Five Things Every Administrator Should Focus On
I had a phone conversation earlier today with a friend and colleague (he’s part owner of a rehab consulting and management company) and as we talked, the conversation reminded me about the host of issues facing health care administrators. Our conversation flowed to long-term care and specifically, SNFs (he spends a lot of his time with SNFs) and the work his firm is involved with. We kicked around some ideas and as our conversation concluded (hopefully with a golf date soon to be set), I did some thinking.
My friend always tries to get me to do “more” speaking engagements, particularly at conferences and trade association meetings and in this case, he was trying to convince me that the discussion we had was great information that “everyone should know”. Oddly enough, I agree but as time doesn’t always permit me to head out on the speaker’s circuit, it made sense to “boil down” our conversation into a quick written summary.
Health care administration, like any leadership discipline, should be (about) one-third current operations focused and two-thirds future operations focused. I realize, having done the job myself for over twenty years, that some days or even weeks bend this ratio but over the long-haul, in order for an Administrator to lead (regardless of title), he/she must be willing to step a good distance forward to lay the ground work and strategies for “what will be”. In other words, effective administration is about understanding what is going on in the industry, how events or policies, etc. not yet in effect will alter the business, and developing plans and strategies to move the “current” toward the “future’. In simpler language: Effective health care administration is principally about planning. Effective leaders have a running gap analysis in their heads; inherently understanding the current status of operations and matching that with what is yet to transpire. Leaders with tenure have a bit of advantage as they should innately understand historically, how change roles out with new government policies, changes to reimbursement, etc. The experience of having been through numerous changes in the business can’t help, if matched with effective planning abilities, but provide a clearer understanding of how to migrate current operations to the next required level of operations.
Synthesizing from my view, what has and is happening in health care today and what I see and hear about long-term care administration and the organizations in the industry, I hashed out five things (issues, concepts, etc.) that every Administrator (senior leader, etc.) should focus on. Obviously, the list could be expanded but in reality, focus on the key or critical five below will produce the kind of results administrators desire and organizations require.
- Medicare and Reimbursement: Regardless of any white-noise concerning possible delays or advances in the implementation of RUGs IV, MDS 3.0, etc., the path is laid and the dates will occur sooner rather than later. Getting clinical and billing functions up-to-speed, educated, and ready to roll is an absolute necessity. During this process, I’d analyze a whole series of issues and begin to lay the ground-work for any related changes to the present course of business, such as;
- What is the potential impact on my Medicare revenues?
- How is the revenue impact related to my current case-mix?
- Should I begin to adjust my case-mix via different marketing strategies or the implementation of some new clinical programs?
- Does my software/IT systems support new forms, new charting/documentation requirements, assessments, and billing documentation? If not, what is my vendor doing to get us there and when will they be ready?
- Big changes are about to occur in therapies particularly and what, if I am using an outside vendor for therapy, are they doing to be ready? Does this impact our contract and our overall care delivery in any way? Is now a time to consider transitioning to an in-house therapy service?
- Are we, as an organization, actively engaged in communicating what is happening to outside vendors, referral sources, etc.?
- Do we have a fully integrate project plan, budget for change implementation (training, software, etc., costs), and a methodology in-place to review, change and update policies, procedures, forms, etc.? (Names need to be involved, dates set, milestones identified, time set aside for review, time set aside for meetings, etc.)
- Compliance: This is a huge issue today and it continues to grow as health care reform upped the ante once again. There are at least a dozen or more key concerns every organization should have in this area and very recent policy and legislative activities have added to the list. Below is a sample of what should be at the forefront of every administrator’s compliance focus.
- Billing compliance, particularly Medicare. Health care reform and the focus on the part of Medicare to save money via reduction of fraud, waste, and overpayment is a hot topic now. I routinely encounter way too many administrators and organizations that have pushed the revenue per diem issue far too much under Medicare, leaving enormous areas of exposure for recovery actions to occur. In other words, I’ve seen way too much routine high level rehab coding, length of stay elongation, etc. than what the clinical documentation supports. Too often, I encounter MDS coding to substantiate rates of payment and then when the resident’s chart/record is reviewed, the documentation is far different than what appears on the MDS. Administrators need to be wary, even though the revenue numbers look good (perhaps too good), of questionable billing activity under Medicare.
- To the point above and addressed in a recent post here, all organizations should have a compliance plan and now, under health care reform, SNFs are required to have one in place this fall. Compliance is about not just being “compliant” with survey and certification rules but also with other federal laws such as Stark and the False Claims Act. There is no reason that any organization participating in Medicare and Medicaid today does not have a fully developed compliance program and a process for routine audits to preemptively identify,correct, and disclose potentially illegal activity – the ramifications under the law for providers are far too severe. For more information, see my post titled “Stark, Health Care Reform, and Updated Compliance Requirements”.
- There are new privacy and security requirements under HIPAA that organizations need to have in-place. For more information, see my post titled “New HIPAA Provision Now in Effect”.
- Survey and certification requirements such as the QIS are here and the government is in the process of revamping the Five Star rating system. As much as I think the survey and certification process is onerous and unrelated to true care quality, administrators need to understand the peril of poor performance and sub-standard quality. Keeping an up-to-date and clean survey history is vitally important in order to avoid fines, public relations problems, rising liability insurance costs and potential litigation problems.
- Patient/Resident satisfaction is an area that too many administrators believe is unrelated to compliance activity; think again. I see way too many facilities that end-up in compliance problems as a result of resident and family complaints. Dealing with satisfaction across the board is an “ounce of prevention” compared to the “ten pounds of cure” that are required when unsatisfied customers complain to the regulatory authorities.
- Transparency and disclosure are two new buzz words that every administrator should incorporate into operations. In today’s arena, disclosure of ownership, governance, staffing, etc. are the new rules of the road and there is no reason any longer not to publicly embrace a plan of transparency and disclosure of all this information and more.
- Labor Relations: The largest allocation of resources in health care is for staff via wages and benefits, etc. yet I still see too many antiquated labor relations approaches that produce high levels of turnover and poor productivity. To me, it is time for health care to adopt labor relations strategies found in other industries and in companies that have world-class employee productivity, retention, and commitment. Administrators can immediately and positively impact the bottom-line by simply focusing on improving retention, hiring practices (avoiding panic hiring and using better matching strategies), improving supervisor training, removing antiquated pay structures and reward systems, and adopting programs and policies that incorporate employees into the overall strategy and direction of the organization. Stable staff equals better compliance, higher customer satisfaction, higher productivity and lower labor costs (less turnover, less recruiting costs, etc.).
- Risk Management: Leading an organization forward is about identifying “risks” that are inherent in the business and developing plans, strategies and processes to mitigate the impact of risk on the organization’s performance. Though of another way and using a phrase I like and used to use frequently, it is about avoiding the expenditure of “stupid money”. Stupid money is money spent unnecessarily on litigation defense, turnover, higher levels of insurance costs such as liability and worker’s compensation, on agency staff or outside pool staff, on fines and forfeitures, etc. These are all expenses associated with identifiable and known risks and risks that can and should be mitigated by appropriate planning and system implementation. Extremely effective risk management tools and practices don’t require large amounts of investment or even, elaborate policies and procedures.
- The best defense is knowledge – knowledgeable and well-trained staff, active and capable management. Risk management is practice best by management being where the “risk” is, not tucked in an office or tied up in too many meetings with limited purpose, no real agenda, and no specific outcome.
- Using patient/resident satisfaction systems is simple and highly effective at identifying areas of potential problems or risks.
- Using benchmarks available from various industry sources to review facility or organization specific indicators against industry norms.
- Using programs of “gain-sharing” and other incentive compensation practices, tied to compliance, tied to satisfaction, tied to workplace accidents, absenteeism, etc.
- Keeping employees informed regarding organizational policies, standards, plans, etc. Employees involvement and input is a very simple and effective way to mitigate a whole series of risks.
- Using periodic audits to check documentation against billing, patient results and outcomes against set standards (infections, wounds, falls, etc.) and compliance with company policies and procedures.
- Education which can occur via very cost-effective means such as webinars, books, staff to staff training, trade association meetings, etc.
- Purposeful Activity: The famed educational philosopher John Dewey wrote a great deal about “purposeful activity” or the time spent engaged in seeking a desired outcome. For Dewey, this involved the application of the scientific method; the search for answers and insights via a systematic and “purposeful” approach. Health care is a bureaucracy and I watch administrators create additional bureaucracy within their own organizations either in defense of the existing bureaucracy or as a symptom of the bigger bureaucratic problem. I’ve never frankly, understood why health care is so fond of so many committees and meetings that accomplish virtually nothing and consume layers of management staff ad nauseum. Purposeful activity for an administrator is about simplifying as much of the operations and business processes as possible and sticking to some real tried and true managerial and leadership approaches.
- Every meeting must have a purpose, an outcome including a “next step”. No meetings or committees should ever be held or created without a purpose and an outcome and the outcome is never to “meet again”.
- Every manager must have enough authority and be charged with making and held accountable for decisions. Managers that are not accountable for “things” and don’t make decisions are enormous wastes of money and enormous sources of risk. Organizations that allow managers the cover of committees and meetings are wasting enormous amounts of productive energy and time.
- Formal meetings and committees should be entirely focused on two things and only two things; compliance (required reporting and information sharing) and addressing what is “new” or going to be “new”. The latter is about change and developing new strategies or learning, etc.
- Meetings must be brief and have requirements for preparation prior to the meeting and work or tasks to accomplish post the meeting. Discussions don’t require a “meeting”.
- Limit communication via voice mail and e-mail and require people to present their issues in person. Voice mail and e-mail have become the bane of office productivity as they produce “cover”, allowing people not to address what needed or needs to be done. (The famous, “I sent you an e-mail on that”).
- For an administrator, the most purposeful activity is planning and strategizing; taking in information, developing plans and strategies, and assessing the same in light of current operations. All activity, or at least as much as possible, should be focused on improving what exists today, matching future industry trends and requirements with current operations and a strategy to address the future requirements, and communicating what is happening via plans, performance indicators, etc. The test is whether the staff under the administrator can answer, “what happens next and why”.
Stark, Health Care Reform and Updated Compliance Requirements
When the Patient Protection and Affordable Care Act (PPACA) became law, a provision within adds a new dimension to the rules on self-referral and refund requirements of overpayment (Medicare) contained within the Stark Law. Specifically, the PPACA requires the Secretary of HHS to develop a new self-disclosure protocol whereby health care providers can disclose known (or found) violations of the Stark Law. The PPACA also gives new authority to HHS to settle claims on a “compromise” basis, creating more reasonable terms and conditions when violations occur and are disclosed.
Stark was created to prohibit a physician from referring patients to entities with which the physician (or physician’s family members) had a financial relationship. Broadly, Stark sought to control business relationships between referring physicians and other providers furnishing services (inpatient and outpatient hospitals, etc.) when such relationships involved financial gains applicable to the referral for the physician or, when compensation associated with such a relationship for the physician was beyond the normal and customary payment the physician would receive within his/her primary practice. Over time, Stark’s realm has expanded to include the OIG’s interpretation of applicability with the Anti-Kickback Act (prohibits payments made in exchange for referrals or recommending the purchase of supplies or services reimburseable under a government health program) where provisions exist in strikingly similar context to the language and intents found in Stark. The OIG at least realized the problems facing providers and allowed for (actually encouraged) self-disclosure under its Self Disclosure Protocol. While disclosure to the OIG did not relieve providers of the burden of Medicare refunds, it did provide for a methodology to avoid the imposition of Civil Money Penalties and exclusion from continued participation in the Medicare program.
Adding an additional complication to the provisions for disclosure under Stark is the interpretation on the part of CMS of its obligation to collect 100% of all Medicare payments made in conjunction with the disclosed violation. According to CMS, it is limited in its authority to compromise the government’s right to full recovery of any and all payments made in conjunction with a Stark violation. Prior to the passage of the PPACA, CMS claimed that the Federal Claims Collection Act provided that an executive agency may only compromise collection of claims that do not exceed $100,000. Claims in excess of $100,000 could only be compromised by the Justice Department. Inserting the provisions found in the False Claims Act and the matter of recovery becomes even more complex. Under interpretations of the False Claims Act, the government and certain courts, state that it is a violation of the Act for a provider not to disclose Medicare overpayments. Briefly, the logic is as follows. It is a violation of the act for any person who “knowingly and improperly avoids or decreases an obligation to pay or transmit money to the Government”. The penalty for such a violation is triple damages. In effect, a violation of Stark creates a potential violation of the False Claims Act and as such, a de facto requirement that any Medicare payments be refunded. A False Claims Act violation, if determined as a result of a Stark disclosure, carries the imposition of signficant damages due to the treble damages provision. The risk therefore, to a provider that reports a Stark violation, is the determination that a violation of the False Claims Act also occurred bringing forth not only the obligation to reimburse the Government for all related Medicare payments but the imposition of the higher damages provided for under the False Claims Act; totals which could be extreme. Medicare participating providers have always faced the risk that any illegal act involving self-referral or unwarranted excess compensation or benefits could trigger a circumstance where the activity nullifies the right of the provider to receive Medicare reimbursement (Medicare is legally bound to not pay for services provided when the provision of such service is connected to a violation or is a violation, of federal law).
With the passage of the PPACA, providers receive some additional potential relief while remaining subject to many of the same risks and obligations associated with reporting a Stark violation (as discussed above). For example, the PPACA requires the Secretary along with the OIG, to establish a new self-disclosure protocol. The purpose of this new protocol is to assist providers and suppliers with disclosure of an actual or potential Stark violation. Establishment of the protocol is to occur within six months of passage of the PPACA (late-September 2010) and identify a specific official or office where disclosures are directed. The PPACA also provides the Secretary with an exception to the False Claims Collection Act, allowing the Secretary to take into account certain factors such as the nature of the illegal practice, the duration of the practice, the timeliness of disclosure, etc., when determining the government’s claim. Providers should note however that the PPACA also requires potential or known disclosures to occur within sixty (60) days of discovery of the violation. Failure to disclose within 60 days correlates to a False Claims Act violation and as such, the remedies available under the False Claim Act are triggered.
In application, providers today should consider the following.
- The predominant cause for a violation is sloppy administration of contractual relationships between a providers and physicians. Examples include discounted office space, leases for space that are not at fair-market value, leases that are not signed by the parties, provisions for physicians to use free staff resources, overpayments for services under Medical Director agreements, Medical Director agreements that aren’t signed, etc. Each of these examples is a potential Stark violation requiring disclosure.
- In light of the point above and the requirements in the PPACA for disclosure of actual or potential violations within 60 days, providers should be fully engaged in routine QA activities to identify, correct and disclose any violations. Ideally, implementation of solid education, preventative QA activity, and effective use of counsel is already in-place, mitigating the occurence of a violation or at the worst, mitigating the extent of a violation.
- Providers should not wait for the completion of the new disclosure protocol as doing so creates undue peril that a violation extends beyond the 60 day disclosure requirement in the PPACA and results in a False Claims Act violation. Providers can and should continue to disclose actual or potential violations to CMS even though it is likely that CMS will not resolve any disclosures until implementation of the Secretary’s new protocol. The best case is that CMS will allow providers to update disclosures made prior to the implementation of the protocol and avail themselves of the new claims resolution system created by CMS and the OIG (an updated disclosure providing more detail sufficient to reduce the liability due to the government).
Hospital Re-Admissions: Update to an Earlier Post
Last week I wrote about hospitals using “observation stays” as a means of dealing with the potential risk of reimbursement penalties imposed by CMS for certain re-admissions. The focus of my post was on how the trend of hospitals using observation stays to avoid CMS scrutiny (and penalties) was impacting Medicare admissions at SNFs. I concluded my post with a few strategies that SNFs could use to deal with this growing phenomenon.
Today while reviewing my always copious amounts of industry e-mails, I ran across a story about a non-profit coalition in Alabama called AQAF that is working on addressing the issue of hospital readmissions. This group comprised of home health providers, hospitals and SNFs is one of 14 groups contracted with CMS in a pilot program known as “care transitions”. The objective of the groups is to develop strategies and processes to reduce what CMS considers to be, avoidable hospital re-admissions.
Knowing many of you read (and some commented) on my post regarding observation stays, I thought you may enjoy the story on the Alabama project. The link to the story is here: http://blog.al.com/living-news/2010/02/project_aims_to_reduce_hospita.html
New HIPAA Provision Now in Effect
In August of 2009, the Department of Health and Human Services issued an interim final rule requiring that all HIPAA covered entities and their business associates develop notification requirements for a breach of unsecured protected health information (PHI). These new requirements are part of the Health Information Technology for Economic and Clinical Health Act (HITECH). In order to comply with the provisions, covered entities need to develop revised policies, assessment tools and notification processes specific to a breach of unsecured PHI.
The new regulations are designed to expand the coverage scope of HIPAA to the increased use of electronic communication. Under the new provisions, a breach that occurs requires the covered entity to notify the individuals affected by the breach, the Secretary of HHS and in certain circumstances, the media.
The fundamental issue in the new provisions centers on the difference between unsecured and secured PHI. PHI that is secured by encryption or has otherwise been rendered unreadable or unusable and is ultimately disclosed, does not require notification. PHI that is unsecured and may be readable or useable and is subsequently disclosed, requires notification as specified in the Act. A breach is defined as the acquisition, use or disclosure of PHI which compromises the security and/or privacy of the information.
According to the rules, if a breach of unsecured PHI occurs, the covered entity must notify the individuals affected no later than 60 days from when the breach was discovered. The notification must include a description of what occurred, a description of what information was disclosed (social security numbers, addresses, etc.), steps the affected individuals should take to protect themselves, a description of what the covered entity is doing to reduce harm to the individuals and to prevent further disclosures and finally, relevant contact information for the covered entity (including toll-free telephone numbers) so that individuals may ask questions. The notification is required to be written.
In addition to notifying the affected individuals, covered entities are required to notify the Secretary of HHS. If the breach affected less than 500 individuals, the covered entity is required to maintain a log of the breach and any prior or subsequent breaches (for the prior year) and submit the information to the Secretary within 60 days of the end of the calendar year. If the breach affected more than 500 individuals, the covered entity must notify the Secretary within 60 days of discovery of the breach. HHS will post the names of covered entities involved in breaches affecting more than 500 individuals on its website.
If the breach involves more than 500 individuals, the covered entity is also required to notify the media outlets within the region or area where the breach occurred. The notice must contain the same information as provided in the notice to individuals. The notification also must occur within 60 days of discovery of the breach.
For Business Associates, the discovery of a breach on their part must be disclosed to the covered entity within 60 days after discovery. If the breach involves multiple covered entities, the business associate is required to notify each covered entity. Notification requirements on the part of the covered entity to affected individuals still apply however, the time frames for providing such notice depend on whether the business associate was an agent or an independent contractor of the covered entity. For example, if the business associate is an agent of the covered entity, the discovery of the breach on its part is viewed in the rules as discovery on the part of the covered entity. In summary, in this case, the rules for notification apply as if the covered entity discovered the breach (60 days from the date of discovery), even if the business associate/agent did not immediately communicate the discovery to the covered entity.
For health care providers who haven’t yet sought to comply with the new regulations, there is a bit of a breather. HHS will not enforce the sanctions provisions for any breaches that occurred prior to February 22, 2010. Complying with the “intent” of the new provisions will require health care providers to obtain new or updated Business Associate agreements with all related parties. The new agreements need to spell out the new notification requirements and the roles and responsibilities of the entities. In addition, providers should review and update their policies to conform with the notification requirements and the time frames as specified for notification. Annual HIPAA training should reflect the new requirements and it is advisable that some form of interim training should occur to alert key staff to the new requirements.
Hospice Contract Reminders for SNFs
On a fairly routine basis, I run across SNF Administrators and Directors of Nursing that continue to have issues with hospice patients in their facilities but not from the standpoint of the patient typically; from the standpoint of dealing with the Hospice and the terms of the contract between the Hospice and the SNF. In fact, because this issue continues to rise frequently enough, a “primer” post on the relationship between a Hospice and an SNF and how these contracts work, by federal code, seemed timely. Below, I’ve arranged the concepts topically, perhaps even useful as a cheat sheet.
- Is an SNF Required to Contract with a Hospice? The answer is no. Regardless of what a surveyor, patient, family, or hospice tells you, there is no requirement for an SNF to establish a contract with a Hospice. While patients have “choice” under Medicare of providers, the SNF is a “provider” and so is the hospice. SNF care is treated entirely separate from a hospice level of care and even the Medicare benefit for Hospice requires a different benefit election. Bottom line: While it likely will make sense for the SNF to have a contract with a Hospice, there is no legal or regulatory requirement for the SNF to do so, if it chooses not to.
- If an SNF Has a Hospice Contract with One Hospice, Must it Contract with Other Hospices as Well?: Again the answer is not and in many cases, not advisable as I will discuss later. Once an SNF has decided to contract with a Hospice, it can choose to limit its contract to just that one and no more. It is possible that changes being discussed around the Hospice Medicare COP (Conditions of Participation) will modify this a bit but as of right now, an SNF can choose to contract with as many or as few (or none) Hospices as it desires. The rule interpretation that is analogous here involves physicians. Even if a patient has a right to choose his or her own provider, the law does not require that an SNF allow “any” provider. Most SNFs limit the number of credentialed physicians they will permit “on-staff” just as hospitals do. The patient retains the right to use a different hospice, just not within the walls of the SNF.
- The Patient Resides in the SNF but is Under the Service of the Hospice. Who is Responsible for the Patient?: Under Federal law, the Hospice is responsible for developing and coordinating the plan of care, providing physician care, medications and supplies related to the terminal diagnoses, and any and all other core services that are required under law for the Hospice to be certified and in business. Essentially, any care related to the terminal diagnoses is the purview of the Hospice and the SNF becomes by definition, the “home” of the patient. This does not alleviate the SNF of certain levels of responsibility for the basic care of the patient such as nutrition, activities, medication administration, ADL care, etc. The Hospice assumes the overall responsibility of managing these “non-core” services and assures that the same are performed according to the plan of care and according to hospice policy. It also surprisingly, doesn’t mean that a negative outcome caused by the SNF to the patient can’t be cited under the SNF code – it can (such as in the case of a life safety code violation, a medication administration violation or an allegation of abuse on the part of an SNF employee).
- What Must be or Should be in a Contract Between a Hospice and an SNF?: Fundamentally, all of the following need to be clearly addressed. Note: This is not an exhaustive list and each provider should refer to the specific governing Federal and State code as a final reference.
- The services provided by the Hospice
- The services provided by the SNF. The SNF cannot provide, even under contract, the core required hospice services (Physician Services, Nursing, Social Services and Counseling/Bereavement).
- Hospice policies and philosophy in writing (as pertinent and applicable)
- Statements that specify that the Hospice takes full responsibility for the professional management of the patient’s hospice care and that the SNF provides room and board.
- Statements spelling out that the Hospice provides the same level of care and service within the SNF that it does for its home-bound patients including necessary medical care and inpatient care.
- Statement prohibiting the Hospice to discharge the patient from its service even if the care becomes costly or inconvenient.
- Statement requiring the Hospice to continue care for a Medicare beneficiary, even if the beneficiary cannot pay.
- Definition of admission criteria and requirements and necessary statements that the same apply for all payer sources and types.
- The Agreement should clearly define that roles and duties of each provider separately as well as in coordination with each other.
- The Agreement should specify all of the reimbursement and billing requirements and understandings between both parties. This is particularly critical when a patient is dually eligible (Medicaid and Medicare) and may be using Medicaid to cover the cost of room and board in the SNF and Medicare for the hospice benefit. Bed hold requirements also need to be addressed.
- What Duties are Joint Between the Hospice and the SNF?: Both providers must jointly develop the plan of care and share the responsibilities for completion of the MDS. Each must also establish a communication plan for changes of condition or other events but it is the responsibility of the Hospice to change the plan of care (SNF may not alter the plan of care). Medication changes (terminal condition related), lab reports and action/in-action, etc., are all the responsibility of the Hospice and the SNF may not take action without the approval of the Hospice. An example that occurs all too frequently concerns the responsibilities between the providers when a patient falls or has frequent falls. SNFs are accustomed to addressing falls almost instantaneously, developing new interventions and care plans. In the case where the patient is under the care of the Hospice, this is the responsibility of the Hospice. The SNF needs to be aggressive in getting the Hospice involved and responsive, timely but it (the SNF) cannot alter the care plan without Hospice involvement and approval.
- Which Provider Has to Deal with Difficult Patients or Difficult Families?: For the most part, this is the responsibility of the Hospice, not the SNF. Clearly, because difficult circumstances arise with patients when the Hospice is not present, the SNF will bear a large portion of the burden but all negative interactions or difficulties need to be shared with the Hospice. For example, the Hospice is required to provide counseling and social service to patients and their families and SNFs need to hold the Hospice accountable for this. Even a difficult family situation in the middle of the night needs to be handled by the Hospice and the SNF should not expect to wait until morning for the Hospice to intervene. If the patient is restless or needs more attention than the SNF can directly provide because the patient is dying, the Hospice must provide the adjunct staff, including Volunteers. Hospice staffing issues, etc. are not the concern of the SNF. The Hospice is required by law to have its personnel available to the SNF and their patient, twenty-four hours per day, 365 days per year.
- What Happens with Hospice Patients in the SNF During Survey and How are Surveyors Required to Review the Care Provided to these Patients?: Essentially, the plan of care and the direction of the care for the Hospice patient in an SNF is the responsibility of the Hospice and surveyors may not take issue with the SNF for adequacy of the care plan, etc. The SNF must still be responsible for the legal requirements of its scope of duties as spelled out in the Hospice/SNF contract. Surveyors may not however, take issue with an SNF because of the actions of a Hospice employee (or the lack of action, etc.). The surveyor can and is only legally bound, to take actions with an SNF regarding the role and responsibility of the SNF as the patient’s “room and board”. All of this said however, it is very important for an SNF to remember that it is responsible for holding the Hospice accountable for the Hospice’s responsibilities under the contract and as set forth by law. An SNF runs the risk of having severe regulatory problems if it chooses not to hold a Hospice accountable for providing required care as needed by the patient or for addressing serious issues in a timely fashion such as a change of condition or adverse, unplanned event that occurred with the patient or his/her family.
- Why Not Have Contracts with Multiple Hospices?: Developing one good, functioning and workable contract takes time and energy. Mutliple contracts take twice as much (if not more) time and frankly, for an SNF already limited in resources and responsible for a house-full (hopefully) of patients, more work in this case is not warranted or advised. Multiple contracts lead to more opportunities for error, confusion and a burden on staff to have to think-through another set of players and nuances. I have never seen an instance where having multiple contracts is beneficial for an SNF and to be quite honest, presents more opporunities for problems than what the extra contracts are worth. My advice: Find a good Hospice, develop a contract, and take the time and energy to work and build a very solid program within the SNF. If the relationship turns sour and issues can’t be resolved, don’t add another contract without eliminating the one that isn’t working.
OIG Reports Published on Hospice
In a post I wrote at the end of July concerning CMS’ 2010 rate announcement and compliance and regulatory trends, I indicated how the OIG was becoming more vigilant in reviewing hospice utilization, lengths of stay and in particular, the correlation between lengths of stay and hospice patients in an SNF. This past month, in mid-September, the OIG released two reports on the coverage and utilization characteristics of hospice patients in an SNF.
The first report concentrated on whether hospice patients residing in the SNF actually met the coverage criteria for hospice benefit eligibility. In order for a patient to receive hospice coverage, the following criteria must be met;
- Services are reasonable and necessary
- The Patient or his/her designated, legal representative elects care per the regulations
- Prior to service commencing, a plan of care is developed
- Hospice services are provided in accordance with the plan of care
- Patient has a terminal condition(s) and is certified as such
Within the report, the OIG indicated that a substantial percentage of claims by hospices for patients within an SNF failed to meet the above criteria. For example, of the claims reviewed by the OIG, 82% did not meet the criteria resulting in erroneous payments of $1.8 billion. Within the 82%, the OIG indicated that 63% failed to have a plan of care established, 33% did not meet the election requirements, 31% failed to provide care as detailed in the plan of care and 4% did not meet the terminal condition requirement. As a result of these findings, the OIG recommended that CMS implement new methods for educating hospices on the requirements as well as conduct routine, targeted reviews as well as additional oversight work to improve hospice compliance with the requirements.
In the second report, the OIG examined the nature of hospice care provided with SNF settings. The report found that the average claim for hospice care amounted to $960 per week for a total of $2.59 billion in 2005 - 2006. During this same period, the number of hospice patients residing in an SNF increased by 3%. The OIG also indicated that the average hospice patient in an SNF received 4.2 visits per week with 96% of the claims receiving professional nursing services, 73% received aide services and 68% receiving medical social work services. The report was intended as informational for CMS.
What the next steps from CMS will be as a result of this report are unknown. As I have written before, it is likely that CMS will continue to conduct more reviews, probes and audits of claims, particularly those arising within an SNF setting. It is also more likely than not, that CMS will begin to deny all or portions of stays for the same technical reasons that the OIG found. I have seen more scrutiny being paid by CMS on probe reviews to diagnoses and more denials as a result of insufficient support (documentation) of terminal status. I think it is fair to say that regulatory activity will assuredly increase for the Hospice industry.
Duties of Boards: An OIG Perspective
This seemed to be a natural successor topic to my last post, “Why Quality Matters”; principally arising out of recent press releases from the OIG. For example, in June the OIG reported that it had recovered $2.4 Billion in fraud, waste and abuse. In July, an OIG release reported that a Nursing Home Executive was banned from being involved in any Federal health care programs as part of a settlement with the OIG. Undoubtedly, more news of the same vein will be forthcoming, particularly since the Stimulus Bill included additional dollars for the OIG to stay on the offensive in “fighting waste, fraud and abuse”. With some reconciled legislation on health care reform also due out in the coming months, a portion of the savings to pay for the added benefits coming from recovery actions, greater scrutinty will no doubt be placed on providers and individuals by the OIG on billing and quality of care activities.
Having been a CEO in a large health care organization I can attest that Boards (especially non-profit boards) believe, more often than not, that compliance and quality is management’s job. I can also attest that all too often, limited time is provided at meetings for matters of quality and compliance. Unfortunately, from all too many conversations with colleagues over the years, I know that even CEOs don’t pay enough attention to the rigors of quality and compliance and as a result, their boards definitely don’t understand how important these matters are – organizationally and personally.
A seemingly complicated lanscape (quality and compliance and the Federal requirements) is perhaps the primary reason why so many organizations fail to fully and adequately embrace what the OIG is actually getting at. In reality, most of the core provisions and what needs to occur at the organizational level is fairly straightforward. Legal counsel that specializes in health care is usually a safe, first step in terms of board education and laying out a compliance program. Grasping the basics however, is an operating responsibility and for most organizations and their boards, they should understand the following.
- Boards have two main responsibilities in this area – the Duty of Care and the Duty of Loyalty. The OIG has made it plain that these fiduciary duties include the maintenance of a corporate compliance program.
- Boards have the oversight obligations to the Quality/Compliance Plan and the Corporate Integrity Agreement. The OIG via recent cases and actions has indicated that the Board must review compliance with federal health care programs at least quarterly. Documentation standards have also been raised to the point where Board resolutions and individual certifications are now the benchmarks for directors to substantiate agreement with board activities on the compliance front and to document board level reporting and investigative actions into quality and compliance at the organizational level.
- Board members are at risk “personally” in terms of liability if the Duty of Care is breached. The OIG has been issuing papers for several years encouraging boards to become more active and more knowledgeable about the federal health care programs their organizations are participating in. The OIG, citing a case involving Caremark has indicated that, “directors under extreme circumstances may be at personal risk if they fail to reasonably oversee the organization’s compliance program or act as mere passive recipients of information”.
Taking the above “core” into account, Boards can and should take a few very simple steps (of course this should be part of a written program adopted by the Board) to achieve and to maintain, essential compliance (legal counsel again is advisable here to make sure that all “Is” are dotted and “Ts” are crossed).
- Quality is a Standing Subject/Report at Each Meeting: The OIG says a minimum of “quarterly” and frankly, in today’s environment that is not enough. This report should be structured and management and other organizational representatives need to bring quality information directly to all members of the Board.
- Document Board Engagement: Board members need to be engaged and minutes should reflect questions and a back and forth conversation to illustrate a dialogue about quality.
- Board Statements: The Board should adopt a resolution and perhaps even sign on to a mission statement commiting each director to his/her Duty of Care.
- Allocate Resources: The Board needs to be active participants in strategic planning and budgeting processes where resources such as staff, equipment and infrastructure are allocated to maintain and improve, the delivery of care to patients and residents.
- Create Structure and Processes: The Board should create for itself, formal programs and processes to solicit feedback beyond information presented by management. For example, the Board should seek education on quality matters and matters of compliance. The Board should require reporting of turnover, resident/patient satisfaction, complaints, and key quality indicators. The Board should also seek outside counsel (physicians, clinicians and other experts) to from time to time, provide additional information and resources to its members and to attend on behalf of the Board, meetings where quality matters are discussed as an “independent” resource or auditor to the Board.
- Implement Accountability: The Board’s chief duty is to assure not just that information is freely flowing but that standards are met and when they are not, corrective action is taken. The Board must assure that management is held accountable for inadequate quality and compliance and that corrective action is taken immediately and reported back to the Board.
It is important to note that these steps are not guarantees of compliance with OIG requirements but certainly, a fabulous practical start – especially if memorialized by action and written documentation. What I can guarantee will occur if these steps are taken and implementation is done carefully and correctly (not just as an exercise in “paper” compliance) is the following.
- Culture of Quality: The organization begins to develop a culture of quality. The Board sets the tone for management and employees and that tone is an expectation of high levels of quality in resident and patient care. The priority is clearly known that quality is as important as financial results.
- Finances and Quality are Connected: When the Board is engaged with equal attention to the quality of care delivered, a better allocation of resources and a better strategic plan and budget is built. The Board becomes far more aware of how resource use is and should be tied, to the ultimate product delivered to patients and residents.
- Quality and Success are Connected: The quality of care is tied to every aspect of an organization (see last post, “Why Quality Matters”) from liability to malpractice to regulatory citations to billing audits to reputation and ultimately, volume. Quality improves staff retention, reduces complaints and regulatory actions and improves customer retention and supply.
The conclusions here are quite simple: Boards and individual Directors need to become more engaged in oversight and inquiry of their organization’s delivery of care to patients and residents. Additionally, given the link between payment and compliance under Federal health care programs (Medicare and Medicaid), Boards have a duty to make certain that compliance programs are in place, effective, and provide detailed enough information to the Board so that the pitfalls associated with individual director liability and organizational criminal and civil penalties can be avoided. In short, compliance programs need to be in place which monitor not only the delivery of care but the billing practices thereto, especially pertaining to Medicare and Medicaid.
Why Quality Matters
In the past month or so I have had a lot of conversations with various entities ranging from providers to investors about the financial state of the industry. The majority of the discussions have been around all things financial – reimbursement in particular and as this topic goes, so goes expenses. Understandably the economic and policy landscape tends to drive conversations and what with healthcare reform, Medicare cuts, state budgets and Medicaid, stimulus (or lack thereof) and now Cap and Trade in the headlines, much of the industry is focused on the “metrics” or the numbers. Being a numbers and a policy guy, all of this talk has been pretty good for business but I have this foreboding sense that too much discussion may diminish another set of metrics that need to be tied to the financial metrics – the quality metrics.
The crazy thing about the SNF industry (and frankly, any healthcare segment where patients receive direct care) is that quality both makes and costs money. There is an interdependent relationship between the financial results of the business and the quality results the patient receives. With the present upward pitch of regulators yammering about “resident centered this and that” and five star ratings published on the internet, the push is on, at least by the Feds, to force the industry to promote more quality in the care residents receive. Arguably, the regulatory process is bereft with insanity and ill-conceived standards impossible to fully comply with but that has frankly, always been the case. What is at the heart of the issue is that financial performance via any long-term measurement and quality of care are inseparable – conjoined in such a manner that were quality eliminated from the picture, the other would surely suffer and perhaps die.
Why does quality matter? If at the simplest level one believes in two types of money, smart and stupid, then focusing on quality is the antidote to spending stupid money. Smart money is therefore, the dollars (and I don’t mean enormous) that are invested in, at a minimum, promoting and doing the “right” things. When smart money is spent in a rational and proportionate manner, the avoidance of spending stupid money (incrementally far greater in volume and dollars) is the minimal return expected. The return that comes longer term from smart money investments in quality is typified by higher Medicare, private pay and other census, lower Medicaid census and resultant, higher revenue and better margins.
To understand how quickly stupid money can rack up is to understand some of the basic pitfalls that exist in the industry today. Things like fines, lawsuits, worker’s comp claims, denials of payment for new admissions, billing probes, etc. are all current industry woes and excellent examples of stupid money spending. With each of these problems comes more stupid money spending on top of the base cost each presents in the form of lawyer bills, public relations headaches, higher insurance premiums, loss of reputation that leads to loss of census and eroding payer mix, etc. As the cycle continues, staffing problems can arise compounded by the need for external pool costs to fill positions, unionization activities (if no union is present) and recurring survey and enforcement issues that never seem to go away without spending additional money on consultants to aid in remediation of the initial problem.
Smart money and a continued focus on quality is a hedge, an inoculation if you will, against the disease of “stupid money”. Oddly enough, smart money need not be typified by exorbitant spending on “capital furnishings and equipment” – the bulk of which rarely does much for a resident outcome and only temporarily, gives the viewer the illusion that “this is a nice place”. Nice surroundings are important but opulence and expansiveness should never be confused with quality that is experienced by a resident or his/her loved ones. In fact, a bad experience with care in a very nice setting typically gives the customer a bigger gripe (“they can spend all this money on furniture but they can’t spend it where it counts” attitude).
The best smart money investments I have seen are in people, management and systems. Staff are critical to the outcomes residents receive and making sure staff are engaged, involved, variably compensated for performance and part of the decision-making process is not expensive and in all cases, an extremely important investment. With a solid staffing and human resource investment, staff make fewer mistakes, are engaged in improving the delivery, care about the organization, resist turnover, and resist costing the operator and owner stupid money by not giving a darn about the mission, vision and results of the business.
Bad management is the leading cause of stupid money spending. Management that is incapable of demonstrating solid human relations skills, active listening, agressive confrontation with poor performance and good performance (correcting the bad and rewarding the good) and problem solving should be eliminated from the picture. These managers, incapable of understanding how important outcomes and spending tied together are, will cost lots of stupid money over the short and long run.
System investments are frankly the easiest and the least expensive investments there are. Investing in common sense systems that seek complaints and errors, addresses them quickly, and educates both staff and residents in quality, topical issues doesn’t cost much and delivers enormous returns. The age old addage of “work expands to fill the time paid” applies; quality sytems make sure that the work is focused and measurable as opposed to confusing and time wasting. Most important, systems investments don’t need to come in the form of computers and software – good old fashioned paper, telephones, and meetings work just as well and sometimes, far better.
Not too surprising, when I encounter organizations that truly focus on quality they all tend to share a set of enviable statistics that many in the industry “wish” they could attain.
- Higher census and better payer mix
- Staff retention and low to no use of external pool staff
- Law suit free
- Low liability and worker’s comp premiums
- Limited regulatory involvement (no complaints, no regulators)
- Lower marketing costs – reputation delivers admissions
- Limited position openings – lower recruitment costs
- Stable, long-term management
- Generally, no unions and no costs associated with defending against a union organizing campaign
- Solid survey results and in all cases, results that don’t breed fines, forfeitures, and/or other regulatory (adverse) actions
- Limited use of “outside” consultants to assist with “fixing” problems
- A positive reputation in the community and definitely, within the desired referral sources.
In short, quality does in fact matter, if for no other reason than it produces results such as those above and more importantly, reduces dramatically, the resources wasted in the form of stupid money.
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