Core Administrative Competency: SNF

As I have written before and readers know, I field as many questions and provide as many resources as I can “free” of charge.  My e-mail is publicly available for contact on this site and on my LinkedIn page.  The title of this post thus, is a reference to the many questions I’ve received as of late regarding a number of issues ranging from fraud, to Medicare, to managed care, to therapy contracts, to quality.  Core Administrative Competency is about what truly, folks in senior administrative positions need to know/develop in order to be more effective in their role(s).

  1. Know How and Why You Get Paid: Sounds fundamental but I have so many conversations with folks that just simply don’t know this subject area very well.  I’m not talking at a technical level like being an MDS expert but at a core level – core enough to understand the relationship between the case-mix, the payment, the RUGs, and to ask clear questions regarding RUG distributions, etc. How about Part B?  Do you know the cap?  Do you know the authorization requirements for cap exceptions? The same is true if your facility takes managed care patients.  Is the payment based on RUGs, levels, other negotiated rate?
  2. Know What you Make from What you Get Paid: Again, sounds fundamental but this one I often find sorely lacking.  The RUG isn’t what the facility makes. The payment either from managed care or Part B.  How about Medicaid?  I have had way too many discussions with SNF administrators and even finance and billing folks where they didn’t realize that they were getting creamed by the insurer and their therapy contractor.  The therapy contract facilities tend to be the most out of line.  The facility is paying the therapy contractor per increment rates – flat for service per the contract.  The facility is receiving then a RUG, a level payment, payment under Part B, etc. Sometimes, the difference between what the facility is receiving via payment and what it is paying out to the therapy contractor for the therapy component, nets the facility zero or less in terms of margin.  This is particularly true with managed care agreements, unless the facility has negotiated variable rates reflective of the payer source.  The same can be true with drugs, medical supplies, etc.  I don’t know how many facilities I have worked with that fail to negotiate “carve-outs” within their managed care agreements for high cost DME (special beds, etc.), certain types of drugs (some antibiotics for example), and wound care supplies.  These elements alone, with RUG based or  level payments, can quickly create losses at the facility level.
  3. Know Your Quality Indicators and Measures: Battling fraud, survey/compliance risk, litigation risk, etc. boils down to knowing your quality and how it stacks up against the industry.  Likewise, these measures are core principles in the upcoming ACO, bundled payment, managed risk environment.  Administrators and DONs should be intimately familiar with and checking on, core quality measures such as infections, falls, hospitalizations, call light wait times, medication and treatment errors, etc.  One of the largest fraud risk areas for any SNF today is over-billing or improperly billing Medicare.  This occurs when the care is substandard or inappropriate for the resident’s needs/condition.  Knowing your quality, being engaged in the QI process is critical to risk prevention and management.
  4. Know Your Contracts for Service: Again, sounds fundamental but all too many administrators that I talk with have never really read their therapy contract.  No wonder they are surprised when they see charges for say, $75 per hour for meeting attendance – at a Care Plan meeting! How about the limitations of liability clauses?  Payments?  QA participation requirements, audit elements, staff retention terms, etc.?  Same is true for pharmacy.  What are the consulting costs and provisions?  What about drug costs?  How are drugs dispensed and in what supply?  Liability for medication errors?  What are the limitations?  Now, extend the same logic to food, other vendors, etc.
  5. MBWA: The goal of all facility administrative staff is to emphasize time spent doing this – known as Management By Walking Around.  The job of an administrator, DON, etc. is not in the office but on the floor, in the meetings at the care level, engaged with patients, physicians, families, and the community. The best prioritize their days around time out of the office.  I often ask administrators how many careplan meetings they sit in, staff education sessions, stand-up meetings, QA, staff meetings, departmental meetings, etc.  I am amazed at the answer (how little).  I am equally amazed and perhaps more, at how few tell me they ever meet with their key hospital referral sources at their peer level.
  6. Know the Industry: The industry is changing rapidly in terms of policy and trends.  Perhaps the largest leadership failure I see “routinely” is administrative personnel (administrators and DONs) that don’t stay current and don’t seek best practices.  Sure, they may attend a trade association conference from time to time, but read, study or explore beyond – rarely.  To be really effective requires being as far ahead as possible; to see the trends and understand the policy, reimbursement, and best practice landscape.  Doing so affords the ability to do gap analysis – where are we vs. where do we need to go.  Doing good gap analysis thus allows development of plans and strategies for improvement.  The biggest risk is getting caught off-guard, behind the times.  For example, being an SNF today with a rehab contract and no plans in place to audit your contractor.  I’ve described “why” and the fraud trends that are rampant on this site.

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