Bundled Payment Lessons Still Relevant for Skilled Nursing Providers

In a post-acute landscape dominated by the rise of Medicare Advantage and the looming changes to therapy payments, the Bundled Payments for Care Improvement (BPCI) program has fallen somewhat by the wayside.

That’s partially because post-acute providers — including skilled nursing operators and home health agencies — can no longer be episode initiators under the upcoming BPCI Advanced model, meaning that hospital providers and physician networks will likely take the lead in development going forward.

But SNF operators have invested significant time and cash in the BPCI program since it was introduced in 2012, and they will still provide value under the system going forward — so the successes and failures along the way still resonate, according to a panel discussion at the Post Acute 360 conference in National Harbor, Md. on Monday.


Under BPCI, the Centers for Medicare & Medicaid Services (CMS) provides a single reimbursement for all the providers along the continuum — with the exact amount based on how much the agency determines specific health care events, or episodes, should cost in total.

“We are using the lessons we learned from BPCI when working with other payers,” Mary Moscato, president of the Boston-based Hebrew SeniorLife Health Care Services, said during the event.

Those payers — including the state of Massachusetts’s Medicaid program — increasingly want to hear about reduced costs, lower lengths of stay, and other metrics that providers like Hebrew SeniorLife were able to improve through their participation in BPCI, Moscato said.


Hebrew SeniorLife, which offers a continuum of care options from skilled nursing to home- and community-based services, saw readmissions drop from 15% down to 6% in the most recent month for which data was available in part due to its participation in BPCI, while also notching net patient reconciliation savings of $2 million.

“And that, for a skilled facility today — anyone will take that,” Moscato said.

That financial success wasn’t necessarily universal. Susan Adams, vice president of alliance integration at the Masonicare network of acute, post-acute, and rehab facilities in Connecticut, said BPCI’s effects on her company’s bottom line were more hit or miss.

“We have very positive quarters, and we had not-so-positive quarters,” Adams said.

But there were still important lessons that participation in BPCI brought to Masonicare’s staff and management, including increased care coordination; at the beginning, Adams said, the network’s SNFs weren’t even referring residents to its own home health agencies. In addition, Masonicare learned not to bite off more than a single network can chew:  Masonicare initially signed on to participate in 25 bundles, which the company eventually adjusted down to 13 and then finally seven.

“Trying to do all things well isn’t something that we achieved, but I think knowing that we were doing something right was helpful,” Adams said.

Future landscape

These considerations aren’t just academic now that CMS opted to allow only acute providers and physicians’ groups to be episode initiators.

Dave Terry, founder and CEO of the Boston-based consultancy and BPCI convener Archway Health, said that he’s already heard significant interest from those providers in the new BPCI structure, which will begin in October of this year.

“They were essentially overwhelmed with interest, and we expect to see a pretty robust enrollment when the program deadline comes at the end of July,” Terry said.

And physician groups and hospitals will still need solid skilled nursing referral partners to succeed under the new models, Terry’s colleague Keely Macmillan — general manager of bundled payments at Archway — told SNN earlier this year.

“For bundled payments to be successful, you need post-acute care engagement … So much of the opportunity for cost savings is in the 90 days after discharge,” Macmillan said. “You have to engage SNFs and home health agencies and have their insight.”

That’s where those lessons learned when skilled nursing facilities and home health agencies could take the lead come into play.

Denise Burgen, formerly the chief quality and innovation officer for University of Rochester Medicine Home Care, said the increased emphasis on data under BPCI helped her organization identify the best potential SNF partners for her company moving forward.

“We were able to figure out which of the skilled nursing facilities and rehabs had better outcomes in terms of readmissions, and were able to kind of select the preferred providers that we would send those patients to when they went into the episode,” Burgen, also a professor of clinical nursing at the University of Rochester, said.

That translates to volume on the other side of the equation, with Moscato reporting increased referrals as a key upside of BPCI participation.

“Just the reputation alone — quality outcomes will be a referral source, a top referral source,” she said.

Plus, as the population ages and acute providers’ reimbursements increasingly rely on how well their patients perform as they travel through the health care continuum, post-acute providers will naturally grow in importance to gain a certain level of equal footing.

“Hospitals will not be the center of everything in the future. We will be,” Moscato said.

Written by Alex Spanko

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