Now into February, its time to take stock of the Post-Acute/SNF landscape, particularly as the same pertains to the evolutionary policy initiatives in-play and moving forward. To start, there is little evidence on the horizon of an all-out retreat on the policy changes begat by the ACA. While some framework is building to “Repeal and Replace” the ACA/Obamacare, the same will leave fundamentally intact, the changes started and wrought by Bundled Payments, Value-Based Purchasing, and the IMPACT Act. The Republican majority, a smattering of Democrats, and the incoming Secretary of HHS have signaled support for these initiatives. Should a Repeal strategy move forward any time soon, these elements, skeletal perhaps or whole in-flesh, will likely remain.
Reviewing thematically, these policy initiatives are centered on an intentional focal shift from episodic, fee-for-service payments to payments based upon performance. Performance in each element is tied to cost and quality. The objective is to create better outcomes (quality) in a more efficient manner. Because these things are government policy, they are clunky – less than simple. In some cases such as with Value Based Purchasing and readmission measures, the methodology is so cumbersome and disjointed (some diagnoses are OK, some are not) that a layman, even one well-educated, could have a hard time qualifying and quantifying an appropriate readmission (by diagnoses, by risk, etc.).
Below is a quick review of the current policy initiatives and what they mean for 2017 for SNFs.
IMPACT Act: The purpose of the Act is to create standardized reporting of quality measures and cost measures across the post-acute domain (HHAs, SNFs, LTCaH, IRF). The objectives are to reduce avoidable readmissions to acute care settings and to create standardized, comparable quality measures to identify federal policy improvements and payment consistencies. CMS of course, uses more floral language regarding the objectives and intent. Ultimately, the translation of the standardized data allows CMS to target regulatory changes and payment initiatives that reward provider performance and streamline (a bit oxymoronic for government) payment systems (rate equalization models). Below are the pertinent domains under the IMPACT Act
- Skin integrity and changes in skin integrity
- Functional status, cognitive function, and changes in function and cognitive function
- Medication reconciliation
- Incidence of major falls
- Transfer of health information and care preferences when an individual transitions
Resource Use and Other Measures
- Resource use measures, including total estimated Medicare spending per beneficiary
- Discharge to community
- All-condition risk-adjusted potentially preventable hospital readmissions rates
- Functional status
- Cognitive function and mental status
- Special services, treatments, and interventions
- Medical conditions and co-morbidities
- Other categories required by the Secretary
As is common in current health policy, reimbursement policy and other policy interweaves with laws such as the IMPACT Act. Value Based Purchasing and Quality Reporting for SNFs, integrates quality measure reporting and results along with readmission performance with incentives or penalties imputed via Medicare reimbursement for 2018. Beginning in October of 2016, SNFs began to submit QRP (Quality Reporting) data via the MDS. The first data collection period concluded on 12/31/16. The Quality Measures reported and applicable under the IMPACT Act (cross setting measures) are:
- Part A stays with one or more falls with major injury (fracture, joint dislocation, concussion, etc.)
- Percent of residents with new or worsened pressure injuries
- Percent of Long-Term Care Hospital patients with an Admission and Discharge Functional Assessment and a Care Plan that addresses function
The Claims Measures are:
- Discharge to community
- Potential preventable, 30 day post SNF discharge, readmission to hospital events
- SNF Medicare spending per beneficiary
The Quality Measures are the elements that impute, based on performance, a reimbursement penalty in 2018 up to 2% of Medicare payments via a reduction in the SNFs reimbursement (rate) update.
Value Based Purchasing (VBP): SNFs are a tad late to this party as other providers such as hospitals, physicians and home health agencies already have reporting and measurement elements impacting their reimbursement. Hospitals for example, have DRG specific readmission penalties (penalties applicable to common admitting diagnoses). For HHAs, a nine state demonstration project is under way linking a series of measures (process, outcomes, claims) from the OASIS with customer satisfaction from the HHCAHPS to reimbursement via an accumulation tied to a Total Performance Score. The measurement years (data gathered) beget payment changes (plus or minus) in outlying years – 2016 data nets payment adjustments in 2018. The payment graduation increases over time (2018 = 3%, 2022 = 8%).
For SNFs, the VBP measure is 30 day, all cause, unplanned readmissions to a hospital. The measurement reflects a 30 day window that begins at the point of SNF admission from a hospital. The 30 day window of measurement spans place of care meaning that the patient need not reside in the SNF for this measurement to still have an impact. For example, a patient admitted to an SNF, subsequently discharged after 14 days to a HHA and then readmitted to the hospital on day 22 (post hospital discharge) is considered a “readmission” for SNF VBP purposes. CMS has offered guidance here regarding diagnoses that are excluded from the readmission measure. Readers that wish this additional information can contact me via my email (on the Author page of this site) or via a comment to this post. In either case, please provide a valid email that I can use to forward the information.
To avoid getting too technical in this post, a quick summary of how VBP will work is below (readers with greater interest can contact me as provided above for a copy of a Client Alert our/my firm produced last fall on VBP).
- A SNFs readmission rate is calculated in separate calendar year periods – 2015 and 2017. The 30 day readmissions (rate) applicable to an SNF is subtracted from the number 1 to achieve the SNFRM (Skilled Nursing Facility Readmission Measure).
- The 2015 rate is called the Improvement Score and the 2017 rate is called the Performance Score. Both scores are compared against a benchmark for the period applicable.
- The benchmark equals 100 points. The difference between the two (Improvement and Achievement) correlate to points plotted on a range – the Achievement range and the Improvement range. The higher of the two scores is used to calculate reimbursement incentives or withholds – performance score.
- Performance scores in terms of points correlate to reimbursement incentives/ withhold. The maximum reduction or withhold is 2%. CMS has yet to identify the incentive amount but under law, the amount must be equal in total value to 50-70% of the total withheld. In effect, we envision a system that imputes a floor of minus 2% with points up to the threshold limit equaling a net of zero (plus 2%) and then climbing above the threshold to the benchmark (national SNF best readmission (average) decile). This maximum level (and above) is likely to equal 100% of the available incentive.
The 2015 data is already “baked” but 2017 is just beginning. SNFs need to be diligent on monitoring their readmissions as this window is the Improvement opportunity. Reimbursement impact isn’t until 2019.
Care Coordination: This catch-all phrase is now in “vogue” thanks to the IMPACT Act and VBP, along with the recently released, new Conditions of Participation. The implication or applicability for Care Coordination is found in the new COPs. Care Coordination elements are located in 483.21 (a new section) titled Comprehensive Resident-Centered Care Plans. Specifically, the references to Discharge Planning (Care Coordination) in this section are implementation elements for the IMPACT Act requirements. Below are the regulation elements for Care Coordination.
- Requires documentation in the care plan of the resident’s goals for admission, assessment of discharge potential and discharge plan as applicable
- Requires the resident’s discharge summary to include medication reconciliation of discharge meds to admission meds (including OTC)
- Discharge plan must incorporate a summary of arrangements for post-discharge care including medical and non-medical services plus place of residence
- All policies pertaining to admission, transfer, discharge, etc. must be uniform, regardless of payer source
- Requires the facility to provide to resident/resident’s representative, data from IMPACT Act quality measures to assist in decision-making regarding selection of post-acute providers
The above elements are in Phase 1 meaning providers should be in-compliance by now (regulation took effect 11/28/16).
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.
With a new year upon us and (perhaps) the most amount of free-flowing health policy changes happening or about to happen in decades, it seems appropriate to create some simple resolutions for the year ahead. Similar to the personal resolutions most people make (get healthy, lose weight, clean closets, etc.), the following are about “improvements” in the business/operating environments. They are not revolutionary; more evolutionary. Importantly, these are about doing things different as the environment we are in and moving toward is all about different.
First, a quick overview or framework for where health care is and where it is going. A political shift in Washington from one party to another foretells of differences forthcoming. It also tells us that much will not change and what will is likely less radical than most think. Trump and the Republicans can’t create system upheaval as most of what the industry is facing is begat by policy and law well settled. Similarly, no political operatus can change organically or structurally, the economic realities present – namely an aging society, a burgeoning public health care/entitlement bill, and a system today, built on a fee-for-service paradigm. Movement toward a different direction, an insight of a paradigmatic shift, is barely visible and growing, while slow, more tangible. In short: where we left 2016 begins the path through 2017 and beyond.
The road ahead has certain new “realities” and potholes abundant of former realities decaying. The new realities are about quality, economic efficiency and patient satisfaction/patient focus. The former realities are about fee-for-service, Medicare maximization, and more is better or warranted. The signs of peril and beware for the former is evident via today’s RAC activity and False Claim Act violations pursuit. Ala Scrooge, this is the Ghost of Christmas Future – scary and a harbinger to change one’s behavior or face the certainty of the landscape portrayed by the Specter.
So, resolution time. Time to think ahead, heed the warnings, realize the future portrayal and make plans for a different 2017.
Resolution 1: The future is about measurable, discernible quality. No post-acute provider, home health or SNF, can survive (much) longer without having 4 or higher Star ratings and a full-blown, operational focus on continuous quality improvement. The deliverable must be open, clear and transparent, visible in quality measures and compliance history. FOCUS ON QUALITY AND IN SPECIFICS INCLUDING HAVING A FULL-BLOWN, FULLY INTEGRATED QAPI PROGRAM.
Resolution 2: The future is about patient preference and satisfaction. For too many decades, patients have gotten farther detached from what health care providers did and how they (providers) did it. No longer. Compliance and new Conditions of Participation will require providers to stop paying lip-service to patient centered-care and start now, to deliver it. The new environment is no longer just what the provider thinks the patient wants or should have but WHAT the patient thinks he/she wants and should have. TIP: Brush-up on the Informed Consent protocols! FOCUS ON PATIENT PREFERENCES IN HOW CARE IS DELIVERED, WHAT PATIENT GOALS ARE, AND THEIR FEEDBACK/SATISFACTION WITH SERVICE.
Resolution 3: Efficiency matters going forward. This isn’t about cost. It is about tying quality to cost and to a better outcome that is more economically efficient. The measurement here is multi-faceted. The first facet is utilization oriented meaning length-of-stay matters. The quicker providers can efficiently, effectively and safely move patients from higher cost settings to lower costs settings, is the new yardstick. The second facet is reductions in non-necessary or avoidable expenditures such as via Emergency Room transfers and hospitalizations/rehospitalizations. NOTE: This ties back to the first resolution about quality. MANAGE EACH ENCOUNTER TO MAKE CERTAIN THAT EACH OF LENGTH OF STAY IS OPTIMAL, AT EACH LEVEL, FOR THE NEEDS OF THE PATIENT AND THAT ANY COMPLICATIONS AND AVOIDABLE ISSUES (FALLS, INFECTIONS, CARE TRANSITIONS) IS MINIMIZED.
Resolution 4: The new world going forward demands that we begin to transition from a fee-for-service mindset to a global payment reality. This transition period will represent some heretical demands. While fee-for-service dies slowly as we know it, its death will include interstitial periods of pay-for-performance aka Value-Based Purchasing. Similarly and simultaneously, new models such as bundled payments will enter the landscape. Our revenue reality is moving and thus, a whole new set of skills and ideas about revenue capture and management must evolve. RESOLVE TO STOP LOOKING AT HOW TO EXPAND AND MAXIMIZE EACH MEDICARE ENCOUNTER. THE NEW REALITY IS TO LOOK AT EACH PATIENT ENCOUNTER IN TERMS OF QUALITY AND EFFICIENCY FIRST, THEN TIE THE SAME BACK TO THE PAYMENT SYSTEM. REVENUE TODAY WILL FOLLOW AND BE TIED TO PATIENT OUTCOMES, ETC.
Resolution 5: To effectuate any kind of permanent change, new competencies need development. Simultaneous, old habits non-effective or harmful, need abandoning. The new competencies required are care management, care coordination, disease management, and advanced care planning. Reward going forward will require providers to be good at each of these. Each ties to risk management, outcome/quality production, and transition efficiency. Remember, our rewards in the future are tied to efficiency and quality outcomes. Advanced Care Planning for example, covers both. Done well, it minimizes hospitalizations while focusing on moving patients through and across higher cost settings to lower cost settings. THIS IS THE YEAR OF BUILDING. RESOLVE TO CREATE CORE COMPETENCIES IN ADVANCE CARE PLANNING, CARE COORDINATION AND THE DEVELOPMENT AND IMPLEMENTATION OF BEST-PRACTICE, DISEASE MANAGEMENT ALGORITHMS AND CARE ALGORITHMS IN AND ACROSS COMMON DIAGNOSES AND RISK AREAS (e.g., falls, skin/wound, heart failure, pneumonia, infections, etc.).
Resolutions 6: The world of post-acute is changing. To change or adapt with it requires first and foremost, knowledge. Too many providers and often, leadership within don’t understand the dynamics of the environment and what is shifting, how and when. Denial cannot be operative and as Pasteur was famed to say, “chance favors the prepared mind”. Opportunity is abundant for those providers and organizations that are up-to-speed, forward thinking and understand how to use the information available to them. RESOLVE TO EDUCATE YOURSELF AND THE ORGANIZATION. KNOW HOW THE 5-STAR SYSTEM WORKS. KNOW WHAT VALUE-BASED PURCHASING IS ALL ABOUT. KNOW THE MARKET AREA YOUR ORGANIZATION IS IN AND HOW YOUR ORGANIZATION COMPARES FROM A QUALITY PERSPECTIVE (MEASURED) TO OTHERS. KNOW THE HOSPITAL PLAYERS AND THE NETWORKS. KNOW YOUR ORGANIZATION’S STRENGTHS AND WHAT IMPROVEMENTS NEED TO BE MADE.
Happy 2017! The beauty of a New Year is that somehow, we get a re-start; a chance to do and be different than what we were in the prior year. For me, I like the CQI approach best which is more about constant evolution than a wholesale, got to change now, approach. Success is about doing things different as realities and paradigms shift. We are certainly, from a health care and post-acute industry perspective, in a paradigm shift. Take 2017 and brand it as the Year to Become Different! The Year of Metamorphosis!
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;
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.
Next week – Wednesday, October 5 – I am conducting a webinar on behalf of HCPro on the subject of preventing unnecessary hospitalizations. The program will cover all care transitions with a particular emphasis on inpatient admissions. Below is a quick summary about the program.
The new quality measures are out, and there is a renewed emphasis on reducing the risk of avoidable hospitalizations and readmissions. Across a number of regulatory elements beginning this year, hospitalization and readmission rates from SNFs will be measured and ultimately factored into the SNF landscape via reimbursement penalties and star ratings.
At the conclusion of this program, participants will be able to:
- Identify the steps that lead to readmissions and what can be done to lessen or eliminate the risk
- Increase their awareness of the tools available to reduce the risk of readmissions
- Use best practices to improve care coordination
- Know which key elements produce readmissions and how to limit or remove them, including medication reconciliation, care conference structure/strategy, care pathways, disease management programs, and communication tools
Registrants get the session content plus handouts which include usable QA tools, care pathways, etc. Any readers interested in this subject area are encouraged to attend and/or share the link with their colleagues. The program link for registration, etc. is below.
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 email@example.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.
Nearing the end of the Supreme Court session, the Court issued an important clarification ruling concerning the False Claims Act in cases of alleged fraud. In the Universal Health Services case, the Court addressed the issue of whether a claim could be determined as fraudulent if the underlying cause for fraud was a lack of professional certification or licensing of a provider that rendered care related to the subsequent bill for services. In the Universal case, the provider submitted claims to Medicaid and received payment for services. The services as coded and billed implied that the care was provided by a licensed and/or qualified professional when in fact, the care was provided by persons not properly qualified. In this case, the patient ultimately suffered harm and death, due to the negligent care.
The False Claims Act statute imposes liability on anyone who “(a) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; or (b) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” It defines “material” as “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.” And it defines “knowingly” as “actual knowledge; … deliberate ignorance; … or reckless disregard of the truth or falsity of the information; and … no proof of specific intent to defraud is required.” The last element is key – no proof of intent to defraud is required.
Though providers sought a different outcome, the initial review suggests the decision is not all that bold or inconsistent with other analogous applications. The provider community hope was that the Court would draw a line in terms of the expanse or breadth of False Claims Act “potential” liabilities. The line sought was on the technical issue of “implied certification”; the notion that a claim for services ‘customarily’ provided by a professional of certain qualifications under a certain level of supervision doesn’t constitute fraud when the services are provided by someone of lesser professional stature or without customary supervision, assuming the care was in all other ways, properly provided. The decision reinforces a narrow but common interpretation of the False Claims Act: An action that would constitute a violation of a federal condition of participation within a program creating a condition where the service provided is not compliant creates a violation if the service was billed to Medicare or Medicaid. Providers are expected to know at all times, the level of professional qualifications and supervision required under the applicable Conditions of Participation.
The implications for providers as a result of this decision are many. The Court concretized the breadth of application of the False Claims Act maintaining an expansive view that any service billed to Medicare and/or Medicaid must be professionally relevant, consistent with common and known professional standards, within the purview of the licensed provider, and properly structured and supervised as required by the applicable Conditions of Participation. Below are a few select operational reminders and strategies for providers in light of the Court’s decision and as proven best-practices to mitigate False Claims Act pitfalls.
- One of the largest risk areas involves sub-contractors providing services under the umbrella and auspices of a provider whereby, the provider is submitting Medicaid or Medicare claims. In these instances the provider that is using contractors must vet each contractor via proper credentialing and then, provide appropriate and adequate supervision of the services. For example, in SNFs that use therapy contractors the SNF must assure that each staff member is properly licensed (as applicable), trained to provide the care required, and the services SUPERVISED by the SNF. Supervision means actually reviewed for professional standards, provided as required by law (conditions of participation), properly documented, and properly billed. The SNF cannot leave the supervision aspect solely to the therapy contractor.
- Providers must routinely audit the services provided, independently and in a structured program. Audits include an actual review of the documentation for care provided against the claim submitted, observations of care provided, and interviews/surveys of patients and/or significant others with respect to care and treatment and satisfaction.
- Establish a communication vehicle or vehicles that elicits reactions to suspicious activity or inadequate care. I recommend a series of feedback tools such as surveys, focus groups, hotlines and random calls to patients and staff. The intent is to provide multiple opportunities for individuals, patients, families and staff to provide information regarding potential break-downs in care or regarding outright instances of fraud.
- Conduct staff training on orientation and periodically, particularly at the professional level and supervisory level. The training should cover organizational policy, the legal and regulatory framework that the organization operates within, and case examples to illustrate violations plus remedy steps.
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.
- 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.
- 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.
- 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.
- 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.
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.
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.