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Senior and Post-Acute Healthcare News and Topics

Coronavirus: Perspective Required

Yesterday I began advising healthcare organizations to pull-out their disaster preparedness plans (required by federal code) and their pandemic policies, reviewing the same, etc. for an almost certain, foretold Coronavirus outbreak.  I was not alone in my advice as my email filled with updates across various trade publications issuing similar advisories.  As a colleague of mine was apt to say: “prior proper preparation prevents poor performance”. Wise words.

When I got home last night and turned-on the television, the programming had barely moved from the early morning cycle.  It was Coronavirus all the time.  The news media was cyclical, channel to channel covering the same subject matter with the same experts and pundits in the same locations.  And, to make the whole news mantra even more sickly, the stories included snarky political spin (from both sides).  It is after all, an election year and nothing feeds politics like a good ole’ crisis.  Think Bush’s hurricane Katrina or Carter’s OPEC embargo and gas prices/waiting lines (wow, am I dating myself).

As I was watching the news and flipping from outlet to outlet, I was struck by the apocalyptic tone.  I have been on the planet for six decades and for all six, facing imminent demise (along with the rest of humanity).  There has never been a period in my lifetime where doom wasn’t omnipresent.  Consider the following from my history (some of you may share parts or all of this journey).

  • As a kid, I was taught to “duck and cover” in school.  We were warned and trained to be vigilant about pending nuclear war.  I doubt that ducking under our desks would have saved me and my classmates.
  • In the early 80s, AIDS arrived and boy was it scary.  We were afraid of blood, gay people, and suspect drug abusers.  Catch it and death was certain.  Isn’t Magic Johnson still alive?
  • Finally, in the early 80s, we no longer had to worry about nuclear apocalypse or all-out war at our front-door.  While the threat does remain, the doomsday clock is also impacted today by climate change – not so in the early 90s.
  • Plagues and disease of one form or another has always threatened my and my fellow men and women’s existence. Aside from the various influenzas seasonal throughout my life, we encountered swine flu and bird flu, both lethal.  There’s been SARS, AIDS, Zika, Ebola, and the list goes on (world-wide pandemics according to WHO – Worldwide Health Organization).
  • Today, some oldies are returning, once eliminated or nearly eliminated.  The measles and small pox have returned.  Both primarily due to a cultural shift in public health focus and vaccination priority.

To the point: I’m still here and so are most of my family and friends.  Now, I’m in no way trying to minimize the importance of containing and understanding the health risks of Coronavirus.  I am saying that the 24 hour, in my (and your) face news cycles, and the need to trump (not that one) each story with a bigger “get” has us perhaps, unnecessarily on-edge. There is a great song by Don Henley that spells it best: “Dirty Laundry”.

As readers and fans of this site know, I am a health care guy and an economist.  For the past thirty-five years, I have been in and around health care and health policy as an executive and a consultant.  The economist in me favors numbers and analysis.  Thus, I have sought to put Coronavirus and where it is today, into a global perspective.  Yes, it is serious but so are lots of things, many presenting more direct risk of death.  Consider the following.

  • Coronavirus has infected 83,000 people world-wide and killed 2,800 as of today.  That is a mortality rate of 3.37%.  The majority of deaths are in China and other countries lacking in first-rate healthcare access.
    • Worldwide influenza deaths approach 500,000 annually (source: WHO)
    •  1.25 million people die in automobile deaths across the world, annually.  That’s 3,287 deaths per day! (source: US Dept. of Transportation)
    •  36,000 die in automobile crashes in the U.S.  If we include folks hit and killed by cars as pedestrians, the number exceeds 40,000.  Daily, auto related deaths in the U.S. amount to an average of 115.  This equates to a fatality rate per 100,000 US citizens of 11.18 and per 100,000,000 of 1.13. Yikes! (source: US Dept. of Transportation)
    • US hospital acquired infections account for 99,000 deaths per year from 1.7 million infections!.  This a mortality rate of 5.8%.  I’d almost rather take my chances with Coronavirus than being admitted to a US hospital! (source: Centers for Disease Control)

I could go on with the list but I think readers will get the point.  As we continue to listen to the news, boil our panic “stew”, seek surgical masks that are ineffective, and begin to self-diagnose our seasonal respiratory colds as something far worse (unlikely), consider the risks associated with getting a hospital acquired infection (sorry to all of my hospital colleagues).  Worse yet, consider the risks of driving to the hospital and then being hospitalized.

My point in this post is simple.  Take a deep breath or five.  Humanity  has been on the brink of the apocalypse before and will always remain there.  We ignore real risks like driving as “ordinary and safe” when not really but fret and panic about a respiratory virus that isn’t as potentially lethal as driving a car. Too many of us believe still that the annual flu vaccine if we take it, will make us sick yet the annual influenza variant is far more lethal than Coronavirus (based on mortality rates).  At least most influenzas have a vaccine.  Also with a vaccine sits the measles, increasing again worldwide.  Its lethality is known but due to an uptick in junk science, people are shying away from vaccines and thus, causing a re-birth of a possible pandemic.  Again, we teeter back to the apocalypse.

An old and treasured Irish proverb states: “Tomorrow is promised to no one”.  For an incredibly long list of reasons, I believe this to be true.  Top among the reasons list isn’t Coronavirus.

February 28, 2020 Posted by | Policy and Politics - Federal, Policy and Politics - Wisconsin | , , , , , , , , , | 4 Comments

PDPM: First Blush Analysis

One quarter (three months and change) down and PDPM appears to be mostly positive for SNFs.  CMS is reporting a higher average per diem payment level than under RUGs.  Despite some added coding complexity, paperwork burdens are down for providers (two MDS’ during most stays now vs. many under RUGs).  Anecdotally, the industry is seeing added access for certain patient types that previously, were difficult SNF placements.  The NTA category is the driver of this additional access as payments help offset, higher clinical costs associated with certain patient needs and comorbidities.  Approximately 2/3rds of facilities have experienced rate increases (67%); 23% experiencing decreases.  Where rate erosion has occurred is in facilities that were heavily skewed under RUGs to RU and RH level therapy payments – 75% or more utilization.  Conversely and logically, the winners have been facilities with a much more balanced book of business; a normative or typical RUG distribution (historically) and a patient/referral base that included more clinical complexity.  Studies that initially showed a 90% plus increase in Medicare per diem rates in October erroneously ignored the initial conversion bounce (NTA pick-up) that came into play for residents in a facility under RUGs on 9/30 that carried-over into PDPM on 10/1.  Suffice to say, the playing field has leveled.

Originally, CMS estimated that PDPM would be budget-neutral with a modest or slight bias toward rates being flat or down just a touch at the facility level.  The projection from CMS using 2017 data was for a 1.37% decrease.  November’s data/results ran 5.7% above the CMS projection.  While CMS has provided no immediate reaction to the “better than expected” trend for providers, the reality is that an adjustment of some form is likely.  MedPac has called for no rate increases for SNFs in FY21.  It is possible that a flat-rate scenario will emerge for at least a few years IF, rate pullbacks aren’t part of the immediate solution.

While fee-for-service rates under PDPM offer encouragement for providers, the overall occupancy trend and payer-mix is a sobering element.  Since 2010, overall fee-for-service utilization is down by 17.7%.  Length of stay for the same period also declined by 7.4% (covered days).

Three factors are heavily influencing the fee-for-service utilization and length of stay trends.  First, Medicare Advantage is a growing payer type (covered lives).  MA plans simply account for shorter stays at reduced rates where SNF care is required.  Second, home health agencies have filled the bill for certain care needs, circumventing altogether, an SNF stay.  It is not uncommon for a routine knee-replacement patient with stable comorbidities to transition home with a home health agency vs. to an SNF or IRF (inpatient rehab facility).   Pneumonias, infections, wounds, etc. can be managed at home; preferable for the patient and often, for the payer.  Third, ACOs and Bundled Payment programs (and MA plans too) work to steer patients to home or outpatient settings either avoiding the SNF entirely or shortening the inpatient stay by a day or series of days.

While the PDPM rate bump may seem good news, and it is, the euphoric feeling is temporary.  Increased revenue is a function of not just rate but utilization.  If utilization continues to remain on a downward path, the dip won’t be offset by rate.  Similarly, utilization patterns are shifting and as of today, I see no progression or shift toward increased SNF utilization.  Frankly, there remains in most markets, too many SNF beds for the functional demand (certainly, for the demand with a good payer source).  Assisted Living models, those adapted to a higher-level chronic care model, continue to erode long-term SNF census.  This erosion causes a two-part dilemma for SNFs. First, fewer patients/residents to occupy beds and second, the remaining patients tend to have Medicaid as a payer source.  For SNFs that can’t play and survive to a large extent in the post-acute realm, alternative options are scarce for long-term resident occupancy (I-SNPs perhaps?).

One last caveat for providers at this juncture, is worth noting.  PDPM rates are up and CMS has yet to begin audits.  I suspect facilities will see some “shock and awe” once these audits begin.  Remember, audits are done by intermediaries and contractors – not by CMS directly.  I have seen some claim funk as facilities have strutted their way to some higher payments by additional speech utilization – utilization that wasn’t there under RUGs.  I’m watching facilities aggressively pursue cognition via Speech Therapy engagement; seeking to score residents at certain times of the day where cognition may be lower (later day, after a nap, etc.).  A note of warning here is warranted.  Coding opportunities are available under PDPM and IF, such an opportunity correlates to a higher payment, that’s great PROVIDED that, the care delivered and documented, supports the coding.  I am already seeing residents coded at one level of cognition, Speech being used for “cognitive training” and nursing documentation stating that the resident is, “alert and oriented x 3”.  Which is it as it can’t be both?  The proper approach is to evaluate the overall needs of the resident and develop a careplan with the whole team that reflects this holistic assessment.  The key then going forward, is for all disciplines to appropriately document the care provided, consistent with the careplan.

 

 

 

 

 

February 10, 2020 Posted by | Skilled Nursing | , , , , , , , , , , , | 2 Comments

BLR Media Forum in Phoenix

Last week I, I had the pleasure of speaking at the BLR Forum in Phoenix (Nov. 18 – 19).  My sessions were in the Post-Acute Forum. It was an honor to connect with the group and I truly enjoyed the various conversations, questions, etc.  My thanks to everyone that attended!

Attached is the Specializing Your SNF presentation.

Specializing your SNF

The second presentation regarding working with your staff and a series of associated tools for download can be found at this link: https://wp.me/ptUlY-ql

Happy Thanksgiving to everyone and I hope to see you all again at another BLR event!

November 26, 2019 Posted by | Uncategorized | , , , , , , , , , , , , , , , , , | Leave a comment

Wisconsin Directors of Nursing Fall Conference

Last Friday, I was honored to speak at the Wisconsin Directors of Nursing Fall Conference.  The crowd was great and I had a lot of fun talking with the hardest working professionals in health care.  As promised to them, I have attached the presentation to this post and a bunch of tools and references that everyone can use.  All links (except the books) are free!

Thanks again to everyone that attended.  Questions?  Feel free to reach out to me at hislop3@msn.com!  Looking forward to seeing you all again in the near future!

WI DON Council Presentation

QAPI Indicator Summary – blank

ELOS

PRE SURVEY OBSERVATIONS WALKING ROUNDS

QUALITY ASSURANCE- HOSPITALIZATIONS

Tuck in Program

CVA pathway

ANALYSIS OF UNPLANNED HOSPITAL TRANSFERS -blank

Admission Audit

5 day post discharge

30 Day Post Discharge Questionnaire

3-RoP-Checklist-overview-FINAL.101416

http://hcmarketplace.com/survey-success-for-long-term-care (book with great survey tools)

http://hcmarketplace.com/preventing-uti-in-ltc  (tools, etc. all pertaining to UTIs)

September 25, 2019 Posted by | Uncategorized | , , , , , , , , | Leave a comment

LeadingAge Ohio Annual Conference

Thanks to everyone that attended my session – Data Driven Organizational Improvement.  As promised, the presentation is available here (first link) as well as a bunch of tools that are free to download.  Any questions? Please feel free to drop me a comment on this site or email me at hislop3@msn.com.  Thanks again Ohio!  Hope to see you all again in San Diego!

Data Driven Org. Improvement

ELOS Orthopedic

ELOS

PRE SURVEY OBSERVATIONS WALKING ROUNDS

QUALITY ASSURANCE- HOSPITALIZATIONS

Tuck in Program

CVA pathway

CLINICAL REVIEW

ANALYSIS OF UNPLANNED HOSPITAL TRANSFERS -blank

Admission Audit

5 day post discharge

30 Day Post Discharge Questionnaire

QAPI Indicator Summary – blank

September 4, 2019 Posted by | Uncategorized | , , , , , , , | Leave a comment

SNFs: Five Issues and Trends to Watch…NOW!

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

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

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

June 26, 2019 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

The Connection Between Quality and Revenue

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

June 14, 2019 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

PDPM Webinar: Last Call

Tomorrow, Dean Freeland, PT and I are hosting/conducting a webinar on PDPM and Therapy Contracts.  Dean’s a partner of mine so the event/production will give all participants a chance to learn and get the latest tips and strategies on Medicare’s new payment system for SNFs from two perspectives; therapy and overall policy and operations.  Don’t miss this one as it will be interesting, informative and fun!

Register here: http://hcmarketplace.com/pdpm-therapy-contracts

February 5, 2019 Posted by | Uncategorized | , , , , , , | Leave a comment

Governance and PDPM: What Boards Need to Know

I spend a good (ok, large) amount of time working with non-profit and privately held health care, post-acute and seniors housing organizations.  Nearly all of my work is at the C-level and above and frankly, my career as an executive was there as well (25 plus years).  Boards/governance bodies play a key role in the success and/or failure of an organization.  The same also mitigate or increase risk to the organization, depending on their behavior.   I have witnessed bad boards absolutely devastate once great, market dominant organizations simply through their failure to stay structurally in-tune with industry trends, market conditions, public policy, and patient care and service requirements (from compliance to outcomes and satisfaction).  Naïve, insular and narrowly focused Boards have taken down some of the largest and most prominent companies in any industry.  Health care, with its unique ties to government programs (Medicare, Medicaid, etc.) and regulatory structures, requires a governance model that reflects the industry challenges and mitigates the risks inherent in regulated, reimbursed health care.

Boards have as their primary duty, a fiduciary obligation to the organization.  This duty is best described as an obligation to act and behave solely, in the best interest of the organization and its shareholders/stakeholders.  In non-profit parlance: best interest in the mission of the organization.  To be an effective fiduciary then, the Board must seek to eliminate conflicts of interest and to learn about the risks or potential harms that are inherent to the organization via the business it is in.  The common definitions associated with a Board’s fiduciary obligation is the duty of care, the duty of loyalty and the duty of obedience.  Simply,

  • Duty of Care:  To act as a prudent person and to be engaged in their duties as Board members in the preservation and protection of the organization.  The actions include attending meetings, reading, questioning, and obtaining industry education
  • Duty of Loyalty: Removing self promotion and personal interest (including personal business interest) from Board duties/responsibilities.  Acting only in the collective best interest or the organization and its mission/shareholder/stakeholders.
  • Duty of Obedience: To assure the organization is compliant with all federal, state and local laws and is conducting business in a compliant manner with other rules and regulations as applicable (e.g., bond/debt  covenants).

With PDPM about to change the entire Medicare fee-for-service reimbursement program for SNFs while presenting broader payment change implications (down the road) for Medicare Advantage and even Medicaid (note that Medicaid payment systems always trend-off Medicare programs), Boards need to start NOW to understand PDPM and its certain, organizational impacts.  Each of the above “duties” are in-play but most acutely, the duty of care and the duty of obedience.

To maintain clarity and a certain amount of brevity and readability, below is my Board education/implementation framework for PDPM.

  1. What is PDPM? Explain at a macro-level what the new program impacts (Medicare A, fee-for-service) and how it works compared to the current Medicare RUGs-based system.  I would avoid the jargon and technical while sticking to the core differences.
    • Differences in patient classification and payment level assignment
    • Differences in the role of therapy and the payment thereof
    • Variable payment differences
    • Clinical incentives and behavioral changes
  2. PDPM Impact for the Organization, Part 1? What should the Board know about how PDPM will impact the organization.
    • Revenue impact?  The Board should see and understand, quantified revenue impacts.  Note: Organizations should be modeling the changes NOW to their reimbursement
    • Any technology changes and investments that are necessary prior to October 1
    • Any staff changes, staff education costs, need to budget for consultants, etc.
    • Changes in therapy contracts or therapy provision necessitated by PDPM
    • Changes in care delivery and why such as more group and concurrent therapy, shorter lengths of stay, possible change in clinical acuity
  3. PDPM Impact for the Organization, Part 2? What the Board should know that doesn’t change under PDPM?
    • No changes to other payer sources and programs expected (e.g., Medicare Advantage)
    • No compliance or regulatory changes (survey regulations)
    • No other program changes such as QRP, VBP, etc.
    • No impact to other services or programs the organization may have (home health, hospice, Assisted Living, Pace, etc.)
  4. PDPM Risks: What to Monitor? The Board needs to assure that the organization’s preparation for PDPM and the changes will be implemented and managed such that the organization will stay compliant with all applicable laws, rules and requirements.
    • Will the revenue changes impact bond/debt covenants (negatively)?
    • How will therapy provision be monitored, especially if therapy is provided via a contractor?  CMS has warned that drastic changes in minutes provided and/or treatment levels (from almost exclusively 1 to 1 to group and concurrent) will lead to targeted audits and potential penalties
    • Revenue changes not adequately predicted to the Board
    • Patient satisfaction changes (negative).  PDPM places a premium on efficiency of stay, especially given the variable payment dynamic.  Will care be complete and patients satisfied or will corners be cut adversely impacting satisfaction?
    • Compliance changes (adverse) or performance changes adverse due to PDPM. Has the organization’s performance metrics such as rehospitalizations, falls, infections rates, etc. changed? Any adverse survey changes or serious citations occurred? The Board must be actively engaged in QAPI and should be monitoring quality of care data
    • Budgets and investments met/made to assure smooth and supportive transition to PDPM
  5. PDPM: Other? The Board should require periodic updates across an extended period of time on how the transition to PDPM has impacted the organization, positively and negatively.  Similarly, as with all other major industry changes, PDPM should impact strategic plans and the same, should adjust for the impact PDPM will have.

Given that PDPM will implement October 1, organizations that haven’t at least begun Step 1 above are behind.  Step 2 should occur ASAP, especially since many organizations will likely see some negative revenue impact, if they have a disproportionate Medicare book of therapy of ultra-high RUGs and longer lengths of stay.  Any organization with a therapy contract (not employed, in-house) will need to get into discussions NOW regarding PDPM and their contract terms.  PDPM changes are sweeping and shouldn’t be ignored and/or, under sold and misconstrued to the Board or governing body.  The risks are too great and the organizational peril, too high.

 

January 31, 2019 Posted by | Uncategorized | , , , , , , , , , | Leave a comment

PDPM and Therapy Contracts Webinar

On February 6 at 1:00 PM eastern, my rehab specialty partner Dean Freeland, PT and  I will be conducting a webinar on PDPM and Therapy.  This live (and recorded) event will cover the new SNF Medicare fee-for-service reimbursement program (PDPM) going into effect on October 1 of this year.  As the new system substantially changes how SNFs are paid under Medicare, we will review preparation strategies and contract strategies for SNFs that use rehabilitative therapy contractors for PT, OT, and Speech.  Even if your SNF is using in-house/employed therapists, this webinar is worthwhile as we will cover the mechanics of payment categories and the nuances of PDPM that are critical to capturing the proper levels of reimbursement.

To participate in this event/program, click on the link below for registration details.  Hope you all can attend!

http://hcmarketplace.com/pdpm-therapy-contracts

 

January 28, 2019 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment