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Home Health Final Rule: Rate Increases plus PDGM

While I was in Philadelphia speaking at LeadingAge’s annual conference, CMS released its 2019 Home Health Final Rule.  As I wrote in an earlier post regarding the proposed rule, the topic of interest was/is a new payment model – PDGM.  As has been the case across the post-acute industry, CMS is advancing case-mix models crafted around a simplified patient assessment, less therapy oriented more nursing/medically balanced.  The industry lobbied for modification or delay in PDGM, primarily due to some underlying behavioral assumptions CMS embedded in the proposal (more on this in later paragraphs).

The most relevant, immediate impact of the final rule is rate increases (finally) for the industry – 2.2% or $420 million.  The industry has experienced rate cuts and rebasing consistently since 2010 as a response to fast growth and high profit margins exhibited by companies like Amedysis (the center of a Congressional hearing in 2011).

PDGM is slated to take effect “on or after January 1, 2020”.  The ambiguity in this language is worth noting as there are some that believe modification, even delay is possible.  Compared to the proposed rule, the final rule includes 216 more Home Health Resource Groups due to bifurcating Medication Management Teaching and Assessment from previous group alignments. The following key changes are a result of PDGM.

  1. As with PDPM on the SNF side, PDGM removes the therapy weight/influence separately from the assessment and payment element weights for HHAs.  The clinical indications or nursing considerations are given more weight along with patient comorbidities.
  2. Coding becomes a key factor in payment mechanics, particularly diagnoses and co-morbidity.
  3. Functional status is given a higher weight, as is the case today with all post-acute payment model reforms.
  4. Episode lengths are halved – down from 60 days (current) to 30 days.
  5. PDGM is budget neutral meaning that when fully implemented,, the cost to the Federal government for Medicare HHA payments in the aggregate is no greater than current (inflation adjusted for time).  To get to budget neutrality, certain behavioral assumptions about provide reactions to the changes are used.  As one would suspect, this is a subject of concern and debate by the HHA industry.

The behavioral assumption issue referenced in #5 above is an imputed reality in all payment model changes.  In fact, it is an economic model necessity when attempting to address “how” certain changes in reward (payment) will move activity or behavior toward those places where reward or payment is maximized.  It is a key economic behavioral axiom: What get’s rewarded, get’s done.

In effect, CMS is saying that budget neutrality is achieved for a 30 day episode when payments for the episode equal $1,753.68.  Getting to this number, CMS assumed that agencies would react or respond quickly to payment changes (areas where increases are found) in co-morbidity coding, clinical group assignment and reduction in LUPA cases.  However, if CMS models slower reactions or limited reactions by the industry (operating norms as current persist), the payment impact is an increase of 6.42% or $1,873.91.  Because budget neutrality is mandated concurrent with PDGM, the concerns providers are raising relates to how payments will ultimately be determined and when if necessary, will adjustments be made IF the anticipated behavioral changes don’t manifest as factored.  Simply stated, this collective concern(s) is the reason the industry continues to lobby for delay, more analysis and further definitional clarity with the PDGM funding and payment assumptions prior to implementation.

One final note with respect to PDGM dynamics.  Readers of my articles and attendees at lectures, webinars, other presentations have heard me discuss overall post-acute payment simplification and the movement within Medicare reimbursement to site neutrality.  PDGM is an interesting payment model from the standpoint that it parallels in many ways, the PDPM movement for SNFs.  It is diagnosis based, more clinically/nursing driven than the previous system and more holistic in capturing additional patient characteristics (co-morbidities) than before in order to address payment relevance. With assessment simplification and a growing focus on patient functional status at various points across a post-acute global episode (from hospital discharge to care completion), an overall framework is becoming more visible.  Expect continued work from CMS on payment simplification, more calls from MedPac for site neutral payments for post-acute care. The policy discussions are those that reinforce payment that follows the patient, based on patient clinical needs, unattached to any site dynamics or locations, save perhaps a coding modifier when inpatient care is warranted to account for the capital and equipment elements in the cost of care.  When looking globally at the overall health care payment and policy trend that is occurring sector by sector, the future of payment simplification and movement to site neutrality is certain.  One question remains: By when?

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November 6, 2018 Posted by | Home Health, Policy and Politics - Federal | , , , , , , , , , , , , | Leave a comment

Post-Acute, Site Neutral Payment Upcoming?

In the 2019 OPPS (outpatient PPS) proposed rule, CMS included a site neutral payment provision.  With the comment period closed, the lobbying (against) fierce, it will be interesting to see where CMS lands in terms of the final OPPS rule – maintain, change, or abate.  The one thing that is for certain, regardless of the fate of this provision, site neutral proposals/provisions are advancing.

CMS has advanced a series of conceptually similar approaches to payment reform.  Site neutral approaches are a twist on value-based care as they seek to reward the efficiency of care by de-emphasizing a setting value.  This is loosely an approach to “payment follows the patient” rather than the payment is dictated by the locus of care.  Assuming, which isn’t always in evidence, that for many if not most outpatient procedures, the care required is the same such that one setting vs. another isn’t impactful to the outcome, then a site neutral payment seems logical.  Managed care companies have been using this approach overtly, attaching higher cost-share to certain sites or eliminating payment altogether for procedures done in higher cost settings. In the OPPS proposal, the savings is rather substantial – $760 million spread between provider payments and patient savings (deductibles).  To most policy watchers, there is a watershed moment possible with this proposal and its fate.  The fundamental question yet resolved is whether hospitals will continue to have a favorable payment nuance over physician practices and free-standing outpatient providers.  Hospitals arguing that their administrative burden and infrastructure required overhead, combined with patient differences (sicker, older patients trend hospital vs. younger, less debilitated patients trending free-standing locations), necessitates a site different payment model (such as current).

In the post-acute space, payment site neutrality has been bandied about by MedPAC for some time.  Up to now, the concept of payment site neutrality has languished due to disparate payment systems in provider niches’.  SNFs and their RUGs markedly different from Home Health and its OASIS and no similarity with LTACHs in the least. Now, with post-acute payments narrowing conceptually on “patient-driven” models (PDPM and PDGM) that use diagnoses and case-mix as payment levers, its possible CMS is setting a framework to site neutral payments in post-acute settings.

In its March 2015 report to Congress, MedPAC called for CMS to create site neutrality for certain patient types between SNFs and IRFs (Inpatient Rehab Facilities).   While both have separate PPS systems for payment, the IRF payment is typically more generous than the SNF payment, though care may look very similar in certain cases.  For IRFs, payment is based on the need/extent of rehab services then modified by the presence or lack of co-morbidities.  IRFs however, have payment enhancements/ additions for high-cost outliers and treating low-income patients; neither applies in the SNF setting.

The lines of care distinction between the two providers today, certainly between the post-acute focused SNFs and an IRF, can be difficult to discern.  For example, both typically staff a full complement of therapists (PT, OT, Speech), care oversight by an RN 24 hours per day, physician engagement daily or up to three times per week, etc.  Where IRFs used to distinguish themselves by providing three hours (or more) of therapy, SNFs today can and do, provide the same level.  As a good percentage of seniors are unable to tolerate the IRF therapy service levels, SNFs offer enhanced flexibility in care delivery as their payment is not predicated (directly) on care intensity.  What is known is that the payment amounts for comparable patient encounters are quite different.  For example, a stroke patient treated in an IRF vs. an SNF runs $5,000 plus higher.  An orthopedic case involving joint replacement differs by $4,000 or more.  Per MedPAC the difference in outcomes is negligible, if at all.  From the MedPac perspective, equalized payments for strokes, major joint replacements and hip/femur related surgical conditions (e.g., fracture) between IRFs and SNFs made sense, at least on a “beta” basis.  With no rule making authority, MedPac’s recommendation stalled and today, may be somewhat sidelined by other value-based concepts such as bundled payments (CJR for example).

So the question that begs is whether site neutral payments are near or far on the horizon for post-acute providers.  While this will sound like “bet-hedging”, I’ll claim the mid-term area, identifying sooner rather than later.  Consider the following.

  • Post-acute care is the fastest growing, reimbursed segment of health care by Medicare.
  • The landscape is changing dramatically as Medicare Advantage plans have shifted historic utilization patterns (shorter stays, avoidance of inpatient stays for certain procedures, etc.).
  • Medicare Advantage days as a percentage of total reimbursed days under Medicare are growing. One-third of all Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2017.  Executives at United Healthcare believe that Medicare Advantage penetration will eclipse 50% in the next 5 to 10 years.  As more Boomers enter Medicare eligibility age, their familiarity with managed care and the companies thereto plus general favorability with the product makes them quick converts to Medicare Advantage.
  • Managed care has to a certain extent, created site preference and site based value payment approaches already.  There is market familiarity for steering beneficiaries to certain sites and/or away from higher cost locations.  The market has come to accept a certain amount of inherent rationing and price-induced controls.
  • At the floor of recent payment system changes forthcoming is an underlying common-thread: Diagnoses driven, case-mix coordinated payments.  PDPM and PDGM are more alike in approach than different.  IRFs already embrace a modified case-mix, diagnoses sensitive payment system. Can homogenization among these be all that far away?
  • There are no supply shortage or access problems for patients.  In fact, the SNF industry could and should shrink by about a third over the next five years, just to rationalize supply to demand and improve occupancy fortunes.  There is no home health shortage, save that which is temporary due to staffing issues in certain regions (growth limited by available labor rather than bricks and mortar or outlets). Per MedPac, the average IRF occupancy rate pre-2017 was 65%.  It has not grown since.  In fact, the Medicare utilization of IRFs for certain conditions such as other neurologic and stroke (the highest utilization category) has declined. (Note: In 2004 CMS heightened enforcement of compliance thresholds for IRFs and as a result, utilization under Medicare has shrunk).
  • Despite payment reductions, Home Health has grown steadily as has other non-Medicare outlets for post-acute care (e.g., Assisted Living and non-medical/non-Medicare home health services).  Though the growth in non-Medicare post-acute services has caused some alarm due to lax regulations, CMS sees this trend favorably as it is non-reimbursed and generally, patient preferred.
  • Demonstration projects that are value-based and evidence of payment following the patient or “episode based” rather than “site based” are showing favorable results.  In general, utilization of higher cost sites is down, costs are down, and patient outcomes and satisfaction are as good if not better, than the current fee-for-service market.  Granted, there are patient exceptions by diagnoses and co-morbidity but as a general rule, leaving certain patients as outliers, the results suggest a flatter, site neutral payment is feasible.

If there is somewhat of  a “crystal ball” preview, it just may be in the fate of the OPPS site neutral proposal.  I think the direction is unequivocal but timing is everything.  My prediction: Site neutral payments certainly, between IRFs and SNFs are on the near horizon (within three years) and overall movement toward payments that follow the patient by case-mix category and diagnoses are within the next five to seven years.

October 2, 2018 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , , , , , | Leave a comment

Five Post Acute Axioms (Truisms)

I read a lot – part of the job.  I hear lots of conversations and participate in many in-person and online.  Last week, I spent a few evenings with my rehab partner.  Between he and my wife, with clients across the country, it was fascinating how the conversation regarding fortune or famine (providers) boiled down to a few simple truths.  Summarizing, those that do well have accepted and work doggedly at embracing and living out these axioms.  Those that are struggling, simply refuse to grasp these plain truths.  Regardless of the entity (SNF, HHA, etc.), these axioms apply (truthfully, for any provider including hospitals).

To preface, I’ve slimmed-down hours upon hours of recent conversations to these five “axioms”.  One could argue more apply.  Between my partners, my wife (a partner) and me, we have some context here as we work with multiple entities that rank in the top 1,000 post-acute providers in the nation.  For example, we all share a working relationship with the 6th ranked SNF in the nation, out of 15,636 SNFs.  Unfortunately, we also have client relationships with the lowest ranked providers including one that ranks 15,609.  This dichotomy (cruel as it is) gives us a unique perspective regarding truisms (embrace them and succeed, ignore them and fail).

  1. Quality Matters: This isn’t about hype or verbiage; it’s about results.  Organizations that are succeeding are doggedly, persistently and hyper-fixated on their care outcomes.  Their culture is deep in quality and they benchmark themselves and what they do, how they perform, with an effort on getting better all the time.  Their outcomes demonstrate their quality.
  2. Staffing Matters: Providers that perform invest in and have in number, great staff perform better.  They put the right people closest to the patients.  They have assessed their operations and know precisely, what levels of staff by credential and education, their operations require.  They train, teach and invest in their “troops”.  You won’t find a great SNF that doesn’t have RNs on every shift, every day.  You won’t find a great provider, HHA or SNF, etc., that doesn’t have actual employees, not contractors, taking care of patients (primarily).
  3. Excellence in Management and Leadership is Imperative: The best have long-term, highly qualified management and leadership at every level in the organization.  They retain great talent and grow it like a prized rose-bush (ever watch rose “aficionados” you’ll get the reference). These folks aren’t the highest paid or even with the most credentials; they are excellent directors of task and people.  The most credentialed (education, certifications, etc.) don’t correlate to the best manager or leader.  In a nutshell: Excellence here means bright, strategic, engaged, earnest, industry and trade experts, that are quality driven.
  4. The Devil is in the Details: The best providers are not just current with policy issues and reimbursement trends, they are ahead and know the implications and manage to these details.  For example, they know length-of-stay matters and they are working to shorten each encounter to only the resources required (days, visits, etc.).  Their quality measures are excellent because they review the dozens of measurable data points to look for trends and to track outcomes.  They have protocols and disease pathways in-place.  They adopted antibiotic stewardship practices before the buzzword existed.  They already were on pain and the management thereof, without or minimizing opioids, before alarms sounded.  They had steps in place to quality review care transitions and hospitalizations.  QAPI was something new but not to them.  Doing things right was and still is, the driver for these excellent organizations.
  5. The Organization is like a Car: This is meant to be a silly reference but also serious.  Driving is all about what is going on ahead of you and being anticipatory and prepared.  The rearview mirror is checked but only briefly.  Failure to pay attention to the road ahead and anticipate hazards, keep safe distances, etc. is how one arrives at a destination, safely and efficiently. Think of it this way: Slow is smooth, smooth is fast (an old and time-honored, Special Forces reference). Great providers embrace this philosophy – do things slowly, smoothly to be able to respond quickly when necessary.  What differentiates the very best providers from the very worst is their focus on FORWARD – being very anticipatory and developing core, innate competencies that help be “smooth and fast” as adaptation is required in health care.

Food for thought.  If one chooses to use the above points on a comparative basis, my guess is you will find what I know.  The best embrace these axioms.  The worst don’t or don’t consistently.  Everyone else in the middle has a choice to make – get better or get worse.  The truth about “great’ in health care is easy to understand.

 

July 16, 2018 Posted by | Home Health, Skilled Nursing | , , , , , , , | Leave a comment

Stuck in Neutral: Bundled Payments and Post-Acute Providers

After CMS nixed the mandatory expansion provisions for Bundled Payments and reduced the metro areas participating in CJR (joint replacement), the prospects for post-acute provider involvement in non-fee-for-service initiatives (payments and incentives based on disease states and care episodes) went in to limbo.  With a fair amount of excitement and trepidation building on the part of the post-acute world about different payment methodologies, new network arrangements, new partnerships, incentive possibilities, etc., CMS put the brakes on the “revolution”; a screeching halt.

While Bundled Payments aren’t dead by any means, the direct relationships for post-acute providers are in “neutral”.  The Bundled Payments for Care Improvement Advanced (BPCI Advanced) initiative announced in January included no avenue for SNFs, HHAs (home health) to apply and participate.  Nationally, other voluntary bundle programs continue including the remnants of CJR, and Models 2, 3 and 4 in Phase II.  According to CMS, as of April of this year, 1100 participants were involved in Phase 2 initiatives.  The Phase 2 initiatives cover 48 episodes of care ranging from diabetes, through various cardiac issues and disease to UTIs.

BPCI Advanced opportunities (episode initiators) involve hospitals or physician groups.  Post-acute will still play a role but the direct connections and incentives aren’t quite tangible or specific, compared to CJR.  Time will tell how the roles for post-acute providers evolve in/with BPCI Advanced.  Oddly enough, the economic realities of care utilization and negative outcome risk suggest that post-acute should play a direct, large role. As hospital stays shorten, outpatient and non-acute hospital surgical procedures increase, the directed discharge to post-acute has taken on greater meaning in the care journey.  HHAs in particular, are playing an expanded role in reducing costs via enhancements to their ability to care for more post-surgical cases direct from the hospital/surgical location.  Simultaneous however, readmission risk exposure increases.  What is certain is that system-wide, the window of 30 to 90 days post hospital or acute episode is where significant efficiency, quality and cost savings improvement lies.

While the direct opportunities initially forecast under BPCI for the post-acute industry have evaporated (for now), strategic benefits and opportunities remain.  Providers should not stray from a path and process that focuses on enhancing care coordination, improving quality and managing resource utilization.  Consider the following:

  1. For SNFs, PDPM (new proposed Medicare reimbursement model) incorporates payment changes and reductions based on length of stay (longer stays without condition change, decrease payment after a set time period).  A premium is being placed on getting post-acute residents efficiently, through their inpatient stay.
  2. For HHAs, payment reform continues to focus on shorter episodes in the future.  Like PDPM for SNFs, the focus is on efficiency and moving the patient through certain recuperative and rehabilitative phases, expeditiously.
  3. Medicare Advantage plans are increasing market share nationwide.  In some markets, 60% of the post-acute days and episodes are covered by Medicare Advantage plans – not fee-for-service. These plans concentrate on utilization management, ratcheting stay/episode length and payment amounts, down.  Providers that again, are efficient and coordinate care effectively will benefit by focused referrals and  improved volumes.
  4. Quality matters more than ever before – for all providers.  Star ratings are increasingly important in terms of attracting and retaining referral patterns  Networks and Medicare Advantage plans are focused on sourcing the highest rated providers.  Upstream referral sources, concerned about readmission risks are targeting their discharges to the higher rated providers.  Consumers are also becoming more market savvy, seeking information on quality and performance.  And of course, government programs such as Value-Based Purchasing place providers with poor performance on key measures (readmissions for SNFs) in the reimbursement reduction pool.
  5. Indirectly, Bundled Payment initiatives move forward and the Advanced option will require physicians and hospitals that participate, to source the best referral partners or lose incentive dollars and inherit unwarranted readmission risk.  SNFs and HHAs that excel at care coordination, length of stay management, have disease pathways in-place, can manage treatment, diagnostic and pharmacology expenses and produce exceptional outcomes and patient satisfaction are the preferred partners.

June 29, 2018 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , , , | Leave a comment

Interoperability and Post-Acute Implications

I’m not sure how many of my readers are following the subject and CMS stance/policy on interoperability among providers but the concepts and resultant debate are rather interesting.  I am trying to encourage as many clients and readers to tune-in on this subject as the implications are sweeping – positively and negatively.

Interoperability in this context means the ability of computer systems or software to exchange and/or make use of information for functional purposes.  In health care, the genesis of the interoperability concept began with HIPAA in the nineties.  HIPAA spawned the HITECH Act in 2009 which ultimately created Meaningful Use.  For anyone unfamiliar with Meaning Use and its incentive provisions, think no further than Value-Based Purchasing (VBP) and quality reporting.  The IMPACT Act is an analogous outgrowth of blended concepts between Meaningful Use, Value-Based Purchasing and Interoperability.  Conceptually, the goal is to create data measures that have “meaning” in terms of clinical conditions, outcomes, patient care and economics.  Ideally, data that matters and can be shared will improve outcomes, improve standardization of care and treatment processes and reduce cost through reduced waste and duplication.  Sounds simple and logical enough.

In April of this year, with the roll-out of various provider segment Inpatient PPS proposed rules for FY 2019, CMS included proposals to strengthen and expedite, interoperability.  The concept is contained within the SNF and Hospital proposed rules.  The twist however, is that CMS is changing its tone from “voluntary” to “mandatory” regarding expediting or advancing, interoperability. Up until this point, Meaningful Use projects that advanced interoperability goals were incentive driven; no punishment.  Among the options CMS is willing to pursue to advance interoperability are new Conditions of Participation and Conditions for Coverage that may include reimbursement implications (negative) and fines for non-compliance and non-advancement.  In the SNF 2019 Proposed Rule, providers are mandated to use the 2015 Edition of Certified Health Record/Information Technology in order to qualify for incentive payments under VBP and avoid reimbursement reduction(s).  For those interested, the 2015 Certified EHR Technology requirement summary is available here: final2015certedfactsheet.022114

The possible implications for providers are numerous – positive and negative.  The greatest positive implication is a (hopeful) rapid escalation of software systems that can share functional data directly without having to build and maintain separate interfaces (third-party).  Likewise, the proposed regulations will facilitate faster development of Health Information Exchanges (HIEs).  Many states have operating HIEs but provider participation and investment has been limited.  A quick interoperability interchange is via an HIE versus separate, unique data and software platform integration.  As SNFs and HHAs have MDS and OASIS assessment requirements on admission, fluid patient history, diagnoses/coding exchange and treatment history will facilitate faster and more accurate, MDS/OASIS completion – a real winner. Dozens of other “tasky” issues can be addressed as well such as portions of drug reconciliation requirements by diagnosis on admission, review of lab and other diagnostic results, order interchanges and interfaces, etc.

The most negative implication for providers is COST.  In reality, the post-acute side of health care isn’t really data savvy and hasn’t really kept pace with software and technology developments.  Many providers are small.  Many providers are rural. Many providers maintain primarily paper records and use technology only minimally.  Full EHR for them is impractical and with present reimbursement levels, unlikely any time soon.  The second most negative implication for providers is the fragmentation that exists among the system developers and software companies in the health care industry.  The “deemed” proprietary nature of systems and their software codes has limited collaboration and cooperation necessary to advance interoperability. HIEs were supposed to remedy this problem but alas, not yet and not at the magnitude-level CMS is foretelling within its Proposed Rules.

Interoperability is needed and amazing, conceptually.  The return is significant in terms of improvements in outcomes and reductions in waste and cost.  Unfortunately, the provider community remains too fragmented and inversely incentivized today to jump ahead faster (money not tied to integration and initiatives among providers).  Software systems don’t work between providers in fashions that support the interoperability goals.  More troubling: the economics are daunting for providers that are not seeing any additional dollars in their reimbursements, capable of supporting the capital and infrastructure needs part and parcel to additional (and faster), interoperability.

 

June 27, 2018 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , | Leave a comment

CMS Proposes Reintroduction of Pre-Payment Review for Home Health (with a twist)

In a memo set for release today, CMS is proposing to reintroduce pre-payment review (with a twist) for Home Health claims.  The memo version is here: HHA Pre Payment Recall, CMS first introduced pre-payment review in August 2016, starting in Illinois.  The process required agencies to submit claim-related data BEFORE receiving final payment or face an adjustment in their payment of minus 25%.  This reduction could not be appealed. Providers could resubmit additional data to achieve full affirmation of their claim PRIOR to submitting final billing for the claim.  After a certain threshold of claims was reviewed and determined proper, the pre-payment process would sunset for the agency.

The initial trial that began in Illinois was such a debacle for agencies and the industry due to the time delays and criterion laxity, slowing cash flow and increasing administrative burden that Congress finally stepped in and put the program on hiatus.  The Illinois experiment was so initially bad that further expansion to other states (Florida was next), never occurred.

In this new proposal which will open for comment (60 days) after publication in the Federal Register, CMS is keeping the program design constant with a couple of twists.

  1. Providers/Agencies in the demonstration states of Illinois, Ohio, Florida, North Carolina, and Texas will be able to choose whether to submit data to the MAC (Medicare Administrative Contractor) for review on a pre-claim or post-claim/payment basis.
  2. Providers/Agencies may opt-out of the payment review (pre or post) by accepting payments at a discounted rate – minus 25%.

As with the former program, providers/agencies will need to meet an acceptable level of affirmed claim submissions (pre or post) to move to an episodic review standard.  In effect, after the agency has been subject to sufficient claim reviews and found to be compliant with required documentation and billing standards, the agency transitions to an “every so often” sampling of claims.  As before, providers that fail to submit data or elect pre or post payment reviews will see claim payments automatically discounted by 25%.

The rationale from CMS to return to this review process is the same as before; assurance of claim accuracy and fraud reduction.  CMS continues to believe that HHAs are sloppy and negligent enough in their claims process that improper payments are too high (as a percent of all claims) and or fraud, still prevalent enough to warrant a program of systematic review. Of course, as of now, CMS can offer no assurance that the next incarnation of claim reviews will go smoother than the 2016 experience.  The belief is that lessons were learned and steps put in-place by the MAC to smooth out reviews and not harm agency financial status or create undue additional burden.  Frankly, I hold no such expectation or belief that the process will be markedly better.

May 31, 2018 Posted by | Home Health | , , , , , , , , | Leave a comment

Home Health and Hospice: Strategic Movement in an Evolving Market

Last year 2017, was a bit of a “downer” in terms of mergers/acquisitions in the home health and hospice industry.  Though 2017 was fluid for hospital and health system activity, the home health and hospice sectors lagged a bit.  Some of the lag was due to capacity concerns in so much that health system mergers, if they involve home health as part of the “roll-up”, take a bit of sorting out time to adjust to market capacity changes (in markets impacted by the consolidations).  The additional drag was attributable to CMS proposing to change the home health payment from a per visit function to a process driven by patient characteristics – after implementation, a net $950 million revenue cut to the industry.  CMS has since scrapped this proposed payment revision however, the future foreshadows payment revisions nonetheless including changing to some format of a shorter episode window for payment (ala 30 days).

Hospice has always been a bit of niche in terms of the post-acute industry.  Where consolidation and merger/acquisition activity occurs, it is most often fueled by a companion home health transaction.  De Novo hospice “only” activity of any scale has been steady and unremarkable, save regional and local movement.  From a reimbursement and policy implication standpoint, hospice has been far less volatile than home health.  Minor changes in terms of scaling payment levels by length of stay have only marginally impacted the revenue profile of the industry.  What continues to impact hospice patient flow is the medical/health care culture within the U.S. that continues to be in steep denial regarding the role of palliative medicine/care and end-of-life care, particularly for advanced age seniors.  Sadly, too many seniors still pass daily in expensive, inpatient settings such as hospitals and nursing homes (hospitals more so), racking up bills for (basically) futile healthcare services.  If and when this culture shifts, hospice will see expansion in the form of referrals and post-acute market share.

Despite somewhat (of) a tepid M&A climate in 2017, the tail-end of the year and early 2018 provided some fireworks.  Early 2018 is off to the races with some fairly large-scale consolidations.  In late 2017, LHC group and Almost Family announced their merger, recently completed.  Preceding this transaction in August, Christus Health in Texas formed a joint venture with LHC, encompassing its home health and hospice business (LTAcH too).  Tenet sold its home health business to Amedysis (though not a major transaction by any means).  And, Humana stepped forward to acquire Kindred’s Home Health business.

In the first months of 2018, Jordan, a regional home health and hospice business in Texas,  Oklahoma, Missouri and Arkansas, announced a merger with fellow regional providers Great Lakes and National Home Health Care.  The combined company will span 15 states with over 200 locations.  In other regions, The Ensign Group, primarily a nursing home and assisted living provider continues to expand into home health and hospice via acquisitions; primarily underperforming outlets that have market depth and need restructuring.  Former home health giant Amedysis continues to redefine its role in the industry via additions of agencies/outlets in states like Kentucky.  Amedysis, once the largest home health provider in the nation, fell prey to congressional inquiries and regulatory oversight regarding suspected over-payments and billing improprieties.  Having worked through these issues and shrinking its agency/outlet platform to a leaner, more core and manageable level, Amedysis is now growing again, though less for “bigger” sake, more for strategy sake.

Given the preceding news, some trends are emerging for home health in particular and a bit (quite a bit) less so for hospice.  Interestingly, one of the trends apparent for home health has been present for hospitals, health systems, and now starting, skilled nursing: there is too much capacity, somewhat misaligned with where the market needs exist.  I believe this issue also exists for Seniors Housing (see related post at https://wp.me/ptUlY-nA ) but the drivers are different as limited regulation and payment dynamics are at play for Seniors Housing.  While home health is no doubt, an industry with continued growth potential as more post-acute payment and policy drivers favor home care and outpatient over institutional options, capacity problems still exist.  By capacity I mean too many providers wrongly positioned within certain markets and not enough providers properly positioned to deliver more integrated elements of acute and post-acute, transitional services in expanding markets (e.g., Washington D.C., Denver, Dallas, etc.).

Prior to their final consolidation with Humana, Kindred provided an investor presentation explaining their rationale for exiting the home health business (somewhat analogous to their exit rationale from skilled nursing).  The salient pages are available at this link: Kindred Investor Pres 2 18 . Fundamentally, I think the underpinnings of the argument beginning with the public policy and reimbursement dynamics which are extrapolated against a “worse-case” backdrop (MedPac recommendations don’t equate to Congressional action directly nor do tax cuts equate directly to Medicare reimbursement cuts) get lost to the real reason Kindred exited: excess leverage.  Kindred was overly leveraged and as we have seen with all too many like/analogous scenarios, excessive overhead and fixed costs in a tight and competitive market with sticky reimbursement dynamics and risk concentration on Medicare beget few strategic options other than shrink or exit.

With the backdrop set, the home health environment is at an evolutionary pass – the fork-in-the-road applies for many providers: bigger in scale or focused regionally with more network alignment required (aka strategic partnerships).  I think the following is safe to conclude, at least for this first half of 2018.

  • The M&A driver today is strategy and market, less financial.  While financial concerns remain due to some funky (technical term) policy dynamics and reimbursement unknowns, the same are more tame than 12-18 months ago.  To be certain, financial gain expectations are part of every transaction, just less impactful in terms of motivation.
  • The dominant strategic driver is network alignment: being where the referrals are.  The next driver is “positioning” as a player managing population health dynamics.  Disease management focus is key here.
  • Medicare Advantage penetration is re-balancing patient flow in many markets.  As the penetration escalates above 50% (half or better of all Med A days coming from Med Advantage), the referral flows are shaping to more demand for in-home care (away from institutional settings), shorter lengths of stay across all post-acute segments, increasing complexity and acuity on transition, and pay-for-performance dynamics on outcomes (particularly, re-hospitalization).
  • Market locations are key and very, very strategic.  With home health, being able to channel productivity, especially in a low labor supply/high demand environment, is imperative.  Being proximal to referrals, being tight with geographic boundaries, being able to lever staff resources, and being able to deploy technology to enhance efficiency is operationally, imperative.
  • Partnerships are synergistic today and in-flux.  It used to be that a key partner was an acute hospital.  Today, the acute hospital remains important but not necessarily, primary.  With physicians starting to embrace ACOs and Bundled Payment models, the referral relationship most preferred may be direct agency to doctor.  In fact, the hospital partner may not be anywhere near as valuable as the surgical center partner, owned and controlled by physicians.
  • Capacity and capability to bear risk from a population management perspective and to accept patients with higher acuity needs (in-home) and broader chronic conditions.  Effectively, home health agencies are going to continue to feel pressure to take patients with multiple chronic needs and comorbidities and to coordinate these care needs across perhaps, two to three provider spectrums (outpatient, specialty physicians, hospice if required, etc.).

 

May 23, 2018 Posted by | Home Health, Hospice | , , , , , , , , , , | Leave a comment

Bundled Payment Hiatus….or, Demise?

Within the last few days, CMS/HHS sent a proposed rule to OMB (Office of Management and Budget) that would cancel the planned January 2018 roll-out of the (mandatory) cardiac and traumatic joint repair/replacement bundles.  Specifically, CMS was adding bypass and myocardial infarction DRGs to the BPCI (Bundled Payments for Care Improvement) along with DRGs pertaining to traumatic upper-femur fracture and related joint repair/replacement.  The original implementation date was March, then delayed to May, again delayed to October and then to January 2018.  Additionally, the proposed rule (text yet available) includes refinement proposals for the current mandatory CJR bundles (elective hip and knee replacements).  It is widely suspected that the mandatory nature of the CJR will revert to a voluntary program in 2018.

The question that begs current is this step a sign of hiatus for episodic payments or an all-out demise.  Consider the following;

  • The current head of HHS, Tom Price is a physician who has been anti the CMS Innovation Center’s approach to force-feeding providers, new payment methodologies.  While Price is on the record as favoring payment reform he is also adamant that the same needs to incorporate the industry stakeholders in greater number and length than what CMS has done to date (with the BPCI).
  • Evidence of true savings and care improvement has not occurred, at least to date.  This is definitely true of the large-scale initiatives.  The voluntary programs, in various phases, are demonstrating some success but wholesale success is simply not there or not yet confirmed by data.
  • Providers have railed against bundle complexity and in particular, the short-comings evident for cardiac DRGs which are inherently far more complex than the orthopedic DRGs, at least those that are non-traumatic.

My answer to the question is “hiatus” for quite some time.  While there is no question that value-based care and episodic payments are part of the go-forward reality for Medicare, timing is everything.  There are multiple policy issues at play including the fate of the ACA.  A ripple effect due to whatever occurs with the ACA (repeal, revamp, replace, etc.) will permeate Medicare (to what extent is yet to be determined). I anticipate the current voluntary programs to continue and CMS to return to the drawing board waiting for more data and greater clarity on “where to go” with respect to value-based care programs.

Finally, because bundled payments did have some implications for the post-acute sectors of health care, this possible change in direction will have an impact, albeit small. The cardiac bundles had little to no impact for SNFs or HHAs and only minor impact perhaps, for IRFs (Skilled Nursing, Home Health and Inpatient Rehab respectively).  Traumatic fractures and joint repair/replacement had some impact for inpatient providers, particularly Skilled and IRFs as rarely can these patients transition home or outpatient from the surgical stay.  Some inpatient care is customary and frankly, warranted.

CJR sun-setting may have some broader ramifications.  Right now, CJR has shifted the market dynamic away from a traditional SNF or IRF stay to home health and outpatient.  The results are evidenced by a fairly noticeable referral shift away from SNFs and concomitant Medicare census declines coupled with length of stay pressures (shorter).  Home health and outpatient has benefitted.  Yet to determine is whether this trend is ingrained and evidence of a new paradigm; one that may be permanent.  If the latter is the case, CJR shifting to a voluntary program may not change the current picture much, if any.  My prediction is that the market and the payers have moved to a new normal for voluntary joint replacements and as such, CJR or not, the movement away from inpatient stays and utilization is here to stay.

August 15, 2017 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , | Leave a comment

SNF Fortunes, HCR/Manor Care and Salient Lessons in Health Care

Long title – actually shortened.  In honesty, I clipped it back from: SNF Fortunes, HCR/Manor Care, Five Star, Value-Based Payment, Hospitals Impacted Too, Home Health and Hospice Fortunes Rise, and all Other Salient Lessons for/in Health Care Today. Suffice to say, lots going on but almost all in the category of “should have seen it coming”.  For readers and followers of my site and my articles and presentations/speeches, etc., this theme of what is changing and why as well as the implications for the post-acute and general healthcare industry has been discussed in-depth.  Below is a short list (not exhaustive) of other articles I have written, etc. that might provide a good preface/background for this post.

Maybe a better title for this post is the question (abbreviated) that I am fielding daily (sometimes thrice): “What the Heck is Going On?” The answer that I give to investors, operators, analysts, policy folks, trade association folks, industry watchers, etc. is as follows (in no particular order) HCR/Manor Care: This could just as easily be Kindred or Signature or Genesis or Skilled Healthcare Group…and may very well be in the not too distant future.  It is, any group of facilities, regardless of affiliation, that have been/are reliant on a significant Medicare (fee for service) census, typified by a large Rehab RUG percentage at the Ultra High or Very High level with stable to longer lengths of stay to counterbalance a Medicaid census component that is around 50% of total occupancy.  The Medicaid component of census of course, generates negative margins offset by the Medicare margins.  For this group or sub-set of facilities in the SNF industry, a number of factors have piled-on, changing their fortune.

  • Medicaid rates have stayed stable or shrunk or state to state conversions to Managed Medicaid have slowed payments, added bureaucracy, impacted cash flows, etc.  This latter element in some states, has been cataclysmic (Kansas for example).
  • Managed Medicare has (aka Medicare Advantage plans) increased in terms of market share, shrinking the fee-for-service numbers.  These plans flat-out pay less and dictate which facilities patients use via network contracts.  They also dictate length of stay.  In some markets such as the Milwaukee (WI) metro market, almost 50% of the Medicare volume SNFs get is patients in a Medicare Advantage plan.
  • Value-Based Care/Impact Act/Care Coordination has descended along with bundled payments in and across every major metropolitan market in the U.S. (location of 80 plus percent of all SNFs).  This phenomenon/policy reality is dictating the referral markets, requiring hospitals to shift their volumes to SNFs that rate 4 Stars or higher. The risk of losing funds due to readmissions, etc. is too great and thus, hospitals are referring their volumes to preferred environments – those with the best ratings.  The typical HCR/Manor Care facility is 3 stars or less in most markets.
  •  Overall, institutional use of inpatient stays is declining, particularly for post-acute stays.  Non-complicated surgical procedures or straight-forward procedures (hip and knee replacements, certain cardiac procedures, other orthopedic, etc.) are being done either outpatient or with short inpatient hospital stays and then sent home – with home health or with continuing care scheduled in an outpatient setting.  Medicare Advantage has driven this trend somewhat but in general, the trend is also part of an ongoing cultural and expectation shift.  Patients simply prefer to be at home and the Home Health industry has upped its game accordingly.

Adding all of these factors together the picture is complete.  Summed up: Too much Medicaid, an overall reduction in Medicare volume, an overall reduction in length of stay, and a shift in the referral dynamics due to market forces and policy trends that are rewarding only the facilities with high Star ratings.  That is/will be the epitaph for Manor Care, Signature, etc.

Five Star/Value-Based Care Models, Etc.: While many operators and trade associations will say that the Five Star system is flawed (it is because it is government), doesn’t tell the full story, etc., it is the system that is out there.  And while it is flawed in many ways, it is still uniformly objective and its measures apply uniformly to all providers in the industry (flaws and all).  Today, it is being used to differentiate the players in any industry segment and in ways, many providers fail to realize.  For example, consumers are becoming more savvy and consumer based web-sites are referencing the Five Star ratings as a means for comparison.  Similarly, these same consumer sites are using QM (quality measure) data to illustrate decision-making options for prospective residents.  Medicare Advantage plans are using the Five Star system.  Hospitals and their discharge functions use them.  Narrow networks of providers such as ACOs are using them during and after formation.  Banks and lenders use the system today and I am now seeing insurance companies start to use the ratings as part of underwriting for risk pricing (premiums).  Summed up: Ratings are the harbinger of the future (and the present to a large extent) as a direct result of pay-for-performance and an ongoing shift to payments based on episodes of care and via or connected to, value-based care models (bundled payments, etc.).  Providers that are not rated 4 and 5 stars will see (or are seeing) their referrals change “negatively”.

Home Health and Hospice: The same set of policy and market dynamics that are adversely (for the most part) impacting institutional providers such as SNFs and hospitals is giving rise to the value of home health and hospice.  Both are cheaper and both fit the emerging paradigm of patients wanting options and the same being “home” options.  Hospice may be the most interesting player going forward.  I am starting to see a gentle trend toward hospices becoming extremely creative in their approach to developing non-hospice specific, delivery alternatives.  For example, disease management programs evolving within the home health realm focused on palliative models, including pain and symptom management.  Shifts away for payment specific to providers ala fee-for-service will/should be a boon for hospices.  The more payment systems switch to episode payments, bundled or other, the more opportunity there is for hospices to play in a broader environment, one that embraces their expertise, if they choose to become creative.  Without question, the move toward less institutional care, shorter stays, etc. will give rise to the home care (HHA and hospice) and outpatient segments of the industry.  As fee-for-service slowly dies and payments are less specific (post-acute) to place of care (institutional biased and located), these segments will flourish.

Hospitals Too: The shift to quality providers receiving the best payer mix and volume and payments based on episodes of care, etc. is impacting hospitals too.  This recent Modern Healthcare article highlights a Dallas hospital that is closing as a result of these market and policy dynamics: http://www.modernhealthcare.com/article/20170605/NEWS/170609952?utm_source=modernhealthcare&utm_medium=email&utm_content=20170605-NEWS-170609952&utm_campaign=dose

REITs, Valuations, M&A, and the Investment World: As we have seen with HCR/Manor Care and Signature (likely others soon), REITs that hold significant numbers of these SNF assets have a problem.  These companies (SNF) can no longer make their lease payments.  Renegotiation is an option but in the case of Signature, the coverage levels are already at 1 (EBITDAR is 1 to the lease obligation).  IF and I should say when, the cash pressure mounts just a bit more, the coverage levels will need to fall below 1.  This significantly impacts the REITs earnings AND changes the valuation profile of the assets held.  What is occurring is their portfolio values are being “crammed” down and the Return on Assets negatively impacted.  And for the more troubling news: there is no fluid market today to offload underperforming SNF assets.  Most of the Manor Care portfolio, like the Genesis and Skilled Healthcare and Kindred portfolios, is facilities that are;

  • Older assets – average age of plant greater than 20 years and facilities that were built, 40 years or more ago.  These assets are very institutional, large buildings, some with three and four bed wards, not enough private rooms and even when converted to all private rooms, with occupancy greater than 80 or so beds with still, very inefficient environments.  Because so few of these assets have had major investments over the years and the cash flow from them is nearing negative, their value is negligible.  There are not buyers for these assets or operators today that wish to take over leases within troubled buildings with high Medicaid, low and shrinking Medicare, compliance (negative) history, etc.  Finally, the cost to retrofit these buildings to the new paradigm is so heavy that the Return on Investment (improved cash earnings) is negative.
  • Three Star rated or less with fairly significant compliance challenges in terms of survey history.  Star ratings are not easy to raise especially if the drag is due to survey/compliance history.  This Star (survey) is based on a three-year history.  Raising it just one Star level may take two to three survey cycles (today that is 24 to 36 months).  In that time, the market has settled again and referral patterns concretized – away from the lower rated providers.
  • In the case of Manor Care, too many remain or are embroiled or subject to Federal Fraud investigations.  While no one building is typically (or at all) the center of the issue, the overhang of a Federal investigation based on billing or care impropriety negatively impacts all facilities in terms of reputation, position, etc.

As “deal” volumes have shrunk, valuations on SNF assets are getting funky (very technical term).  The deals that are being done today are for high quality assets with good cash flow, newer buildings or even speculative deals on buildings with no cash flow (developer built) but brand-new buildings in good market locations.  These deals are purchase and operations (lease to operators and/or purchased for owner operation).  Cap rates on these deals are solid and range in the 10 to 12 area.  Virtually all other deals for lesser assets, etc. have dried up.

Final Words/Lessons Learned (or for some, Learning the Hard Way): As I have written and said ad nausea, the fee-for-service world is ending and won’t return.  Maximizing revenue via a focal opportunity to expand census by a payer source, disconnected from quality or services required, is a defunct, extinct strategy. That writing was on the wall years ago.  Today is all about efficient, shorter inpatient stay, care coordination, management of outcomes and resources and quality.  The only value provider assets have is if they can or are, corollary to these metrics.  By this I mean, an SNF that is Five Stars with modern assets and a good location within a strong market has value as does the operator of the asset.  An SNF that is Two Stars with an older building, a history of compliance problems, regardless of location, 50 percent Medicaid occupied has virtually no value today…or in the future.  Providers that can network or have an integrated continuum (all of the post-acute pieces) are winning and will win, especially if the pieces are highly rated.  Moreover, providers that can demonstrate high degrees of patient satisfaction, low readmission rates, great outcomes and shorter lengths of stay are and will be prized.  The world today is about tangible, measurable outcomes tied to cost and quality.  There is no point of return or going back.  And here’s the biggest lesson: The train has already left the station so for many, getting on is nearly impossible.

June 14, 2017 Posted by | Home Health, Hospice, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , | Leave a comment

Health Systems, Hospitals and Post-Acute Providers: Making Integration Work

Early into the Trump presidency and health care/health policy is front and center.  The first “Obamacare repeal and replace” attempt crashed and burned.  The upcoming roll-out of the next round of bundled payments (cardiac and femur fracture) is delayed to October from the end-of-March target date.  Logically, one can question is a landscape shift forming? Doubtful.  Too many current realities such as the need to slow spending growth plus find new and innovative population health and payment models are still looming. These policy realities beget other realities. One such reality is that hospitals and health systems must find ways to partner with and integrate with, the post-acute provider industry.

In late 2016, Premier, Inc. (the national health care improvement organization) released the results of a study indicating that 85% of health system leaders were interested in creating expanded affiliations with post-acute providers.  Interestingly, 90% of the same group said they believed challenges to do so would exist (Premier conducted the survey in summer of 2016 via 52 C-suite, health system executives).  Most of the challenges?  The gaps that exist “known and unknown” between both provider segments (acute and post-acute) and the lack of efficient communication interfaces (software) between the segments.

On the surface, bundled payments notwithstanding, the push for enhanced integration is driven by a number of subtle but tactile market and economic shifts.

  1. Inpatient hospital lengths of stay are dropping, driven by an increasing number of patients covered by managed care.  Today, the largest payer source contributor of inpatient days, Medicare, is 30.6% “managed”…and growing.  Medicaid is 62.7% and commercial, nearly 100% (99%). Source: http://www.mcol.com/managed_care_penetration
  2. Payment at the hospital end is increasingly tied to discharge experience – what happens after the inpatient stay.  The onus today is on the hospital (and growing) for increasing numbers of patient types (DRG correlated) to discharge the patient properly such that the same does not beget a readmission to the hospital.  Too many readmissions equal payment reductions.
  3. Population health, focused-care models such as ACOs are evolving.  Their evolution is all about finding the lowest cost, highest quality centers of care.  Other BPCI (bundled payment) initiative projects such as Model 3, focus directly on the post-acute segment of care.  Unlike CJR (and the recently delayed cardiac bundles), the BPCI demonstration that began in 2013 covers 48 episodes of care (DRG based) and has participating providers (voluntarily) operating programs in all four model phases, nationwide.
  4. Patient preference continues to demand more care opportunities at-home.  Never mind the increased risk of complication with longer inpatient hospital stays (the risk of infection, pressure injuries, weight loss, delirium, etc. increases as stays increase), it is patient preference to discharge quickly and preferably, to home with services (aka home care).

Regardless the fate of Obamacare now or in the near future, these trends are unlikely to change as they have been moving separate from Obamacare.  Arguably, the ACA/Obamacare accelerated some of them.  Nonetheless, the baked-in market forces that have emanated from ACOs and care episode payments illustrate that even in infancy, these different models produce (generally) more efficient care, lower costs and improved patient satisfaction and outcomes.

As with any integration approach such as a merger for example, cultural differences are key.  The culture of post-acute care is markedly different from that of acute/hospital care.  For hospitals to appreciate this difference, look no farther than the two key determinants of post-acute culture: regulation and payment.  The depth and breadth plus the scope of survey and enforcement activity is substantially greater on the post-acute side than the acute side.  As an example, observe the SNF industry and how enforcement occurs.  Hospitals are surveyed for re-accreditation once every three years.  The typical SNF is visited no less than four times annually: annual certification and three complaint surveys.

In terms of payment, the scope is drastically different.  While hospitals struggle to manage far more payers than a post-acute provider, the amount that is paid to a hospital is substantially larger than that paid to a post-acute provider.  At one point years back, the differences were substantiated largely by acuity differences across patients.  While a gap still exists, it has narrowed substantially with the post-acute provider world seeing an increase in acuity yet lacking a concomitant payment that matches this increase.

Given this cultural framework, post-acute providers can struggle with translating hospital expectations and of course, vice-versa.  Point-of-fact, there is no real regulatory framework in an SNF under federal law for “post-acute” patients.  The rules are identical for a patient admitted for a short-stay or for the rest of his/her life.  Despite the fact that the bulk of SNF admissions today are of the post-acute variety, the regulations create conformity for residency, presumptively for the long-term.  Taking the following into consideration, a challenge such as minimizing a post-acute SNF stay to eight days for a knee replacement (given by a hospital to an SNF) is logical but potentially fraught with the peril presented by the federal SNF Conditions of Participation.  The SNF cannot dictate discharge.  A patient/resident that wishes to remain has rights under the law and a series of appeal opportunities, etc. that can slow the process to a crawl.  At minimum, a dozen or more such landmines exist in analogous scenarios.

Making integration work between post-acute and acute providers is a process of identifying the “gaps” between the two worlds and then developing systems and education that bridge such gaps. Below is my list (experiential) of the gaps and some brief notes/comments on what to do bridge the same.  NOTE: This list is generally applicable regardless of provider type (e.g., SNF, HHA, etc.).

  • Information Tech/Compatibility: True interoperability does not yet exist.  Sharing information can be daunting, especially at the level required between the provider segments for good care coordination.  The simple facts are that the two worlds are quite different in terms of paper work, billing requirements, documentation, etc.  Focus on the stuff that truly matters such as assessments, diagnoses, physician notes, plans of care, treatment records, medications, diagnostics, patient advance directives and demographics.  Most critical is to tie information for treating physicians so that duplication is avoided, if possible.
  • Regulatory Frameworks: This is most critical, hospital/physician side to the post-acute side, less so the other way.  Earlier I mentioned just one element regarding an SNF and discharge.  There are literally, dozens more.  I often hear hospitals frustrated by HHAs and SNFs regarding the “rules” for accepting patients and what can/cannot be done in terms of physician orders, how fast, etc. For example, it might be OK in the hospital to provide “Seroquel for sleep or inpatient delirium” but it is not OK in the SNF.  HHAs need physician face-to-face encounters just to begin to get care moving, including orders for DME, etc.  There is no short-cut.  Creating a pathway for the discharging hospital and the physician components to and through the post-acute realm is critical to keep stays short and outcomes high… as well as minimize delays in care and readmissions.
  • Resource Differences: Understanding the resource capacities of post-acute, including payment, is necessary for smooth integration.  What this means is that the acute and physician world needs to recognize that stay minimization is important but so is overall care minimization or better, simplification.  Unnecessary care via duplicative or unnecessary medications, tests, etc. can easily eat away at the meager margins that are operative for SNFs and HHAs.  For example, I have seen all too many times where a patient has an infection and is discharged to an SNF on a Vancomycin IV with orders for continued treatment for four more days.  Those four days are likely negative margin for the SNF.  A better alternative?  If possible, a less expensive antibiotic or send the remaining Vancomycin doses to the SNF.  Too many tests, too many medications, too much redundancy erodes post-acute margin quickly.  Finding common ground between providers with shared resource opportunities is important for both segments to achieve efficiency and still provide optimal care.
  • Language Differences: In this case, I don’t mean dialect.  Industry jargon and references are different.  I often recommend cheat-sheets between providers just to make sure that everyone can have a “hospital to SNF to HHA” dictionary.  Trust me, there is enough difference to make a simple working dictionary worth the effort.
  • Education/Knowledge: The gap between staff working in different environments can be wide, particularly as the same relates to how and why things are done the way they are.  For example, therapy.  Physical therapy in a hospital for the acute stay is markedly different than the physical therapy in a home health setting or a SNF setting.  Care planning is different, treatments similar but session length and documentation requirements are vastly different.  The clinical elements are surprisingly similar but the implementation elements, markedly different.  The notion that one staff level is clinically superior to another is long dispelled.  SNF nurses can face as many clinical challenges and perhaps more due to no/minimal immediate physician coverage, as a hospital nurse.  True, there are specialty differences (CCU, Neuro ICU, Trauma, etc.) but at the level where patients flow through acute to post-acute, the clinical elements are very similar.  The aspect of care differences and the how and why certain things are done in certain settings is where interpretation and education is required.
  • System and Care Delivery: While the diagnosis may follow, assuring proper integration among the various levels or elements of care requires systematic care delivery. The best language: clinical pathways and algorithms.  Developing these across settings for an episode of care creates a recipe or roadmap that minimizes redundancy, misinterpretation, and lack of preparation (all of which create bad outcomes).  With these in-place, common acute admissions that beget post-acute discharges, places every care aspect within the same “playbook”.

 

March 28, 2017 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , | 2 Comments