3 Steps to Success in New Skilled Nursing Payment Models
by Laurie Thomas and Guy Cowart
Historically, we as skilled nursing and therapy providers have been used to a level of industry stability. Within this familiar framework, we’ve trained our leaders with certainty and delivered care with a confident rhythm.
Unfortunately, this model simply may not serve us well in the future, with our rapidly changing environment demanding provider adaptations that can be hard to understand, let alone implement. Despite these uncertainties, providers could achieve the greatest success if they shift their approach into a new gear, elevating clinical and data-driven practices while adjusting their mindset regarding the patient journey.
That’s our approach here at Consonus Healthcare, which provides rehab, pharmacy, post-acute care transformation services and consulting in over 300 facilities nationwide. Our parent company, Marquis, owns and operates 24 post-acute and assisted living facilities.
With regulatory focus on aligning providers in the Triple Aim, the Centers for Medicare and Medicaid Innovation have developed alternative payment models (APMs) that are redistributing our incentives. These several new models are requiring that we reevaluate our historically successful practices to ensure that we are giving our patients the best clinical outcomes in the shortest amount of time while keeping costs low enough to be sustainable.
Each APM type is testing a slightly different theory of accomplishing the Triple Aim.
- Bundled Payments for Care Improvement (BPCI), are voluntary models that focus on DRG-specific cost targets, held accountable by various groups carrying the risk for cost.
- Bundles (the non-BPCI variety) are mandatory cost bundles defined by broader diagnostic group, including Joint Replacement, Cardiac and Hip Fracture, that place the hospital at risk for costs incurred in the 90 days after hospital discharge.
- Accountable Care Organizations (ACOs) have been created to coordinate care for groups of 5,000 or more Medicare patients, taking on the financial risk for overspending as well as the possibility of financial incentive for any savings attained.
- Value Based Payments take certain metrics into consideration when reimbursing providers, penalizing those for incurring hospital readmissions and rewarding those for avoiding them.
The most universal impact that APMs have had on the industry is with the shifting of incentives. Those held accountable for the cost of care are doing everything they can to ensure that the patients they are responsible for are receiving the highest quality care at lower costs.
One main tactic to maintain this control is narrowing the network of providers to which they refer. If a post acute provider cannot adequately demonstrate the ability to meet the metrics referral sources care about — be it overall costs, specific timelines, or outcome-based metrics such as hospital readmissions — the provider will not receive their patients and census will decline. Essentially, those providers that are not in strategic alignment with their referral sources and payers will not survive the shift in reimbursement we are currently experiencing.
The penetration of these pilot APMs varies from market to market, and your market could participate in any combination of APMs to any degree. Therefore, the involvement each provider has with APMs differs equally as much, giving some the advantage of experience moving into the future of long term care.
Our team operates in one of the most highly penetrated managed care markets in the country, Oregon. We also provide service in facilities across the country, operating in a wide range of markets, including those that are highly saturated with APMs. This has provided us the unique opportunity to fine-tune our clinical care, operational metrics and leadership approach in order to best succeed in this uncertain environment.
To do this, we have approached everything in reverse and begin each patient journey with the end clearly in mind. We ask ourselves the following:
- What is a reasonable discharge plan?
- How do we prevent an expensive readmission?
- What functional outcomes are needed for successful discharge?
- What treatment plan is required to accomplish this?
- How do we collaborate across the health care continuum?
To best answer these questions, we have identified the key areas of influence and determined the most effective and efficient ways to measure and optimize them.
Implement an Advanced Rehab Model
First and foremost, an advanced rehab model is imperative. The delivery of rehab services is at the heart of every skilled nursing facility and discharging patients to a safe and appropriate level of care is a necessary key metric in supporting a facility’s position in a marketplace.
At Consonus, we are developing a treatment model that rethinks the entire stay of the patient, from evaluation and treatment to discharge. Our evaluation process takes the entire patient into consideration, identifying potential barriers to treatment such as cognitive impairments, chronic conditions, balance issues and fall risks, in addition to physical limitations and length of stay restraints.
Once this comprehensive assessment has been made, our therapists use the insights gained to tailor therapy treatments for maximum effectiveness. We can determine the proper use of modalities, decide which disciplines are needed on which days, assign the appropriate team member to each patient, and utilize group and concurrent treatment settings if needed.
Our treatment is structured with the end in mind: discharge. Understanding the limitations of the discharge timeline and location can help us garner the most benefit from the time we have with each patient. We collaborate with the family throughout the patient’s journey to ensure that they are properly trained to support the patient’s transition home. Additional collaboration with home health maximizes post-discharge success and reduces the chance of a hospital readmission.
Understand and Apply Data
Secondly, we need to understand and apply data to bridge the gap between the care we deliver and the value we create. To keep our seat at the table with our payers and remain a strong presence in their networks, we need to quantifiably demonstrate the value that our high quality care brings to them. Depending on which APM they participate in, they may value different aspects of our performance which is why the more data we arm ourselves with, the better.
Currently, health care data is largely sourced from Centers for Medicare & Medicaid Services (CMS) claims data, which is often up to 20 months old. While this can be valuable, Consonus has identified the critical need for real-time data in order to be able to most confidently speak to our referral sources and payers about the metrics in which they are most highly invested.
To meet this need, we have developed our own live data analytics tool that collects data every hour from our electronic health record partners, our therapy data, our CMS readmissions data, our market share data, hospital data and home health data. This tool then combines and analyzes this data in the ways that we, our referral sources, and our payers find most valuable.
Consonus has found that the most valuable reports are based around hospital readmissions. With referral sources financially at risk for these instances, it is vitally important to understand what this data can tell us. We can analyze our opportunities for improvement by looking at monthly, weekly, daily and even hourly trends. It also gives us information about diagnoses and symptoms most likely to readmit as well as length of stay.
To support conversations with referral and payer sources as well as operational rehab goals, we utilize the CARE Tool (Continuity Assessment Record Evaluation). It objectively measures functional improvement through two item sets: Self Care and Mobility. These item sets allow us to evaluate an individual in terms of functional tasks they would find in their daily life, including eating, putting on and removing shoes, going up and down steps, and transferring into cars. This gives us the ability to determine a patient’s improvement while in therapy, recommend optimal functional improvement scores for discharge and determine the length of stay at which a patient’s improvement plateaus.
Invest in Leadership
The third essential of the Consonus approach to successfully navigating APMs is our investment in our leadership. We have discovered that with all the tools in the world, an organization cannot adapt to the changing environment without strong leaders that execute operational and strategic success.
These leaders must be equipped with the strategic understanding of the metrics driving the changes in the marketplace. Educating them to the incentives that drive each player at the table helps us collaborate more effectively to improve the experience of our patients. Leaders that can develop and build solid relationships with these players will have a more powerful voice with which to advocate for the patients we devote our careers to serving.
As Vice-President of Strategic Development, Laurie’s job is to create value for Consonus by developing strategic partnerships and creating future-focused services for a post-acute care profession in significant transition. A proven leader with a reputation for translating vision into action, she’s responsible for strategic planning, maintaining client engagement and managing the sales and support teams.
As Vice President of Operations for the rehab division of Consonus Healthcare, Guy Cowart oversees 80 contracts in ten states and manages an operating budget of more than $70 million. Over the past decade, he’s established himself as a thought leader in understanding the changing role rehabilitation plays in the post-acute care setting.