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SNF M&A: The Provider Number Trap

Over my career, I have done a fair amount of M&A work….CCRCs, SNFs, HHAs, Physician practices, hospice, etc. While each “deal” has lots of nuances, issues, etc. none can be as confusing or as tricky to navigate as the federal payer issues; specifically, the provider number.  For SNFs, HHAs, and hospices, an acquisition not properly vetted and structured can bite extremely hard post-closing, if provider liabilities existed pre-close and were unknown and/or unknowable.  Even the best due diligence cannot ferret out certain provider number related liabilities.

The Medicare provider number is the unique reference number assigned to each participating provider.  When initially originating as a provider, the organization must apply for provider status, await some form of accreditation (for SNFs it is via a state survey and for HHAs and hospice, via private accreditation) and then ultimate approval by Medicare/DHHS.  As long as the provider that has obtained the number, remains in good standing with CMS (hasn’t had its provider status/agreement revoked), the provider may participate in and bill, Medicare and Medicaid (as applicable).

Provider numbers are assignable under change of control, providing the assuming party is eligible to participate in the Medicare program (not banned, etc.).  Change of control requires change of ownership or control at the PROVIDER level, not the facility or building level.  The building in the case of an SNF, is not the PROVIDER – the operator of the SNF is.  For example, if Acme SNF is owned and operated by Acme, Inc., then Acme, Inc. is the Provider so long as the SNF license in Acme’s state is to Acme, Inc.  Say Acme decides to sell the SNF property to Beta REIT and in turn, Beta leases the facility back to Acme.  Acme no longer owns the building but remains the Provider as it continues to hold the license, etc. consistent with the operations of the SNF.  Carrying this one step further.  Acme decides it no longer wants to run the SNF but wishes to keep the building.  It finds Zeta, LLC, an SNF management/operating company, to operate the SNF and leases the operations to Zeta.  Zeta receives a license from the state for the SNF and now Zeta is the PROVIDER, even though Acme, Inc. continues to own the building.

In the example above regarding Zeta, the typical process in such a change of control involving the operations of a SNF is for Zeta to assume the provider number of Acme.  The paperwork filed with CMS is minimal and occurs concurrent to the closing creating change of control (sale, lease, etc.).  What Zeta has done is avoid a lengthier, more arduous process of obtaining a new provider number, leaving Acme’s number with Acme and applying as a new provider at the Acme SNF location. While taking this route seems appealing and quick, doing so comes with potential peril and today, the peril is expansive and perhaps, business altering.

When a provider assumes the provider number of another entity at change of control, the new provider assumes all of the former provider’s related liabilities, etc. attached to the number.  CMS does not remove history or “cleanse” the former provider’s history. The etc. today is the most often overlooked;

  • Star ratings
  • Quality measures including readmission history
  • Claim error rate
  • MDS data (submitted)
  • Federal survey history
  • Open ADRs
  • Open or pending, probes and RAC audits

The above is in addition to, any payments owed to the Federal government and any fines, forfeitures, penalties, etc.  The largest liability is or relates to, the False Claims Act and/or allegations of fraud.  These events likely preceded the change of control by quite a distance and are either impossible to know at change of control or discoverable with only great, thorough due diligence.  The former in my experience such as whistleblower claims may not arise or be known until many months after the whistleblower’s allegation.  During the interim, silence is all that is heard.  Under Medicare and federal law, no statute of limitation exists for fraud or False Claims.  While it is possible via indemnification language in the deal, to arrest a False Claims Act charge and ultimately unravel the “tape” to source the locus of origin and control at the time of the provider number, the same is not quick and not without legal cost.  Assuming the former provider is even around or can be found (I have seen cases where no such trail exists), winning an argument with CMS that the new provider is blameless/not at fault is akin to winning the Battle of Gettysburg – the losses incalculable.  Remember, the entity that a provider is dealing with is the Federal government and as such, responsive and quick aren’t going to happen.  Check the current status of the administrative appeal backlog as a reference for responsive and quick.

Assuming no payment irregularities occur, the list preceding is daunting enough for pause.  Assuming an existing provider number means assuming all that goes with it.  On the Federal side, that is a bunch.  The assuming party gets the compliance history of the former provider, including the Star rating (no, the rating is not on the SNF facility but on the provider operating the SNF).  As I have written before, Star ratings matter today.  Inheriting a two Star rating means inheriting a “dog that doesn’t hunt” in today’s competitive landscape.  It also means that any work that is planned to increase the Star rating will take time especially if the main “drag” is survey history.  The survey history comes with the provider number.  That history is where RAC auditors visit and surveyors start whenever complaints arise and/or annual certification surveys commence.

The Quality Measures of the former provider beget those of the assuming provider.  This starts the baseline for Value Based Purchasing.  It also sets the bar for readmission risk expectations, network negotiations and referral pattern preference under programs such as Bundled Payments.   Similarly, all of the previous MDS data submissions come with that same provider number, including those that impact case-mix rates under Medicaid (if applicable).  And, not exhaustively last but sufficient for now, all claims experience transfers.  This includes the precious error rate that if perilously close to the limit, can trip with one more error to a pre-payment probe owned, by the assuming provider.  Only extreme due diligence can discover the current error rate – perhaps.

Avoiding the peril of all of the above and rendering the pursuit or enforcement of indemnification (at the new provider’s expense) a moot issue is simple: Obtain a new provider number.  It is a bit time-consuming and does come with a modicum of “brain damage” (it is a government process) but in comparison to what can (and does) happen, a very, very fractional price to pay.  In every transaction I have been directly involved with, I have obtained a new provider number.  In more than one, it has saved a fair amount of go-forward headache and hassle, particularly on the compliance end.  Today, I’d shudder to proceed without a new provider number as the risks of doing so are enormous, particularly in light of the impact of Star ratings, quality measures and survey history.  Additionally, the government has never been more vigilant in scrutinizing claims and generating ADRs.  Inheriting someone else’s documentation and billing risks genuinely isn’t smart today.

While inappropriate for this post, I could list a plethora of examples and events where failure to obtain a new provider number and status has left the assuming provider with an absolute mess.  These stories are now, all too common.  Even the best due diligence (I know because my firm does it), cannot glean enough information to justify such a sweeping assumption of risk. Too much cannot be known and even that which can, should be rendered inconsequential by changing provider status.  Reliance on a definitive agreement and litigation to sort responsibilities and liabilities is not a prudent tactic. Time and resources are (always) better spent, applying for and receiving, a new provider number and provider status.

February 1, 2017 Posted by | Home Health, Hospice, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , | 3 Comments

Presentation Available: New Conditions of Participation for SNFs – Phase 1 Implementation

On the Reports and Other Documents page ( http://wp.me/PtUlY-4g ), I have uploaded a Power Point presentation my firm has made available to clients covering the new Federal Conditions of Participation for SNFs and the implementation elements that are part of Phase 1 (titled “New COPS for SNFs Phase 1”).  The presentation covers what is happening in terms of the new regulations arising out of the law, focused on Phase 1 requirements which began November 28.  The presentation will also alert providers, etc. to Phase 2 issues as applicable.

Additional background information on the Phases and the Rule can be found on this site at these post references: http://wp.me/ptUlY-kU

http://wp.me/ptUlY-kL

As always, questions, etc. can be forwarded to me via a comment accompanying this post or via e-mail (contact information on the Author page).  Remember, if you wish a reply/response, please include a valid e-mail address/contact with your post or question.

Happy Holidays!

 

December 19, 2016 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , | 2 Comments

Webinar – Post-Election Healthcare Policy: What to Expect

Join me as I host a one-hour webinar and conference call regarding post-election healthcare policy.  The program/call is set for Wednesday, December 14 at 1:00 PM EST/noon CST.

With uncertainty looming, providers are wondering what will change as the Inauguration approaches and a new Congress settles in. We will review the ACA, Medicaid and Medicare, and related policy issues including;

  • Value Based Purchasing
  • CMS Center for Innovation/Alternative Delivery Models/Bundled Payments
  • Additional Quality Measures and Quality Reporting
  • Inter-Program and Payment Reform – Rate Equalization for Post-Acute Providers
  • IMPACT Act
  • ACO Expansion

The program is sponsored by HCPro and the registration link is below;

 http://www.longtermcarebillers.com/content/join-us-quarterly-biller%E2%80%99s-association-webcast

 

December 6, 2016 Posted by | Policy and Politics - Federal | , , , , , , , , , , , , , , | Leave a comment

The Election is Over….Now What?

We knew that sooner or later, the first Tuesday in November would arrive and with that, a new President and changes (many or few) to Congress. The outcome certain, we move to uncertainty again concerning “what next”?…or as applicable here, what next from a health policy perspective.

With Donald Trump the incoming President-Elect, only so much from a policy perspective is known.  Hillary Clinton’s path was easier to divine from a “what next” perspective as fundamentally, status quo was the overall direction. Trump’s likely direction and thus, changes to current policy, etc. are hazy at best.  Thematically, there are points offered throughout the campaign that give some guidance.  Unfortunately, much that drives current reality for providers is more regulatory begat by legislative policy than policy de novo.

Without divining too much from rhetoric, here’s what I think, from a health policy perspective, is what to expect from a Trump Administration.

  1. ObamaCare: Trump ran on a theme of “repeal and replace” ObamaCare aka the Affordable Care Act. This concept however, needs trimming.  Repealing in total, existing federal law the magnitude of the ACA is difficult if not nearly impossible, especially since implementation of various provisions is well down the road.  The ACA and its step-child regulations are tens of thousands of pages.  Additionally, even with a Republican White House and Republican-majority Congress, the Congressional numbers (seats held) are not enough to avoid Democratic Senate maneuvers including filibuster(s). This means that the real targets for “repeal and replace” are the insurance aspects namely the individual mandate, Medicaid expansion, certain insurance mandates, the insurance exchanges, a likely the current subsidy structure(s).  The other elements in the law, found in Title III – Improving the Quality and Efficiency of Health Care, will remain (my prediction) – too difficult to unwind and not really germane to the “campaign” promise.  This Section (though not exclusively) contains a slew of provisions to “modernize” Medicare (e.g., value-based purchasing, physician quality reporting, hospice, rehab hospital and LTACH quality reporting, various payment adjustments, etc.).  Similarly, I see little change made, if any to, large sections of Title II involving Medicaid and Title IV involving Chronic Disease.  Bottom line: The ACA is enormous today, nearly fully intertwined in the U.S. health care landscape and as such, too complex to “wholesale” eliminate and replace. For readers interested in exploring these sections (and others) of the ACA, a link to the ObamaCare website is here http://obamacarefacts.com/summary-of-provisions-patient-protection-and-affordable-care-act/
  2. Medicaid: The implications for Medicaid are a bit fuzzier as Trump’s goals or pledges span two distinct elements of the program.  First, Trump’s plan to re-shape ObamaCare (repeal, etc.) would eliminate Medicaid expansion.  As mentioned in number 1 prior, this is a small part of the ACA but a lipid test for Republican governors, especially in states that did not embrace expansion (e.g, Wisconsin, Kansas, etc.).  Second, Trump has said that he embraces Medicaid block-grant funding and greater state autonomy for Medicaid programmatic changes (less reliance on the need for states to gain waivers for coverage design, program expansion, etc.).  It is this element that is vague.  A series of questions arise pertaining to “policy” at the federal level versus funding as block grants are the latter.  The dominant concern is that in all scenarios, the amount of money “granted” to the states will be less than current allocations and won’t come with any matching incentives.  With elimination of the expansion elements, how a transition plan of coverage and care will occur is a mystery – federal assistance? state funding mostly?  What I do predict is that Medicaid will only suffer the setback of a restructure and replacement of the Medicaid expansion elements under the ACA.  I don’t see block grants happening any time soon as even Republican governors are opposed without a plan for wholesale Medicaid programmatic reform.  Regardless of the approach, some initial Medicaid changes are in the offing, separate from the Block Grant issue.  The Medicaid Expansion issue is no doubt, a target in the “repeal and replace Obama Care”.  The trick however is to account for the large number of individuals that gained coverage via expansion (via eligibility increases due to increased poverty limits) – approximately 8 million impacted.  This is less about “repeal” and more about “replace” to offset coverage lapse(s) for this group.
  3. Related Health Policy/ACA Issues: As I mentioned earlier, the ACA/ObamaCare is an enormous law with tentacles now woven throughout the health care industry.  The Repeal and Replace issues aren’t as “clean” as one would think.  The focus is the insurance mandate, the subsidies, the mandated coverage issues and to a lesser extent, Medicaid.  That leaves fully 80% of the ACA intact including a series of policy changes and initiatives that providers wrestle with daily. These issues are unlikely to change in any substantive form.  Republicans support alternative delivery projects, value based purchasing, etc. as much if not more than Democrats.  Additionally, to repeal is to open a Pandora’s Box of agency regulations that tie to reimbursement, tie to other regulations, etc.  For SNFs alone, there exists all sorts of overlap between Value Based Purchasing, Bundled Payments, new Quality Measures and quality reporting (see my post/presentation on this site regarding Post-Acute Regulatory Changes).  The list below is not exhaustive but representative.
    • Value Based Purchasing
    • CMS Center for Innovation/Alternative Delivery Models/Bundled Payments
    • Additional Quality Measures and Quality Reporting
    • Inter-Program and Payment Reform – Rate Equalization for Post-Acute Providers
    • IMPACT Act
    • ACO Expansion

As providers watch the inauguration approach and a new Congress settle in, the wonder is around change. Specifically, what will change.  My answer – bet on nothing substantive in the short-run.  While Mr. Trump ran partially on a platform that included regulatory reduction/simplification, the lack of overall specifics regarding “which or what” regulations on the health care front are targets leaves us guessing.  My guess is none, anytime soon.

The Trump focus will be on campaign specific agenda first: ObamaCare, Immigration, Taxation, Foreign Trade, Energy, etc. – not health policy per se.  There is some flow-through gains providers can anticipate down-the-road that can be gleaned from the Trump campaign but these are a year or more off.  If Trump does deal with some simplification on drug and research regulation (faster, cheaper, quicker approvals), funding for disease management and tele-medicine and a fast-track of some Republican policy “likes” such as Medicare simplification, Medicaid reform at the program level, and corporate tax reduction (will help for-profit providers), then gains will occur or opportunities for gains will occur.

From a strategic and preparatory perspective, stay the course.  Providers should be working on improved quality outcomes, reducing avoidable care transitions/readmissions, looking at narrow networks and network contracting/development opportunities and finding ways to reduce cost and improve care outcomes.  Regardless of what a Trump Administration does first, the aforementioned work is necessary as payment for value, bundles/episodes of care, and focus on quality measures and outcomes is here to stay and to stay for the foreseeable future.

November 18, 2016 Posted by | Home Health, Hospice, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , | Leave a comment

Conference Presentation

In September, I spoke at the Kairos Health conference in Pennsylvania on request/behalf of HCPro.  The topic was on upcoming/current regulatory and compliance issues in Post-Acute Care.  By request, I am providing the presentation on this site.  Readers can find it on the Reports and Other Documents Page.  The title is “Upcoming Post-Acute Regulatory Issues”.  It is free for viewing or download.  As always, questions, comments, etc. feel free to comment to this post or drop me a note at the email address provided on the Author page of this site.

October 13, 2016 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , | Leave a comment

New SNF Conditions of Participation: Implementation Timeframes

About ten days ago, I published a post regarding the new Federal Conditions of Participation for SNFs.  This long awaited regulatory update includes new, revised, and existing regulations published in final rule form last week (October 4).  The post is here for reference http://wp.me/ptUlY-kL

The questions frequently asked regarding the new CoPs (since release) are around implementation dates.  As readers will note, whether in my post or in the actual Final Rule, enforcement is in phases spanning a three year time frame – November 2016 through 2018. Recall that the CoPs in the Final Rule are the broad law changes.  Implementation requires specificity found (typically) in the Interpretive Guidelines – the actual “regs”.  We aren’t there yet and given the breadth of change in certain instances, time is necessary for regulations to be written and providers to comply.  Hence, the phasing.

I have posted below, the implementation timeframe for reference.  This guide is available via this post and is hosted on the Reports and Other Documents page on this site. I have articles forthcoming (soon) here and on other sites regarding implementation strategies and tips.  In the meantime, readers can always forward a question via comment to this post or to my e-mail address noted on the Author page.  Remember: If you want an answer direct, please provide a current, working e-mail address.  I do respond to all questions and comments as efficiently as I can.

The timeframe document is here:

implementation-timeframes

 

October 11, 2016 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , | Leave a comment

CMS Releases Final Rule on SNF Conditions of Participation

The long-awaited final rule on the revised/new SNF Conditions of Participation is set for publishing on October 4 in the Federal Register. The public inspection version is available now, including the comments from the Proposed Rule at this link: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-23503.pdf  The whole document is over 900 pages.  The salient portions that include the regulatory changes/summary of provisions is the first 14 or so pages.

Two things to remember for policy readers and folks in the industry.  First, what is available is the “law” not the interpretive guidelines that expands on the law in a way that creates enforcement regulations and the roadmap or “how to”.  The Final Rule is absent this information.  CMS still needs to develop this element.  Second, implementation will occur in phases.  The first phase is set for November 28, 2016 with minor changes that most providers should be ready for or are parts (related or integrated) from annual rule releases/updates (CMS updates PPS for each provider segment annually) already disclosed.  For example, QMs that translate into this rule regarding unnecessary drugs, antipsychotics-psychotics, etc.  These are now encapsulated in the rule but frankly, not new in scope.  The second phase is November 2017 and the third phase, 2019.

In November of last year, concurrent with the release of the Proposed Final Rule, I wrote a piece and did a webinar for HCPro on this topic.  The written piece is here: http://wp.me/ptUlY-iT  In my review of the two, what I though would move forward fundamentally “intact” did. What I was concerned about however, didn’t change much based on the over 10,000 comments.  There is definitely, a “Camel’s nose under the tent” element with regard to staffing requirements; though not an overt regulation.  The devilish elements are around the “facility assessments” for  staff adequacy and competency, etc. and the food service requirement to meet individual preferences plus serve nutritionally adequate, palatable meals, etc.  As one of the main issues in any environment remains food (always a certain number of complaints), this one could prove very, very prickly when it comes to survey/enforcement.  The summary of changes/provisions is below, as published.

  • Basis and scope (§483.1)

 We have added the statutory authority citations for sections 1128I(b) and (c) and section

1150B of the Social Security Act (the Act) to include the compliance and ethics program,

quality assurance and performance improvement (QAPI), and reporting of suspicion of a

crime requirements to this section.

  • Definitions (§483.5)

 We have added the definitions for “abuse”, “adverse event”, “exploitation”,

“misappropriation of resident property”, “mistreatment”, “neglect”, “person-centered

care”, “resident representative”, and “sexual abuse” to this section.

  • Resident rights (§483.10)

 We are retaining all existing residents’ rights and updating the language and organization

of the resident rights provisions to improve logical order and readability, clarify aspects

of the regulation where necessary, and updating provisions to include advances such as

electronic communications.

  • Freedom from abuse, neglect, and exploitation (§483.12)

 We are requiring facilities to investigate and report all allegations of abusive conduct.

We also are specifying that facilities cannot employ individuals who have had a

disciplinary action taken against their professional license by a state licensure body as a

result of a finding of abuse, neglect, mistreatment of residents or misappropriation of

their property.

  • Admission, transfer, and discharge rights (§483.15)

 We are requiring that a transfer or discharge be documented in the medical record and

that specific information be exchanged with the receiving provider or facility when a

resident is transferred.

  • Resident assessments (§483.20)

 We are clarifying what constitutes appropriate coordination of a resident’s assessment

with the Preadmission Screening and Resident Review (PASARR) program under

Medicaid. We are also adding references to statutory requirements that were

inadvertently omitted from the regulation when we first implemented sections 1819 and

1919 of the Act.

  • Comprehensive Person-Centered Care Planning (§483.21) *New Section*

 We are requiring facilities to develop and implement a baseline care plan for each

resident, within 48 hours of their admission, which includes the instructions needed to

provide effective and person-centered care that meets professional standards of quality

care.

 We are adding a nurse aide and a member of the food and nutrition services staff to the

required members of the interdisciplinary team that develops the comprehensive care

plan.

 We are requiring that facilities develop and implement a discharge planning process that

focuses on the resident’s discharge goals and prepares residents to be active partners in

post-discharge care, in effective transitions, and in the reduction of factors leading to

preventable re-admissions. We are also implementing the discharge planning

requirements mandated by The Improving Medicare Post-Acute Care Transformation Act

of 2014 (IMPACT Act) by revising, or adding where appropriate, discharge planning

requirements for LTC facilities.

  • Quality of care (§483.24)

 We are requiring that each resident receive and the facility provide the necessary care and

services to attain or maintain the highest practicable physical, mental, and psychosocial

well-being, consistent with the resident’s comprehensive assessment and plan of care.

  • Quality of Life (§483.25)

 Based on the comprehensive assessment of a resident, we are requiring facilities to ensure

that residents receive treatment and care in accordance with professional standards of

practice, the comprehensive person-centered care plan, and the residents’ choices.

  • Physician services (§483.30)

 We are allowing attending physicians to delegate dietary orders to qualified dietitians or

other clinically qualified nutrition professionals and therapy orders to therapists.

  • Nursing services (§483.35)

 We are adding a competency requirement for determining the sufficiency of nursing staff,

based on a facility assessment, which includes but is not limited to the number of

residents, resident acuity, range of diagnoses, and the content of individual care plans.

  • Behavioral health services (§483.40)

 We are adding a new section to subpart B that focuses on the requirement to provide the

necessary behavioral health care and services to residents, in accordance with their

comprehensive assessment and plan of care.

 We are adding “gerontology” to the list of possible human services fields from which a

bachelor degree could provide the minimum educational requirement for a social worker.

  • Pharmacy services (§483.45)

 We are requiring that a pharmacist review a resident’s medical chart during each monthly

drug regimen review.

 We are revising existing requirements regarding “antipsychotic” drugs to refer to

“psychotropic” drugs and define “psychotropic drug” as any drug that affects brain

activities associated with mental processes and behavior. We are requiring several

provisions intended to reduce or eliminate the need for psychotropic drugs, if not

clinically contraindicated, to safeguard the resident’s health.

  • Laboratory, radiology, and other diagnostic services (§483.50) *New Section*

 We are clarifying that a physician assistant, nurse practitioner or clinical nurse specialist

may order laboratory, radiology, and other diagnostic services for a resident in

accordance with state law, including scope-of-practice laws.

  • Dental services (§483.55)

 We are prohibiting SNFs and NFs from charging a Medicare resident for the loss or

damage of dentures determined in accordance with facility policy to be the facility’s

responsibility, and we are adding a requirement that the facility have a policy identifying

those instances when the loss or damage of dentures is the facility’s responsibility. We

are requiring NFs to assist residents who are eligible to apply for reimbursement of dental

services under the Medicaid state plan, where applicable.

 We are clarifying that with regard to a referral for lost or damaged dentures “promptly”

means that the referral must be made within 3 business days unless there is

documentation of extenuating circumstances.

  • Food and nutrition services (§483.60)

 We are requiring facilities to provide each resident with a nourishing, palatable, well balanced

diet that meets his or her daily nutritional and special dietary needs, taking into

consideration the preferences of each resident. We are also requiring facilities to employ

sufficient staff, including the designation of a director of food and nutrition service, with

the appropriate competencies and skills sets to carry out the functions of dietary services

while taking into consideration resident assessments and individual plans of care,

including diagnoses and acuity, as well as the facility’s resident census.

  • Specialized rehabilitative services (§483.65)

 We have added respiratory services to those services identified as specialized

rehabilitative services.

  • Administration (§483.70)

 We have largely relocated various portions of this section into other sections of subpart B

as deemed appropriate.

 We require facilities to conduct, document, and annually review a facility-wide

assessment to determine what resources are necessary to care for its residents

competently during both day-to-day operations and emergencies. Facilities are required

to address in the facility assessment the facility’s resident population (that is, number of

residents, overall types of care and staff competencies required by the residents, and

cultural aspects), resources (for example, equipment, and overall personnel), and a

facility-based and community-based risk assessment.

 Binding Arbitration Agreements: We are requiring that facilities must not enter into an

agreement for binding arbitration with a resident or their representative until after a

dispute arises between the parties. Thus, we are prohibiting the use of pre-dispute

binding arbitration agreements.

  • Quality assurance and performance improvement (QAPI) (§483.75)

 We are requiring all LTC facilities to develop, implement, and maintain an effective

comprehensive, data-driven QAPI program that focuses on systems of care, outcomes of

care and quality of life.

  • Infection control (§483.80)

 We are requiring facilities to develop an Infection Prevention and Control Program (IPCP)

that includes an Antibiotic Stewardship Program and designate at least one Infection

Preventionist (IP).

  • Compliance and ethics program (§483.85) *New Section*

 We are requiring the operating organization for each facility to have in effect a compliance

and ethics program that has established written compliance and ethics standards, policies

and procedures that are capable of reducing the prospect of criminal, civil, and

administrative violations in accordance with section 1128I(b) of the Act.

  • Physical environment (§483.90)

 We are requiring facilities that are constructed, re-constructed, or newly certified after the

effective date of this regulation to accommodate no more than two residents in a bedroom.

We are also requiring facilities that are constructed, or newly certified after the effective

date of this regulation to have a bathroom equipped with at least a commode and sink in

each room.

  • Training requirements (§483.95) *New Section*

 We are adding a new section to subpart B that sets forth all the requirements of an

effective training program that facilities must develop, implement, and maintain for all

new and existing staff, individuals providing services under a contractual arrangement,

and volunteers, consistent with their expected roles.

Stay tuned.  I will have more forthcoming as survey guidelines come out, implementation is sorted, etc.

September 30, 2016 Posted by | 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

SNFs: Strategies to Mitigate Readmission and Rehospitalization Risk

Across a number of regulatory elements beginning this year (May/June through October), hospitalization and readmission rates (to) post-hospitalization from SNFs will be measured and ultimately, factored into the SNF landscape via reimbursement penalties and Star ratings.  Below is a quick summary of where and when the hospitalization/readmission issues come into play.

  • CJR – aka bundled payments for Hip and Knee replacement, began April 1.  The issue here is that readmissions post-hospital discharge count against the required measurement elements of cost and quality across the 90 day episode of care.  The impact is direct to the discharging hospital but in turn, can impact the willingness of hospitals to discharge to an SNF if the readmission risk is outside the regional quality benchmarks.  Poor performance can impact referrals, go forward partnerships and for those SNFs that can and will participate at-risk in Year 2, access to incentive payments.
  • SNF VBP Value Based Purchasing begins in July of this year with the first measurement period continuing through July of 2017.  Rehospitalization rates for SNFs will be measured (all cause, risk adjusted).  Beginning in October 2018, CMS will reduce Medicare A payments by 2% for SNFs that perform on this measure, below benchmark standards.
  • Five Star – in May/June of this year, new measures are added including rehospitalizations (plus hypnotic use, discharge home, decline in ADL status since admission, mobility in room).  The QMs will be rebased to incorporate these new measures.
  • IMPACT Act – Expected in the SNF PPS final rule for 2016 (April, data collection beginning in October 2017) are four new measures including rehospitalization upon admission and 30 days post discharge from the SNF.  The other elements are discharge to community, drug regimen review and average cost per beneficiary during and after the SNF stay.

Though I have cautioned facilities to pay attention to their hospitalizations/rehospitaliztions for some time now, it isn’t too late (almost) to get started; started in earnest!  Below are my top four recommended strategies to employ ASAP (not in any particular order) to mitigate post-discharge hospitalization risk and post-admission rehospitalization risk.

  1. QA Your Transitions: Every hospitalization/rehospitalization requires a QA analysis of the reasons why, whether such reasons were appropriate/inappropriate, what transpired at the hospital, and most important, what could be done (if anything) to change the events leading to the transition.  The latter element is part of the organization’s QAPI and begets staff training, system change, etc.  The key is to do a true root cause analysis.
  2. Staff Education: As my firm works with facilities constantly, we notice that the largest, single reason for care transitions out of the SNF to the hospital (ER, etc.) is a lack of staff competence in assessment and communication with physicians and families.  The inability to present a clear picture of the resident’s current condition, options, monitoring points, etc. creates confusion for the physician and a sense of insecurity for family, precipitating the transition if for no other reason than perceived “safety”. Plenty of tools exist (contact me for resources) from AMDA (physician communication protocols) to INTERACT.
  3. Advance Care Planning: Too often this subject is viewed as gathering advance directives (code/no code status, Living Wills, DPOaHCs, etc.).  While these are important the real crux or guts of this element is the discussion concerning specificity of care decisions, including hospitalization/care transitions.  Based on my and my firm’s experience, better than half of all care transitions to a hospital are avoidable with proper planning.  Up front, clear conversation with patients/residents and families regarding the SNF resources (what can be done in-house, etc.) and the risks of hospitalization can and will reduce hospital transitions (particularly ER visits).  I suggest developing a communication tool regarding the decision(s) and sharing it with staff, physicians and most important, patients and families.
  4. Algorithms and Pathways: These elements take the vagaries out of the care planning and care delivery process, eliminating what can be and typically  are, transition triggers.  For CJR, we built hip and knee pathways.  These translate to standardized careplans, address the advance care planning elements, discharge points, pain, skin/wound, etc. comorbidities.  As these elements are addressed pre-admission and within 24/48 hours of admission, a clear reduction in transition risk is present.  Likewise, build as many comorbidity (common) algorithms as possible. For example, I recommend pain, anti-coagulation, diabetes, CHF, depression, and bowel/constipation protocols as a start.  Depending on the SNF’s admission profile (typical case-mix), others may be more pertinent.  What we know is that too many transitions occur as a result of an unclear game plan and approach to resident/patient care leaving careplanning gaps, communication gaps, and treatment protocol gaps.

Concluding: A few caveats apply.  Reducing readmission and/or rehospitalization risk starts at a core facility/organization level.  My strategies above assume that the SNF has proper/adequate staff levels and adequate resources in terms of a solid therapy program, medical direction and physician staff.  Additionally, the SNF should have (by now) a functioning QAPI program in place.  Without such a program, the core QA function required to understand transitions and complete a root cause analysis is only an exercise.  Finally, one last tip.  Reducing hospitalizations/rehospitalizations is an organization-wide initiative.  It is not solely a nursing or social services function.  Every discipline has a role and when the root causes of transitions are analyzed it becomes clear quickly, how many little or seemingly minor pieces properly detected and addressed, contribute to reducing this risk element.

April 12, 2016 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , | 2 Comments

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