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!
On the Reports and Other Documents page ( http://wp.me/PtUlY-4g ), I have uploaded a Power Point presentation my firm has made available to clients covering the new Federal Conditions of Participation for SNFs and the implementation elements that are part of Phase 1 (titled “New COPS for SNFs Phase 1”). The presentation covers what is happening in terms of the new regulations arising out of the law, focused on Phase 1 requirements which began November 28. The presentation will also alert providers, etc. to Phase 2 issues as applicable.
Additional background information on the Phases and the Rule can be found on this site at these post references: http://wp.me/ptUlY-kU
As always, questions, etc. can be forwarded to me via a comment accompanying this post or via e-mail (contact information on the Author page). Remember, if you wish a reply/response, please include a valid e-mail address/contact with your post or question.
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.
About ten days ago, I published a post regarding the new Federal Conditions of Participation for SNFs. This long awaited regulatory update includes new, revised, and existing regulations published in final rule form last week (October 4). The post is here for reference http://wp.me/ptUlY-kL
The questions frequently asked regarding the new CoPs (since release) are around implementation dates. As readers will note, whether in my post or in the actual Final Rule, enforcement is in phases spanning a three year time frame – November 2016 through 2018. Recall that the CoPs in the Final Rule are the broad law changes. Implementation requires specificity found (typically) in the Interpretive Guidelines – the actual “regs”. We aren’t there yet and given the breadth of change in certain instances, time is necessary for regulations to be written and providers to comply. Hence, the phasing.
I have posted below, the implementation timeframe for reference. This guide is available via this post and is hosted on the Reports and Other Documents page on this site. I have articles forthcoming (soon) here and on other sites regarding implementation strategies and tips. In the meantime, readers can always forward a question via comment to this post or to my e-mail address noted on the Author page. Remember: If you want an answer direct, please provide a current, working e-mail address. I do respond to all questions and comments as efficiently as I can.
The timeframe document is here:
The long-awaited final rule on the revised/new SNF Conditions of Participation is set for publishing on October 4 in the Federal Register. The public inspection version is available now, including the comments from the Proposed Rule at this link: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-23503.pdf The whole document is over 900 pages. The salient portions that include the regulatory changes/summary of provisions is the first 14 or so pages.
Two things to remember for policy readers and folks in the industry. First, what is available is the “law” not the interpretive guidelines that expands on the law in a way that creates enforcement regulations and the roadmap or “how to”. The Final Rule is absent this information. CMS still needs to develop this element. Second, implementation will occur in phases. The first phase is set for November 28, 2016 with minor changes that most providers should be ready for or are parts (related or integrated) from annual rule releases/updates (CMS updates PPS for each provider segment annually) already disclosed. For example, QMs that translate into this rule regarding unnecessary drugs, antipsychotics-psychotics, etc. These are now encapsulated in the rule but frankly, not new in scope. The second phase is November 2017 and the third phase, 2019.
In November of last year, concurrent with the release of the Proposed Final Rule, I wrote a piece and did a webinar for HCPro on this topic. The written piece is here: http://wp.me/ptUlY-iT In my review of the two, what I though would move forward fundamentally “intact” did. What I was concerned about however, didn’t change much based on the over 10,000 comments. There is definitely, a “Camel’s nose under the tent” element with regard to staffing requirements; though not an overt regulation. The devilish elements are around the “facility assessments” for staff adequacy and competency, etc. and the food service requirement to meet individual preferences plus serve nutritionally adequate, palatable meals, etc. As one of the main issues in any environment remains food (always a certain number of complaints), this one could prove very, very prickly when it comes to survey/enforcement. The summary of changes/provisions is below, as published.
- Basis and scope (§483.1)
We have added the statutory authority citations for sections 1128I(b) and (c) and section
1150B of the Social Security Act (the Act) to include the compliance and ethics program,
quality assurance and performance improvement (QAPI), and reporting of suspicion of a
crime requirements to this section.
- Definitions (§483.5)
We have added the definitions for “abuse”, “adverse event”, “exploitation”,
“misappropriation of resident property”, “mistreatment”, “neglect”, “person-centered
care”, “resident representative”, and “sexual abuse” to this section.
- Resident rights (§483.10)
We are retaining all existing residents’ rights and updating the language and organization
of the resident rights provisions to improve logical order and readability, clarify aspects
of the regulation where necessary, and updating provisions to include advances such as
- Freedom from abuse, neglect, and exploitation (§483.12)
We are requiring facilities to investigate and report all allegations of abusive conduct.
We also are specifying that facilities cannot employ individuals who have had a
disciplinary action taken against their professional license by a state licensure body as a
result of a finding of abuse, neglect, mistreatment of residents or misappropriation of
- Admission, transfer, and discharge rights (§483.15)
We are requiring that a transfer or discharge be documented in the medical record and
that specific information be exchanged with the receiving provider or facility when a
resident is transferred.
- Resident assessments (§483.20)
We are clarifying what constitutes appropriate coordination of a resident’s assessment
with the Preadmission Screening and Resident Review (PASARR) program under
Medicaid. We are also adding references to statutory requirements that were
inadvertently omitted from the regulation when we first implemented sections 1819 and
1919 of the Act.
- Comprehensive Person-Centered Care Planning (§483.21) *New Section*
We are requiring facilities to develop and implement a baseline care plan for each
resident, within 48 hours of their admission, which includes the instructions needed to
provide effective and person-centered care that meets professional standards of quality
We are adding a nurse aide and a member of the food and nutrition services staff to the
required members of the interdisciplinary team that develops the comprehensive care
We are requiring that facilities develop and implement a discharge planning process that
focuses on the resident’s discharge goals and prepares residents to be active partners in
post-discharge care, in effective transitions, and in the reduction of factors leading to
preventable re-admissions. We are also implementing the discharge planning
requirements mandated by The Improving Medicare Post-Acute Care Transformation Act
of 2014 (IMPACT Act) by revising, or adding where appropriate, discharge planning
requirements for LTC facilities.
- Quality of care (§483.24)
We are requiring that each resident receive and the facility provide the necessary care and
services to attain or maintain the highest practicable physical, mental, and psychosocial
well-being, consistent with the resident’s comprehensive assessment and plan of care.
- Quality of Life (§483.25)
Based on the comprehensive assessment of a resident, we are requiring facilities to ensure
that residents receive treatment and care in accordance with professional standards of
practice, the comprehensive person-centered care plan, and the residents’ choices.
- Physician services (§483.30)
We are allowing attending physicians to delegate dietary orders to qualified dietitians or
other clinically qualified nutrition professionals and therapy orders to therapists.
- Nursing services (§483.35)
We are adding a competency requirement for determining the sufficiency of nursing staff,
based on a facility assessment, which includes but is not limited to the number of
residents, resident acuity, range of diagnoses, and the content of individual care plans.
- Behavioral health services (§483.40)
We are adding a new section to subpart B that focuses on the requirement to provide the
necessary behavioral health care and services to residents, in accordance with their
comprehensive assessment and plan of care.
We are adding “gerontology” to the list of possible human services fields from which a
bachelor degree could provide the minimum educational requirement for a social worker.
- Pharmacy services (§483.45)
We are requiring that a pharmacist review a resident’s medical chart during each monthly
drug regimen review.
We are revising existing requirements regarding “antipsychotic” drugs to refer to
“psychotropic” drugs and define “psychotropic drug” as any drug that affects brain
activities associated with mental processes and behavior. We are requiring several
provisions intended to reduce or eliminate the need for psychotropic drugs, if not
clinically contraindicated, to safeguard the resident’s health.
- Laboratory, radiology, and other diagnostic services (§483.50) *New Section*
We are clarifying that a physician assistant, nurse practitioner or clinical nurse specialist
may order laboratory, radiology, and other diagnostic services for a resident in
accordance with state law, including scope-of-practice laws.
- Dental services (§483.55)
We are prohibiting SNFs and NFs from charging a Medicare resident for the loss or
damage of dentures determined in accordance with facility policy to be the facility’s
responsibility, and we are adding a requirement that the facility have a policy identifying
those instances when the loss or damage of dentures is the facility’s responsibility. We
are requiring NFs to assist residents who are eligible to apply for reimbursement of dental
services under the Medicaid state plan, where applicable.
We are clarifying that with regard to a referral for lost or damaged dentures “promptly”
means that the referral must be made within 3 business days unless there is
documentation of extenuating circumstances.
- Food and nutrition services (§483.60)
We are requiring facilities to provide each resident with a nourishing, palatable, well balanced
diet that meets his or her daily nutritional and special dietary needs, taking into
consideration the preferences of each resident. We are also requiring facilities to employ
sufficient staff, including the designation of a director of food and nutrition service, with
the appropriate competencies and skills sets to carry out the functions of dietary services
while taking into consideration resident assessments and individual plans of care,
including diagnoses and acuity, as well as the facility’s resident census.
- Specialized rehabilitative services (§483.65)
We have added respiratory services to those services identified as specialized
- Administration (§483.70)
We have largely relocated various portions of this section into other sections of subpart B
as deemed appropriate.
We require facilities to conduct, document, and annually review a facility-wide
assessment to determine what resources are necessary to care for its residents
competently during both day-to-day operations and emergencies. Facilities are required
to address in the facility assessment the facility’s resident population (that is, number of
residents, overall types of care and staff competencies required by the residents, and
cultural aspects), resources (for example, equipment, and overall personnel), and a
facility-based and community-based risk assessment.
Binding Arbitration Agreements: We are requiring that facilities must not enter into an
agreement for binding arbitration with a resident or their representative until after a
dispute arises between the parties. Thus, we are prohibiting the use of pre-dispute
binding arbitration agreements.
- Quality assurance and performance improvement (QAPI) (§483.75)
We are requiring all LTC facilities to develop, implement, and maintain an effective
comprehensive, data-driven QAPI program that focuses on systems of care, outcomes of
care and quality of life.
- Infection control (§483.80)
We are requiring facilities to develop an Infection Prevention and Control Program (IPCP)
that includes an Antibiotic Stewardship Program and designate at least one Infection
- Compliance and ethics program (§483.85) *New Section*
We are requiring the operating organization for each facility to have in effect a compliance
and ethics program that has established written compliance and ethics standards, policies
and procedures that are capable of reducing the prospect of criminal, civil, and
administrative violations in accordance with section 1128I(b) of the Act.
- Physical environment (§483.90)
We are requiring facilities that are constructed, re-constructed, or newly certified after the
effective date of this regulation to accommodate no more than two residents in a bedroom.
We are also requiring facilities that are constructed, or newly certified after the effective
date of this regulation to have a bathroom equipped with at least a commode and sink in
- Training requirements (§483.95) *New Section*
We are adding a new section to subpart B that sets forth all the requirements of an
effective training program that facilities must develop, implement, and maintain for all
new and existing staff, individuals providing services under a contractual arrangement,
and volunteers, consistent with their expected roles.
Stay tuned. I will have more forthcoming as survey guidelines come out, implementation is sorted, etc.
As alternative payment models expand and the options clarify, the post-acute segment of the health care spectrum faces a series of strategic questions, primarily;
- Join a network that exists or is forming be it part of an ACO, a SNP, a preferred provider organization in a Managed Medicaid state, or part of a bundled payment initiative
- Form one de novo – a SNP, a PACE, etc.
- Wait and see what evolves as certainly, much will change over the next two to four years.
One consideration that cannot be overlooked is that CMS plans on aggressively pursuing additional “value-based payments” at the expense of fee-for-service arrangements presently in-place. The process, if consistent with what has occurred in terms of roll-out/roll-forward, suggests a pace that will include new initiatives (e.g., bundled payments) every 12 months. Simultaneous or parallel to this movement, states continue to push forward on various hybrid Medicaid options including managed Medicaid plans, hybrid plans for dual eligible individuals, and the encouragement of more SNP and PACE options with some states offering incentives for formation (PACE Innovation Act allows for different program options with different benefit structures across more population categories. Also provides program opportunities for for-profit organizations).
The question oft asked these days is given the above, where to next for an SNF, a HHA, or even an ALF or Hospice? The answer starts with the market area and the dynamics within the market. The trends I see are truly unique and different region to region, market to market, state to state. For example, in certain states and regions, ACOs exist, are up and running, and have experience under their “belt”. In other states, ACOs are just forming or in some cases, re-forming post a distasteful experience and opportunities are fresh. In still other states, ACOs don’t exist and perhaps trial balloons have floated but nothing has persisted to conclusion.
The market factors that drive (majority of) network formation and thus, the maturity of the formation, the opportunities and the palate for additional or new ventures are;
- How much “managed” Medicare and Medicaid exists in the state, region, etc. and for how long. In markets with a large penetration of Medicare Choice plans, narrow networks and the experience and acceptance between providers is greater.
- Are ACOs up and running and/or forming. The more they are or are developing, the greater the interest in and opportunity for, network enhancement and development
- The market experience with early-phase, bundled payments via BPCI – the precursor to the current bundled payment initiatives. Similarly, whether the region is participating in the CCJR initiative or will in the new cardiac bundled payments.
No matter the dynamics of the market however, certainty does exist that post-acute providers must move to adapt to a value- based payment paradigm. How much risk a provider can and will accept depends on the provider, its existing care management acumen, its infrastructure maturity and its financial/capital position. Similarly, the evolution period that predominates the post-acute world now requires balance. This period is still fee-for-service heavy yet, transitioning (depending on regions, markets) to value-based payments. Providers must manage and excel at both though strategies to succeed in both are not mutually exclusive. Additionally, while payments are evolving, the compliance requirements are not. Oddly enough, the forthcoming revised Federal Conditions of Participation for SNFs will not in any way, provide accommodation for providers that work heavily in a transitional, post-acute world. The regulations are long-term care driven and heavily so in some cases wholly anathema to the transitional care world that is evolving.
Assumptively, this episode of care, value-based payment world is not going away. What this means is that survival in such a world for any post-acute provider is to avoid reactive strategy (defensive), instead applying resources and energy in the direction of the change. What I advise, before I answer the questions posed in the title, is as follows;
- Know your market and critically evaluate the landscape. What is going on in terms of Medicare Advantage plans, ACOs, etc.? If not done, have an in-depth conversation with hospital and physician referral partners regarding their approaches, strategies, etc. to bundled payments. Don’t be surprised however, if a level of vapor-lock exists. Be willing to forebear the task and direct some additional dialogue.
- Assess your organization critically. Where are your quality ratings and measures (stars, etc.)? How does your organization manage its lengths of stay, key quality measures (falls, hospitalizations, wounds, patient satisfaction, etc.)? Where is your HIS/MIS at? Can you communicate with other providers, provide physicians access, etc.?
- Can your organization make investments financially in infrastructure and staff realignment while still caring for a payer mix that is predominantly fee-for-service? Can you survive lower margins perhaps even losses while you transition? You may have extra staff temporarily, different staff, and more capital investment than typical.
- Can you laterally partner or downstream? For example, an SNF needs to find a HHA partner. What synergies in the market exist? Can (or will or already is) the SNF be in the HHA business? How about outpatient? How about physicians? Partner? Employ? Joint venture (careful here)?
Concluding: To the questions(s) posed in the title. Join? Yes, particularly if the provider is single site or limited sites in a region. Again, I am assuming the provider is prepared to join (I’ll summarize at the end). Source complimentary networks and get in and watch for opportunities in the market and within the network to develop additional product/service lines.
Form? Not unless the provider has mass, expertise and enough geographic span and parallel partner alignment to manage a population of at-risk individuals for capitated payments. This is a step that requires significant infrastructure and capital. A provider must have enough outlets and partners to manage population risk across a group exceeding normally, 10,000 lives (ideally larger). The common network models applicable for post-acute providers looking to form their own network are SNPs and PACE programs.
Wait? I can’t recommend waiting as doing so will leave any provider at peril of being left-out as networks continue to evolve. This said, a play cautiously strategy is fine provided that the provider or group is diligent and active in gauging networks and negotiating. A wholesale “wait and see what happens” is an ill-advised strategy.
Final Note: By prepared to join a network I mean minimally, having the following pieces with experience and data as applicable.
- Ratings at 3 Stars or better – ideally 4 or higher particularly in markets where multiple 4 star or better providers exist.
- A great QAPI program that monitors outcomes and tracks and trends quality data and quality measures plus patient satisfaction. Minimally, the provider should have data and analysis on infections, falls, wounds, hospitalizations, response times, other care transitions, length of stay, etc.
- A procedure and personnel to care manage referrals through a full episode of care.
- A process of sharing quality data and communication on patient care and service issues across provider segments.
- HIS/MIS at a level that allows certain functional connectivity between providers such as lab/diagnostics, hospital, physicians, pharmacy, etc. such that patient information can be communicated and acted upon.
- Parallel service partners (either owned or contracted with) across, up and down stream – physicians, hospitals, pharmacy, HHA, hospice, outpatient, etc.
- Care algorithms to support best practices for outcomes on key patient profiles (minimally, bundled payments) plus supportive protocols for key co-morbidities such as COPD, CHF, diabetes, peripheral vascular disease, depression, and other source acquired pressure injuries and infections. The latter are necessary to minimize re-hospitalization risk.
- Care staff trained and using INTERACT tools and versed in physician communication protocols, ideally from a source such as AMDA.
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.