How Bundled Payments Can Keep SNFs on Top of Their Game

The home setting is fast becoming the preferred choice in delivering post acute care (PAC) for health care organizations in bundled payment settings, according to a recent industry report.

But while health care providers are steering patients away from an institutionalized setting, one industry expert believes this realization should alert skilled nursing facilities (SNFs) and keep them on their toes in terms of their care delivery methods.

Chicago-based health care consulting firm LewinGroup analyzed health care providers that participate in the Centers for Medicare & Medicaid Services’ (CMS) Bundled Payments for Care Improvement (BPCI) initiative. The program was established to gauge whether linking payments for all providers involved in delivering an episode of care can reduce Medicare costs, while maintaining or enhancing the quality of care.


Providers—also known as BPCI Awardees—can include hospitals, physician groups, post-acute care providers, SNFs and home health agencies (HHAs), among others.

The full report, compiled by LewinGroup for CMS, is available here.

By the numbers


Between October 2013 and September 2015, a total of 873 SNFs participated in CMS’ BPCI program, delivering care in 35,000 episodes, according to the report.

Among key findings in the report include an overall shift away from sending patients to an institutionalized PAC setting and SNFs.

In fact, among patients who received PAC, the percentage discharged to institutional facilities declined in 61% of clinical episodes, particularly for major joint replacement and cardiac valve replacement patients, as well as patients living with respiratory diseases.

Further, length of stay declined by an average of 1.5 days for BPCI patients who used SNF care.

Greater scrutiny 

The health care industry’s focus on sending patients into the home setting has become a key takeaway for Chris Garcia, CEO of Darien, Conn.-based health care consulting and software provider Remedy Partners.

At Remedy, he and his team consult with more than half of the health care providers participating in the BPCI program.

“The impact of the new incentive is getting [health care providers] to rethink … where they send patients,” Garcia told Skilled Nursing News. “We are seeing an increase in the utilization of home health services and a corresponding decrease in the utilization of facility-based care—whether it’s a SNF or an in-patient rehab facility.”

More and more patients are choosing the home as their preferred recovery setting, and providers are realizing it is also the lowest-cost platform, Garcia explained.

For this reason, SNFs are now put under greater scrutiny by BPCI-participating hospital groups, according to Garcia.

“There are skilled nursing facilities that do not choose to participate in the bundled payment program, but are having to accommodate a hospital that has elected to be in the program,” Garcia said. “If [a participating hospital] sends a patient to a skilled nursing facility, that hospital is very concerned about what’s going on with that patient and is going to scrutinize that skilled nursing facility, whether they are or are not in the program.”

For SNFs participating in the BPCI program, this greater scrutiny ensures that SNFs are on top of their game and that they are delivering quality care throughout the episode, according to Garcia.

“The skilled nursing facility [becomes] the gatekeeper of that patient and is at financial risk for the outcome of that patient,” he said. “Those skilled nursing facilities are acutely aware and are acutely concerned about that patient because they now have the financial risk of that patient.”

A win for all

The reporting period that the LewinGroup analyzed in its report reflects only a portion of new entrants into the BPCI program, with many more entrants joining in the third and fourth quarters of 2015, according to Garcia.

“The measurement period still does not adequately capture the majority of the participants of the program when they’re running at 100%,” he said. “The conclusion that Lewin draws from the data does not adequately represent the successes or failures of the program. One of the major learnings from anybody participating in this program is that it takes time to redesign care.”

Despite this, Remedy Partners has seen the effectiveness of bundled payments. In June, the company reported a $500 million reduction in unnecessary medical expenses by its clients over the past year, representing more than 1,000 healthcare locations in 43 states, according to a company statement.

“Everybody is winning from this program—the government is reducing their spend, which is going to elongate the Medicare trust fund, [and] we’re getting people to put the patient back into the equation,” Garcia said.

Written by Carlo Calma

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