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SNFs: Five Issues and Trends to Watch…NOW!

The beautiful, fascinating thing about health policy in the U.S. is its cycle of evolution.  It evolves, sometimes slowly and other times quickly but always, in a progressive (not in the political sense) direction.  Providers today can be lulled to sleep (quickly) by the vacuum drone of big policy lectures, webinars, etc., easily thinking for example, PDPM is the two-ton gorilla in the room (we need to deal with).  Perhaps because reimbursement and survey/certification issues are so large that they shadow, seemingly eclipse, other trends and issues.  Yet, think of these other trends and issues like mosquitoes (the state “summer” bird in Wisconsin where I am from); omnipresent, annoying, nipping, but not large enough to cause much damage.  Still, mosquito bites can be a real nuisance and in rare cases, rather debilitating.

None of the following trends/issues weigh-out like PDPM but each has a potential impact for the post-acute sector, namely SNFs.

  1. QRP and VBP: Both can, with poor performance or lackadaisical compliance, reduce Medicare reimbursement.  Today, 73% of the SNFs are feeling some kind of Medicare reimbursement reduction due to VBP performance (lack thereof) in terms of readmissions.  Come October 1, the penalty for non-QRP reporting at a certain threshold kicks-in with a penalty/reduction equal to 2% of Medicare payments  Combine the two and the reduction can mount to 4% of Medicare payments (fee-for-service) to an SNF.
  2. Medicare Advantage and Readmissions: Tying one to the other for VBP is an interesting proposition.  Here’s how this works.  While VBP only positively or negatively impacts fee-for-service Medicare payments, the Medicare Advantage impact that the SNF market is seeing with respect to readmission rates, encompasses Medicare Advantage patients.  Convoluted, I know.  In short-hand: All Medicare patient days count toward the readmission (avoidable) calculation, fee-for-service and/or Advantage.  Based on a recent study published in the Annals of Internal Medicine, Medicare Advantage patients have a higher  readmission experience than their fee-for-service counterparts.  To be clear, the readmission contrast was for patient diagnostic categories of acute myocardial infarction, congestive heart failure and pneumonia. Still, the issue here is that facilities with a high percentage of Medicare Advantage patients need to be aggressive with these payers in terms of care coordination; particularly as the same intersects with length of stay.  Medicare Advantage plans often look to aggressively shorten lengths of stay, perhaps too aggressively.  Similarly, their networks may not coordinate post-inpatient care via home health agencies as well as one would expect.  They simply don’t have the best agencies in network or they don’t work to consistently integrate the post-acute providers in collaborative coordination efforts.
  3. More SNF VBP?: In a bill recently proposed in the House (bipartisan sponsors) known as the BETTER Act (Beneficiary Education Tools Tele-health Extender Reauthorization), Section 204 includes direction to the Secretary to adopt additional performance measures for reimbursement purposes beginning on or after, October 2021.  The language implies the categories (“additional measures determined appropriate”) to include functional status, patient safety, care coordination and/or patient experience.  As I have written before: Quality and revenue are directly connected today and more is coming.  SNFs better be “on” their Quality Measures and laser-focused on their outcomes or suffer the reimbursement (reduction) consequences.
  4. Quality Measures: Any SNF that hasn’t looked for a while at their Five Start report and specifically, their Quality Measures section is literally, asleep at the wheel.  The numbers now are broken down between long-stay and short-stay measures, with applicable detail.  It isn’t the aggregate rating any more that matters. The reality is the categorical ratings matter most and for SNFs hoping to play “big” in the post-acute arena, the short-stay ratings are KEY.  Today, referral networks are reshaping how and where patients go, post-hospitalization.  Not a day goes by that I don’t hear from hospital and health system folks about their current reviews of SNF QMs, and in particular, the short-stay measure performance.  In a recent discussion with a convener for a Bundled Payment project, she relayed how one SNF was beside itself when she said basically, “no inclusion in their preferred network”.  The SNF was unaware that their short-stay QM rating was only two stars.  The convener was only interested in SNFs with short-stay measures rating four and five stars.
  5. Phase 3 Conditions of Participation Requirements: Though not as impactful as Phase 2 requirements, there are a few here that could bite facilities surveyed post November 28 of this year.  The inspection star ratings are unfrozen now so survey performance  will impact star ratings again…no hiatus.  The biggies?  Infection control with a designated, trained preventionist is required.  Remember, infection control citations tend to be widespread in scope. A compliance and ethics program is required after November 28.  Staff need to be trained on the program and infection control.  The facility assessment is required to tie with the facility’s QAPI program. The facility must develop a person-centered, baseline care plan within 48 hours of admission. With respect to dietary/food service, the facility must designate a director of food service who will have training/certification as a certified dietary manager, certified food service manager, a dietitian, or some other equivalent certification and training in food service management or hospitality from an accredited institution.  A good resource that covers all Phase 3 requirements (as well as Phases 1 and 2) is available (download) here: 3-RoP-Checklist-overview-FINAL.101416
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June 26, 2019 Posted by | Uncategorized | , , , , , , , , , | Comments Off on SNFs: Five Issues and Trends to Watch…NOW!

The Connection Between Quality and Revenue

In nearly all provider segments of health care, revenue maximization and integrity are directly tied to compliance and quality ratings. In home health, submission of quality data via the OASIS (known as HH CAHPS) is required.  Agencies that fail to submit the required data experience reimbursement reductions of 2%.  For SNFs, reporting of QRP data is required. Failure to meet the 80% threshold reporting requirement on quality measures equals a 2% payment reduction (beginning October of 2019).  The cut-off date to meet the compliance level for the period 10/1/18 to 12/31/18 was May 15, 2019; too late for facilities that under-performed.

Many SNFs (73%) are currently experiencing Medicare reimbursement reductions due to poor quality performance with respect to 30 day re-hospitalization results. Combining this reduction with a potential QRP reduction of another 2% by October 1, certain facilities will experience a 4% reduction in Medicare payments.  For an industry already strapped financially, this could be a nail in the coffin.  Instead of the inevitable conclusion however, the penalties are wholly avoidable.

Yet not robust, the data reporting via CMS (using facility supplied data) is sufficient enough to trend performance weakness/strengths and thus, the revenue connections. By revenue connections, I mean the places where revenue can be made or lost.  And, while the CMS data is not real time, it is close enough to give an SNF a basis by which to track and thus trend, the key data markers.  For instance, facilities can research and compare their short-stay and long-stay measures in the following categories.

  • Hospital admission/re-admissions
  • ER/ED utilization/transfers
  • Falls with injury
  • Decline in functional status
  • Improvement in functional status
  • Pressure injuries (not pre-admission acquired)
  • Spending per Medicare beneficiary
  • Infections

Each of the above have unique implications on revenue and expense; singular and combined. The revenue and expense connections follow.

Today, quality data management in an SNF setting is an integral component of revenue maximization and revenue integrity. Consider the following data implications tied directly to reimbursement (increases or decreases due to data management, reporting, and interpretation).

  1. Value-Based Purchasing: The focus is on hospital readmissions within a thirty day window post SNF admission. The data is now publicly displayed in an SNF’s QM section on the Five Star report. Poor performance on this measure (below the standardized benchmark) creates a reimbursement penalty equal to 2%. Conversely, exceptional performance creates a bonus payment of up to 1.5%
  2. Quality Reporting Program: SNFs need to report via the MDS, quality measure data. Simply failing to report at the 80th percentile level (not what data, just reporting the data) equates to a 2% reimbursement reduction beginning October 2019.
  3. PDPM: It’s all about the assessment and coding come October 1. Facilities need to gather data, starting at the hospital end, to paint the best, clearest picture of the patient and his/her care needs. The focus is on capturing all levels of diagnoses and functional status. Miss the data, miscode the data, or inadequately apply the data and the result can be, a significant payment level gap (under-reimbursed) via a lower than actually applicable, per diem amount. Being able to analyze the clinical data and apply it to the MDS can mean tens of thousands of dollars…one way or the other.
  4. Referrals, Narrow Networks and Market Share: SNF revenue is totally a function of beds occupied by the best payer source. Facilities that do well know this. Being in a position to garner the most referrals connected to the best payers requires a posture of exceptional quality, demonstrated via data. The best SNFs lever their data to achieve maximum occupancy and referrals. Narrow networks in most markets today are eliminating poor performing SNFs from their preferred referral lists, some with Bundled Payment programs completely eliminating certain SNFs (poor performance) as options. As SNF performance data in terms of survey compliance, staffing levels, re-hospitalization rates, and quality measures/outcomes is public, comparisons among facilities is common. The best stand out because their measures are better than others and thus, they gain the preferred referrals and the revenue in-turn.

The simplest conclusion for an SNF today is quality and performance data equals revenue: either maximized or reduced. The connection however, is not just at the top-line. The impact flows to the bottom line as well. Consider the following elements as bottom-line impactful when it comes to quality and data.

  1. Insurance premiums for liability coverage are risk-rated. If the SNF quality is low, the premium is higher as is the deductible. Higher expenses here reduce margin.
  2. For an SNF looking to borrow money, banks and lenders today impute risk/poor quality into the lending terms and thus, into interest rates and debt to equity levels (how much can be borrowed). Higher interest expense reduces margin.
  3. Recruitment and retention costs for employees are directly influenced by quality performance. Study after study demonstrates that employees prefer to work for high-performing organizations and stay in jobs where the quality is valued and high. Given that labor is the greatest cost an SNF bears, being as efficient as possible in the recruitment and retention arena enhances margin.
  4. Survey performance directly impacts the bottom-line, especially where fines and often, resultant legal action are involved. Today, the survey format is heavily influenced by facility quality data – the QIS (Quality Indicator Survey) protocol. Poor quality and thus, poor survey performance can lead to enormous fines. An Immediate Jeopardy citation comes in minimally (fines), at $1,000 per day for each day, the jeopardy remains (from the date the jeopardy situation began). The Plaintiff’s Bar scans public survey data and recruits negatively affected residents and families as litigants in cases involving sub-standard care and potentially, claimed wrongful and preventable death. The result, for substandard performance, is hugely negative to the bottom-line and thus, margin.

The message or take-away for providers is that data matters – at the top-line and at the bottom-line. Facilities must know their quality data, have processes in-place to monitor the data, report the data and assure data integrity if they wish to maximize their revenues and ultimately, their margin. It is easy to do with proper knowledge and planning and conversely, too easy without, to experience revenue reductions due to poor performance and poor data management.

Revenue maximization and integrity is not a vacuum concept. Complexity surrounds the ultimate billing and recovery/payment for care provided to patients. Medicare today exists in a pay-for-performance environment and the performance expectations are increasing. The performance metrics are quality measures and the same uniquely, controllable at the facility level. From staffing to re-hospitalizations to falls, infections, survey results (remember, the new SNF survey is principally data driven in the QIS format) to length of stay, ICD-10 codes and patient satisfaction measures, facilities that mine their data, know how it relates to care and use a QAPI process to monitor and improve their outcome numbers, will succeed from a revenue perspective and a market share perspective.

Catch this session (and me) and other great sessions at the Revenue Integrity Symposium in October (15-16) in Orlando!

http://hcmarketplace.com/revenue-integrity-symposium?webSyncID=5c56a212-852b-635d-aad0-430216e04a7e&sessionGUID=c59e2226-ca5d-5741-7187-a3390bc28582

 

 

June 14, 2019 Posted by | Uncategorized | , , , , , , , , , , | Comments Off on The Connection Between Quality and Revenue