A2847

An Act concerning a pilot program for incentive-based value payments for home health agencies and health care service firms and supplementing Title 30 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. The Division of Medical Assistance and Health Services in the Department of Human Services shall establish a pilot program to adopt a new, incentive-based value payment system for licensed home health agencies and registered health care service firms providing services to Medicaid and NJ FamilyCare recipients. Participation in the incentive-based value payment system shall be mandatory for home health agencies and health care service firms providing services to Medicaid and NJ FamilyCare recipients, and shall reward the home health agencies and health care service firms for achieving improved performance outcomes in at least four core measurements of quality improvement and cost savings. The division shall implement the incentive-based value payment system established under the pilot program no later than January 1, 2021.

b. The Assistant Commissioner for the Division of Medical Assistance and Health Services shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), and in consultation with the Home Health Services Value Payment System Advisory Board established pursuant to section 2 of this act, adopt regulations establishing:

(1) core measurements to be considered when determining quality improvement and cost savings for Medicaid and NJ FamilyCare recipients receiving private duty nursing services, including, but not limited to: preventable hospital admissions and readmissions; medication reconciliation; adverse events; discharge planning during hospitalization; continuity of care; and collaboration with primary care and other health care providers;

(2) core measurements to be considered when determining quality improvement and cost savings for Medicaid and NJ FamilyCare recipients receiving personal care assistant services, including, but not limited to: patient and nurse retention; patient satisfaction; longevity of care; and the number of service hours authorized compared with the number of service hours provided;

(3) performance targets for the improvements in the core measurements;

(4) a formula for determining the baseline data against which the core measurements shall be compared when determining the level of improvement and cost savings achieved by each home health agency and health care service firm;

(5) the amount of the incentive payments, which may include payment amounts scaled to the level of improvement achieved in each core measurement; and

(6) a schedule for making incentive payments, including: one payment within 60 days after the start of the pilot program to assist home health agencies and health care service firms with implementation and reporting costs, the maximum amount of which shall be established by the assistant commissioner; the option of a second payment during the course of the pilot program; and a final payment to be made upon completion of the pilot program; and

(7) any other requirements for participation in the pilot program as the assistant commissioner shall deem necessary and appropriate.

c. For the purposes of the pilot program established by this act, each home health agency and health care service firm shall:

(1) for each patient, designate a single health care professional who is responsible for establishing a plan of care for that patient and for coordinating person-centered services throughout the continuum of care;

(2) develop protocols for immediate follow up after discharge from a hospital, including a comprehensive risk assessment;

(3) establish protocols to facilitate collaboration with hospitals and other health care providers to coordinate patient care throughout the continuum of services;

(4) establish protocols and procedures to reconcile patient medications; and

(5) establish standards, requirements, and programs to educate patients, families, and caregivers regarding individualized plans of care and goals to address the unique needs of each patient, family member, and caregiver.

d. The incentive-based value payment system shall be administered by managed care organizations that have contracted with home health agencies and health care service firms to provide home health services to Medicaid and NJ FamilyCare recipients. Managed care organizations shall distribute incentive-based value payments to home health agencies and health care service firms consistent with division regulations.

e. (1) The Department of Human Services and each Medicaid managed care organization in the State shall provide to the division all such data concerning home health services provided in the State as the division determines to be necessary for the purposes of establishing and evaluating the incentive-based value payment system, including all such data as may be required to develop baseline data and to compare outcomes among home health agencies and health care service firms throughout the State. The division may authorize an administrative fee to be paid to managed care organizations to offset the cost of reporting data pursuant to this subsection, if that data is in addition to data the organization currently reports to the State.

(2) The division shall provide the data received pursuant to paragraph (1) of this subsection and data reported by home health agencies and health care service firms concerning their participation in the incentive-based value payment system to the Rutgers Center for State Health Policy for the purposes of evaluating the program with regard to patient outcomes, quality of patient care, cost savings, and such other metrics as the division shall require.

f. The division shall require an annual audit of the incentive-based value payment system, which shall be performed by an independent third party auditor. The results of the audit shall be included in the annual report required pursuant to subsection g. of this section.

g. No later than one year after the effective date of this act, the division shall report to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), on the projected benefits and costs of the incentive-based value payment system established under the pilot program. In determining the costs and benefits of the new system, the division shall cooperate with and consider input from home health agencies, health care service firms, provider associations, managed care organizations, and the Rutgers Center for State Health Policy.

Commencing two years after the effective date of this act, and annually thereafter for the duration of the pilot program, the division shall report to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), on the status of the pilot program, including the costs of implementation, the number of home health agencies and health care service firms, the size of each agency and firm, the number of clients served by each agency and firm, the total cost savings realized and the proportion of cost savings attributable to each agency and firm, the amount of incentive-based value payments made to each agency and firm, the proportion of total payments made that are received by each agency and firm, an analysis of quality improvement and cost savings for type of service provided by agencies and firms, the division’s recommendations, if any, concerning revisions to the incentive-based value payment system, and any other information as may be necessary to evaluate the results of the pilot program.

h. The pilot program shall continue for at least two years after the date of implementation, after which date the assistant commissioner may revise the requirements for the program, terminate the program, or recommend to the Legislature, in the annual report required under subsection g. of this section, that the program be made permanent.

i. The total expenditures made by the State under the pilot program, including incentive payments and administration costs, shall not exceed $10 million.

2. a. There is established in the Department of Human Services the Home Health Services Value Payment System Advisory Board, which shall provide the Assistant Commissioner for the Division of Medical Assistance and Health Services with recommendations concerning the regulations which are to be adopted pursuant to section 1 of this act.

b. The board shall comprise eight public members to be appointed by the Governor. The public members shall include a representative from the Rutgers Center for State Health Policy, a representative from a home care agency providing private duty nursing, a representative from a home care agency providing personal care assistance, a representative of the Home Care & Hospice Association of New Jersey, a finance professional with a background in home care administration, a registered nurse who provides long-term home health care services, a certified homemaker-home health aide, and a representative from a Medicaid managed care organization. The public members shall be appointed no later than 30 days after the effective date of this act.

c. The board shall organize as soon as practicable following the appointment of its members, and the members shall select a chairperson and vice chairperson from among themselves. The chairperson shall appoint a secretary who need not be a member of the board. The board shall meet at such times as the chairperson shall designate.

d. Members of the board shall serve without compensation, but shall be reimbursed for necessary expenses incurred in the performance of their duties within the limits of funds appropriated or otherwise made available to the board for its purposes.

e. The Department of Human Services shall provide staff services and other necessary support to the board.

f. No later than six months after the effective date of this act, the board shall submit to the Assistant Commissioner for the Division of Medical Assistance and Health Services its recommendations concerning the requirements for home health agencies and health care service firms participating in the incentive-based value payment system established under to this act, as well as any other matters for which the assistant commissioner requests recommendations. The board shall expire upon the adoption of regulations pursuant to section 1 of this act.

3. The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.

4. This act shall take effect immediately.

STATEMENT

This bill requires the Division of Medical Assistance and Health Services in the Department of Human Services (DHS) to establish a pilot program to adopt a new, incentive-based value payment system for licensed home health agencies and registered health care service firms providing services to Medicaid and NJ FamilyCare recipients. Participation in the incentive-based value payment system, which will reward agencies and firms for achieving improved performance outcomes in at least four core measurements of quality improvement and cost savings, will be mandatory. For Medicaid and NJ FamilyCare recipients receiving private duty nursing services, the core measurements will include, but not be limited to: preventable hospital admissions and readmissions; medication reconciliation; adverse events; discharge planning during hospitalization; continuity of care; and collaboration with primary care and other health care providers. For Medicaid and NJ FamilyCare recipients receiving personal care assistant services, the core measurements will include, but not be limited to: patient and nurse retention; patient satisfaction; longevity of care; and the number of service hours authorized compared with the number of service hours provided. The goal of the system will be to reduce the costs associated with long-term care by improving the coordination of long-term health care services.

The Assistant Commissioner for the Division of Medical Assistance and Health Services will be required to establish, in consultation with the Home Health Services Value Payment System Advisory Board established under the bill, regulations concerning the core measurements and performance targets for the system, a formula for establishing baseline data for comparison, the amount of the incentive payments, a schedule for making payments, and any other requirements the assistant commissioner deems necessary and appropriate. The advisory board will comprise eight public members appointed by the Governor, and will include a representative from the Rutgers Center for State Health Policy, a representative from a home care agency providing private duty nursing, a representative from a home care agency providing personal care assistance, a representative of the Home Care & Hospice Association of New Jersey, a finance professional with a background in home care administration, a registered nurse who provides long-term home health care services, a certified homemaker-home health aide, and a representative from a Medicaid managed care organization (MCO). The advisory board is to provide its recommendations no later than six months after the effective date of the bill and will expire upon the adoption of regulations by the assistant commissioner.

Under the pilot program, home health agencies and health care service firms will be required to designate a single health care professional for each patient to establish a plan of care and coordinate person-centered services for the patient, develop protocols for immediate follow up after discharge from a hospital, develop protocols for medication reconciliation, establish protocols to facilitate collaboration with hospitals and other health care providers, and establish standards, requirements, and programs to educate patients, families, and caregivers regarding individualized plans of care and goals to address the unique needs of each patient, family member, and caregiver.

The incentive-based value payment system will be administered by MCOs that have contracted with home health agencies and health care service firms to provide home health services to Medicaid and NJ FamilyCare recipients. The MCOs will distribute the incentive-based value payments to the home health agencies and health care service firms, consistent with division regulations.

The bill requires DHS and each MCO in the State to provide to the division all such data concerning home health services provided in the State as the division determines to be necessary for the purposes of establishing and evaluating the incentive-based value payment system, including all such data as may be required to develop baseline data and to compare outcomes among home health agencies and health care service firms throughout the State. The division will be permitted to authorize an administrative fee to be paid to MCOs to offset the cost of reporting data pursuant that is in addition to data the MCO currently reports to the State. The division will provide the data received from DHS and MCOs, along with data reported by home health agencies and health care service firms, to the Rutgers Center for State Health Policy for the purposes of evaluating the program with regard to patient outcomes, quality of patient care, cost savings, and such other metrics as the division shall require.

The incentive-based value payment system is required to commence no later than January 1, 2021. The division will be required to submit an initial report to the Legislature on the projected benefits and costs of the system, and to thereafter submit annual reports on the status of the pilot program, including the costs of implementation, the number of home health agencies and health care service firms, the size of each agency and firm and the number of clients served, the total cost savings realized and the proportion of cost savings attributable to each agency and firm, the amount of incentive-based value payments made to each agency and firm and the proportion of total payments received by each agency and firm, an analysis of quality improvement and cost savings for type of service provided by agencies and firms, the division’s recommendations, if any, concerning revisions to the incentive-based value payment system, and any other information as may be necessary to evaluate the results of the pilot program.

The bill requires an annual audit of the incentive-based value payment system to be performed by an independent third party auditor. The results of the audit are to be included in the annual report.

The total expenditures made by the State under the pilot program, including incentive payments and administrative costs, are not to exceed $10 million.