Why Rockport Launched its Own Risk-Bearing Post-Acute Network

As operators in the skilled nursing industry continue to reckon with the challenges related to the ongoing shift to value-based care – particularly on the reimbursement side – one provider has taken it upon themselves to create a post-acute network that is a “win-win” for all involved.

Rockport Healthcare Services created affiliated entity Post Acute Collaborative Partners (PACP), a risk-bearing network of skilled nursing facilities and home health entities with the goal of maximizing the objectives of the “triple-aim” in health care for the benefit of health plan members, payers and post-acute providers.

PACP is approaching its third year in a capitation agreement with a large independent physician association (IPA) in Los Angeles County, where it has a high volume of its nursing homes, and it’s now looking to expand both across the state of California and outside of its borders. 

The network has its second capitation provider signing on at the beginning of April.

“I think it’s the best model out there in terms of now the alignment of the objectives of the triple aim from cost efficiencies, which really means reducing costs, providing quality outcomes by the reduction of rehospitalizations, and still maintaining a very high customer service focus because of a lot more touches with these particular members because we want to make sure they move to the next level of care,” PACP Executive Director George Sauers told Skilled Nursing News.

‘The Robin Hood of the SNF industry’

Reimbursement models historically have created silos of inefficiencies that can be detrimental to the delivery of high quality, cost effective post-acute care, according to Sauers. He also serves as Rockport’s chief managed care and strategy officer.

“Now we’re here in 2022 and you know, HMOs, ACOs, the bundled payment initiatives, it’s all about driving down length of stay while still providing quality care and a high level of customer satisfaction,” Sauers said. “From a SNF industry standpoint, specifically Rockport, reducing length of stay is a direct hit to the bottom line.”

While he recognized the importance of moving patients to the next level of care as quickly and safely as possible, Sauers argued the existing financial models and incentives aren’t aligned to do that because the volume doesn’t replace the reduction in length of stay.

“Now today with very serious efforts to divert away from skilled nursing facilities, go directly home with home health, etc. – those incentives are becoming even more important,” he said.

And that’s where Post Acute Collaborative Partners comes in.

PACP provides the IPA a 20% discount over their historical SNF spend. At the same time, the facilities are paid an episodic payment and because the residents are closely monitored, the reduction in length of stay increases the revenue per patient day for the participating facilities, Sauers said.

Looping in preferred home health providers also reduces rehospitalizations, which in turn earns some additional back-end bonuses and increases revenue further, according to Sauers. Any leftover margin at the end of each quarter goes back to the buildings.

“We take on the risk, we alleviate the risk for those non-Rockports. As long as they’re doing a good job of meeting the objectives, there’s financial upside for them, and as they participate with us in the model via an episodic payment model, plus the margin share, plus the back-end rehospitalization incentive, those that participate with us are going to get the volume. We’re going to steer those referrals to buildings that participate,” he said.

Sauers said they’ve been able to increase revenue per patient day (PPD) for the managed care patients by 46%.

Because PACP is becoming a Rockport affiliate, in the state of California Rockport Healthcare Services, its administrative entity, will benefit financially from admissions being driven into client facilities as well as any bonuses from those facilities, Sauers said.

In non-Rockport facilities there is no direct profit derived from utilization of those facilities, he noted. As the model is expanded into other markets, Rockport will only generate income from the quarterly margin shares.

“Talk of the triple aim is wonderful, but prior to the PACP model, someone was always going to get the short-end of the stick,” Sauers said. “With PACP, the biggest winners are the SNF providers themselves, payers and their members. Because of that, it feels like the right thing to do for our health care system.”