News and information from the American Healthcare Association
2015 Progress Update Solid Results Yet Challenges Remain
We entered 2015 with two major reimbursement objectives. The first was to avoid being a pay-for in any temporary doc fix. The second was to achieve a clean SNF payment rule for 2016. We exceeded our expectations on the first and met the second. In addition to securing a permanent doc fix and the stability that legislation brings to the sector, we also successfully inserted therapy review language that eases the regulatory burden on our members and makes sense for patients.
On the quality front, our major objective was to seamlessly launch the next installment of the Quality Initiative. Through your collective hard work in achieving the objectives of the original Quality Initiative, we worked with CMS, set a solid expansion, and rolled out an even more impressive set of goals for the next five years. You have moved the needle so much that MedPAC and CMS officials have publicly acknowledged that care in facilities is improving. We will now take this progress to even greater heights.
There has also been good news on the assisted living front. Our long-standing goal of avoiding federal regulation is in good shape. We've redoubled our lobbying efforts and believe that the dynamics that would lead to federal regulation are not in place. We will continue to work hard to keep any consideration of top-down regulation in check. Additionally, we have successfully launched the Senior Living Executive Council (SLEC) - a panel that mirrors the Council for Post-Acute Care (CPAC) on the skilled nursing side. The SLEC provides larger companies a forum to make policy and political suggestions to the NCAL Board. The effort is off to a terrific start, with 17 companies currently participating. We also successfully launched the next phase of the Quality Initiative for assisted living, which focuses on hospital readmissions, antipsychotics, staff stability and customer satisfaction. Furthermore, LTC Trend Tracker??? was expanded to include AL data for the new Turnover and Retention Upload.
Yet, challenges remain. Any thought that the permanent doc fix meant that we were in the clear on the Hill was dashed by major trade legislation known as Trade Promotion Authority (TPA). In fact, we had no time to celebrate our wins for the year. Just one day after Congress completed work on the doc fix, congressional staff thought it would be a good idea to make us a pay-for in the trade bill. We have succeeded in squashing that effort, but episodes like that signal that we can never rest.
In this memo, I am going to first step back and discuss our biggest struggle. Then I'll walk through the remaining policy challenges for this year and next. Finally, I'll outline some options for you to help.
A SEAT AT THE TABLE
As an entrepreneur and former governor, I have belonged to and worked with scores of trade associations. Some may have been in the room when policy is deliberated, but most have not. I've noticed that the boards and members of almost all trade association believe that their organization is uniquely relevant and at the nexus of policy discussions. They are wrong.
The truth is that most trade associations do not have a seat at the table. It's a matter of simple math. There are 7,000 trades associations in the U.S. There are 15,000 registered lobbyists in DC alone. Roughly 10,000 of those 15,000 would tell you that they are the Speaker's best friend, but that of course is not possible. Assuming the Speaker works 250 days a year, and decides to meet with two associations each day (which realistically he cannot); it would take 14 years for the Speaker to meet with each group! It would take him 30 years to meet with each lobbyist! The reality is that I doubt there are more than 500 trade associations that are truly moving the needle in the Federal City.
So the question is: How do we make a difference? First, the Board has allowed me to bring my leadership approach to the organization. That approach is simple. I believe that for any organization to reach its optimum performance it needs to be driven by a mission and measured by metrics. The goal in our work is easy because the work you do is so important. Together the Board and our staff created the mission of "Improving Lives by Delivering Solutions for Quality Care." That statement drives our staff, drives me, and provides the context for every decision we make.
We measure ourselves by metrics as opposed to anecdotes or adjectives. While many associations strive to adjectives, we strive to specific policy or empirical objectives. It's hard to aspire to an empty superlative. But it is easy to evaluate if the goals are specific and defined. The Board sets objective goals, we hold ourselves accountable to them, and we measure everything we can along the way. In short, we are running AHCA/NCAL in the same way that you are running your business.
In this town, that is a big advantage. Most associations understand the importance of mission. Few understand the importance of metrics and the power of measurement and accountability.
We use that process to win in two areas. The first is that we have to provide policy solutions. We take solid policy alternatives to the Hill, to CMS, and to the think tanks. Frankly, Washington is starved for credible, substantive initiatives, and by providing them, we make ourselves relevant. More importantly, we create the template for policy, rather than waiting for bad policy to be thrust upon us that we then try to change.
But being right on policy is not enough. It should be, but it's not. In this town we also have to be strong politically and strong with our lobbying efforts. All 7,000 trade associations believe they are right on policy, but not all 7,000 can be heard. Only those that understand they need to marry great policy with deep political efforts truly have a chance to get to the table.
All of that means that we are essentially two enterprises: 1) a policy shop comprised of Quality, Research and Reimbursement divisions; and 2) a political and lobbying shop. Collectively, the aim is to improve lives by providing solutions for quality care and that drives everything we do.
MOVING INTO 2016
Let's begin with the Hill. AHCA was able to remove the Medicare cut from the trade bill, but the entire episode is a preview of what we face for the remainder of the year. Some congressional staff, and probably a few members, believe that now that the doc fix is over, all provider pay-fors are available for everything else. The reasoning is that when the annual doc patch loomed, Congress would resist using health care offsets for anything other than the SGR because they knew it was impending. With that ritual out of the way, we are now fair game for everything else.
I don't want to overstate this risk, but I also don't want to understate it. It is real enough that the Senate initially paid for TPA with a quarter of one percent cut to all providers for the last half of 2024. It's serious enough that staffers are telling us we need to carefully follow the Highway Bill, the debt ceiling and budget debates. But, we were able to put together a coalition of providers, then get fortunate on the House dynamics, and the cut was pulled from the trade bill.
My belief is that we are not as vulnerable as we were when the doc fix threat existed, but we are also not in the clear. As a result, we will remain diligent. For example, we thought that after the doc fix, we might be in a position to pare back some of our outside lobbying team. We've decided against that, and so our lineup of consultants remains. In fact, we've added Kyle Simmons to our roster. Kyle was Senate Majority Leader Mitch McConnell's chief of staff for 15 years and has been a terrific addition. Further, we have decided that because the risk remains, our political activity must be just as strong, and so our schedule of events and commitments will actually increase.
Our organizational goal calls for no cuts. Despite these new risks, I believe we will succeed in achieving that goal.
With CMS we are now focused on the 2017 SNF payment rule. We learned the hard way back in 2011 that you can't wait for a bad rule to come out to respond. We now work a year in advance to give us the best chance for a clean rule. Most of that work is done by outside volunteers, and we have a retreat set for September to lay out the plan of action. I'll have more clarity by then of the likelihood of a clean 2017 rule and will report at that time. We know that CMS continues to have concerns surrounding therapy utilization and is on a path to characteristic-based payments. But it is too early to predict if the agency will use the 2017 rule to mandate those changes.
I believe our biggest challenge may not be the Hill or CMS, but instead changes taking place to post-acute payments in the market. Part A Medicare, as a percentage of payments, continues to decline. Managed care, ACOs, and "duals" projects are replacing our traditional form of payment. All these alternatives have in common a reduced length of stay and narrower networks. AHCA has devoted resources and developed educational and advocacy materials intended to mitigate the effects of these changes. In addition, we have initiated dialogues with the CMS Medicare Advantage and Medicaid Managed Care teams to address these issues, as well as many others.
My concern is that we can win every issue on the Hill and at CMS, but if we wake up one day and don't have any Part A left - replaced instead with payments that cut length of stay in half - we are in real trouble.
The Board agrees with this concern and is acting. Chairman Len Russ appointed the payment reform task force, which has now been at it for over a year. Part of its work has been a plan that would place us in charge of the Part A payment by creating a SNF episode that we would control. This plan is deep in the development stage, but not yet ready for the Hill. Significant time and money are being spent to get it ready. With respect to Part A, AHCA has now beefed up its reimbursement division to assist members and states to best position themselves as the market changes. This work has ranged from providing toolkits to members who are in managed care markets, to hosting seminars and webinars on how members themselves can take on risk.
Finally, there are opportunities. We believe this will be the year that we get the Veterans Affairs (VA) legislation passed. This will provide veterans with the option of using our members' facilities. It will also clarify myriad rules that relate to taking care of this important population. We believe that passage will increase our members' volume and more important, provide high-quality care options that our nation's heroes deserve.
We are also still pushing for relief on observations stays. It's increasingly the case that Medicare recipients leave hospitals thinking they have a rehab benefit - only to learn that they do not. Congress wants to act. The issue is the cost. We want it fixed, Congress wants it fixed, but we need the Congressional Budget Office to outline the cost. We believe a report is forthcoming and may pave the way to solve this problem.
I'm pleased to report that the organization is also having a good year. One metric we look at is membership. We are at record membership both with AHCA and NCAL.
I'm also pleased to report that we continue to exceed our goals relating to employee satisfaction. We set out this year to have our progress validated by a third party, and just last week, The Washington Post named AHCA/NCAL as one of the top employers in the greater Metro DC area. We achieved that status by competing with over 1,900 who applied and had their employees independently surveyed. We ended up as the 16th rated small employer and #1 among trade associations.
WE NEED YOUR TALENT
Not only are there 7,000 trade associations in town, there are many that are much larger and have more resources than we do. Our operating budget is $34 million. The American Hospital Association is over $100 million. PhRMA and the American Medical Association are over $200 million each.
But we have a much larger footprint than our $34 million because of the generous donation of millions of dollars in time that we receive from you. Through our committees and Board our outside members donate tens of thousands of hours each year to help us achieve our goals.
Here are five ways that we could use your help right now:
Embrace Quality Initiative 2.0. Go to this link and it will outline the goals of this new initiative. These are the CMS focus areas, and your continued pledge to work on them will help us meet our goals and position you for changes taking place in payments.
Participate in the Quality Awards. This link will get you started. Over 3,000 buildings have now received this Baldridge-based recognition. It will make your buildings better and can differentiate you from competitors.
Come to the Annual Convention. This year it's in San Antonio from October 4-7 and we need you there.
Get involved with your member of Congress either by coming to DC and we will set up Hill visits or by touring your member of Congress or Senator through one of your buildings. Go to this link and we will set this up for you and make it easy.
Participate in our political activity. We have an amazing lineup of high-level political events throughout the year. You are invited to them and have the unique experience of spending time with our nation's leaders, usually in a pretty small, intimate setting. Please contact Jennifer Hahs for more information.
LET'S KEEP IT GOING
Our success really is a journey. We are at a point where the first half of 2015 has gone well, but this is not the end. We have to finish 2015 off strong and then accelerate heading into 2016 and beyond.
I hope you feel that we have built a solid platform for you here in Washington. Our team is talented and passionate. We are thankful every day that we don't have an ordinary job. We get to spend every day looking for solutions to improve lives. Thank you for supporting and encouraging that passion.