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Flourishing Under Healthcare Reform – Maximize Your Profits By Minimizing The Impact Of LUPAs

Full Episodes Worth 11 Times More Than LUPA Episodes
Among the most costly groups of Medicare patients are those subject to LUPA. Using the most recently available national claims database, Healthcare Market Resources’ research shows that a full episode patient is worth 11 times more than a LUPA episode patient. Furthermore, the indirect costs in servicing a patient – including intake, medical records, billing and quality review – are practically the same regardless of whether it is a LUPA or full episode. The average labor cost per visit is also higher for a LUPA episode, since the added effort of the initial and discharge visits are balanced by fewer “regular” visits. LUPA episodes are financially unattractive and, therefore, every effort should be made to minimize their frequency.
Understanding Why LUPAs Occur Can Help Minimize Them in the Future
There are three types of LUPA episode patients based on the reason for the adjustment: Inevitable episodes, intake episodes and operational episodes. By understanding why an adjustment is made, an agency can take steps to minimize the occurrence of LUPA episodes in the future:
1. Inevitable LUPA Episodes
These types of LUPA episodes are very difficult to prevent. They can happen if a patient is readmitted to the hospital or transferred to hospice before a treatment plan is completed. Another example of an inevitable LUPA episode is a patient service who requires a re-certification period, but achieves the treatment plan goals before completion of the full episode visit level. Other than making sure that the transfer to hospice occurs after the fifth visit, there is little that your agency can do to prevent these inevitable LUPAs.
2. Intake LUPA Episodes
As you can see in the Metrics Matters section of this newsletter, patients with certain primary diagnoses are more likely to generate LUPAs than others. The prime offenders – diagnoses that generate the most “intake” LUPA episodes – include:
Mental health
B12 shots (Blood)
Catheter changes.
Once your agency has decided to admit a patient with one of these diagnoses, there is little that you can do to avoid the LUPA. If your agency has programs that serve these patient populations while your competitors do not, you’ll likely end up with a disproportionate number of LUPA cases. Several of Healthcare Market Resources’ Market Profile Reports can help your agency determine if it’s bearing the burden of LUPA diagnoses for your community.
Certain referral sources, such as ambulatory surgery centers, may also generate a disproportionate number of LUPAs because of the limited needs of their patients. Only an agency that is built around a per-visit model rather than an episode model may have the cost structure to serve these patients. As the impact of the reimbursement cuts begin to affect the survivability of home care agencies – especially local visiting nurse associations (VNAs) – tough decisions may have to be made as to whether an agency can afford to continue to serve these patient populations, particularly if the long-term survivability of the agency is at stake.
3. Operational LUPA Episodes
Frequently caused by patients missing visits, this type of LUPA is the most preventable. Monitoring these “absences” on a real-time basis and holding staff accountable for rescheduling the visit is essential. Also, your agency can contact projected LUPA patients between visits to see if their condition has changed. If a patient’s condition has changed, your agency can respond by contacting the physician to get an assessment visit authorized. In any case, this practice is good customer relations. Additionally, agencies should conduct periodic chart reviews to determine how many LUPAs were preventable.
LUPA Rates Vary Among Different Markets
LUPA rates also vary significantly from market to market. Healthcare Market Resources demonstrated LUPA levels vary dramatically by state, for example, in a previous newsletter article, “Metrics Matters: What Percentage of Your Home Care Patient Episodes Are Subject to LUPA?” In fact, we found a negative.65 correlation, which is statistically significant, between recert rates and LUPA levels. That means the higher the recert rate, the lower the LUPA levels. This strong correlation indicates that LUPAs are less likely to occur if agencies serve a highly chronic population.
Each market has its own LUPA level, caused by:
The types of patients referred to home health
At what point in the disease process patients are referred
How long agencies are “allowed” to keep patients.
Managing your agency’s percentage of LUPA patients can have a significant impact on your financial results.…

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Health Care Reform For Small Business – Professional Employer Organizations (PEOs) To the Rescue

Professional Employer Organizations offer a one-stop solution for companies averaging 5 to 100 employees. They provide HR consulting, employee benefits, payroll, workers comp insurance, and many other employer-related services. As more regulations are created, and managing them becomes more difficult for employers, the PEO value proposition become more attractive.
2010
A� Small business tax credit – This tax credit is applicable for businesses with less than 25 full-time employees with an average wage below $50,000. The maximum credit equals 35 percent of the employer’s contribution to health insurance premiums, but it is unlikely the maximum credit will be applied. Calculating exactly what an employer qualifies for is an extremely sensitive process.
How PEOs help:
PEOs proactively consider whether their clients qualify for the credit and pass the total amount directly to the client. Since most PEOs manage their clients’ payroll and insurance plans, calculating the credit amount is much easier.
2011
A� W-2 provision – Employers must report the aggregate cost of employer-provided coverage on employees’ W-2s for informational purposes.
How PEOs help:
PEOs manage all aspects of their clients; payroll and benefits, so complying with this provision is synergistically efficient – the amount will be shown on all PEO work-site employees’ paychecks.
A� Wellness Grants are available for businesses with fewer than 100 employees to assist in implementing employee wellness programs. There is $200 million dollars that will be distributed over a five year period.
How PEOs help:
Since many PEOs partially self-insure their health insurance policies, they have always had a vested interest in proving their clients’ employee easy access to wellness programs. Most PEOs have long offered robust wellness programs that help employees live healthier lives, and consequently, make less medical claims – which is cheaper for everyone.
In 2013
A� FSA limits – all employee contributions to the FSA or Flexible Spending Account are limited to $2,500 per year. The penalty for using Flexible Spending Accounts incorrectly will be an increase from 10 percent to 20 percent.
How PEOs help:
PEOs manage all aspects of FSA administration for their clients – all FSAs offered to client employees will be adjusted seamlessly to comply with this provision.
A� Tax increases – Medicare payroll tax increase of 0.9% on self-employed individuals and employees with respect to earnings and wages received during the year above $200,000 for individuals above $250,000 for joint filers will go into effect. The new tax does not change the employer’s tax obligations, but self-employed individuals are not permitted to deduct any portion of the additional tax. In addition, there will be a new 3.8% Medicare contribution on certain unearned income from individuals with AGI over $200,000 ($250,000 for joint filers).
How PEOs help:
Professional Employer Organizations are responsible for deducting and filing all payroll taxes to the appropriate governing body. Unlike a payroll service, PEOs are often responsible and liable for calculating and deducting the proper amounts.
A� Notices & Fines
1. Plan sponsors must supply participants at enrollment or re-enrollment a new form of plan summary that must include information on benefits, exclusions, and cost-sharing requirements. Those that do not comply with this provision are subject to a noncompliance fee of $1,000 for each failure.
2. Employers must provide a written notice regarding the existence of the Insurance Exchange and that the employee might qualify for subsidies by March 1, 2013.
3. Plan sponsors will be required to provide an annual statement to the government and covered individuals reflecting the months during the calendar year for which the individual had “minimum essential coverage”. Those that do not comply with this are subjected to a noncompliance penalty of $50 for each missed statement to an employee to a maximum of $100,000.
How PEOs help:
PEOs are often the plan sponsor for all their clients’ healthcare, unless they “carve out” benefits, which would mean they are not the plan sponsor, and the client maintains their own health insurance. Should a client be receiving healthcare through a PEO sponsored plan, each of these mandates falls squarely on the shoulders of the PEO. Notice the trend, due to co-employment, many of the additional requirements put forth by health care reform are burdens for the PEO.
2014
A� State-based insurance exchanges open – State-based insurance exchanges are planned to pool employers together into one large group much like PEOs have done for years in order to reduce overall premiums. However the exchange program has been attempted in other states and has not had the same success that PEOs have had. As with many public programs, cost-efficiency and timely service is inferior to that offered by private entities. We don’t foresee this principle changing.
How PEOs help:
PEOs have long pooled employers together for cooperative purchases of many items including health insurance, the result is lower cost. There is …