Ciena Looks to Build on Bundled Payment Success with Medicare Advantage

As the health care system continues to push skilled nursing providers in the direction of risk, the Ciena Group has relied on lessons learned from bundled payments as it looks at entering the world of Medicare Advantage.

The fact that skilled nursing could not initiate episodes under the newest bundled payments model “pulled the rug out” from under the Southfield, Mich.-based Ciena, director of business innovation and strategic planning Joyce Turner told Skilled Nursing News at the LTC 100 conference in Naples, Fla. last week.

But that doesn’t mean that skilled nursing providers have no agency in the world of new payment models. As Medicare Advantage becomes ever more dominant as a payer, leaders at Ciena have begun exploring an institutional special needs plan (I-SNP), a special type of Medicare Advantage plan that has grown in popularity among operators in recent years.

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Ciena in particular has tried to draw lessons from its experience in the Bundled Payments for Care Improvement (BPCI) Model 3, where total expenditures for a beneficiary’s episode of care were reconciled against a bundled payment amount set by CMS.

Established in 1998, Ciena grew substantially in 2016 with the acquisition of Laurel Health Care Company, a move that brought the firm’s footprint to more than 9,000 skilled nursing beds across Michigan, Indiana, Ohio, North Carolina, and Virginia.

SNN sat down with Turner to talk about the crossove between bundled payments and Medicare Advantage, as well as Ciena’s multi-state footprint and its 2016 purchase of Laurel Health Care Company.

Can you walk me through how you’ve navigated the merger?

The Laurels were really a very nice acquisition or purchase for us. They fit very well into our portfolio. They’re very well marketed and branded, and so we didn’t want to change that brand, because they are so well known. We didn’t want to change the Ciena brand either, so what we’ve done is we’ve come together under what’s called the Ciena Group.

It provides us really with the best of both worlds. So now we have amazing best practices on the Laurel side, and we have amazing best practices on the Ciena side and through this Ciena Group, we’re now integrating those processes.

Is that process still ongoing?

It is. But we’re all on the same electronic medical records system now. That’s big. And we have most of our clinical policies, procedures, guidelines pretty much integrated. Our IT technology is pretty much integrated; our compliance and our business side is integrating. So it’s been a very good endeavor for us.

We’re also doing a lot of relocation and rebuilds. We have some older facilities that we’ve completely relocated in the same county and rebuilt them. So we have three of those that we will be opening, brand new facilities this year — two of them very soon.

We also have CONs [certificates of need] for three new existing facilities and so we’re hoping to break ground on those this year. We’re also adding to existing facilities and always looking at changing, upgrading. The baby boomers are our consumers, and making sure that we offer a product and services that they’re going to want and going a step above and beyond — it’s not just meeting expectations, but exceeding the excellence is what we always strive for.

Are you adding specific wings or services on the clinical side that you weren’t before?

Not necessarily. Depending on what the market is, what we are doing is more private rooms, larger rooms, more suites and that type of thing.

But if we’re looking for a bariatric program, we have bariatric rooms that are specifically set up for bariatric patients. So depending on what the market is and what that dictates to you — we are involved in [that] because so much is changing in skilled nursing. We kind of check all the boxes. We look at the bundled payment opportunities, we look at the I-SNP opportunities. We were involved in bundled payment, the BPCI 3 program. We were our own convener in that program and were very successful in that program.

Then when the [BPCI] Advanced program came out, we could no longer initiate episodes.

So how did you move forward after that?

You have to partner with the physician group or an acute care hospital, so it’s finding the right partner to be able to do that with. Part of the other thing, too, is when we participated in the Bundled Payment for Care Initiative, we didn’t go with a third-party convener; we were our own convener and we managed our own program.

We were very successful in doing that. And we had to figure this out: How are we going to change our practices where we’re going to be paid for an episode of care and the quality of care versus the fee-for-service program? So by participating in that, we were able to change the culture and the mindset within our facilities, and that’s a big ship to turn.

Especially when you have as many facilities as Ciena has.

Exactly. That’s a big ship to turn. And so we were fully prepared when the next bundled payment program came out, to move in a lot of our facilities to participate again — because we had worked for the last three years in getting this figured out.

And we were able to lower cost of care — like 26% from our baseline from our historic to our performance period — lower our length of stay, lower our return to hospital, and yet improve the quality of care a lot as well.

So when they came out with the bundled payment and we could no longer initiate episodes, it just pulled the rug out from under us. Because — and I had met with CMMI and CMS regarding this — we’ve made sweeping changes because you wanted us to participate in this innovation program, and made these sweeping changes which gave our facilities incentives to perform differently based on an episode of care, based on volume, and then you pull the rug out.

So the whole mindset is going to go back to fee-for-service, because that’s what they have. So it was very disheartening to say the least. But we have met with CMMI, since and they’re actively looking for ways to make this happen again with post-acute.

Yeah, I’ve seen that.

Yes, and we just recently had met with [CMMI director] Adam Boehler and met with [others] in Washington, D.C. They had brought together some of us providers that had participated in the original, and shared ideas and thoughts on how we can move this forward. It’s not going to be exactly the same, but at least we’re talking now, and we’re actively looking into this and what these payment incentives would look like again. So we’re hopeful for that.

The other thing is the I-SNP. We’re vetting different partners for that — is this a good fit for Ciena?

The one thing that I thought was interesting in our participation with bundled payment is the last year of 2018, we probably reduced our episodes by 50%. And the reason for that is not because they didn’t have the clinical conditions — they would have initiated an episode, but they were now [in] Medicare Advantage.

So we saw a huge increase in the Medicare Advantage penetration and lost 50% of the episodes that [we] would have initiated under bundled payment because of that. So that is a huge trend that we’re seeing, more and more Medicare Advantage penetration. And the thoughts kind of are with the I-SNP: If you can’t beat ’em, join ’em. Let’s see what we need to do then to become a provider.

There’s different ways of looking at it. [From] the economic side of it, it’s a nice adjunct to our core business. But there’s also another way of looking at it as well: increasing market share through your quality of care, increasing improving your quality measures.

Developing a professional model of care that involves nurse practitioners and physicians that are there much more frequently, that know these patients and see them much more frequently, and through that I-SNP program, being able to provide that type of model of care — [it’s] going to help improve and increase market shares with your Medicare Advantage plans, with your ACOs, maybe developing transitional care units or programs where we can take your patients: “You don’t have to send them to the hospital because this is the model of care that we have in this, and this how we can provide for them.”

So there’s a lot of ways of looking at the I-SNP program.

You’re looking at it now, and if there’s one common refrain for I-SNPs, it’s that they can pay off, but it takes time and it’s not for everyone. So what are some of your considerations as you weigh moving in?

You have to build out the network that provides every Part A and Part B service. So when you’re building out a network, it’s hard to build out a network in a county where you have one facility. Now, if you have a footprint in maybe two, three, four, five counties, that have a significant number of facilities and beds, then that makes it worth your while to build out that network.

And enrollment is key to success. Volume is key in this program. But you have to be strategic as well. We have some facilities that are vent units — that may give us a nice PDPM [boost]. However, they do return to the hospital a lot, and the key to managing these patients and being successful in this program is being able to manage them on site, and being able to manage that level of care, whatever that would be.

We have another hospital that is associated with a huge teaching hospital. so when we have a patient go out to the teaching hospital, they run every test under the sun. They like to teach! But it can be very costly.

So these are not facilities that we would want to move into an I-SNP program. We would look very strategically at location, building out the network, the type of facility it is. But I do think that we would have the volume that we would need in terms of enrollment for a successful program.

Would you start it in one state to see how it goes before moving it out to the others?

Possibly. We’re looking at Michigan, of course; we have our largest footprint in Michigan. We’re also looking at it in Ohio, a lot around the Columbus area, and developing programs there, and then from there moving on. But again, volume is important and it’s the same concept even with bundled payment. Because it can be so volatile, you really need to have volume that’s going to help offset some of those high-cost outliers.

Because you’re in so many states, you have a lot of factors that come into consideration. I’m thinking primarily about Medicaid, but obviously there are variations in other ways. We hear a lot about the challenges of multi-state footprints, but what are some of the benefits you’ve seen?

Well, you’re correct that every state is different. Some states are much more friendly in doing business with skilled nursing, and starting building new facilities and things like that. There are other states that are much more stringent.

So when we look at purchasing these facilities, we look at those types of state requirements. Can we make improvements to these facilities? Can we totally relocate these facilities? Do they have a CON? What does their Medicaid system look like, the dual eligibles? So we take all those things into consideration.

And not that there’s a yes or no to any of them, but the question is: Can we do business here, and can we manage our business here? And can we provide the outcomes are going to achieve excellence in these states?

We’re still looking at growing. We continue to build new facilities. But all those different types of things are taken into consideration before we start to move forward with them. But then we have the infrastructure, and can quickly bring these facilities on. We’ve done it quite a bit, and we do have a pretty good program for building out those infrastructures quite quickly.

This interview has been condensed and edited.

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