Rewarding higher care standards.

ecwip – or the Enhancing Care with Incentive Payment program - is a new payment program to reward and incentivize higher performing nursing homes with additional resident care-focused funding beyond current Medicaid reimbursement rates. As the number of Pennsylvanians seeking long-term care continues to increase, the state’s Medicaid program has not kept pace with the reimbursement funding necessary to provide that care. This program was designed to financially incentivize nursing homes that are excelling at delivering positive resident outcomes. The better the care outcomes, the higher the reward payment. Additionally, the program will limit or withhold any additional funds for underperforming providers in an effort to push providers to elevate overall resident care. This model will help the state invest in providers that are focused on high-quality resident outcomes, and weed out those that are not. ecwip is an initiative of the Pennsylvania Health Care Association, a nonprofit statewide advocacy association representing Pennsylvania’s seniors and most vulnerable residents and their providers of care in the commonwealth’s nursing homes, assisted living communities and personal care homes.

More than 70% of all nursing home care provided in Pennsylvania is paid for by the state’s Medicaid program – a program that is responsible for paying for the care of low-income residents. The cost for that care continues to outpace Pennsylvania’s allocation of funds to reimburse providers for the care they provide. At the same time, Pennsylvania’s population has a rapidly increasing senior demographic that is becoming more reliant on Medicaid to pay for their nursing home care. An incentivized payment program, like ecwip, ensures nursing homes serving Medicaid-dependent residents are excelling at providing resident care by “equipping” them with additional funds to continue providing that care. Additional funds help providers reinvest in resident care. The ability to offset resident care costs promotes more sustainable operations by making up for the shortage of funds in base reimbursement rates. With ecwip, providers will have to demonstrate, through designated quality metrics, they are deserving of the additional funds. This holds providers to higher standards and allows the state to have more accountability of the funds it allocates.

In conjunction with providers and other advocate groups, PHCA has identified four key measures to incentivize providers to deliver improved outcomes, two of which have been identified by the Pennsylvania Department of Human Services as integral components of a nursing facility quality incentive program in their managed care strategy. The four measures are: percentage of long-stay residents experiencing one or more falls with major injury percentage of long-stay residents with pressure ulcers percentage of long-stay residents with worsening activities of daily living (ADL) total nursing staff turnover rate These measures center on quality care and are measured based on current data reported to the federal Centers for Medicare & Medicaid Services (CMS). These measures are directly tied to the overall well-being of residents and the ability of providers to manage and reduce overall health care costs. ewcip also promotes healthy occupancy levels at nursing facilities – holding providers more accountable to only care for an amount of residents that promotes a higher quality level. By only serving a manageable resident population, providers are incentivized to eliminate staffing agencies and ultimately reduce staff turnover. ecwip favorably incentivizes providers that disproportionately care for more Medicaid-reliant residents, or low-income residents. High-Medicaid providers are likely to have less revenue to invest in resident care because Pennsylvania’s Medicaid reimbursement rate falls short of the actual cost of care.

To truly incentivize providers to engage with the program and improve key quality metrics, there needs to be notable funding allocated to the program. ecwip was designed to create a financial incentive for those providers that demonstrate positive resident outcomes through specific care metrics. With the rollout of ecwip, providers will have no choice but to focus on investing in and enhancing care in order to receive additional funding. Providers that underperform leave more funds for providers that are enhancing care. PHCA is advocating for $100 million annually in state funds to be allocated to the program. With an allocation of $100 million, a single nursing home could, on average, be rewarded $360,000 a year. ecwip would also provide more immediate cash flow to providers – measuring provider progress and paying incentives quarterly – making the quarterly average payout up to $90,000.

There are currently 24 other states that offer similar programs to expand funding support and enhance care. In 2020, Ohio launched an incentive program that also focused on four quality metrics. The statewide average for those four measures improved by an average of 34%. Ohio is now ranked within the top four states in three of the four quality measures. The Centers for Medicare and Medicaid Services (CMS), the federal regulatory agency for nursing homes, is a proponent of quality incentive programs.

PHCA is asking Governor Shapiro, his administration and the Pennsylvania General Assembly to allocate $100 million in the 2024-25 state budget for the implementation of ecwip. The Pennsylvania Department of Human Services will need to adopt the model ecwip has been built around and sunset the current program.

The Pennsylvania Department of Health is the state regulatory agency for nursing home providers. At any time, regardless of any incentivized care program, the Department of Health can cite a nursing home for deficiencies and apply harmful penalties. With ecwip, providers control their own incentivized successes and losses. If a provider underperforms, they are at a loss of receiving additional supporting funds beyond the inadequate Medicaid reimbursement rate.

No. As an advocacy organization – not a health care provider – there is no benefit to PHCA should ecwip be adopted. The beneficiaries of ecwip are the residents of Pennsylvania who will see more funding support their care needs while having care outcomes improve.