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Bundled Payment Update

CMS has released the text of the proposed rule with regard to bundled payment status (see my post from earlier today).  The link is here – https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-17446.pdf

In summary, here are the high points.

  • No advance of the cardiac and upper femur fracture/traumatic joint repair/replace bundles for 2018.  The reason? As stated in my earlier post.  Lack of consensus on the part of the hospital and provider community in terms of rate and structural episode accuracy is the major cause of collapse.  The complexity to convert crossing DRGs into one episode payment across multiple physician providers was simply too much.
  • With the end of the cardiac bundles, it appears that the cardiac rehab incentive payments have entered limbo.  We’ll await additional rule-making for more guidance and possible restoration.
  • On the existing hip and knee replacement bundles (aka CJR) that are in-effect and mandatory in 67 MSAs, CMS is proposing to cut the mandatory MSA participation in half (34 to remain).  The remaining 34 MSAs are per CMS, higher cost areas that may show efficiencies and care improvements over-time.  Recall in my earlier post that this is one of the problematic elements regarding BPCI – no real evidence of savings and improvement overall.
  • Finally, CMS will give participation flexibility to low volume hospitals and rural hospitals in the remaining CJR mandatory MSAs.

In closing, text in-hand, the news earlier is confirmed and pretty much as expected.  CMS is proffering language around renewed flexibilities, commitment to engage providers and more voluntary models as the future.  At least for now, mandatory and expanded bundled/episode payment models are on semi-permanent hiatus.

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August 15, 2017 Posted by | Policy and Politics - Federal | , , , , , , , , , , | 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

CMS Proposes Additional Bundled Payments: The Post-Acute Implications

On July 25, CMS released a proposed rule to create additional bundled payments/DRG focused EPMs, targeted for July 1, 2017.  The announcement/proposed rule is consistent with CMS’ and the Administration’s goal to migrate up to 50% of all traditional FFS (fee-for-service) payments to alternative models by 2018.  As with the CJR (bundled payments for hip and knee replacements), the comment period is relatively short.  Similarly, the likelihood of CMS deviating much in terms of timelines and methodology (payment) from the proposed rule is slim.  The view is that CMS has foretold providers of these initiatives, created a pathway or road map via analogous alternative models (BPIC and ACOs), and developed a systematic approach to the operational elements of the initiatives sufficient for providers to adapt and move forward.

Bundled Payments for Coordinated Cardiac and Hip-Fracture Care

As in the CJR initiative/rule, CMS has identified certain DRGs that it believes via evidence and study,  present opportunities for cost reduction and improved quality outcomes emanating from initial hospitalization through an episode of care equaling 90 days.  Following a near identical road map or path used with CJR (hip and knee replacement), CMS will provide the originating hospital with a target payment goal based on a regionally weighted average  with a small, statistically smoothed reduction.  This targeted value is the cost benchmark for the applicable DRG plus all related costs for a period totaling 90 days, encompassing the hospital originating stay.  Functionally, the payment equals the hospital inpatient stay, post-acute services, outpatient services, certain physician and supply components, etc. (aka the Episode Payment or “bundled payment”).  Below is a summary of the DRGs that make up the new “bundles” and the methodology in terms of how this initiative is set to work.

  • Includes cardiac care elements/DRGs for myocardial infarction and coronary artery bypass graft procedures (MI and CABG) plus an orthopedic element for hip/femur fractures and surgeries that is an addition or augment to the CJR.  The cardiac elements are mandated for hospitals in 98 MSAs (anyone who wants the list or wants to know about a particular region, contact me as provided on this site).  The hip/femur element is only applicable in the CJR regions; the original 67.
  • The related DRGs are:
    • Myocardial Infarction (MI): DRGs 280-282
    • Coronary Artery Bypass (CABG): DRGs 231-236
    • Surgical Hip Femur Fracture Treatment (SHFFT): DRGs 480-482
  • The Hospital is paid a calculated amount based on a regional target by applicable DRG
  • The amount is equal to the cost of the care at the hospital and the target, reflects the total expected cost for the complete episode of care (hospital, physician, post-acute).  The actual payment to the hospital is the target amount minus a quality measures discount equal to 1.5 to 3%.  Based on actual performance, savings can be returned as an incentive or recouped.
  • Post-acute providers bill per fee schedule.
  • In year 1, CMS reviews the costs per episode, the applicable quality indicators and patient satisfaction results. The review is against expected costs and quality standards.
  • In year 2, CMS reviews the same data and if the costs and quality are equal to or better than expected, the hospital can receive an incentive payment. If worse, the hospital will see a payment reduction (capped at 5% in year 2, moves to 10% in year 3 and 20% in following years).
  • Hospitals after year 1, can contract with post-acute providers to share risk (gains and losses) if the post-acute providers meet certain quality standards (3 star or better).
  • The whole initiative is slated for a 5 year period after which, CMS will review.

(The above is a cliff-note version covering the major highlights.  I have a client-based, in-depth summary that I can provide to readers.  Contact me via email at hislop3@msn.com or via a comment to this post.  Please provide a current, working email address and I will forward the summary, free of charge)

Within the proposed rule, CMS introduced two additional initiatives;

  • Cardiac Rehab Incentive Payments: A series of incentive payments to get hospitals under the Cardiac initiative to aggressively push patients into cardiac rehab programs during the 90 day Episode. These payments would be made to participants in 45 regions not selected and 45 additional regions selected within the bundled payment program.
    • First 11 cardiac rehab services will include a $25 per service bonus.
    • Services after 11 will include an incentive payment of $175 per service, up through the 90 day episode window.
    • Sessions are limited to 36 one hour periods over 36 weeks with a possible extension of an additional 36 sessions over a longer period if authorized by the MAC (Medicare Administrative Contractor). Intensive sessions are limited to 72 one hour sessions, up to 6 sessions per day, for 18 weeks.
  • A pathway for physicians that participate in bundled payments to qualify for financial rewards under the Quality Payment Program (CHIP and MACRA). Essentially, the methodology creates incentives for physicians that choose to be at a certain level of financial risk for payment loss, to gain incentive payments for meeting certain quality standards and adopting Electronic Health Record Technology.

Post-Acute Implications and Strategies

Unlike CJR, the implications for post-acute providers under the cardiac components are fairly minimal. The typical down-stream referrals (post-acute hospitalization services) for the cardiac components in the rule are minimal.  Most cardiac patients utilize after-care services through the hospital directly; principally for cardiac rehab.  When post-hospitalization discharges include care services, the bulk are through and coordinated with home health.  If more intense periods of inpatient care are required after acute hospitalization, the typical path is discharge to LTAcH or IRF.  This component however, can provide some strategic opportunities for SNFs that want to embrace a cardiac program with proper staffing, technology investments (telemetry), etc.

The SHHFT (hip/femur fracture) initiative is similar in opportunity to the CJR.  It presents SNFs and HHAs with numerous opportunities to partner with orthopedic groups, hospitals, and surgery centers to develop lower cost, high quality, coordinated care programs.  As with CJR, this phase of the bundled payment programs includes regulatory waivers for high quality providers (start ratings 3 and above).  These waivers include the three-day qualifying hospital stay for SNF coverage and the relaxation (requirements) of direct referral relationships that include incentive dollars.

For certain post-acute providers, there may be some opportunity to advance into the cardiac rehab arena.  While the incentive payments are targeted to the hospital, the hospital can pass these along and many may want do to just that.  Hospital cost structures are often too high to reap a modest incentive reward such as provided in the rule, necessitating a partner-type relationship to deliver the actual programming.

Strategically, post-acute providers need to consider the following and position accordingly;

  • As with CJR, star ratings matter.  SNFs and HHAs that want to succeed, garner partner opportunities and referrals should rate/rank 4 or 5 stars.  While three stars can play, the same will be market constricted by the 4 and 5 star programs.
  • Quality matters.  Post-acute providers need to aggressively monitor their outcomes and their patient satisfaction.  I recommend the following at a minimum.
    • QA and reduce as much as possible, any rehospitalization.  To do this, staff need training, tools such as INTERACT, service depth expanded and reviewed, and proper support tools and equipment available.
    • Employ or develop a Care Navigator within your organization (more than one if need be).  I recommend that this position is tasked with handling all critical elements of the initial referral and intake, coordinating all care during the post-acute stay, coordinating discharge including referrals downstream (e.g., SNF to home care), coordinating return physician visits, patient teaching, and all follow-ups on status and questions.  This role should include watching lengths of stay and gathering critical quality measures such as weight loss, wound/skin, falls, infections, etc.
    • Develop and utilize pathways and protocols that correlate to the bundled payment DRGs for the post-acute components.  In other words, if your organization is a SNF, it should have a post-surgical pathway for a femur fracture that covers from admission, pain management, therapies, skin and wound, length of stay, patient teaching, discharge, etc. all laid out in a pathway/decision matrix married to care plans.  Not only are these necessary to assure effective, efficient care; they are great marketing tools.  Collaborate with the hospital, with physician partners and discharge partners to gain a complete perspective.
    • Train and develop staff skills to coincide with the types of patients encompassed by the bundled payment models.  Your SNF or HHA should have expertise in every care element plus ideally, staff that have advanced training and certifications in key disciplines.  For example, an SNF that seeks to take post CABG patients needs RNs with ALS certification and telemetry experience/training.
    • Develop a post-acute continuum.  Playing in the bundled payment arena now and going forward as a post-acute provider will necessitate having a continuum of services.  Bundled payments and being at risk are anathema to truncated, one-off providers.  In other words, an SNF that doesn’t have a HHA component and outpatient component won’t be a referral magnet as the EPMs (episodic payment models) move forward.  I recommend providers that can, acquire or develop their own programs and those that cannot, partner accordingly.  Quality and efficiency are key so if for example an SNF chooses to partner with a HHA, the SNF is warned to find such an agency that will match quality, monitor all elements of outcome data and satisfaction, collaborate on program development, QA, etc.  The same is true for outpatient relationships.

As with CJR, the focus in this next phase is to re-shape how the post-acute provider world interacts with the acute hospital and physician world.  Providers need to re-organize thematically on quality, efficiency and collaboration. The winners (if you will) are the providers that manage the most services, in a coordinate delivery model, that can demonstrate quality with the ability to manage and coordinate care across a myriad of delivery points; seamlessly.

 

August 5, 2016 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , | Leave a comment

Bundled Payment Primer: SNFs

On April 1,  implementation of the CMS expanded Bundled Payments for Care Improvement demonstration for hip and knee replacement (aka CCJR) begins.  This phase takes the initial voluntary BPCI program and expands the concept on a non-voluntary basis to 67 metropolitan regions.  See my post on the final rule here at http://wp.me/ptUlY-jh.  Effectively,  Medicare reimbursed knee and hip joint replacements through a covered (Medicare) center (hospital or qualifying surgery center) within one of the designated regions, will be paid on a “bundled” basis.

Overview

Beginning April 1, 2016 (and for five consecutive years) CMS will establish a target price for each designated region for each episode (hip or knee) of care. This target price is then discounted by 2% and operates as a benchmark – the bundled payment amount.  For any Medicare hip or knee replacement surgery at the qualifying hospital, the payment is designed to reflect the costs of the admission, surgery, hospital services, and all additional post-acute costs of care for 90 days following the surgery. All providers, including the hospital and suppliers, bill Medicare for care provided (Parts A and B as applicable) on a fee-for-service basis.  CMS then aggregates the payments made via Medicare for the referenced element of care and all other related (hip and knee) elements across a performance year and compares the same to the regional target.  If costs incurred are equal to or lower than the target (bundled payment benchmark) and the hospital met or exceeded certain quality measures, a bonus or reconciliation payment is made (payment is the difference between the actual costs and the benchmark, up to a specified cap) to the hospital.  In year one, no penalty is applied for costs above the benchmark or lesser levels of quality.  In year two however, less than targeted cost or quality outcomes will create a payment recoup scenario equal to the cost difference compared to the benchmark, up to a certain cap.

Implications for SNFs

For SNFs, while there is no direct correlation in Medicare payments per the bundled payment initiative (no bonus applicability, penalty, etc.), the indirect implications are enormous and potentially for many, survival (or not) deep.  Consider the following;

  • While the hospital is accountable directly for costs and quality, the cost benchmark covers all care costs within the element of care, including the SNF post-acute stay.  An expensive, inefficient stay imputes higher costs into the “total cost” equation.
  • While the hospital is directly accountable for the quality measures, the quality measures cross domains.  Poor quality, readmissions, low patient satisfaction affects the over quality measures and can lead to payment reductions after year one.   The quality measures are;
    • Complication rates post procedure
    • Readmissions within 30 days
    • Patient satisfaction of providers across the element of care
  • After year one, only SNFs (that) rated three stars or above can participate in the program. Hospitals can only refer to 3 star or higher ranked providers.

Taking into account the three points above, SNFs can and will experience, game changing referral and relationship dynamics within the affected regions.  Hospitals will seek (and have sought) relationships with  high quality, cost-effective post-acute providers.  For example, one hospital system that I advise regularly has drawn a clear line for referrals at 4 stars and preferably, 5 stars – one year ahead of the requirement.  They have already shifted their referral practices in anticipation.  Further, as the Final Rule created opportunities (regulatory laxity) and freedom for incentive sharing, alliances are forming whereby providers will share incentives in order to assure high quality, cost-effective outcomes.

Strategies for SNFs in a Bundled Payment Region

While April 1 looms, there is still time for an SNF to get properly positioned initially, for a bundled payment transition.  Why I say initially is that most providers, including hospitals, will not be fully ready (and CMS is still providing additional details) for the “new” reality.  As with all programs of this nature, a great deal is learned as lived as regulatory details dribble past deadlines and frankly, many providers simply won’t have systems in-place, fully integrated to monitor the costs, quality measures, etc. across all domains.  Further, year two is where the game really changes as penalties apply in addition to bonus opportunities and the three star limit becomes effective.

Below is my outline or roadmap that SNFs should follow to succeed and thrive in a bundled payment environment.  Note: CMS will push forward, additional elements of care, beyond hips and knees, with bundled payments.  Likewise, regions will expand and targeted regulations (separate from bundled payments) for SNFs impute quality measure impacts on payments (commencing in October 2016). Simply stated: the following has broader implications than just bundled payment implications.

  • Manage Your Stars: Simple but difficult for many.  If your facility is not four stars or above, you will have trouble and will see a reduction in Medicare census and referrals.  Even three stars is and will be, inadequate.  This is especially true in a market where there are competing facilities at the three or better (star) level.  Changing your star rating is not an overnight process but the best start is to drill hard on your quality measures (improve) and survey results.  Staffing numbers can shift quickly but only by integrating more professional nurses at the bed side, without reductions in per patient day staff ratios (a financial investment).  Remember, with PBJ forthcoming, the numbers can’t be “phantom” staff (sorry but too many SNFs today have jacked up their star levels by gaming the self-reported staffing system).
  • QA Your Care Transitions: No SNF should today, fail to intimately manage their care transitions – all transitions.  Readmissions are a risk area in bundled payments and today, for SNFs regardless (readmission penalties apply for 2016).  Similarly, one of the simplest ways to manage costs related to any stay is to insure that the maximum level of care is available on-site and the resident doesn’t need to transition for things like wound management, radiology, other diagnostics, physician visits, etc.  The cost of the transport if attended and billable, the costs associated with the encounter, the diagnostic, etc. all “count” in the analysis of the cost of care per element against the bundled benchmark.  In addition, risk is inherent in any transition for a resident/patient.  Everything from infection to fall risk heightens when a resident/patient is transported out of the environment and then back.
  • Excel at Advanced Care Planning and Discharge Planning: From the hospital encounter through the SNF stay and beyond, keeping the stay efficient and the resident/patient satisfied is all about care planning and discharge planning.  The rule of thumb is the earlier the better.  If possible, assign a Care Coordinator to the encounter, early – ideally concurrent with the hospital admission.  Discuss the options with family, the patient, the team and build as much into the discharge plan as early as possible.  For example, if “home” is the goal, get into the patient’s home as early as permissible. If there is family involved, start teaching and providing resources as soon as possible.  If post SNF care is required, connect as much of it (e.g., home health) as early as possible and get the other provider elements into the equation ASAP.
  • Use an Algorithm or Pathway: Build a hip and knee protocol, pathway/algorithm that covers all elements (typical) of therapy by day by type of surgery.  Inclusive should include radiology protocols, pain, wound care, supplies, safety precautions, etc.  Work this protocol through your QAPI process with your physicians/Medical Director.  Ideally, get hospital folks to react and help and add input, especially Orthopods (if they will participate).  I recommend incorporation of pharmacy, nutrition, nursing, and social service as integral elements, especially as the same relate to co-morbidities or post-surgical management.  For example, having pharmacy manage and coordinate your anti-coagulation protocol.  The more you can develop a “recipe” for folks to follow and measure, the greater the likelihood of a smooth transition, exceptional outcomes, and enhanced patient satisfaction.
  • Manage and Align Your Partners: Understanding that risk comes from multiple elements is key to achieving high quality and superior efficiency.  Many SNFs use contractors for care elements such as therapy and pharmacy, physician services, etc.  Every discipline that is part of the care process must be aligned to assure high quality and efficient care.  This environment (bundling) is different now.  Its not about “more” care as many have become accustomed via Medicare RUG maximization and extending lengths of stay.  It is about the right care.  Physicians need to help; keep orders simple, reduced redundancy and unnecessary tests, etc.  Pharmacy needs to do medication reconciliation at admission and actually, somewhat virtually.  Formularies must be tight to assure the most targeted, effective, and lowest cost medication regime.  If home health is part of the discharge process, pick a single partner or limited partners and integrate them into the process.  Remember, the risk areas encompass satisfaction and cost elements across a 90 day horizon!
  • Build Your Core Competency: Delivering high quality, cost-effective care is about having exceptionally competent, well-trained staff giving the care, supported by focused, competent management.  Nurses must be capable of caring  for the patient profile from wound to pain to skin to all other components.  All staff must be responsive and focused on issues like fall risk, weight loss, dehydration, infection, etc.  These issues are monitored daily and part of, what should be, an integrated QAPI program.  Social Workers must be able to field questions, coordinate resources, and be responsive, informative and knowledgeable about resource issues (Medicare, insurances, etc.).  Review all aspects of care and look to bring them into the environment if feasible.  For example, invest in anti-coagulation machines, products to float heels (Heelzup), proper size wheelchairs, patient lifts, air mattresses, etc.  I commonly recommend having at least some staff wound care certified, pain management certified, cardiac certified, etc.  I like to have therapists with advanced training in neuro, lymphedema care, sports medicine (great for ortho rehab), etc.  Without the resources in-house, it is very unlikely that an SNF will be able to manage the current and go-forward demands of lower cost and higher quality.

February 5, 2016 Posted by | Skilled Nursing | , , , , , , , , | Leave a comment