Other than value-based purchasing, 17 percent of respondents indicated they accept financial risk and 7percent were unsure. We explored the responses on the effect of the IMPACT Act from theserespondents, and while 41 percent felt the Revised Medicare CoPs would have a negative impact, only28 percent of respondents not indicating financial risk felt it would have a negative impact. The samewas true regarding audits from Medicare MAC/RAC contractors, where 73 percent of those at financialrisk felt a negative impact compared to the respondents not at financial risk at 60 percent.

More than half of those respondents (64%) were for profits, and 70 percent were located in an urbanarea. Slightly over half (53%) were in the smallest revenue category.

Respondents That Felt at Financial Risk by Revenue Category

4%

6%

11%

26%

53%

$20M+

$10M-$20M

$5M-$10M

$2M-$5M

$500K-$2M

Reason Not Involved in Health Care Reform ModelRespondents

No infrastructure 7.9%

Not ready 19.9

No opportunity 59.9

Tried but haven’t been successful 12.3


Future ConcernsMedicare Regulations

Respondents were asked what impact (positive, negative, or none)did they feel changes in Medicare regulations would have on theiragency in the coming year. Respondents, nearly three-quarters(67%), felt that STAR Ratings will have a positive impact on theiragency in the next year. Medicare Prior Authorization andMAC/RAC audits received the highest responses for a negativeimpact, while half (50%) of respondents were unsure how theIMPACT Act would affect them.

Percentage of Respondents by Model and Impact Rating

Positive Negative No Impact Unsure

Value-basedPurchasing 32.4% 20.1% 25.1% 22.3%

Star Ratings 67.4 11.1 14.3 7.3

IMPACT Act 19.2 9.4 21.5 49.8Medicare PriorAuthorization of HHServices Demo

14.0 63.4 13.4 9.1

Revised MedicareConditions ofParticipation

27.5 27.6 24.2 20.8

ICD-10 42.7 18.0 33.5 5.8

Medicare MAC/RACAudits 15.1 59.6 16.4 8.9

OASIS C-2 29.6 15.2 35.9 19.3

Comprehensive CJR 41.9 13.6 24.1 20.4

Key Concern

The single biggest issue of concern related to an agency’s futurewas reimbursement for both for-profits and nonprofits. The secondmost frequent response by for profits was Medicare changes andregulations. Nonprofits were concerned with financialstability/survival.

Our previous study (FA 2014) reported the top concerns for nearlyhalf of the respondents were Medicare reimbursement cuts andincreasing regulatory mandates.

The Improving Medicare Post-AcuteCare Transformation Act of 2014(IMPACT Act) mandates standardizedassessment-based data elements forpost-acute care in order to facilitatecare coordination, exchange data, andimprove beneficiary outcomes. TheIMPACT Act also aims to have thestandardized data be used to reformpost-acute care payments whileensuring beneficiaries have access tothe most appropriate care setting.MedPAC has recommended features ofa unified PAC PPS to Congress andestimates that profitability would bemore uniform across different types ofstays or patients, and that a PAC PPSwould also redistribute payments fromhigher cost settings and providers tolower cost settings and providers. ThePAC PPS will also create paymentconsequences for failure to reportstandardized assessment data, quality,resource use and other measures.Home health agency submission ofquality of resource use measures arescheduled to begin CY 2017 andsubmission of standardized patientassessment data beginning CY 2019.

The prototype payment design is dueJune 2023.

Executive Summary. Report to theCongress: Medicare and the Health CareDelivery System. Medicare PaymentAdvisory Commission. June 2016.

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014-and-Cross-Setting-Measures.html

IMPACT Act


Future Consolidation

Respondents were asked if they wereconsidering any changes in the next twelvemonths. The majority intend to stay thesame. It is interesting to note that nearly 20percent believe that they will be involved ina merger or acquiring another agency. Withthe understanding that there are more than12,000 home care agencies and another4,500 hospices, we potentially are seeing asignificant change in agency ownership and size.

Of those who responded that they may be acquired, 40 percent were nonprofits.

More respondents from Region II were considering merging or affiliating with another agency (19%),acquiring another agency (19%), or being acquired (6%) than any other region. Overall, Region 8 had themost respondents selecting stay the same (79%) and Region 2, the least selecting stay the same (31%).

Respondents by Consideration and Legal Status

For Profit NonprofitMerging or affiliating with another agency 3.0% 6.0%Selling 4.7 0.0Acquiring another agency 11.1 9.3Being acquired 1.0 2.6Closing 0.3 0.7Stay the same 69.6 73.5Unsure 10.1 7.9

Respondents by Consideration and Ownership

Hospital-based HospitalAffiliated Freestanding Government

Merging or affiliating withanother agency 4.7% 0.0% 3.7% 8.7%

Selling 0.0 1.9 4.3 4.3Acquiring another agency 3.1 11.1 11.8 4.3Being acquired 1.6 1.9 1.2 0.0Closing 0.0 1.9 .3 0.0Stay the same 84.4 75.9 68.6 73.9Unsure 6.3 7.4 10.1 8.7

Changes Considered Within the Next Year

RespondentsMerging or affiliating with another agency 3.6%Selling 3.7Acquiring another agency 10.8Being acquired 1.3Closing .4Stay the same 70.5Unsure 9.6


AccreditationMore than half (55%) of study respondents areaccredited. Of those that are not, 19 percent plan to seekaccreditation next year. Agencies appear to be satisfiedwith their accrediting organization as 91 percent plan tocontinue with the same organization. Only 4 percent ofthose who intend to continue accreditation will do sowith a different organization.

More than half (55%) of those agencies with accreditationranked in the top two highest quartiles on Home HealthCompare.

We found accredited respondents to have a higheraverage for their overall operating margin than respondents that were not accredited. Medicaremargins also rated slightly higher for accredited respondent agencies compared to respondents notaccredited.

Accredited Respondents by Legal Status

79.7%

20.3%


Accredited respondents had ahigher quality percentile meanthan respondents that were notaccredited.


Areas of InterestPredictive Analytics

Agencies can control their quality outcomes, quality outcomes thatwill matter and will eventually affect how every home healthagency in the country is reimbursed. Predictive analytics can helpan agency make better decisions to improve patient care, reducehospital readmissions, manage chronic disease, and increaseperformance or lower costs within clinical, financial, andadministrative divisions. Home health is just beginning to learn touse predictive analytics in clinical operations and we anticipate thiswill grow.

To improve patient care, 35 percent of survey respondents usepredictive analytics in creating a treatment plan. Those usersmay be more advanced users of technology as 70 percent ofthose respondents also have the capability to receive electronichealth records, 24 percent have a telehealth system, and 55percent have had the telehealth system for more than fiveyears. Also, 86 percent of those using predictive analytics usean OASIS scrubber, 65 percent also have an on-line trainingsystem, and 89 percent use a software-based schedulingsystem.

Of the users of predictive analytics, 84 percent are for-profitsand 16 percent are nonprofits.

Of all for-profits, 37 percent use predictive analytics, and 27percent of all nonprofits do.

Respondents Using Predictive Analyticsby Revenue Category

Respondents

$500K - $2M 54.4%$2M - $5M 26.6$5M - $10M 10.4$10M-$20M 5.6$20M+ 3.0

“Delivering higher quality, lower cost carerequires an analytics-driven approach thatsegments patient populations and deliverstailored care management solutionsbased on specific needs. Achieving thisrequires a robust infrastructure oftechnology and clinical skills, which willtake time to build and operationalize.Providers should consider partnershipsand alliances to acquire both.”

Top health industry issues of 2017. A year ofuncertainty and opportunity. PwC HealthResearch Institute. December 2016

Predictive Analytics


Other Countries

Just over half (57%) of respondents saw value in learning how othercountries provide health care at home related services. Receivingthe most mentions, 25 percent would like to learn more aboutCanada, followed by United Kingdom (15%).

Social Media

The two main vehicles of social media for business related activitiesused by respondents were Facebook (45%) and LinkedIn (33%).Twitter ranked third with 12 percent of respondents, followed byYouTube (9%), and Podcast (6%). Other media channels includedthe company or organization website.

Use of Facebook for business related activities was most common inCMS Region 7 (IA, KS, MO, NE). LinkedIn use was seen more in CMSRegion 1 (CT, MA, ME, NH, VT, RI).

Use of Twitter, Podcast, and You Tube was seen by most users inRegion 2 (NJ, NY, PR).

The elderly and homebound are usingFacebook, Skype, and Twitter to beconnected with family members and tofollow news more so every year.According to a report published by thePew Research Center, use of Facebook foronline adults aged 65 and older increasedto 62% in 2016 from 48% in 2015.

Although the elderly tend to be moresensitive to privacy concerns, using socialmedia has helped educate seniors in theuse of technology and has made themmore comfortable with sharinginformation on the internet. Seniors arealso receiving support in their home forhealth issues as more physicians providesocial media pages and online technologyfor patient information.

PewResearchCenter. Social Media Update2016. November 11, 2016.http://www.pewinternet.org/2016/11/11/social-media-update-2016/

Social Media and Seniors


Methodology

Criteria for Participation The overall population of home health agencies selected to participate in thestudy was defined by the following criteria obtained from the Medicare-certified cost report databaseand Home Health Compare:

1. Reported annual revenue greater than $500,000 based on the most recent Medicare CostReport data released in January 2016.

2. Reported ownership, legal, and geographic status in Medicare cost report data. Ownership andlegal status were also verified in the survey.

3. Reported results for the Home Health Compare Quality of Outcome Care measures for the datacollection period July 2014 through June 2015 released January 2016. For comparisonpurposes, Home Health Compare Quality of Outcome Care measures were also used for thedata collection period April 2014 through March 2015 released October 2015.

4. Reported Home Health Compare rates for ACH and ED Use.The total sample frame of agencies meeting the above criteria was 7,767.

Determining Sample Size Because the totalpopulation list identified agencies by each ofthe above characteristics (with the exceptionof hospital affiliated agencies), sample sizeand quotas were determined. Agencies werecategorized into five revenue and ownershipcombinations for the number of contactsneeded to achieve a representative samplefor each category. Random samples were drawn from each combination of the total population of 7,767to be studied. As cost report data does not signify ownership distinction between hospital-based orhospital affiliated, agencies surveyed were specifically asked for clarification on ownership status to reportvalid results on each group. The resulting percentage was used to determine the representative sampleultimately used for hospital affiliatedagencies.

Survey Administration VuPoint Research ofPortland, Oregon attempted telephonecontacts to each of the potentialrespondents in the sample frame.Telephone surveys were also made toagencies who volunteered on the study’sweb survey. Volunteer agencies totaled 270.The majority of these agencies were in theinitial sample list and were disqualified as duplicate. Surveys were administered by telephone and werecompleted over a ten week period beginning in late May 2016. Of the 1,568 agency representativessuccessfully contacted via telephone, 759 completed the survey. Four volunteer respondents did notmeet the revenue criteria and were considered convenience samples only. The margin of error on the751 completed surveys for all respondents is +/- 3.5 percentage points at the 95% level of confidence.The margin of error for respondents by the five revenue categories is +/- 4.0 percentage points.

Universe Population and Sample SizePopulation Sample Size

Group Count % Count %$500,000-$2M 4,004 51.6 400 52.6

$2M-$5M 2,205 28.4 199 27.8

$5M-$10M 907 11.7 92 11.4

$10M-$20M 422 5.4 32 5.2

>$20M 229 2.9 28 2.9

Margins of Error

Group Sample Size Plus or Minus% Points

All Respondents 751 3.5Respondents by Revenue

$500,000-$2M 400 3.5$2M-$5M 199 4.0$5M-$10M 92 3.5$10M-$20M 32 4.0>$20M 28 3.5


Survey Analysis Survey response data was analyzed using the SPSS statistical software. Because thevolume of completed surveys needed to achieve a representative sample for each combination was notin proportion to the number of agencies in the same combination of the total population the samplewas drawn from, results were weighted so that completed surveys by set combination matched theirpresence in the population. Weighting method was reviewed by the Department of Mathematics andStatistics at University of Massachusetts, Amherst, and statistician Gladys Casas Cardoso PhD. Statisticalsignificance as reported was provided by Vladimir Novkov, researcher at Neris Analytics Limited andnoted in italics in the Notes on Statistical Analyses section.

Cross tabulations of survey results by quality and profitability performance groups were the primarysource of findings, although multiple segmentations of respondents by revenue, geographic area,ownership, legal status, and other characteristics were also analyzed. Results are reported percentageswith statistical differences noted with the mean (M) or average value, standard deviation (SD), or meanrank in the Notes on Statistical Analyses section.

Quality Distribution in the Home Health Comparemeasures for quality ranking was determined by thepopulation and calculated into a composite scorepercentile within a range of 0 (lowest quality) to 99(highest quality). The quartiles for ranking resultedin; score of 75 to 99 = Highest 25%, score of 51 to 74= Mid-high 25%, score of 25 to 50 = Mid-low 25%,and score of 0 to 24 = Lowest 25%. Agencies weregraded for quality using the composite percentilescore to provide a mean rank. Home Health Compare measures were downloaded from CMS in January2016 with a data collection period for measures from July 2014 to June 2015.

Profitability Profitability ranking was determined by agency net income as reported in the agencyrespondent’s most recent cost report data that aligned with the quality data collection periods. Fromlowest (negative) net income to highest (positive) net income, the quartiles for ranking profitabilityresulted in the most profitable agencies in the highest 25 percent ranking and the least profitableagencies in the lowest 25 percent ranking.

Profitability Statistics for Study Respondents

MedicareMargin

Overall OperatingMargin

Mean 5.4304% 0.6746%Median 11.1187% 2.3503%Std. Deviation 33.97454% 25.11113%Skewness -2.652 -3.266Std. Error of Skewness .090 .090Minimum -220.93% -212.02%Maximum 98.48% 81.26%

Quality Percentile Statistics for Study RespondentsJanuary 2016 Percentile

Mean 54.02Median 55.00Std. Deviation 28.149Skewness -.108Std. Error of Skewness .090Minimum 2Maximum 99


Legal Status Legal status of respondents was 80percent for-profit agencies and 20 percentnonprofits. MedPAC reported Medicare-certifiedhome health agencies in 2014 as 89 percent for-profit, and 11 percent nonprofit3.

The legal status of the facility had a significanteffect on all measures of quality. For-profitagencies had significantly lower composite scoresand scored on the lowest percentile of all threegroups.

Location Urban / Rural MedPAC reported 85percent of home health agencies as urban and 15percent as rural in 20144. Study respondents weresimilar in urban and rural location.

Results showed that urban agencies hadsignificantly lower ED use score than ruralagencies. However, there were no statisticallysignificant differences in the other measures ofquality.

The location of the facility had no significant effect on the two profitability measures.

3 MedPAC. A Data Book: Health care spending and the Medicare program, June 2016.4 Ibid.

Percentage of Respondents by Medicare and Overall Operating Profitability Quartile

Margin HighestProfitability

Mid-HighestProfitability

Mid-LowestProfitability

LowestProfitability

Hospital-basedMedicare 6.2% 4.6% 16.9% 72.3%Overall 36.5% 9.5% 7.9% 46.0%

Hospital AffiliatedMedicare 23.6% 20.0% 16.4% 40.0%Overall 22.2% 20.4% 24.1% 33.3%

FreestandingMedicare 29.9% 29.7% 25.7% 14.8%Overall 24.4% 30.0% 27.8% 17.8%

GovernmentMedicare 22.7% 31.8% 18.2% 27.3%Overall 27.3% 13.6% 22.7% 36.4%

TotalMedicare 27.1% 26.8% 24.0% 22.0%Overall 25.3% 27.1% 25.7% 21.9%

Participating Agencies by Ownership and Legal Status


Hospital-based 1.0% 39.1%Hospital Affiliated 3.5 21.9Freestanding 93.6 31.8Government 1.9 7.3

Participating Agencies by Ownership and LocationUrban Rural

Hospital-based 63.6 36.4Hospital Affiliated 73.7 26.3Freestanding 81.6 18.4Government 59.1 40.9Total 78.8 21.2


Star Ratings The quality of patient care star rating as reported on Home Health Compare was also usedas an indicator of an agency’s performance compared to other agencies from one and one-half stars(below average) to five stars (highest rating). Star Ratings were downloaded from CMS in January 2016.

Participating Agencies by Star Rating Compared to Nation

Acute Care Hospitalization Each measure for individualstudy respondents was compared to the national averageof the Acute Care Hospitalization (ACH) measure of 16.0percent as reported on Home Health Compare in January2016. Groupings were in quartiles and above and belownational average. CMS defines the Acute CareHospitalization measure as how often home health patientshad to be admitted to the hospital. ACH measures weredownloaded from CMS in January 2016 with a datacollection period from April 2014 to March 2015.

Urgent, Unplanned Care in the Emergency Room Measuresfor individual study respondents were compared to thenational average for Urgent, Unplanned Care in theEmergency Room (ED Use) of 12.3 percent as reported onHome health Compare in January 2016. Groupings were inquartiles along with a rating of above or below nationalaverage. CMS defines Emergency department use withouthospitalization as how often patients receiving home healthcare needed any urgent, unplanned care in the hospitalemergency room – without being admitted to the hospital.ED Use measures were downloaded from CMS in January2016 with a data collection period from April 2014 to March2015.

Chain Agencies were matched to their cost report to determine if they were part of a chain. Weidentified 22 percent of respondents as being part of a chain, and 65 percent were not. The remaining13 percent left this field blank in the cost report and were not used in chain comparisons.

ACH Statistics of Study RespondentsJanuary 2016 ACH

Mean 15.622Median 15.738Std. Deviation 3.7384Skewness -.223Std. Error of Skewness .091Minimum .9Maximum 27.5

ED Use Statistics of Study RespondentsJanuary 2016

ED Use

Mean 12.370

Median 12.300

Std. Deviation 3.8773

Skewness .481

Std. Error of Skewness .091

Minimum .9

Maximum 33.0

1%

9%

16%

23% 24%

17%

7%3%2%

9%

16%

23%22%

16%

8%

3%

1.5 Stars 2.0 Stars 2.5 Stars 3.0 Stars 3.5 Stars 4.0 Stars 4.5 Stars 5 Stars

Study Respondents Nation


Agencies that are part of a chain have significantly higher composite and percentile score. However, theyalso have significantly higher hospitalization rate and ED use rates.

Whether the facility is a part of a chain or not had no significant effect on the measures of profitability.

Years in Operation The respondent’s Medicarecertification date as reported in Medicare cost reportswas used as the initial start date of agency operation.

State Representation Agency respondents were from48 U.S. states along with District of Columbia andPuerto Rico. Regional representation of the tenstandard federal regions (established by the Office ofManagement and Budget) is shown below.

Participating Agencies by StateAlabama 7 Louisiana 16 Ohio 36Arizona 4 Maine 1 Oklahoma 23Arkansas 10 Maryland 4 Oregon 6California 39 Massachusetts 16 Pennsylvania 26Colorado 11 Michigan 29 Puerto Rico 1Connecticut 11 Minnesota 16 Rhode Island 3Delaware 2 Mississippi 4 South Carolina 4DC 2 Missouri 15 South Dakota 7Florida 71 Montana 2 Tennessee 14Georgia 8 Nebraska 9 Texas 127Hawaii 2 Nevada 6 Utah 12Idaho 5 New Hampshire 5 Vermont 1Illinois 38 New Jersey 3 Virginia 19Indiana 22 New Mexico 10 Washington 17Iowa 25 New York 13 West Virginia 5Kansas 11 North Carolina 14 Wisconsin 15Kentucky 3 North Dakota 1

States Represented by Region

RegionNumber of

ParticipatingAgencies

States Represented

I 37 CT, ME, MA, NH, RI, VTII 17 NJ, NY, PRIII 58 DE, DC, MD, PA, VA, WVIV 125 AL, FL, GA, KY, MS, NC, SC, TNV 156 IL, IN, MI, MN, OH, WIVI 186 AR, LA, NM, OK, TXVII 60 IA, KS, MO, NEVIII 33 CO, MT, ND, SD, UTIX 51 AZ, CA, HI, NVX 28 ID, OR, WA

Participating Agencies by Years in OperationRespondents

45 years or more 3.1%25 to 44 years 17.719 to 24 years 13.813 to 18 years 12.66 to 12 years 30.25 years or less 22.5


Notes on Statistical Analyses

Back Office Technology/Billing Systems

A Kruskal-Wallis test showed that there was a statistically significant difference on the quality percentilescore depending on the number of years agencies have used their back office software. Agencies thathave used their system for less than two years scored a lower mean (M = 52.22, SD = 27.19) on qualitythan agencies that have used their system for more than five years (M = 58.48, SD = 27.44). In addition,agencies that responded with the two to five year category had the lowest mean (M = 48.90, SD = 28.78).

Electronic Health Records

Respondents that had the capability to receive EHR information ranked higher in the quality compositescore than respondents that did not. Also, the mean (M = 12.54, SD = 3.88) for EHR users was lower(better) for ED use than those that did not have that capability (M = 13.13, SD = 3.599).

EHR users had a higher mean (M = 8.79, SD = 31.84) on Medicare margin than non-users (M = 1.63, SD =34.15).

Telehealth

Results show that the presence of telehealth has a significant effect on quality. Quality percentile scoresfor telehealth users averaged higher (M = 63.52, SD = 26.02) than agencies that do not use telehealth (M= 51.35, SD = 28.21). Quality percentile scores were also higher (M = 71.70, SD = 21.73), but notsignificant, for agencies that have 51 to 100 telehealth units in use than those that had less than ten inuse (M = 58.80, SD = 28.45).

The presence or not of telehealth services did not have a significant effect on Medicare or overallprofitability.

Outsourced Coding

Results from the T-test show that agencies that used outsourced coding in the last 12 months hadsignificantly higher quality composite scores and percentile position than those that did not.

Field Nursing

Results show that the primary staffing approach has a significant statistical difference on all measures ofquality. In addition, Contract Staff were shown to have significantly lower results on the composite andpercentile scores than all other staffing approaches. Contract Staff did not differ significantly than theother types of staffing in hospitalization rate. A Kruskal-Wallis H test showed that there were nostatistically significant differences in the results on the two profitability measures caused by differentstaffing approaches.

Study findings on quality percentile scores showed full time RN (M = 55.12, SD = 27.37) and part time RN(M = 54.66, SD = 30.01) approaches to have the highest quality ratings, followed by per visit/per diemRN (M = 53.86, SD = 29.14). Contract staff (M = 26.75, SD = 23.13) showed the lowest quality scores.


Productivity

Results on the t test with number of routine visits per day as the grouping factor showed that there wasa statistically significant difference between the number of visits and the measures of quality. Inparticular, agencies with nursing staff that did 8 or more routine visits showed significantly lowercomposite score (M = 39.06, SD = 29.09), than all other number of visits (4 visits or less, M = 53.59, SD =30.28, 5 visits, M = 55.80, 6 visits, M = 55.74, 7 visits, 55.90).

A Kruskal-Wallis H test showed that there were statistically significant differences in the results on theprofitability measure caused by the number of visits expected by the nursing staff. There was astatistically significant difference on the Medicare margin depending on the average number of visits.Agencies with 8 and more visits have a higher mean (M = 17.43, SD = 19.01) than agencies with fewervisits (6 visits, M = 6.28, SD = 34.11). In addition, agencies with 8 and more visits had lower score on theoverall operating margin than agencies with 7 visits. However, in this case the difference was not sopronounced.

The only significant difference between the percentage of meeting the nursing goals and the qualityscores is on the percentile score. In particular, the category of 90-100% had a significantly highercomposite score (M = 55.13, SD = 28.15) than the 50-75% category (M = 50.20, SD = 26.26).

Caseload

There were significant differences in the percentile score and ED use. In particular, agencies withcaseloads of 19 or less (M = 11.37, SD = 3.74) scored lower (better) on ED use in comparison withcaseloads of more than 30 (M = 12.74, SD = 4.01), and caseloads of 26 to 30 (M = 13.29, SD = 3.30).Agencies with a caseload of over 30 patients (M = 48.23, SD = 27.28) scored significantly lower on thequality composite than agencies with caseloads of 20 to 25 (M = 56.66, SD = 28.72).

Results show that the typical caseload had significant impact on the Medicare margin of the agency.Agencies with a patient caseload of more than 30 had a higher mean (M = 12.68, SD = 25.55) for theMedicare margin than agencies with a caseload of 26 to 30 (M = 8.13, SD = 32.60), 20 to 25 (M = 2.56,SD = 35.75) and 19 or less (M = 1.52, SD = 38.22).

Physical Therapy Staff

Agencies using contract staff (M = 45.01, SD = 28.73) have significantly lower quality percentile scoresthan agencies using a full time (M = 60.77, SD = 23.99) or part-time (M = 59.37, SD = 31.44) physicaltherapist staffing approach.

Results show that there were significant differences on the Medicare margin. In particular, the per visit/per diem (M = 10.855, SD = 37.88) category had markedly higher mean than full time (M = 0.410, SD =32.77) and all other approaches.

There were not any significant differences in the quality or profitability variables for number of visits byphysical therapists, nor productivity goals.

Admission Nurse Model

The non-parametric Mann-Whitney Test showed that there were no statistically significant differencesbetween the use of a Admission Nurse Model, including the profitability measures.


The Home Health Compare composite mean for agencies that use the Admission Nurse Model waslower (M = 52.21, SD = 29.21) than those who do not (M = 55.72, SD = 27.19).

FTE Management

The lower the number of FTEs to manage, the lower (better) the ACH rate. Those with 6 or less FTEs (M= 15.43, SD = 3.77) to manage had a lower mean as compared with FTEs of 20 or more (M = 16.01, SD =3.07).

Results show that the average number of FTEs has a significant effect on the quality score. In particular,agencies with an average of 16-20 FTEs (M = 61.73, SD = 22.40) to manage have significantly higherpercentile scores than agencies with 7-10 FTEs (M = 51.65, SD = 28.25) and 6 or less (M = 51.76, SD =29.68).

Results show that the number of FTEs to manage has an effect on the overall operating margin with 16to 20 FTEs to manage. Agencies with 16-20 FTEs (M = 7.28, SD = 19.85) to manage have a higher marginthan those with 7-10 FTEs (M = -3.35, SD = 28.65) and all other categories.

Clinical Team Structure

More than half, 56.1 percent, of respondents with a multidisciplinary clinical team structure have ACHscores lower (M = 15.49, SD = 3.84) than both the national average and those that do not use (M =16.17, SD = 3.03) the structure. ED use is slightly lower for respondents who use the structure (M =12.34, SD = 3.89) than those that do not (M = 12.57, SD = 3.76).

Compensation

The payment method for LPNs had a significant effect on quality. In particular, the hourly rate (M =59.04, SD = 27.58) approach for LPNs resulted in significantly higher quality percentile in comparison withthe per visit rate (M = 49.71, SD = 28.86). The payment method for therapists also had a significant effecton quality measures. Percentiles were the highest for therapists using the salary approach (M = 61.96, SD= 24.87), compared to the per visit rate (M = 49.59, SD = 28.52).

The per visit rate (M = 10.28, SD = 25.30) for RNs showed positive results for the Medicare margin,followed by the salary method (M = 4.97, SD = 43.36) for RNs. The lowest mean for the Medicare marginwas at the hourly rate (M = -7.37, SD = 54.69).

The per visit rate for LPNs had the highest mean (M = 10.92, SD= 26.84) in terms of the Medicare margin.The other category of compensation for physical therapists had the highest mean (M = 10.67, SD = 20.38)for the Medicare margin, compared to the hourly rate (M = -11.43, SD = 37.88) for the Medicare margin.

Software-based Scheduling

Users of software-based scheduling showed a significantly higher Medicare margin (M = 7.37, SD =32.44) than non-users (M = -3.40, SD = 39.76).

This study found users (M = 15.44, SD = 3.73) of a software-based scheduling system had lower ACHscores than those that did not (M = 16.34, SD = 3.55), and lower than those that had a system but didnot use it (M = 16.87, SD = 6.25). ED use rates were also lower for users (M = 12.31, SD = 3.81) thannon-users (M = 12.65, SD = 4.11), and those that have a system but are not using it (M = 14.37, SD =5.03).


Patient Scheduling

There were no statistically significant differences on the different ways of patient scheduling and thedifferent quality measures.

OASIS Review

The only significant difference was in the hospitalization rate where RNs with no other responsibilities ledto lower hospitalization rates (M = 14.16, SD = 4.03) in comparison with QI/PI Clinician (M = 15.86, SD =3.73), Clinical Supervisor (M = 15.88, SD = 3.61), and all other types of reviews.

The position that performed the final review had no significant effect on the measures of profitability.

Palliative Care

The presence of palliative care had no significant effect on profitability.

Analysis of results showed that the type of palliative care offered had a significant effect on ED use. Inparticular, agencies that worked with an outside organization’s palliative care program (M = 15.52, SD =4.10) had significantly higher ED use rates than both those who worked through hospice (M = 11.77, SD =3.44).

Predictive Analytics

There were no significant differences in quality measures. ACH rates were slightly better (M = 15.32, SD= 3.66) than the national average and non-users (M = 15.76, SD = 3.74). The Medicare margin (M = 4.58,SD = 48.82) was higher for users than non-users (M = 4.18, SD = 33.54) along with the overall operatingmargin which was also slightly higher for users (M = 1.78, SD = 24.08) than non-users (M = -1.34, SD =35.95) of predictive analytics.

Accreditation

Accredited respondents (M = 55.47, SD = 27.96) had a higher quality percentile mean than respondentsthat were not accredited (M = 52.65, SD = 28.11).

We found accredited respondents to have a higher mean (M = 2.30, SD = 20.88) for their overalloperating margin than respondents that were not accredited (M = -2.27, SD = 40.29). Medicare marginsrated slightly higher for accredited respondent agencies (M = 5.38, SD = 35.73) compared torespondents not accredited (M = 5.04, SD = 43.18).

To our Ind

We sincer

we encou

If you’re n

firm. We

patient sa

W

C

N

C

If so, plea

Dr. Bob FaFounder a

dustry Colleag

rely hope you

urage you to c

not familiar w

exist to help

atisfaction (to

Want to optim

urious if ther

eed the best

ould you use

se contact us

azzi and Managing

gues,

u’ve found thi

contact us.

with Fazzi, we

home health

o become Invi

mize your reve

e’s a faster w

trained and m

help keeping

s today. We c

g Partner

is information

would also li

h and hospice

incible!).

enue cycle an

way to achieve

most engaged

g up and com

can’t wait to h

n to be helpfu

ke to take th

agencies imp

d improve ca

e Key Perform

d staff possib

plying with re

help you.

Tim APartn

ul. If you hav

is opportunit

prove quality

ash flow?

mance Indicat

ble?

egulatory cha

Ashe ner and Chief

ve questions a

ty to tell you a

, profitability

tors?

anges?

f Operating O

about this stu

a little about

y, efficiency an

Officer

udy,

our

nd

fazzi.com | 800-379-0361

www.fazzi.com

National Sta

ate of the Indust

The N

develo

For mo

and B

and bu

Intellig

try Report for Ho

ational State

oped by the B

ore informat

usiness Intel

usiness broke

gence, Lynn H

ome Health and

Contac

of the Home

Business Intel

ion on this re

ligence servi

ers, please co

Harlow. lharlo

Hospice ® 2017

ct Informat

e Care and H

ligence Divisi

eport or for

ces for agen

ontact our P

[email protected]

7

tion

Hospice Indus

on of Fazzi As

information

ncies, vendor

Partner/Direct

m

stry Report w

ssociates.

on Fazzi’s Da

rs, equity firm

tor of Busine

Page

was

ata

ms

ess

e | 51

mailto:[email protected]

www.fazzi.com

national state of the industry report - … report 2016 (002...national state of the industry report...

Documents