The shrinking pool of Medicare patients has long been a source of worry for skilled nursing providers, who are battling shortfalls in revenue ranging from low state reimbursement to challenges in billing private insurance companies.

In particular, accountable care organizations (ACOs) have come up over and over again as some of SNF operators’ key pain points. Research published in 2018 found operators reporting pressure to reduce length of stay for patients in Medicare ACOs; one operator recently went so far as to describe the organizations — in which hospitals, physicians, and other health care providers band together to provide care to Medicare fee-for-service beneficiaries — as “a disaster for SNFs.”

But one ACO, the Beth Israel Lahey Performance Network (BILPN), sees opportunity in the use of the three-day stay waiver, which allows certain ACOs to send patients directly to a SNF without the normally required three-day hospital stay.

The ACO is part of Beth Israel Lahey Health, which was formed in March of this year as a combination of three health networks in the Boston metropolitan area: the Beth Israel Deaconess Hospital System and physician groups, the Lahey Health hospitals and physician groups, and Mount Auburn Hospital and its physicians. As a result, its work to develop the ACO is still in progress — particularly since the Lahey hospital system and Beth Israel Deaconess are in different ACO tracks, which each come with their own sets of risks and rewards.

But Roger Schutt, *the medical director for post-acute care at the BILPN, is particularly optimistic about how the new organization can use the three-day stay waiver to direct patients to the best setting for their care.

Skilled Nursing News sat down with Schutt to talk about how the ACO has used the three-day stay waiver and how it wants to expand the waiver to capture more patients in the community.

Describe your approach to the three-day waiver program.

We were receiving feedback when meeting emergency room (ER) physicians about patients coming to the ER that were Medicare ACO patients who had had some kind of change at home or a fall — not really a significant injury. Or maybe a urinary tract infection (UTI), but they really weren’t septic, they weren’t really sick enough, and they didn’t meet the eligibility criteria to be admitted to the hospital.

What they were having struggles with was what to do with this patient, because a lot of times, family members or the patients themselves didn’t feel comfortable going back home again. Even with setting up visiting nurses, they didn’t feel that they were getting the level of care that they needed going home. So a lot of these patients were being placed in the observation unit at the hospital for a few days and then being discharged back home again.

And so the physicians were expressing: “Is there anything, any way we can help these patients a little bit more to get the care that they need in the right place? They don’t need hospitalization, but home didn’t seem to be the right place either for them.”

At that time, Medicare was offering the ability to apply for the three-day waiver program. In order for us to participate, we had to apply to Medicare and prove to them that we were an ACO that would be managing these patients and tracking and set up protocols, which we did. They approved us to start in the program in 2015.

When we initially launched the program, primarily because of the feedback we were getting, we were targeting mostly patients that were presenting to the emergency room. It was a way of trying to relieve some of the pressures on the emergency room and the observation units, but also to get patients in the right place for treatment and care.

Over time, we saw the success in the ER — and the response from a lot of patients and patients’ families about how beneficial this was for them. We then started expanding the program to going to physicians’ offices and our complex care managers. We were talking to them about it, and found an opportunity where there were patients that were failing at home; they either had chronic medical illness or maybe something acute happened to them. They were seen in the [primary care physician’s] (PCP) office or maybe in an emergency room but were sent home, were doing okay maybe for a few days, but then started to fail at home. And they didn’t necessarily meet criteria for a hospitalization.

So we then expanded this to our complex care managers, and our PCP offices were able to call us and run by the patients’ symptoms, and what’s going on with the patient. Then we could qualify them — if possible — to waive the three-day requirement and place them into a SNF, to get them the rehab or the medical care that they needed to improve, and get back home with home care services or with family services at home.

Do you know how many times the three-day stay waiver has been used for SNF referrals?

We do track for referrals that we’ve had over the years. We haven’t fully closed out 2018, because we’re still waiting for some data to come; we do it on claims-based analysis. But at this time, it appears that we had about 405 patients that were waived directly from either home, hospital, or an observation unit at one of our hospitals to a SNF.

How does that compare to other years?

In the first year that we launched it, we actually had a bit more patients, though I think this number, 405, will probably come up close to 2015, where we had around 440 patients that were waived to go into the SNF. In the next year, in 2016, we actually came out of the Pioneer program halfway through the year, so we only have half a year of statistics on that, and we had 271 patients.

We restarted it again in January of 2017, when we were back into another Medicare Shared Savings Program (MSSP). And that year, because we have to get the patient list, and it takes a little bit to make sure we are able to properly validate that a patient is qualified to be waived, we had a little bit of a dip; around 360 patients were waived in 2017.

We have to do a lot of work to make sure that the case managers and care managers in the outpatient and in the hospital setting are aware of the program — that we have the ability for our ACO members’ patients to waive them. So one of the first things that we have to do is make sure that when they identify a patient that may be a candidate for a waiver, check their eligibility, whether they are part of our ACO. So we have to make sure that our member organizations have a list of the patients that are in our ACO.

Then the patients themselves have to meet certain criteria to be waived. The No. 1 criteria, really by CMS regulation, is that the patient can’t meet criteria for a hospital admission. So if they meet the criteria for a hospital admission, they need to be admitted to the hospital.

The other criteria that they need to have is they need to have a defined diagnosis. We can’t admit someone to the SNF and then do a lookup for what’s going on. We really need to know exactly what’s going on, whether it’s a UTI or pneumonia or a fall without injury.

One of the other important things that Medicare requires of us is to make sure that the patient is not going to be long-term care, because it is supposed to be a short stay in the SNF. So a patient that maybe has been failing for a while at home and really needs some type of long-term care, we’re unable to waive those type of patients at this time, per Medicare regulations.

Since long-term care patients are excluded, how long do the waived patients usually end up staying at the SNF?

We usually average 14 to 15 days on a three-day waiver in the facility. It’s a little bit lower than our patients that are admitted from the hospital to the SNF; our average there is around 16 or 17 days. When you look at the case mix index between these patients, the patients that are coming in under the three-day waiver are less acute than patients that are coming out of the hospital — which would make sense, given that they did require a hospitalization to begin with.

Yes. You’ve touched on the conditions that these patients have, but can you go into some of the most common conditions for patients who end up having the three-day stay requirement waived?

Our most common one is falls without injury. Usually there are patients that have fallen and have some kind of injury, such as a large bruise on the hip or something like that. And they’re in pain or they’re having difficulty with mobility, so the goal is to get them into the SNF and get the pain under control, but really get them working with therapy to keep them moving so they don’t lose ground to the point of losing muscle mass.

Another is IV hydration, for dehydration. Particularly in the summer months, that tends to be one that ticks up. The third one is usually some type of need for IV antibiotics, where they’re a little bit too sick for oral antibiotics, but they’re not quite sick enough that they have to go in the hospital, because they’re not septic.

As we know, Medicare does not pay at home for IV antibiotics; the patient would have to pay out of their pocket. So that’s something that’s much easier to receive in the SNF setting.

Do you have any idea of the savings generated by using this waiver?

I don’t have the exact number in front of me, but I can give you a rough estimate on that, if you just take the fact that we had about 400 or 405 patients that we were saying right now for last year. And our average in the Boston area for admissions to hospital is around $20,000 per admission to the hospital. If you multiply that out, it’s a little more than $8 million in costs to Medicare for that many patients, if they were to have been admitted to the hospital.

Then you obviously have to pay for the SNF stay, so if you take that and you multiply that by 15 [days], which is our average, and we use an average around here of about $500 a day, is what it costs for an average SNF stay in this region, that comes out to be around $3 million. So overall, it’s a little over $5 million that we’ve saved in costs admitting these patients to the SNF.

But from my point of view as the director of the program, I think more important than the cost savings is getting the patient to the right place for care. They don’t need to be in the hospital. They can’t really make it at home. Where can we get them that they’re going to get the nursing care or the rehabilitation care that they need to then get back home and be successful being back there? And so that’s why I think this program is fantastic.

And the hospital is a tough place if you’re an elderly patient.

Yes, exactly. When you’re a patient in the hospital, their job is to treat the acute problem, and they don’t look at the other psychosocial issues that may be going on with you, whereas SNF — that’s part of what they do, they look at the whole person. They may be treating the UTI or the pain that’s going on, but there are the social workers that are talking with the family about the needs at home, and how can we better set up services at home to make this successful?

Also, because therapy in hospitals is geared to, again, the acute, if [the patients are] in bed for any length of time, they’re losing muscle mass, they’re losing strength. When you get to a SNF, we get them up, we mobilize them, we take them to the dining room. That’s not just the therapy; they’re getting out to the activities and doing other things in the SNF that help keep them more connected to the community than isolated, I think, in the hospital.

Do you have any plans to use the three-day stay waiver in new ways, or expand it?

We would love to expand it more. When we looked at where most of our referrals are coming from for this program, most of them come out of the ER or the observation unit, so I think we’re missing a fair amount of patients that are probably in the community — either seen in PCPs’ offices or followed by our complex care managers — that probably could benefit from this program.

Our goal is really to continue to encourage the ERs and the observation units at the hospitals to use the program, and making sure they’re aware of it, but [also] really to get the message out more to our PCPs in the community, because they see these patients and sometimes it may not be on the top of their radar to think: “Hey, I can get them directly to a SNF for a few days of rehab, and it may be beneficial for them.”

We’ve set up a hotline here at our central offices, where if a PCP thinks they have a patient that may be eligible for the program, they can call and talk to one of our care managers to run by the case and say: “What do you think? Does this person meet the criteria? Are they someone you think would do well in this?”

We’re hoping that’ll uptick some of the referrals directly from the community, and to the SNF three-day waiver program.

How many SNFs end up receiving patients from your ACO? Do you have a preferred network?

That’s a very important question, because our geographic area runs all the way from the New Hampshire border all the way down to Cape Cod in eastern Massachusetts, which is a very large geographic area. So we have developed a preferred SNF network of 63 homes across this geographic area.

We have four [nurse care managers] that interact with those homes, calling to see if there are issues, concerns. We also bring these facilities together on a webinar quarterly, to give them updates of how the network is doing as far as managing patient length of stay, rehospitalizations, ER visits.

But also to get feedback from them on: What are the barriers to providing care for these patients in the SNF? Are there problems with hospital discharge summaries, communications from the hospital? Are there problems with access — of getting patients to go back to the hospital for a consult and things like that — that may precipitate a patient not doing well in the SNF, and ending up back in the ER?

Of that 63, we do have a subset of facilities that were chosen because they’re near either one of our hospitals or near one of our larger physician groups where we get our referrals from. There’s 33 of those homes.

Medicare requires us to apply for them to be a waiver home, so we have to fill out an application that is sent to Medicare.Usually every January, they update the three-day waiver list, so we’re actually in the process now in the fall; we’ll collect and submit in the month of September any new homes that we want to add to our three-day waiver, and then we submit that application to Medicare, and they make a decision by the end of December for January 1 of the following year.

So we’re in that process now. Medicare does require a star rating of three or better to be in a three-day waiver home, and any of our homes that fall below a three-star rating, any time during the year, they have to immediately come off the three-day waiver program, and they can’t come back on until the following year when we reapply to Medicare for them.

It does present sometimes a problem for us, and that’s one of the reasons why we have added additional three-day waiver homes — because we’ve had an issue in the past where in certain locales, the home we were using for a three-day waiver, for whatever reason, their star rating dropped below a three, and we had to take them off. And we didn’t have a facility in that locale that was near patients’ families or the hospital that we could refer to.

So we really try to keep two or three homes, at least, in each region that are on the three-day waiver program, so in case one does fall off for some reason, the other one will be able to absorb those patients.

You’ve talked about the different ways you work with the SNFs in terms of keeping them updated and giving them feedback. Have you ever entered into a risk-based or shared-savings arrangement with SNFs?

No, we haven’t. We’ve thought about it, but we have not actually gone that way at this time.

Do you have anything that you want to add?

I know when most people talk about SNFs, they talk about the length of stay and the rehospitalization, and we do look at that data. We have to look at that data; we have to be good stewards of the money that has been given to us by CMS to manage the patients.

But I really look at what can we do to help the SNFs with their resources, to really improve the quality of care they’re giving the patient that we’re sending them. One of the things that we do on our webinars within network, since it’s so vast, is that if we find that we have a home that’s doing a best practice, really doing a good job, we ask them to present that to the others, so that others can learn.

I think as an ACO, we need to facilitate that. We need to help these facilities. Some of them are large corporate facilities that obviously have better resources, but some of them are small mom-and-pop facilities that just don’t have the resources to really develop the programs and the education of the staff that they might need to take care of these medically complex patients.

I feel that as an ACO, it’s our job to kind of give them that opportunity, to help teach them, and give them the educational material that they may need to bring them up to speed to help take care of these patients. I think it’s a win for the nursing facilities; it’s certainly a win for the patients, as they get better care, and then in the end, it becomes a win for us.

*This story has been updated to correct Schutt’s title to “medical director for post-acute care at BILPN.” SNN regrets the error.