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.
Join me as I host a one-hour webinar and conference call regarding post-election healthcare policy. The program/call is set for Wednesday, December 14 at 1:00 PM EST/noon CST.
With uncertainty looming, providers are wondering what will change as the Inauguration approaches and a new Congress settles in. We will review the ACA, Medicaid and Medicare, and related policy issues including;
- Value Based Purchasing
- CMS Center for Innovation/Alternative Delivery Models/Bundled Payments
- Additional Quality Measures and Quality Reporting
- Inter-Program and Payment Reform – Rate Equalization for Post-Acute Providers
- IMPACT Act
- ACO Expansion
The program is sponsored by HCPro and the registration link is below;
We knew that sooner or later, the first Tuesday in November would arrive and with that, a new President and changes (many or few) to Congress. The outcome certain, we move to uncertainty again concerning “what next”?…or as applicable here, what next from a health policy perspective.
With Donald Trump the incoming President-Elect, only so much from a policy perspective is known. Hillary Clinton’s path was easier to divine from a “what next” perspective as fundamentally, status quo was the overall direction. Trump’s likely direction and thus, changes to current policy, etc. are hazy at best. Thematically, there are points offered throughout the campaign that give some guidance. Unfortunately, much that drives current reality for providers is more regulatory begat by legislative policy than policy de novo.
Without divining too much from rhetoric, here’s what I think, from a health policy perspective, is what to expect from a Trump Administration.
- ObamaCare: Trump ran on a theme of “repeal and replace” ObamaCare aka the Affordable Care Act. This concept however, needs trimming. Repealing in total, existing federal law the magnitude of the ACA is difficult if not nearly impossible, especially since implementation of various provisions is well down the road. The ACA and its step-child regulations are tens of thousands of pages. Additionally, even with a Republican White House and Republican-majority Congress, the Congressional numbers (seats held) are not enough to avoid Democratic Senate maneuvers including filibuster(s). This means that the real targets for “repeal and replace” are the insurance aspects namely the individual mandate, Medicaid expansion, certain insurance mandates, the insurance exchanges, a likely the current subsidy structure(s). The other elements in the law, found in Title III – Improving the Quality and Efficiency of Health Care, will remain (my prediction) – too difficult to unwind and not really germane to the “campaign” promise. This Section (though not exclusively) contains a slew of provisions to “modernize” Medicare (e.g., value-based purchasing, physician quality reporting, hospice, rehab hospital and LTACH quality reporting, various payment adjustments, etc.). Similarly, I see little change made, if any to, large sections of Title II involving Medicaid and Title IV involving Chronic Disease. Bottom line: The ACA is enormous today, nearly fully intertwined in the U.S. health care landscape and as such, too complex to “wholesale” eliminate and replace. For readers interested in exploring these sections (and others) of the ACA, a link to the ObamaCare website is here http://obamacarefacts.com/summary-of-provisions-patient-protection-and-affordable-care-act/
- Medicaid: The implications for Medicaid are a bit fuzzier as Trump’s goals or pledges span two distinct elements of the program. First, Trump’s plan to re-shape ObamaCare (repeal, etc.) would eliminate Medicaid expansion. As mentioned in number 1 prior, this is a small part of the ACA but a lipid test for Republican governors, especially in states that did not embrace expansion (e.g, Wisconsin, Kansas, etc.). Second, Trump has said that he embraces Medicaid block-grant funding and greater state autonomy for Medicaid programmatic changes (less reliance on the need for states to gain waivers for coverage design, program expansion, etc.). It is this element that is vague. A series of questions arise pertaining to “policy” at the federal level versus funding as block grants are the latter. The dominant concern is that in all scenarios, the amount of money “granted” to the states will be less than current allocations and won’t come with any matching incentives. With elimination of the expansion elements, how a transition plan of coverage and care will occur is a mystery – federal assistance? state funding mostly? What I do predict is that Medicaid will only suffer the setback of a restructure and replacement of the Medicaid expansion elements under the ACA. I don’t see block grants happening any time soon as even Republican governors are opposed without a plan for wholesale Medicaid programmatic reform. Regardless of the approach, some initial Medicaid changes are in the offing, separate from the Block Grant issue. The Medicaid Expansion issue is no doubt, a target in the “repeal and replace Obama Care”. The trick however is to account for the large number of individuals that gained coverage via expansion (via eligibility increases due to increased poverty limits) – approximately 8 million impacted. This is less about “repeal” and more about “replace” to offset coverage lapse(s) for this group.
- Related Health Policy/ACA Issues: As I mentioned earlier, the ACA/ObamaCare is an enormous law with tentacles now woven throughout the health care industry. The Repeal and Replace issues aren’t as “clean” as one would think. The focus is the insurance mandate, the subsidies, the mandated coverage issues and to a lesser extent, Medicaid. That leaves fully 80% of the ACA intact including a series of policy changes and initiatives that providers wrestle with daily. These issues are unlikely to change in any substantive form. Republicans support alternative delivery projects, value based purchasing, etc. as much if not more than Democrats. Additionally, to repeal is to open a Pandora’s Box of agency regulations that tie to reimbursement, tie to other regulations, etc. For SNFs alone, there exists all sorts of overlap between Value Based Purchasing, Bundled Payments, new Quality Measures and quality reporting (see my post/presentation on this site regarding Post-Acute Regulatory Changes). The list below is not exhaustive but representative.
- Value Based Purchasing
- CMS Center for Innovation/Alternative Delivery Models/Bundled Payments
- Additional Quality Measures and Quality Reporting
- Inter-Program and Payment Reform – Rate Equalization for Post-Acute Providers
- IMPACT Act
- ACO Expansion
As providers watch the inauguration approach and a new Congress settle in, the wonder is around change. Specifically, what will change. My answer – bet on nothing substantive in the short-run. While Mr. Trump ran partially on a platform that included regulatory reduction/simplification, the lack of overall specifics regarding “which or what” regulations on the health care front are targets leaves us guessing. My guess is none, anytime soon.
The Trump focus will be on campaign specific agenda first: ObamaCare, Immigration, Taxation, Foreign Trade, Energy, etc. – not health policy per se. There is some flow-through gains providers can anticipate down-the-road that can be gleaned from the Trump campaign but these are a year or more off. If Trump does deal with some simplification on drug and research regulation (faster, cheaper, quicker approvals), funding for disease management and tele-medicine and a fast-track of some Republican policy “likes” such as Medicare simplification, Medicaid reform at the program level, and corporate tax reduction (will help for-profit providers), then gains will occur or opportunities for gains will occur.
From a strategic and preparatory perspective, stay the course. Providers should be working on improved quality outcomes, reducing avoidable care transitions/readmissions, looking at narrow networks and network contracting/development opportunities and finding ways to reduce cost and improve care outcomes. Regardless of what a Trump Administration does first, the aforementioned work is necessary as payment for value, bundles/episodes of care, and focus on quality measures and outcomes is here to stay and to stay for the foreseeable future.
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.
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 firstname.lastname@example.org 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.
The bulk of my work centers around gathering data, analyzing trends and working with the leadership of various organizations to implement strategy or more centered, strategies. The process is iterative, interactive and always fascinating. Throughout my career, I’ve worked within (virtually) every health care industry segment and seniors housing segment. I also counsel and have worked with entities that buy, sell, invest in, consult with, account for, finance, and research health care and seniors housing businesses. Its my work with the latter that is the genesis of this post and my decades of work with the former that is the “content”.
There are two fundamental reasons why health care leadership is hard and different from leadership duties in other industries: 24/7 demands and the immediacy of the customer to the enterprise. Health care and seniors housing (regardless of the segment specific) never closes, has no true seasonality, and demand can increase and decrease with equal force and equal pace, almost entirely related to external factors and forces. Pricing for the most part, other than seniors housing, is almost immaterial and unrelated to revenue. No other, non-governmental, business is as regulated and scrutinized and mandated transparent than health care. Likewise, no other business has the mandate that the full array and intensity of all services must be available 24/7, on immediate demand, with no ability to defer, fallow, or limit. Even a 24 hour PDQ won’t have all services available constantly (if the hot dogs run out, they are gone!).
While other industries will have close customer contact, health care has a unique, and intimate relationship with its customers. In SNFs, Assisted Living Facilities, Seniors Housing, etc. the customer is present for long-periods (years). In hospitals, the customer is present for hours, days, up to weeks at a time (the latter rare unless we are talking LTAcH). In the health care setting, the enterprise has total responsibility for all needs of the customer – great to small. The quality of care and service to all needs matters and is measured, reported and today in many regards, tied to compensation. Back to the PDQ, the over-done hot dog costs the same and there is no governmental entity that maintains a hotline for customer reports and investigations regarding the quality of the hot dog.
In health care, there is a very unique and in many ways, perverted twist concerning the customer relationship. The customer today is a Dr. Jekyll/Mr. Hyde manifestation. No other industry has customers that are bifurcated as such – the payer being a consumer unique and separate from the actual present being. Health care entities, to be successful, must satisfy both and manage the expectations of both, seamless and fluid to each party. I know of no other industry where on any given day in a hospital for example, where it is likely that of 300 individual inpatients there are dozens more of the payer/insurer consumers requiring unique attention, simultaneously. Miss a step, miss a form, etc. and the payer consumer refuses to pay for the human consumer that is receiving or received the care.
Because of the “constant” nature and customer relationships (coupled with many other reasons of course), health care leadership is hard. It is hard because these two fundamental components are nearly, completely, out of the control of the leader. The leader can only react or respond but truly, never change the paradigm or structure and always, in terms of the payer customer, sit beholding to the rule changing process and bureaucracy of the payer customer. This last element can be unbelievably insidious. For example, in the State of Kansas, dozens of SNFs face grave peril in terms of solvency because the State cannot efficiently certify eligibility for Medicaid for qualified seniors. The delay has left dozens of facilities with Medicaid IOUs at six digits and climbing – the human customer receiving care, the paying customer bureaucratically inept and unwilling and incapable of paying its bills, and the SNF sitting with no real recourse.
Given the above, its frankly easy to see why so many leaders fail or simply, give up. The deck is stacked toward failure. On the expense side of the equation, because of mounting regulation, fewer elements are within a leader’s control. With a rare exception, revenue is completely beyond control in terms of price and reimbursement for services provided. With RAC and other audits, revenue initially earned can be retrospectively recast and denied. (The PDQ six month’s later decides to recoup payment for the hot dog because, in its infinite wisdom, you didn’t need to the eat the hot dog or you should have made a wiser food choice). The overwhelming variables that can contribute to failure in a micro and macro sense for a leader are not lessening. His/her organization is open and under scrutiny, 24/7. He/she must oversee and be accountable for the health outcomes of a human customer that in turn are interpreted by the payer customer (remotely), subject to alteration, and retroactive scrutiny. Today, success isn’t just based on what occurred at the point of service but after the service concluded. The enterprise is at-risk for human behavior (compliance and non-compliance) of the consumer for not just days post service but months. Further, the enterprise is at-risk for the satisfaction of a consumer whose behavior and lifestyle may have significantly contributed to his/her need for care and service initially. As one executive told me recently; “We have to tell people the truth about their disease, figure out how to make it sound good and nice, and hope that we have done so in such a life affirming fashion that the patient will give us 5 stars for service. Figure that one out”. Alas, perhaps failure is inevitable.
Aside from failure correlating to burn out or shear “giving up” (the average large system executive tenure is less than 10 years), the failure in leadership that I see resides primarily in two areas. The first is an inability or lack of willingness to realize that the paradigm is constantly changing today and the pace of which, is accelerating. It is human nature to seek equilibrium; to pursue elements of stasis and calm. The same ( is) anathema to leading a health care enterprise. The second area is aversion to risk. Precisely because of the first point, taking risk or being capable of tolerating large elements of risk is imperative today in health care. The best leaders are true entrepreneurs today. They see opportunity and are willing to pursue it with vigor. They find the niches and pursue them. Every bureaucracy and rapidly changing industry paradigm begets opportunity with equal pace and ferocity. For example, the growing “private, non-reimbursed” service sectors in health care that continue to grow and flourish because of and in-spite of the heavily regulated, price tied market. I know of and have consulted for, provider groups that have moved further away from Medicare and managed care to private payment with phenomenal success. Was the strategy a risk? Yes. Most would not take this type of risk. I am harkened however by the notion that at times, the greatest risk present is the risk of doing nothing.
Successful leadership and leaders today, those that I know, have the ability to think systematically and algebraically – to solve the industry polynomials with all of the variables. They are inquisitive by nature and unwilling to accept the status quo, regardless of where and why. They embrace the famed Pasteur quote: “Chance (luck) favors the prepared mind”. They also have the soul and panache (tempered) of Capt. Jack Sparrow (from Pirates of the Caribbean). They like risk and have the entrepreneurial heart and mind to innovate and move fluidly through problems and challenges such that the same are opportunities. They don’t allow their enterprises to become complacent or bureaucratic.
Today, success is about better – better products, better service, and better care. Payers are demanding accountability and want an increasing level of care and service for lower levels of payment. That is the paradigm and it is moving to higher levels of accountability and lower levels of overall payment. The best execs know this and don’t quibble with it (much). They realize that success if about adapting the enterprise accordingly while finding the pliable spots that such an environment creates. These spots are service lines, system enhancements, productivity improvements, and different levels of patient engagement. Similarly, they realize the risk limits of concentration – too much exposure to certain payers. They have seen this trend coming and have already moved. For those still trying to reverse or slow the trend, this is where failure first begins ( the search for stasis in a rapidly changing world).
The second most important function an executive and/or a governance board conducts (second only to planning) is risk management. This key leadership function is evolving rapidly primarily due to the evolutionary movement around compliance (ACA, CMS, etc.) and the payer focal shift from episodic, procedural care to outcome or evidenced based care, pay-for-performance, etc. Similarly, as government policy shifts so does commercial market dynamics with like movements toward pay-for-performance and disease management. While the core concept of “enterprise” protection remains the same, the scope today is different, the breadth wider and the responsibilities and tasks more structured than say, ten plus years ago.
Risk management is the term that encompasses a series of activities, programs, policies, etc. that work (ideally) together to protect and secure the overall enterprise/organizational identity, value, market share, legal structure and by downstream relationship, the stakeholders/shareholders. Its activities, etc. are passive and active. Passive activities (examples) include the purchase of insurance and implementation of firewalls and data security systems. Active activities include audits, training of staff, QA/QI activities, customer/patient engagement programs, etc. The purpose of this post is to focus on the “active” elements and in particular, the most important elements today given the evolving environment and the new risks emerging. The purpose is to frame a model of risk prevention culture rather than an environment fraught with rule deontology and protectionism. The latter tends to breed its own kind of risk(s) in addition to the risk(s) it seeks mitigate.
I like to think of effective risk management plans today as having six key elements. Importantly, the plan is not operative while the elements are. The plan is what the organization uses to monitor the completion (activities), ongoing improvement (identification and address of organizational weakness and vulnerability), and accountability of management in identifying and managing risk. Remember, these elements are the “active” side. I, for sake of the theme of this article, will assume that providers acquire adequate insurance policies utilizing industry professionals in their development plus that they maintain modern IT infrastructure to secure patient data, etc.
- Organizational Focus on Patient Care Quality and Service: This isn’t about slogans or marketing rather, it is about having an overall and deeply integrated culture around patient care outcomes and satisfaction. In a pay-for-performance, competitive, ACO world, this element is key.
- Executive and Board involvement in QA/QI, especially at the highest organizational levels.
- Compensation for management and executives incorporating (heavily) patient outcomes and satisfaction to the degree that all other elements are dwarfed by the weight given to this measure.
- Monitoring in-place of key patient outcome data and benchmarking of the same.
- Monitoring of response and wait times. This element is key as the goal is to create response times as near as possible/practical to immediate or to minimize wait times wherever possible.
- A program of patient/family engagement that includes surveys, focus groups, etc.
- A grievance resolution system that is open, accessible and seeks to address concerns as instantaneous as possible. The approach must be around resolving concerns without delay and bureaucracy.
- Staff training focused on customer service, QA/QI, communication and dealing with patient/family stress, trauma, etc.
- Engagement of staff in a “bottom-up” program or approach whereby lower level line staff are engaged in all training, QA/QI processes, mentoring, etc.
- Audit Contractors and Sub-Contractors: The use of contractors such as physician intensivists (hospitalists) and therapy companies, imaging companies, lab providers, environmental service providers (laundry, housekeeping, etc.) is on the rise as organizations seek to control costs and improve efficiency. Contractors, etc. yield new risk as their conduct, care, service, etc. create a risk transferable directly to the parent organization. The risk of course, is multi-fold. First, as applicable, is care risk (outcomes, service, competence, qualifications, insurance, etc.). Second, is labor risk (legal status, background checks, etc.). Third, is billing risk and compliance risk. If the contractor is involved in any element of care that is billable to a payer (Medicare, Medicaid, commercial insurance), the organization must assure complete compliance with billing and care provision rules in order to negate billing fraud or inappropriate claims risk (risk of non-payment or worse). Summarized, organizations must monitor and audit, externally, the work of contractors. Immunization clauses within contracts cannot supplant audits of risk areas proportional to the scope of the service agreement. For example, the organization must audit its medical staff, the care provided, documentation, billing as applicable, patient contact and satisfaction, response times, etc. The same is true for any care service contractor.
- Billing Audits: This element is particularly crucial for government programs such as Medicare and Medicaid. Providers today must get in the habit of reviewing their claims submitted to payer sources, particularly the government. Two huge risk areas are present today. First, focused fraud actions against providers under the False Claims Act. Audits here are all about making sure that what was billed was actually provided, documented, necessary and compliant. Second, billing accuracy such that claim submissions are “clean” and “accurate”. Denials for inaccuracy, etc. can lead to imbalances in error rates and thus, probes and claims held for review. The latter negatively impacts cash flow and staff productivity as extra work to justify payment is required. I also recommend that organizations be very, very careful about compensation programs tied to revenues and claims, especially without counter-balancing elements and a strong audit program. I like billing audits that are third-party conducted, benchmarked against regional and national data (our business should look like others in the region and nationally) and occur episodically and randomly as frequent as monthly and certainly, no less than quarterly.
- Organizational Transparency and Staff Engagement: A huge risk area providers continue to face is the mixed message and incongruent messages sent to staff from leadership and at the highest levels of the organization. The impetus behind so many False Claims investigations and actions undertaken by the DOJ (Department of Justice) isn’t smart federal auditors – its disgruntled staff. Whistleblowers are the fundamental impetus behind False Claims allegations and actions. Mitigating this risk is simple (beyond doing the right things of course). Organizations, especially leadership, must be transparent and as open and candid as possible. The point here is that there really is no reason to not share goals, plans, operating data, etc. with staff. When I was a CEO, my office was never locked and thus, work and files on my desk and credenza. My compensation was open and I did not hide what I made or how I made it. Not too surprising, across decades of running large healthcare organizations, I never had a fraud allegation or an allegation of any impropriety. Staff knew what the corporate plans were, how they achieved compensation and bonuses, etc. We gain-shared so staff had opportunities to reap reward as the organization grew and performed. Staff engagement means at the planning and implementation levels. It also means active programs of training and a large amount of dialogue regarding why the organization does what it does and where the right and wrong lie. The same Whistleblower mentality is also fundamentally sound when it is used to police bad internal behavior, including that of management.
- Focus on Competence: A simple thing but rarely do I see this element boldly, prominently emphasized. Competence is about the ability to do what is required at the professional, validated level. It is about validation of core skills and abilities within a framework of education and testing. Organizations that focus on developing and maintaining staff and managerial competence limit risk inherently. All together, risk is often a byproduct of incompetence and protection of a weak, status quo. If excellence and competence is demanded and the systems engaged and in-place to assure it, then there is little room for marginal, sub-standard and incompetent to remain. How does an organization focus on competence? First, eliminate old, worn out HR policies and job descriptions and performance evaluations and replace the same with competency and behavioral standards. Competency standards are the elements one must demonstrate and perform as part of the job at a repetitive, proficient level. Behavior standards are the elements of personal conduct and accountability that the organization demands (uniforms, attendance, inservice attendance, etc.). Evaluate standards routinely, move in new skills, refine old skills, educate and test. Require ongoing passage and demonstration and be intolerant of employees and managers that can’t/won’t meet the competency and behavioral requirements. Competency standards are required for ongoing employment; reward for performance thus can only and should only occur when the base standard is consistently exceeded.
- Be Public: By employing all of your constituents in oversight, the likelihood of getting surprised or being caught off guard is minimized. Be public as possible with standards, expectations, contact information, grievance steps, etc. Be open to all criticism and frankly, demand (as much possible) feedback regarding just about anything in the business. No reason that business goals can’t be public and yes, even margin goals. Heck, explain why margins are necessary. Engage the broader universe and community and ask for input and reactions. People will tell you the good, the bad and the ugly – the latter being where potential risk lies. Force the conversation and the accountability and in doing so, limit a large area where risk can fulminate.