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Senior and Post-Acute Healthcare News and Topics

The Real Impacts of Poor Quality, Inadequate Compliance and Weak Risk Management

A number of interesting information drops occurred this past week or so reminding me that from time to time, the obvious isn’t always so obvious.  The seniors housing and skilled care industry today is going through a rocky patch.  A solid half of the SNF industry is severely hurting or struggling mightily due to Med Advantage, softer demand, pervasive reliance on Medicaid for census, labor shortages, rising wage pressure, tight Medicare reimbursement, new regulations, etc. (I could elaborate for a stand-alone article).  While not as pervasive in its struggles as the SNF industry, Assisted Living is facing challenges due to softer census, too much capacity, rising resident acuity, labor costs and shortages and gradually increasing regulatory scrutiny.  The relative strength in the overall seniors housing and post-acute sector is home health and independent housing.  Notice, I did say relative as home health demand is good but regulatory over-burden is still present along with tight reimbursement.  Home health is also experiencing labor challenges, the same as SNFs and ALFs.  The relative strength that is found in independent housing tends to be more on the market and sub-market rent side.  Many, many high-end providers are still struggling with census challenges and soft demand in certain markets.

As I have written and counseled many times to investors and clients alike, there is something to learn from the national trends but health care and seniors housing is still, a local reality.  What this means is that in spite of some rocky water for the industry, there are providers that do well and are bullish about their fortune in their respective industry segments.  Not to seem too convoluted, the national trends matter but as I like to think, in the context of what they truly mean.  In this regard, what they truly mean is how the trends impact providers on a macro basis as well as on a micro, behavioral basis.

As I started, this past week or so included some interesting information drops.  The first and not too surprising, is another alarm from a major, publicly traded provider organization that it was on the narrow ledge to failure.  Five Star Senior Living provided notice that given its financial condition now and as forecasted, it would not be able to meet its continuing obligations in the form of debt or timely payment of operating expenses.  When I say half the SNF industry is in battle to survive, I’m not kidding.

In unrelated drops, CNA (the major national commercial insurance provider) released its 2018 Claims Report for Long-Term Care/Senior Living.  The claims in this case are liability related.  Following CNA’s release, Willis Towers Perrin (major insurance brokerage and consultancy firm) provided their outlook for liability insurance noting that Long-Term Care and Seniors Housing should expect liability premium increases of 5% to 30%.  Anecdotally and unrelated, we are seeing steep property/casualty increases in the industry as well due to extreme weather losses over the last twelve to eighteen months.

While not absolute but substantial in nature, there is a direct correlation between providers that are struggling and the quality of care and service they provide to their patients.  The core competencies required to provide superb care are tied directly to compliance and risk management.  I have never seen an organization that delivers excellent care have poor compliance trends (billing, survey, other) and weak risk management leading to high levels of worker’s comp cases, lawsuits, liability insurance claims, etc.  Lately, there is the same correlation developing between quality and financial results.  As more quality payer source referrals and higher reimbursement with incentive payments connect to patient care outcomes, a gap is evident between the providers that are thriving and those that are dying.  That gap is the quality divide.

There is a spiral effect that is visible today in the SNF industry.  This effect has been visible for some time in hospitals.  It occurs as follows.

  • Care delivery is inconsistent and in most cases, not great.  Service is the same.
  • Complaints and survey results demonstrate the same and are reflected in star ratings.
  • Consumers and referral sources catch wind that care is not good.
  • Staff turnover accelerates, including key personnel that take with them, a disparaging message regarding care.
  • Quality mix erodes slightly.  Medicaid census increases as the “next best” alternative to an empty bed.
  • Financial results start eroding and losses occur or come into view.  Cash margins are getting tighter.
  • Expenses become an issue and cuts are necessary.  The cuts are incongruous to improving care.
  • With limited resources, quality suffers even more.  No money is available for capital and equipment upgrades.  Staff morale suffers and staffing levels are lower.  Productivity wanes as morale is poor and patient care follows.
  • Survey results are very poor and fines now happen.  The fines are expensive, removing more resources away from patient care.
  • Costs are growing rapidly related to higher insurance premiums, poor worker’s comp experience, unemployment costs, turnover, and legal costs to defend the facility.  These costs are removing resources away from patient care.
  •  Finally, because the resources are too depleted to make the necessary changes to rebuild quality, staff levels, etc. and no lender is available to front any more capital, the enterprise collapses.  The names are becoming familiar….Signature, ManorCare, Five Star, Genesis, Kindred are all SNF providers whose future is extinction or “almost”.

Arguably it takes money to have and deliver quality.  Equally as arguable today is that without quality, money won’t be made sufficient enough to stave-off failure due to…poor quality.  When quality isn’t the primary objective, compliance and risk management work as dead weights that the organization must carry; and the weight increases over time.  Why this isn’t obvious yet in the post-acute and seniors housing industry is beyond me.  An analogy that  I have used time and time again is the restaurant analogy.  Successful restaurants are laser-focused on their products – food and service.  They know that poor marks in either category or an outbreak of food borne illness can be death to their livelihood. In a crowded market of diners, price or value ties to quality and experience across a myriad of options.  What is common among the restaurants that succeed is their quality meets and exceeds, the customer’s realization of value (getting equal to or more satisfaction for the price paid).  When this occurs, money flows in increments sufficient to reward investors, pay employees, invest in equipment, and to reinvest in the products and services that customers buy.  Simple.

Seniors housing and post-acute care aren’t too different or disparate from the restaurant analogy.  The market is crowded with options…too many actually. Yes, the customer relationships are a bit different but the mechanics and economic levers and realities identical.  Providers that give great care, equal to or higher than the price points/reimbursement levels are GAINING customers via referrals.  The customers they are gaining are coming with good payment sources.  Money in the form of cash flow is strong enough to invest in plant, property, equipment and staff.  Doing so reinforces quality and service and allows the referral cycle to optimize.  As the market continues to shrink in terms of number of providers due to failure, the few that are exceptional continue to see their future and fortune improve.  Again, simple.

What we know is the following and the message should be clear today for those who still can control how they approach and manage their quality and customer experience.

  • Poor quality costs money disproportionately more than the dollars required to deliver “high quality”.  The costs are erosive and ongoing.
    • Higher insurance premiums
    • Poor compliance results with fines (the federal fines today are steep and immediate for SNFs)
    • Higher capital costs (yes lenders are now looking at quality measures as a measure of credit risk)
    • Increased litigation risks which when realized, contribute to higher insurance premiums.
  • All of the reimbursement incentives today and going forward are only available to providers that can deliver high quality, efficient patient outcomes.  Value-based purchasing rewards good care (limited rehospitalizations) and punishes poor care.  The impact is just being seen today and in the years forward, the impact is greater – both ways (reward and punishment).   The same is true under the new and forthcoming, case-mix payment models.  The high quality, adept providers will be able to provide the care rewarded highest, under these new payment models (PDPM, PDGM).  Those that don’t have the clinical infrastructure will languish.
  • Referrals today are more and more, skewed toward quality providers.  With hospitals and narrow networks looking for select post-acute providers that won’t increase their risks in value-based purchasing or bundles/ACOs, poor providers in terms of quality are increasingly seeing diminished referrals.
  • The Plaintiff’s Bar is watching the SNF and seniors housing industry carefully and with optimism.  The CNA report I referenced includes these snippets.
    • 22.6% of closed claims relate to pressure injuries (an almost entirely avoidable negative outcome).
    • Death from or related to pressure injuries is the highest average claim by cost.
    • 14 out of the 15 highest cost claims occurred in for-profit facilities.
    • Assisted Living claims cost more on average than SNF claims.
    • Falls continue to represent the lion share of liability claims – 40+%.  The vast majority tie to SNF care.
    • The frequency of claims is increasing.
    • Independent Living is not immune.  The report contains claim data on fall and pressure injury cases from Independent Living.

While no organization is immune from a law suit, the reality remains that organizations with exemplary quality history, high satisfaction levels, and processes that focus uniquely on the elements of great care and service (staffing levels, staff competency, good management, proper equipment, IT infrastructure, etc.) provide less of a target, if any.  No matter where, negative outcomes still occur but in “quality” organizations, they are an exception.  Because care is primary and service right behind, there is far less of a motivation for patients and families to litigate as by reason, the organization wasn’t negligent.  Again, the connections are rather ‘simple’.

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November 16, 2018 Posted by | Assisted Living, Home Health, Senior Housing, Skilled Nursing | , , , , , , , , , , , | Leave a comment

Home Health Final Rule: Rate Increases plus PDGM

While I was in Philadelphia speaking at LeadingAge’s annual conference, CMS released its 2019 Home Health Final Rule.  As I wrote in an earlier post regarding the proposed rule, the topic of interest was/is a new payment model – PDGM.  As has been the case across the post-acute industry, CMS is advancing case-mix models crafted around a simplified patient assessment, less therapy oriented more nursing/medically balanced.  The industry lobbied for modification or delay in PDGM, primarily due to some underlying behavioral assumptions CMS embedded in the proposal (more on this in later paragraphs).

The most relevant, immediate impact of the final rule is rate increases (finally) for the industry – 2.2% or $420 million.  The industry has experienced rate cuts and rebasing consistently since 2010 as a response to fast growth and high profit margins exhibited by companies like Amedysis (the center of a Congressional hearing in 2011).

PDGM is slated to take effect “on or after January 1, 2020”.  The ambiguity in this language is worth noting as there are some that believe modification, even delay is possible.  Compared to the proposed rule, the final rule includes 216 more Home Health Resource Groups due to bifurcating Medication Management Teaching and Assessment from previous group alignments. The following key changes are a result of PDGM.

  1. As with PDPM on the SNF side, PDGM removes the therapy weight/influence separately from the assessment and payment element weights for HHAs.  The clinical indications or nursing considerations are given more weight along with patient comorbidities.
  2. Coding becomes a key factor in payment mechanics, particularly diagnoses and co-morbidity.
  3. Functional status is given a higher weight, as is the case today with all post-acute payment model reforms.
  4. Episode lengths are halved – down from 60 days (current) to 30 days.
  5. PDGM is budget neutral meaning that when fully implemented,, the cost to the Federal government for Medicare HHA payments in the aggregate is no greater than current (inflation adjusted for time).  To get to budget neutrality, certain behavioral assumptions about provide reactions to the changes are used.  As one would suspect, this is a subject of concern and debate by the HHA industry.

The behavioral assumption issue referenced in #5 above is an imputed reality in all payment model changes.  In fact, it is an economic model necessity when attempting to address “how” certain changes in reward (payment) will move activity or behavior toward those places where reward or payment is maximized.  It is a key economic behavioral axiom: What get’s rewarded, get’s done.

In effect, CMS is saying that budget neutrality is achieved for a 30 day episode when payments for the episode equal $1,753.68.  Getting to this number, CMS assumed that agencies would react or respond quickly to payment changes (areas where increases are found) in co-morbidity coding, clinical group assignment and reduction in LUPA cases.  However, if CMS models slower reactions or limited reactions by the industry (operating norms as current persist), the payment impact is an increase of 6.42% or $1,873.91.  Because budget neutrality is mandated concurrent with PDGM, the concerns providers are raising relates to how payments will ultimately be determined and when if necessary, will adjustments be made IF the anticipated behavioral changes don’t manifest as factored.  Simply stated, this collective concern(s) is the reason the industry continues to lobby for delay, more analysis and further definitional clarity with the PDGM funding and payment assumptions prior to implementation.

One final note with respect to PDGM dynamics.  Readers of my articles and attendees at lectures, webinars, other presentations have heard me discuss overall post-acute payment simplification and the movement within Medicare reimbursement to site neutrality.  PDGM is an interesting payment model from the standpoint that it parallels in many ways, the PDPM movement for SNFs.  It is diagnosis based, more clinically/nursing driven than the previous system and more holistic in capturing additional patient characteristics (co-morbidities) than before in order to address payment relevance. With assessment simplification and a growing focus on patient functional status at various points across a post-acute global episode (from hospital discharge to care completion), an overall framework is becoming more visible.  Expect continued work from CMS on payment simplification, more calls from MedPac for site neutral payments for post-acute care. The policy discussions are those that reinforce payment that follows the patient, based on patient clinical needs, unattached to any site dynamics or locations, save perhaps a coding modifier when inpatient care is warranted to account for the capital and equipment elements in the cost of care.  When looking globally at the overall health care payment and policy trend that is occurring sector by sector, the future of payment simplification and movement to site neutrality is certain.  One question remains: By when?

November 6, 2018 Posted by | Home Health, Policy and Politics - Federal | , , , , , , , , , , , , | Leave a comment

Site Neutral Payment Update

In early October, I wrote an article regarding CMS 2019 OPPS (outpatient PPS) proposed rule, specifically regarding site neutral payments.  The purpose of the article was to address the site neutrality trend that CMS is on, streamlining payments to reduced location of care disparities for the same care services.  Succinctly, if the care provided is technically the same but the costs by location are different due to operating and capital requirements, should payments vary?

Yesterday, CMS pushed forward the OPPS final rule, maintaining the concept of site neutrality despite heavy hospital lobbying.  The gist of the rule is as follows.

  • Hospital off-campus outpatient facilities will now be paid the same as physician-owned or independently owned/operated outpatient facilities for clinic visits.  No longer will there be a hospital place-of-care premium attached to the payment.
  • Off campus is defined as 250 yards or more “away” from the hospital campus or a remote location.
  • For CY 2019, the phase-in/transition is a payment reduction equal to 50% of the net difference between the physician fee schedule payment for a clinic visit and the same payment for a hospital locus clinic or outpatient setting.  The amount is equal to 70% of the OPPS (hospital outpatient PPS rate).
  • For CY 2020, the amount paid will be the physician fee schedule amount or 40% of OPPS rate, regardless of location.
  • Final Rule text is here: 2019 OPPS Final Rule

What CMS noted originally as the need stemmed from a Medpac report where a Level 2 echocardiogram cost 141% more in a hospital outpatient setting than in a physician office/clinic setting. This final rule is part of an expected and continuing trend to simplify and streamline payments among provider locations.  Similarly, CMS is following a path or theme laid forth by Medpac concerning payments tied to care services and patient needs rather than settings or places of care.  The 2019 OPPS payment change is a $760 million savings in 2019 expenditures.

Finalization of the OPPS rule with site neutral payments cannot be overlooked in significance. As I wrote in the October article, this is a harbinger of where CMS and Medicare policy makers are heading.  Hospitals lobbied hard and heavy against this implementation claiming a distinction in payment was not only required by dictated by patient care discrepancies.  Alas, there appeared to be no common ground found within that argument.

I suspect now that the door is opened just a touch wider for site neutral post-acute payment proposals to advance.  Under certain case-mix categories, there truly is very little difference in care delivered and no difference in outcomes (adversely so) between SNFs, IRFs, and LTAcHs yet there is wide payment difference.  With lengths of stay declining and occupancy rates the same (declining) among these provider groups, CMS will no doubt (my opinion) push forward a streamlined proposal on site neutral payments in the next three years.  I anticipate the first proposal to concentrate almost exclusively, on SNFs, IRFs and perhaps, some home health case mix categories.  If hospitals can’t budge CMS away from the site neutral path, there is zero likelihood that IRFs and LTAcHs can divert CMS from site neutral proposals in the near future.

 

November 2, 2018 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , | Leave a comment

Don’t Miss Event: Webinar on Reducing Rehospitalizations

A week from today, I am conducting a webinar on reducing/avoiding unnecessary rehospitalizations.  With SNFs just experiencing the VBP impact (Medicare incentive or reduction) starting October 1, this event is extremely timely.  I’ll cover the health policy and reimbursement implications regarding rehospitalizations plus new QRP and QM updates.  I’ll also touch on PDPM implications.  Some great tools are available for attendees as well.

Register here at a super price – $59 for the session and the tools!

http://hcmarketplace.com/reducing-readmissions

 

November 1, 2018 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , | Leave a comment

Post-Acute, Site Neutral Payment Upcoming?

In the 2019 OPPS (outpatient PPS) proposed rule, CMS included a site neutral payment provision.  With the comment period closed, the lobbying (against) fierce, it will be interesting to see where CMS lands in terms of the final OPPS rule – maintain, change, or abate.  The one thing that is for certain, regardless of the fate of this provision, site neutral proposals/provisions are advancing.

CMS has advanced a series of conceptually similar approaches to payment reform.  Site neutral approaches are a twist on value-based care as they seek to reward the efficiency of care by de-emphasizing a setting value.  This is loosely an approach to “payment follows the patient” rather than the payment is dictated by the locus of care.  Assuming, which isn’t always in evidence, that for many if not most outpatient procedures, the care required is the same such that one setting vs. another isn’t impactful to the outcome, then a site neutral payment seems logical.  Managed care companies have been using this approach overtly, attaching higher cost-share to certain sites or eliminating payment altogether for procedures done in higher cost settings. In the OPPS proposal, the savings is rather substantial – $760 million spread between provider payments and patient savings (deductibles).  To most policy watchers, there is a watershed moment possible with this proposal and its fate.  The fundamental question yet resolved is whether hospitals will continue to have a favorable payment nuance over physician practices and free-standing outpatient providers.  Hospitals arguing that their administrative burden and infrastructure required overhead, combined with patient differences (sicker, older patients trend hospital vs. younger, less debilitated patients trending free-standing locations), necessitates a site different payment model (such as current).

In the post-acute space, payment site neutrality has been bandied about by MedPAC for some time.  Up to now, the concept of payment site neutrality has languished due to disparate payment systems in provider niches’.  SNFs and their RUGs markedly different from Home Health and its OASIS and no similarity with LTACHs in the least. Now, with post-acute payments narrowing conceptually on “patient-driven” models (PDPM and PDGM) that use diagnoses and case-mix as payment levers, its possible CMS is setting a framework to site neutral payments in post-acute settings.

In its March 2015 report to Congress, MedPAC called for CMS to create site neutrality for certain patient types between SNFs and IRFs (Inpatient Rehab Facilities).   While both have separate PPS systems for payment, the IRF payment is typically more generous than the SNF payment, though care may look very similar in certain cases.  For IRFs, payment is based on the need/extent of rehab services then modified by the presence or lack of co-morbidities.  IRFs however, have payment enhancements/ additions for high-cost outliers and treating low-income patients; neither applies in the SNF setting.

The lines of care distinction between the two providers today, certainly between the post-acute focused SNFs and an IRF, can be difficult to discern.  For example, both typically staff a full complement of therapists (PT, OT, Speech), care oversight by an RN 24 hours per day, physician engagement daily or up to three times per week, etc.  Where IRFs used to distinguish themselves by providing three hours (or more) of therapy, SNFs today can and do, provide the same level.  As a good percentage of seniors are unable to tolerate the IRF therapy service levels, SNFs offer enhanced flexibility in care delivery as their payment is not predicated (directly) on care intensity.  What is known is that the payment amounts for comparable patient encounters are quite different.  For example, a stroke patient treated in an IRF vs. an SNF runs $5,000 plus higher.  An orthopedic case involving joint replacement differs by $4,000 or more.  Per MedPAC the difference in outcomes is negligible, if at all.  From the MedPac perspective, equalized payments for strokes, major joint replacements and hip/femur related surgical conditions (e.g., fracture) between IRFs and SNFs made sense, at least on a “beta” basis.  With no rule making authority, MedPac’s recommendation stalled and today, may be somewhat sidelined by other value-based concepts such as bundled payments (CJR for example).

So the question that begs is whether site neutral payments are near or far on the horizon for post-acute providers.  While this will sound like “bet-hedging”, I’ll claim the mid-term area, identifying sooner rather than later.  Consider the following.

  • Post-acute care is the fastest growing, reimbursed segment of health care by Medicare.
  • The landscape is changing dramatically as Medicare Advantage plans have shifted historic utilization patterns (shorter stays, avoidance of inpatient stays for certain procedures, etc.).
  • Medicare Advantage days as a percentage of total reimbursed days under Medicare are growing. One-third of all Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2017.  Executives at United Healthcare believe that Medicare Advantage penetration will eclipse 50% in the next 5 to 10 years.  As more Boomers enter Medicare eligibility age, their familiarity with managed care and the companies thereto plus general favorability with the product makes them quick converts to Medicare Advantage.
  • Managed care has to a certain extent, created site preference and site based value payment approaches already.  There is market familiarity for steering beneficiaries to certain sites and/or away from higher cost locations.  The market has come to accept a certain amount of inherent rationing and price-induced controls.
  • At the floor of recent payment system changes forthcoming is an underlying common-thread: Diagnoses driven, case-mix coordinated payments.  PDPM and PDGM are more alike in approach than different.  IRFs already embrace a modified case-mix, diagnoses sensitive payment system. Can homogenization among these be all that far away?
  • There are no supply shortage or access problems for patients.  In fact, the SNF industry could and should shrink by about a third over the next five years, just to rationalize supply to demand and improve occupancy fortunes.  There is no home health shortage, save that which is temporary due to staffing issues in certain regions (growth limited by available labor rather than bricks and mortar or outlets). Per MedPac, the average IRF occupancy rate pre-2017 was 65%.  It has not grown since.  In fact, the Medicare utilization of IRFs for certain conditions such as other neurologic and stroke (the highest utilization category) has declined. (Note: In 2004 CMS heightened enforcement of compliance thresholds for IRFs and as a result, utilization under Medicare has shrunk).
  • Despite payment reductions, Home Health has grown steadily as has other non-Medicare outlets for post-acute care (e.g., Assisted Living and non-medical/non-Medicare home health services).  Though the growth in non-Medicare post-acute services has caused some alarm due to lax regulations, CMS sees this trend favorably as it is non-reimbursed and generally, patient preferred.
  • Demonstration projects that are value-based and evidence of payment following the patient or “episode based” rather than “site based” are showing favorable results.  In general, utilization of higher cost sites is down, costs are down, and patient outcomes and satisfaction are as good if not better, than the current fee-for-service market.  Granted, there are patient exceptions by diagnoses and co-morbidity but as a general rule, leaving certain patients as outliers, the results suggest a flatter, site neutral payment is feasible.

If there is somewhat of  a “crystal ball” preview, it just may be in the fate of the OPPS site neutral proposal.  I think the direction is unequivocal but timing is everything.  My prediction: Site neutral payments certainly, between IRFs and SNFs are on the near horizon (within three years) and overall movement toward payments that follow the patient by case-mix category and diagnoses are within the next five to seven years.

October 2, 2018 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , , , , , | Leave a comment

Upcoming Webinar: Reducing Hospitalizations and SNF Reimbursement Implications

I am conducting a webinar on Thursday, November 8 regarding the strategies SNFs can and should employ to reduce unnecessary hospital transfers/hospitalizations (E.R. visits and inpatient admissions).  Value-based purchasing has just taken hold in the SNF realm with facilities about to experience their first outcome October 1, 2018 (incentive or reduction).  I’ll cover the policy implications but moreover, review upcoming reimbursement issues beyond just VBP, delving into the care transition (hospitalization) implications that are woven in PDPM.  For example, with PDPM instilling a critical focus on length of stay via imbedded payment reductions after day 20, facilities will naturally look to shorten lengths of stay perhaps at the peril of VBP (Value-Based Purchasing) implications.

During the hour-long session, I’ll address;

  • Reimbursement and policy related implications associated with unnecessary care transitions/hospitalizations under VBP but also, tangential to QRP, PDPM, Five Star QMs, survey and relative to the IMPACT Act.
  • Proven strategies with tools to identify transition risk, monitor performance and benchmark an SNF against its peers.
  • How to leverage good performance in a competitive market and to gain market share in a bundled payment, Medicare Advantage, pay-for-performance environment.

More information and registration information is available at this link.

http://hcmarketplace.com/reducing-readmissions

 

September 13, 2018 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , | Leave a comment

SNF PPS Final Rule 2019

Yesterday I wrote a quick post regarding the news that CMS was about to issue the SNF Final Rule for Fiscal Year 2019.  Today, the text is available.  Official publication in the Federal Register is set for August 8th.  Readers may access the text here: SNF 2019 Final Rule

I will have analysis and more information available regarding the Final Rule implications for providers later today.  NOTE: Biggest implications center on the shift away from RUGS IV to PDPM (new payment model).  That shift/change occurs 10/1/19 unless otherwise delayed.  On this site, on the Reports and Other Documents page, there is a PDPM calculation worksheet for download.  You can also access it here via this link: PDPM Calculation for SNFs

The worksheet is a good tool/review to grasp the basic mechanics of PDPM and how rates are/will be derived.

August 1, 2018 Posted by | Skilled Nursing | , , , , , , , , , , , | 1 Comment

CMS Final SNF PPS Rule for 2019: Increases plus PDPM

Late this afternoon, I caught news that CMS will release a number of Final Rules impacting post-acute providers over the next few days.  Below is a quick summary of what is known for SNFs.  I will update this information as I get access to the Final Rule.

  • PPS rates (manual) to adjust by 2.4% (increase).
  • A final version of PDPM is included in the Final Rule.  Implementation steps including dates won’t be known until the Final Rule is issued and likely, there will still be some “fill-in-the-blanks” that will be later developed and issued. The good news is that the assessment and documentation changes that were part of the PDPM proposal remain.
  • There will be some quality measure changes forthcoming as CMS’ Meaningful Measure Initiative is tasked with weighing cost vs. benefit across provider measures.  It will be some time however, before it is clear which measure changes will occur and the impact.  Important to know: Changes in meaningful measures impact QRP and ultimately, Value Based Purchasing/Pay for Performance for providers.  It is important that SNFs pay close attention to these measures as their use is beyond reporting; now reimbursement correlated and compliance correlated as well (new survey process is very similar in many ways to QIS – data driven).

More information on this topic once the Final Rule is public.

July 31, 2018 Posted by | Uncategorized | , , , , , , , , , , | Leave a comment

Five Post Acute Axioms (Truisms)

I read a lot – part of the job.  I hear lots of conversations and participate in many in-person and online.  Last week, I spent a few evenings with my rehab partner.  Between he and my wife, with clients across the country, it was fascinating how the conversation regarding fortune or famine (providers) boiled down to a few simple truths.  Summarizing, those that do well have accepted and work doggedly at embracing and living out these axioms.  Those that are struggling, simply refuse to grasp these plain truths.  Regardless of the entity (SNF, HHA, etc.), these axioms apply (truthfully, for any provider including hospitals).

To preface, I’ve slimmed-down hours upon hours of recent conversations to these five “axioms”.  One could argue more apply.  Between my partners, my wife (a partner) and me, we have some context here as we work with multiple entities that rank in the top 1,000 post-acute providers in the nation.  For example, we all share a working relationship with the 6th ranked SNF in the nation, out of 15,636 SNFs.  Unfortunately, we also have client relationships with the lowest ranked providers including one that ranks 15,609.  This dichotomy (cruel as it is) gives us a unique perspective regarding truisms (embrace them and succeed, ignore them and fail).

  1. Quality Matters: This isn’t about hype or verbiage; it’s about results.  Organizations that are succeeding are doggedly, persistently and hyper-fixated on their care outcomes.  Their culture is deep in quality and they benchmark themselves and what they do, how they perform, with an effort on getting better all the time.  Their outcomes demonstrate their quality.
  2. Staffing Matters: Providers that perform invest in and have in number, great staff perform better.  They put the right people closest to the patients.  They have assessed their operations and know precisely, what levels of staff by credential and education, their operations require.  They train, teach and invest in their “troops”.  You won’t find a great SNF that doesn’t have RNs on every shift, every day.  You won’t find a great provider, HHA or SNF, etc., that doesn’t have actual employees, not contractors, taking care of patients (primarily).
  3. Excellence in Management and Leadership is Imperative: The best have long-term, highly qualified management and leadership at every level in the organization.  They retain great talent and grow it like a prized rose-bush (ever watch rose “aficionados” you’ll get the reference). These folks aren’t the highest paid or even with the most credentials; they are excellent directors of task and people.  The most credentialed (education, certifications, etc.) don’t correlate to the best manager or leader.  In a nutshell: Excellence here means bright, strategic, engaged, earnest, industry and trade experts, that are quality driven.
  4. The Devil is in the Details: The best providers are not just current with policy issues and reimbursement trends, they are ahead and know the implications and manage to these details.  For example, they know length-of-stay matters and they are working to shorten each encounter to only the resources required (days, visits, etc.).  Their quality measures are excellent because they review the dozens of measurable data points to look for trends and to track outcomes.  They have protocols and disease pathways in-place.  They adopted antibiotic stewardship practices before the buzzword existed.  They already were on pain and the management thereof, without or minimizing opioids, before alarms sounded.  They had steps in place to quality review care transitions and hospitalizations.  QAPI was something new but not to them.  Doing things right was and still is, the driver for these excellent organizations.
  5. The Organization is like a Car: This is meant to be a silly reference but also serious.  Driving is all about what is going on ahead of you and being anticipatory and prepared.  The rearview mirror is checked but only briefly.  Failure to pay attention to the road ahead and anticipate hazards, keep safe distances, etc. is how one arrives at a destination, safely and efficiently. Think of it this way: Slow is smooth, smooth is fast (an old and time-honored, Special Forces reference). Great providers embrace this philosophy – do things slowly, smoothly to be able to respond quickly when necessary.  What differentiates the very best providers from the very worst is their focus on FORWARD – being very anticipatory and developing core, innate competencies that help be “smooth and fast” as adaptation is required in health care.

Food for thought.  If one chooses to use the above points on a comparative basis, my guess is you will find what I know.  The best embrace these axioms.  The worst don’t or don’t consistently.  Everyone else in the middle has a choice to make – get better or get worse.  The truth about “great’ in health care is easy to understand.

 

July 16, 2018 Posted by | Home Health, Skilled Nursing | , , , , , , , | Leave a comment

Stuck in Neutral: Bundled Payments and Post-Acute Providers

After CMS nixed the mandatory expansion provisions for Bundled Payments and reduced the metro areas participating in CJR (joint replacement), the prospects for post-acute provider involvement in non-fee-for-service initiatives (payments and incentives based on disease states and care episodes) went in to limbo.  With a fair amount of excitement and trepidation building on the part of the post-acute world about different payment methodologies, new network arrangements, new partnerships, incentive possibilities, etc., CMS put the brakes on the “revolution”; a screeching halt.

While Bundled Payments aren’t dead by any means, the direct relationships for post-acute providers are in “neutral”.  The Bundled Payments for Care Improvement Advanced (BPCI Advanced) initiative announced in January included no avenue for SNFs, HHAs (home health) to apply and participate.  Nationally, other voluntary bundle programs continue including the remnants of CJR, and Models 2, 3 and 4 in Phase II.  According to CMS, as of April of this year, 1100 participants were involved in Phase 2 initiatives.  The Phase 2 initiatives cover 48 episodes of care ranging from diabetes, through various cardiac issues and disease to UTIs.

BPCI Advanced opportunities (episode initiators) involve hospitals or physician groups.  Post-acute will still play a role but the direct connections and incentives aren’t quite tangible or specific, compared to CJR.  Time will tell how the roles for post-acute providers evolve in/with BPCI Advanced.  Oddly enough, the economic realities of care utilization and negative outcome risk suggest that post-acute should play a direct, large role. As hospital stays shorten, outpatient and non-acute hospital surgical procedures increase, the directed discharge to post-acute has taken on greater meaning in the care journey.  HHAs in particular, are playing an expanded role in reducing costs via enhancements to their ability to care for more post-surgical cases direct from the hospital/surgical location.  Simultaneous however, readmission risk exposure increases.  What is certain is that system-wide, the window of 30 to 90 days post hospital or acute episode is where significant efficiency, quality and cost savings improvement lies.

While the direct opportunities initially forecast under BPCI for the post-acute industry have evaporated (for now), strategic benefits and opportunities remain.  Providers should not stray from a path and process that focuses on enhancing care coordination, improving quality and managing resource utilization.  Consider the following:

  1. For SNFs, PDPM (new proposed Medicare reimbursement model) incorporates payment changes and reductions based on length of stay (longer stays without condition change, decrease payment after a set time period).  A premium is being placed on getting post-acute residents efficiently, through their inpatient stay.
  2. For HHAs, payment reform continues to focus on shorter episodes in the future.  Like PDPM for SNFs, the focus is on efficiency and moving the patient through certain recuperative and rehabilitative phases, expeditiously.
  3. Medicare Advantage plans are increasing market share nationwide.  In some markets, 60% of the post-acute days and episodes are covered by Medicare Advantage plans – not fee-for-service. These plans concentrate on utilization management, ratcheting stay/episode length and payment amounts, down.  Providers that again, are efficient and coordinate care effectively will benefit by focused referrals and  improved volumes.
  4. Quality matters more than ever before – for all providers.  Star ratings are increasingly important in terms of attracting and retaining referral patterns  Networks and Medicare Advantage plans are focused on sourcing the highest rated providers.  Upstream referral sources, concerned about readmission risks are targeting their discharges to the higher rated providers.  Consumers are also becoming more market savvy, seeking information on quality and performance.  And of course, government programs such as Value-Based Purchasing place providers with poor performance on key measures (readmissions for SNFs) in the reimbursement reduction pool.
  5. Indirectly, Bundled Payment initiatives move forward and the Advanced option will require physicians and hospitals that participate, to source the best referral partners or lose incentive dollars and inherit unwarranted readmission risk.  SNFs and HHAs that excel at care coordination, length of stay management, have disease pathways in-place, can manage treatment, diagnostic and pharmacology expenses and produce exceptional outcomes and patient satisfaction are the preferred partners.

June 29, 2018 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , , , | Leave a comment