Why Some SNFs with Low Star Ratings are All-Star Performers for Hospital Partners

When consumers see that a skilled nursing facility has a low rating on the Five-Star Quality system, they might naturally assume that the SNF is of low quality – but some of these facilities actually are preferred referral partners for hospitals in their area, and their star ratings are suffering from their willingness to take on high-acuity patients.

It’s a situation that Dr. Nirav Shah, Senior Scholar at Stanford University’s Clinical Excellence Research Center, flagged in a keynote address at the recent National Investment Center for Seniors Housing & Care (NIC) conference in San Diego.

Several industry experts corroborated his perspective on the insufficiency of star ratings in reflecting the value that SNFs might actually be delivering to their local health systems.

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At issue – taking on more acute patients can translate to lower star ratings, as patients with complex needs present higher levels of risk. And operators of lower-rated facilities are calling for compensation or different licensure categories to counter this problem because, after all, they are taking on patients that are hard to place.  

Meanwhile, hospital systems may not even be attuned to a facility’s star rating – picking the right SNF partnership oftentimes means weighing a facility’s ability to take on tough cases, along with preventing readmissions to acute care.

The situation has been exacerbated due to changes in regulation of other high acuity facilities like long-term care hospitals (LTCHs), which are not taking on as many complex patients. And, it has now fallen upon skilled nursing facilities to take on a lot of these patients that would normally go to an LTCH, according to Sharon Thole, executive vice president of operations for Health Dimensions Group (HDG).

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Thole has seen significant changes in regulation over the last couple years for LTCHs that have led to bottlenecks and diminishing profits for the hospitals as well. 

“Their ability to take on some of these complex patients has really declined,” Thole said of LTCHs. “The hospitals are sitting there with these patients … since the pandemic, these patients are getting stuck in the system, the hospital system. The hospital needs a release valve.”

Meanwhile, the hospital is losing revenue the longer it takes to place these patients, she said.

“Because they didn’t meet the LTCH criteria, they would come to us,” said Thole. “We would wean them [off the ventilator], and then they would end up being in our transitional care unit until maybe we could decannulate them and move them on.” Decannulate is the procedure to remove breathing tubes placed during a tracheotomy.

These types of facilities taking on higher acuity are usually rated lower by the five-star system, she said. This mostly has to do with the number one driver in calculating star ratings – surveys.

“If you’ve had any high scope and severity tags, those points stay with you for three years. It takes a long time for you to improve your star rating if you had taken that risk with a patient and something didn’t go as planned,” said Thole. “I think it’s really that regulatory piece. That’s the driver of it.”

Specifically, the results of inspections stay for a rolling three years, with each survey cycle weighted less as each cycle occurs, Thole added.

More risk, questionable reward

Thole has operated very high acuity communities before with low star ratings, including a 25-bed ventilator community on one floor and behavioral health and transitional care on another. These types of communities are taking a lot of risks, she said, but it’s not always clear if they’ll get support from referring providers, or if they’ll get paid for all services.

Thole did say the high acuity facility she operated had a preferred partnership with the hospital, and got paid incentives and rewards based on outcomes.

Another example: a one-star nursing home in Los Angeles that at one time got paid $1,000 a day instead of the more standard $350 per day for taking on the local hospital system’s highest-needs patients, and was staffed with hospitalists, Shah said in his NIC address.

The facility was happy to take patients in need of wound care, those needing a ventilator or individuals with pressure ulcers. And, the hospital was happy to discharge patients there, given that existing relationship and understanding that higher acuity patients were welcomed there.

But from a regulatory standpoint, fallout with fines, star ratings and reputation are all risk factors to taking on more challenging patients – and it’s getting more difficult to take on that risk, Thole said.

“The regulatory environment and the fines that are being imposed put too much stress on the organization to the point that they have to pass on these high risk patients,” Thole said of many SNFs.

John Capasso, executive advisor of senior care for HDG, acknowledges that not all nursing homes are equipped to handle a patient needing a tracheotomy, bariatric services or a ventilator. But ultimately, it all comes down to proper staffing.

Challenging patients can run the gamut of behavioral health issues, those with aggressive behaviors or drug-seeking behaviors, Capasso said. Residents needing dialysis or someone with high cost medications could also be considered a challenging patient.

“Reimbursements don’t take into account the fact that there’s very high medication expenses on some patients. That can be a limitation as well,” added Capasso, who also worked in the hospital setting for the first 20 years of his career as a clinician.

Hospitals look beyond star ratings

The ability to admit patients, through adequate staffing, is really trumping all other considerations including star ratings when hospitals are considering a discharge to a SNF, Capasso said. Getting a hospitalist at a SNF, or a primary care physician with a speciality in geriatrics, will draw a hospital system to a particular facility even more.

Hospitals continue to be in a situation where their length of stays exceed pre-pandemic levels. Simply having vacancies, close proximity and of course adequate staff could be enough to discharge a resident to a particular facility.

Hospital case managers may not know if a star rating has changed per quarter for a facility, either.

“There’s a lot of information that [case managers] are trying to cover while discharging a patient. They simply may not know,” Capasso said of SNF star ratings. 

What they do know, he said, is the rate at which patients are coming back to the hospital.

“[Hospital readmissions] can really unfavorably impact the hospital from a financial basis, because when they get a readmission within 30 days, there’s a penalty associated with that,” said Capasso. “I think case managers know that a lot better than they may know star ratings.”

Hospital systems are reevaluating

Thole said HDG has been meeting with hospital executives in a consulting capacity to discuss patient placement, and finding new ways to partner with hospital systems.

Hospitals are asking themselves if they should purchase nursing homes, how they might partner with them or financially support them if they take on these riskier patients, she said.

“It’s not just the ventilator and wound care patients, it’s also the behavioral health patients. I would say they probably struggle even greater with behavioral health and finding a location in which these patients can be successful,” said Thole.

The hardest part is ensuring SNF partners have additional resources, psychological support, and the ability to review medications, she said. All of these aspects can help these patients be in a supportive environment that can keep them stable.

“Under behavioral health, there usually is also [chemical dependency] issues. We don’t have a lot of regulatory support in managing these patients,” said Thole. “They can leave the community whenever they want, and then they can come back, and oftentimes they can come back under the influence of drugs or alcohol, and then we are left to manage them.”

If a resident has an episode like this, Thole said, the facility can usually call and try to get them rehospitalized, or the police could intervene to deescalate the situation.

“They’re in a safe environment and we need to take care of this patient, but with that, we don’t want to put any of our staff and residents at risk,” said Thole. “Oftentimes if they’re in an exacerbated situation, we have to try to get staff to sit with them, be with them, which is adding a layer of cost in a behavioral health situation.”

If a resident isn’t at the SNF for rehabilitation, then the reimbursement falls to Medicaid, she said.

Tiered SNF industry

It’s been suggested before that nursing homes are quickly becoming like mini hospitals, given how much acuity has risen among residents. With the types of patients changing so much, Thole believes it makes sense to have a tiered SNF industry based on acuity, or challenging patients.

It would better reflect an industry that is straddling two worlds right now, she said – old expectations of a nursing home, more of a homelike long-term model, and new expectations to take on higher acuity and more challenging patients.

“It’s a double standard with the regulations, and our ability to take on these difficult and complex patients,” said Thole.

Thole would like to see different licensures and a different reimbursement system for SNFs that take on higher acuity.

“I think people would consider doing that line of nursing home care, or skilled nursing home care,” said Thole. “In my profession, it was probably the most rewarding time for me. We had this amazing team that took on these difficult patients … we got to celebrate those successes, and people were able to go home.”

Capasso, however, doesn’t see a tiered SNF industry happening in future.

“There are already different facilities that are classified differently, and already have higher levels of complexity needed. Inpatient rehab facilities [IRFs] and long term acute care hospitals [LTACs] – when someone needs a ventilator, they call a long term acute care hospital,” said Capasso. “That’s what they’re designed for.”

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