Preferred SNF Networks Reduce Readmissions, But Do They Prevent Choice?

Hospitals that develop preferred provider networks of skilled nursing facilities (SNFs) are seeing lower readmission rates over time than those that don’t. However, establishing these networks does not come without roadblocks.

In a recent study published by Health Affairs, a peer-reviewed health care journal, four hospitals with preferred SNF networks were monitored from 2009 to 2013. During that period, these hospitals reduced their readmission rates faster than those without preferred networks, capturing a 4.5-percentage-point advantage.

Despite the apparent benefits of developing a preferred SNF network, some hospitals avoid this system, most often for fear of violating patient choice rules.


“Choice seemed to be the primary reason hospitals did not embark on network development efforts, as it came up in nearly every interview,” study author John McHugh, assistant professor in the Department of Health Policy and Management at Columbia University’s Mailman School of Public Health, told Skilled Nursing News.

The patient choice conundrum

The Centers for Medicare and Medicaid Services (CMS) requires that hospitals give patients a list of Medicare-eligible providers at discharge and do not restrict patients’ SNF decisions. However, hospitals with networks have a looser interpretation of patient choice, the study found.


The difference between hospitals with networks and those without, when it comes to patient choice, is how much information they share with patients in their list of available SNFs. Hospitals with preferred SNF networks may gently encourage patients to select SNFs within the network by “tiering them,” as one vice president for strategy at a hospital with a formal network told researchers when interviewed.

“It is possible to create a preferred network either by enhancing existing SNF relationships or by liberally interpreting and implementing the requirement for patient choice,” the researchers said in their report. “The hospitals that developed SNF networks provided patients with additional information to assist them in making their decision, such as informing patients that a provider team would help manage their care in the network SNFs. Then patients were left to decide if such enhanced continuity of care was important to them.”

Hospitals without preferred networks were much stricter in their application of the patient choice rule. The senior vice president for operations at one of these hospitals told the researchers that his hospital does not include CMS star ratings or other information about the available SNFs. That information can be researched online and the hospital does not try to sway decisions by supplying it on the list of SNFs, he said.

“We have tried to develop, using payer language, a narrow network with post-acute facilities, and our legal experts have said that we’re not able to do that outside of any sort of Medicare innovation programs, because they are very concerned about the requirement for the patient to feel that they have a choice in where they go,” said the senior vice president.

Despite this concern, hospitals with networks did not show concern about the legality of the potentially persuasive information they provide, according to McHugh.

“Each of the hospitals that had SNF networks were very clear that they were still providing the patients with choice,” McHugh told SNN. “In fact, some, if not all, had patients sign forms that stated they were provided with choice. I did not get the sense that the hospitals were worried about ‘getting in trouble’ as they were providing information, but not telling the patients that they had to go to a facility within the network.”

How SNFs become part of a preferred network

Hospitals do not necessarily choose SNFs for their preferred network based on quality markets like CMS ratings. Rather, they tend to build their networks based on facilities to which they have discharged many patients in the past, the research showed. This prevents hospitals from having to retrain discharge planners.

Additionally, SNFs must understand cost drivers and prove their worth to a hospital to become a part of its preferred network. Inclusion in an accountable care organization (ACO) or participation in a bundled payment model are attractive to a hospital.

Another way hospitals are now assessing SNFs’ worth is by asking them for data that provides qualitative markers of their performance: Hospitals look at readmission rates, staffing ratios, patient satisfaction, and lengths of stay.

Preferred SNF networks foster improved care coordination

Within the study, all hospitals with SNF networks sent teams of their employees — usually a physician and one or two nurse practitioners — to SNFs for visits to discharged patients. This continuity of care may be a contributor to the improved readmission rates that these hospitals achieved, McHugh said.

“It is my understanding, based on interviews, that the hospitals are more successful at reducing readmissions because they do have teams of providers following the patients and allowing them to treat in place,” McHugh told SNN. “Unfortunately, we were not able to isolate the specific facilities that comprised the network — otherwise we could have tested this exact thought by comparing patients sent from a hospital to network versus non-network SNFs. We could only estimate based on overall hospital readmission rates.”

Many of the hospitals also held regular, often quarterly, meetings with regional SNFs to educate and discuss care coordination from hospital to SNF, McHugh added. Additionally, many held one-on-one meetings between the hospital and the SNF to discuss specific readmission cases as often as weekly.

Hospitals without networks showed more resistance to this type of post-acute care coordination.

“One hospital interviewee, when asked why they do not have a network, stated that they did not see where else a patient would go if they had to be hospitalized from a SNF,” McHugh said. “Instead of following the patient with a team and treating in place, this particular hospital did not want to interfere with the care process in an institutional setting. They did however, manage patients sent home, because if they were in need of enhanced care, could be sent to SNF.”

Written by Elizabeth Jakaitis

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