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health care

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The Vineyard Nursing Association headquarters in Vineyard Haven.

The Visiting Nurse Association of Cape Cod (VNACC), part of Cape Cod Healthcare, will acquire the assets and liabilities of the financially pressed Vineyard Nursing Association (VNA), in a transaction worth more than $2 million. The target date for closing the deal is the end of February.

Cape Cod Healthcare confirmed the deal in a press release issued Wednesday morning. “The nationally recognized Visiting Nurse Association of Cape Cod has entered into an agreement to acquire the Vineyard Nursing Association, in order to provide services on Martha’s Vineyard and Nantucket. The two non-profit organizations have executed a letter of intent outlining the VNA of Cape Cod’s proposal to acquire the assets of Vineyard Nursing Association.”

“Patients will see a seamless delivery of care,” Dianne Kolb, President and CEO of the Visiting Nurse Association of Cape Cod said in a press statement. “We are excited to join the Martha’s Vineyard and Nantucket communities, and look forward to a long and rewarding partnership with patients, providers and community leaders.”

The VNA turned to the Cape Cod affiliate as it explored ways to escape a changing health care landscape that has reduced its revenues, even as the Island agency’s costs grew. VNA chief executive Robert Tonti has had discussions with Martha’s Vineyard Hospital and with Martha’s Vineyard Community Services but ultimately turned to VNACC. The Cape agency comes with financial strength — a budget of $50 to $60 million annually, 4,700 employees making more than 300,000 visits each year, more than 2,000 patients — and it is a unit of Cape Cod Healthcare, whose revenues are more than $700 million. The Island VNA’s budget is about $4 million.

In a conversation Tuesday afternoon, Mr. Tonti said that VNACC’s financial strength and the similarity of its services to those offered by VNA made the deal a good match.

The sale is expected to breathe new financial life into the VNA, which has been struggling to maintain its financial health. The VNA took a revenue hit of about $466,000 in the first half of 2013, largely because of changes in insurance reimbursement rules, federal spending reductions, and a decline in the agency’s patient census.

The income loss led the agency to reduce staff and trim hours for administrators. But it did little to reverse the agency’s financial fortunes. Mr. Tonti said that VNACC experienced similar revenue hits, but its strength made it better able to absorb them. He also said that VNACC’s salary and benefits packages make it more competitive than the Vineyard Nursing Association, under relentless financial pressure, has been able to be.

The VNA opened its spacious, new headquarters on Breakdown Lane in Vineyard Haven in November 2012. It currently owes a total of $1.25 million in mortgage debt on its new building, which includes a construction loan and equity line of credit, according to Mr. Tonti.

According to records on file in the Dukes County Registry of Deeds, the VNA has one mortgage for $720,000 recorded on Jan. 10, 2012. They also have a Promissory Note for, not to exceed $300,000 and an additional Promissory Note for $540,000. The total indebtedness is $1,560,000. In addition, they owe $117,489 to the Commonwealth of Mass. for unpaid overdue contributions or payments in lieu of contributions, with interest to the Department of Unemployment Assistance.

Asked to comment on the VNA mortgage debt, Fielding Moore, president and CEO of Edgartown National Bank, holder of the VNA mortgage, according the Dukes County Registry of Deeds, said customer information is confidential and the bank is not allowed to make it public. In an email to The Times, Mr. Moore said, “I can tell you that we have been very supportive of VNA and will continue to be supportive of their new direction. We feel that VNA provides a vital service to the Island and are very pleased that they have found a solution that works for them and will ensure the long term sustainability of this important service for the community.”

VNA operates on a budget approaching $4 million a year, almost all of that from third party payors, including Medicare and Medicaid, the balance from private insurance and private pay. Fundraising supplements reimbursement income. Since 2009, homecare organizations have had Medicare reimbursement rates cut. In the next four years the cuts proposed will chop 13.5 percent off reimbursement rates.

In May 2011, the VNA, doing business as the Nantucket Visiting Nurses Association, began providing home health care services on Nantucket, after Nantucket Cottage Hospital ended its home health care and visiting nurse program.

“This year,” Mr. Tonti wrote in a November 19 statement, “revenue for patient services has decreased 13 percent, with Medicare and third party insurance programs responsible for 84 percent of our shortfall.

“The drop in revenues and increase in expenses over the past year are due to Affordable Care Act reductions in reimbursement rates by two percent, sequestration reductions on Medicare reimbursements by two percent, increased compliance and regulatory systems and policies that make accessing home care benefits more restrictive, and seasonality of workforce demands and balance of having the right workforce at the right time.

“The long-term financial stability of a small home care agency like the VNA is increasingly difficult with reimbursement reductions and the high cost of providing health care services, largely in the area of clinical salaries and benefits.”

In November, Amy Houghton, VNA business and development director said they were engaging in conversations with other organizations on- and off-Island, to see if there are economies of scale that might be achieved through partnership or affiliation. “Home care is not going away on Martha’s Vineyard,” Ms. Houghton said.

Founded by the Woods Hole Women’s Club in 1916, The VNA of Cape Cod provides care for patients 24 hours a day, seven days a week for patients from Plymouth to Provincetown, a service area spanning 1,000 square miles, according to the organization’s website.

The Cape Cod Healthcare group includes Cape Cod Hospital, Falmouth Hospital, a skilled nursing and rehabilitation facility, an assisted living facility, the Cape’s only local laboratory service (C-Lab), and numerous health programs.

Healthy deal

According to the VNACC press statement, the agency’s nurses, therapists, home health aides and staff make more than 300,000 home health and hospice care visits annually. The agency also offers screenings, immunizations and wellness programs through its public health initiative.

“The stellar reputation and top quality services the VNA of Cape Cod provides make it a good fit for Martha’s Vineyard and Nantucket,” VNA board chairman Michael Goldsmith said in the press statement. “We are confident that patients and members of the community will experience the same high level of services they have received from the Vineyard Nursing Association for the last 30 years. The VNA of Cape Cod is, like us, a community-based operation, but also has the experience and the resources to address changes in the rapidly evolving homecare market, as well as the financial wherewithal to insure quality care on the Islands for the long term.”

Under the terms of the letter of intent, following a period of review of Vineyard Nursing Association’s assets and operations, and the completion of applicable regulatory filings and procedures, the VNA of Cape Cod will acquire Vineyard Nursing Association’s unrestricted assets, including the agency’s present building.

Once the transaction is complete, the VNA of Cape Cod will also assume management of Vineyard Nursing Association and will conduct an operational review and assessment of the business.

“Our VNA team provides high-quality, evidence-based care to home health and hospice patients in our region,” said Michael Lauf, president and chief executive of Cape Cod Healthcare. “Island residents can now look forward to the same level of services our team provides in the other 29 towns in our service area.”

Hospital watched closely

In comments last November following news of VNA’s struggles, Tim Walsh, chief executive at the Martha’s Vineyard Hospital, said the challenges facing VNA are common in the home care sector.

“The VNA is an important part of the whole continuum of care for patients after they leave the hospital,” Mr. Walsh said in November. “Their struggles reflect the larger industry-wide dilemma of increasing demand and costs, and lower payments. Windemere is caught in the same vise that is affecting the VNA, and we are watching the VNA situation carefully.”

This week, Mr. Walsh, said hospital administrators and Mr. Tonti met several times to discuss the VNA’s serious financial problems and how the hospital might assist. Mr. Walsh said the hospital’s primary focus was how to provide continuity of care for patients.

Mr. Tonti told hospital officials he was in discussions with Cape-based organizations and Martha’s Vineyard Community Services about a purchase.

Mr. Walsh said the alliance with Cape Cod Healthcare will be a benefit for Islanders. “It’s an excellent system,” he said.

Asked if there was any discussion with the hospital about absorbing the VNA, Mr. Walsh said, “Internally we had worked out a scenario to continue the service through Partners Home Care without absorbing the substantial debt carried by the VNA.”

Community Services disappointed

Juliette Fay, executive director of Martha’s Vineyard Community Services (MVCS) , said that up until last week the Island’s umbrella social services agency was actively in discussions with the VNA to take over the health care agency.

Ms. Fay said community services did “due diligence” on the company during the month of December and hired a consultant to help with its examination, which continued through the first weeks of January.

“We were getting ready to make a proposal and in the meantime what had happened, and they had alerted us to the fact that it might happen, another merger partner had resumed interest,” she said.

At that point, the discussions stopped. Ms. Fay said the turn of events was a disappointment.

She said Community Services’ interest in the VNA was strategic as opposed to business. “We felt that the two entities together could bring about some growth of service for the long haul, that other opportunities would surface as a result of our cross-licensure.”

Ms. Fay added that on-Island governance brings a degree of local accountability. “So that was also a bit of a disappointment,” she said.

Bringing the VNA under the Community Services umbrella would have allowed the agency to gain much needed space. Ms. Fay said from her view there was much to gain in a pairing of the two organizations, particularly in light of health care reform.

“I think the most strategic aspect of the two entities coming together is that integrated health care systems, health and behavioral health, is what is going to be required in the next three, four, five years under Obamacare,” she said, “and this would have enabled Community Services and VNA to move in that direction rather nicely.”

Ms. Fay said she could not answer why the VNA bypassed MVCS in favor of Cape Healthcare. “You would have to ask them that,” she said. “I think probably the other merger partner was looking at this as a financial interest. They, having very similar services and much more of them and they could very easily absorb what was going on on the Island and they could bring their best practice to it. This was not a service that we were offering at the time.”

That was not always the case. At one time, the Island hosted two visiting nurse services, the VNA and the Visiting Nurse Service (VNS). In June 2008, Community Services announced the end of the agency’s Visiting Nurse Service and an end to what the MVCS board termed “a costly duplication of service and not a small amount of confusion for the public.”

On Tuesday, Ms. Fay said she wished the VNA well. “There’s a good group of people over there, and we wish them the best. It’s a very necessary service and a huge part of the health care landscape.”

 

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Martha's Vineyard Hospital

On a good day, health insurance is a topic that can leave the average person and experienced Massachusetts hospital administrators scratching their heads.

January 1, the day the Affordable Care Act (ACA) transition went into effect, was not a good day. An inadequate state website and ongoing confusion and disconnects at administrative levels left many Massachusetts residents previously enrolled in one of the state’s sanctioned insurance plans unsure of where they stood.

Since 2006, by law, with some exceptions, all residents of Massachusetts were required to have health coverage that met state standards. For those residents not covered by an employer or commercial health plan, the state created an agency, the Massachusetts Health Connector, to act as a broker for qualifying insurance plans.

MassHealth covered the poorest residents. Low-income residents had a choice of private, state-subsidized commercial products made available by various insurers through the Health Connector’s Commonwealth Care program. The Connector also offered more expensive programs for the self-employed.

For all practical purposes, Islanders who subscribed to Commonwealth Care needed to choose an insurer that had a contract with the Martha’s Vineyard Hospital. In recent years, those insurers included the Network Health Plan, the Neighborhood Health Plan, Celticare, and for a time BMC.

When the ACA, also known as Obamacare, went into effect on October 1, the Massachusetts health care plan intended to provide health insurance for all since 2006 was required to retool and offer ACA compliant plans.

The state announced that as of December 31 it would end the Commonwealth Care program, which did not comply with ACA.

It was to be replaced by ConnectorCare, a new program for Massachusetts residents with incomes of three times the federal poverty level or less (about $70,600 or less for a family of four) who can qualify for help from the state and federal government to pay for their health insurance provided through a set of six new insurance plans, known as managed care organizations (MCOs), that meet ACA guidelines for health coverage.

One advantage of the change was that new federal qualifications allowed Massachusetts to expand the number of people covered under MassHealth through the Medicaid expansion plan, a federally subsidized program, by about 130,000 as of January 1, reducing the number covered under Commonwealth Care.

Law changed but website was not up to the job

By most accounts, the old state Health Connector website worked fine. The new site does not. State officials lay the blame on CGI — the Canadian contractor responsible for the federal Obamacare website as well as sites in several states — hired to deliver a $69 million upgraded website.

While CGI continues to work with the Connector to perfect and smooth the user experience on portions of the site that are functional, the Connector has halted work on the development of the remainder of the site, including an eligibility determination system, pending a consultant’s report.

While the Connector created alternative processes and tripled the size of its call center to process applications ahead of the January 1 deadline, very little has changed on the technical side since mid-December when CGI’s efforts to upgrade the site had to be aborted because the fixes were not working, according to the State House News Service.

Visitors to Massachusetts Health Connector web site still cannot use the website to determine their eligibility or select a plan, application data that is submitted through the website is not storing correctly, and small businesses are still using the old web-based system to shop for plans, the News Service reported last week.

“We still have an incomplete and inadequate IT functionality as a result of an underperforming vendor that has made it difficult for users to complete the application process,” said Roni Mansur, deputy executive director and chief operating officer at the Connector.

With the website unable to process applications, the federal government provided a waiver that allowed more than 124,000 Commonwealth Care subscribers to have their plans extended until March 31, 2014, by which time they will have to be enrolled in a new ACA-compliant plan.

Hospital officials struggle to keep up with insurance two-step

Behind the scenes, Martha’s Vineyard Hospital is working to keep abreast of the changes in the law and computer glitches on the state level, said hospital chief executive officer Tim Walsh.

Six MCOs will now offer a new ACA-compliant product. In all cases, the six previously offered plans through Commonwealth Care.

They are: BMC HealthNet Plan, CeltiCare Health Plan, Fallon Community Health Plan, Health New England, Neighborhood Health Plan, and Network Health. But not all MCOs cover all areas of the state, and not all hospitals accept every health plan. That decision depends on contracts between the MCO and the individual hospitals.

One complication for hospital officials across the state was the need to sign short-term contracts with Commonwealth Care insurance providers for a product that was originally scheduled to end on January 1, but will now cease to exist on March 31.

At the same time, the hospital has signed new contracts with specific managed care organizations for their new insurance products.

Further complicating matters for Islanders, in the transition from one plan to another, some MCOs auto-enrolled their existing Island patients, but assigned them to physicians on the mainland.

Mr. Walsh said that parent company Partners Healthcare, which is responsible for negotiating all contracts with the MCOs, is working with the MCOs to clear up the confusion and keep Martha’s Vineyard Hospital administrators up to date.

Mr. Walsh said there has been no shortage of confusion and disconnects, and patients are often caught in the middle. “We are doing our best to let patients know what they need to do to maintain their coverage, and in many cases, lead them through the process of switching plans so they will have coverage,” Mr. Walsh said.

He added that the county’s Health Care Access Program is also a good resource for people who need assistance, and it is working closely with the hospital.

For one letter writer, confusion and frustration

In a Letter to the Editor published January 16, Tiare Hess of Oak Bluffs wrote, “People who were before enrolled in programs like MassHealth Essentials and others, which are no longer offered as of January 1, were automatically enrolled in the BMC HealthCare Plus program, which no one on the Island — particularly the only hospital — accepts.

“Representatives and supervisors on the MassHealth call line can only tell people they can change their coverage to something the hospital and others will take starting February 1, which leaves many of us without needed medical services until then.”

Mr. Walsh said the hospital signed a contract with BMC effective January 1. The problem, he said, is that the BMC claims management system was not programmed in time for January 1, and the hospital is now working with patients to solve the problem.

Network Health is the largest MCO on the Island. Mr. Walsh said the hospital had to quickly sign a short-term contract when its Commonwealth Care plan was extended, but Partners has been unable to negotiate a new long term contract, so Island residents enrolled in that plan will need to make the switch if they want to continue to be covered in visits to the hospital.

In addition to BMC, the hospital has signed a long-term contract with the Neighborhood Health Plan. More contracts may be signed in the future.

Asked if it is understandable that patients would be confused, Mr. Walsh said, “Absolutely. We’re confused. There is an awful lot happening, and there is a lot that was supposed to happen that did not.”

Mr. Walsh added that “continuity of care” is his biggest concern. “We don’t want people unable to see their doctor because their plan is getting shuffled around in a lot of red tape.”

For one patient, frustrating roadblocks

The daily headlines, the jockeying for political gain on both sides of the aisle, and the health care punditry used to fill cable air time mean little to those who had insurance under the old system and are now struggling to find their way through the new system, which requires deciphering an often bewildering lexicon of insurance providers and plans.

“It’s incredibly frustrating,” said Sarah Young, 53, of Oak Bluffs, in a telephone call to The Times Friday to talk about her specific situation.

Ms. Young goes to Martha’s Vineyard Hospital on a weekly basis for allergy treatments in the office of her primary care physician. Last fall, along with thousands of others, she enrolled in one of the state-subsidized Commonwealth Care plans. Then she learned that she must determine her eligibility for one of a set of new ACA-compliant insurance offerings and enroll in a new state health plan.

The first hurdle was the Health Connector website. “I’ve gone online numerous times to the website and tried to do what I could do there, and I think everybody is pretty much aware now that that website has been having problems,” she said. “I have probably spent from eight to ten hours between trying to get on the website, calling for help, re-logging in; they finally are sending a paper application for re-enrolment.”

Ms. Young saw signs in the hospital on her weekly visits to her primary care doctor alerting patients that the hospital would no longer be accepting Commonwealth Care coverage as of January 1.

At the same time, acknowledging the many bureaucratic problems, President Obama extended the ACA signup deadline to March 31. The Massachusetts Health Connector followed suit and extended Commonwealth Care plan benefits until March 31, providing a grace period for those like Ms. Young who had so far failed to transition to a new plan.

It appeared that Ms. Young had time, but she did not. Her insurance provider was one with which the hospital did not hold a short-term agreement for extended coverage.

“My doctors office went out of their way today, Friday, to call me and let me know that they had received notice that they [MVH] would no longer be accepting Celticare which is the specific brand of insurance from Commonwealth Care that I subscribe to,” Ms. Young said. “They probably called me because I have an appointment on Tuesday, and I said, well cancel the appointment.”

Ms. Young said it is frustrating, not just because her insurance is essentially suspended and she is unable to pay out of pocket, but because she does not know how it will affect the treatment she has been receiving for well over one year.

Ms. Young said she went to the hospital website to see if there was any information that might be useful regarding the change in insurance policy but found no new information.

After receiving regular treatment and to suddenly be told that the hospital will no longer accept her insurance, Ms. Young said, throws her “into a bit of a panic.”

Ms. Young, who is self-employed and works two jobs, said the lapse in insurance coverage and the difficulty in finding a new plan is frustrating.

“I feel like I’ve trying to do what I’ve been told to do and I can’t do what I’ve been told to do, and now I’m told I have no insurance,” she said.

Told of Ms. Young’s predicament, Mr. Walsh said that in a case like this, where there is a pre-approved plan of care, the hospital would continue the plan of care and bill her insurance provider irrespective of the lapsed contract.

For more information

Massachusetts Health Connector

1-877-623-6765

Martha’s Vineyard Hospital

508-693-0410

Martha’s Vineyard Health Care Access program

508-696-0020

Neighborhood Health Plan

1-866-414-5533

BMC Healthnet Plan

1-855-833-8120

An editorial: Navigating the health insurance morass