Anthony Laflen, Sr. Director, Industry Market Leader at PointClickCare, is intimately familiar with the challenges — and opportunities —today’s skilled nursing payment landscape presents.
From spending more than a decade working in the skilled nursing provider world and today in his role with PointClickcare helping care organizations equip themselves with data, Laflen brings perspectives from all sides of the conversation about the payment plans of tomorrow.
In this Payment Perspectives interview, Laflen explains how skilled nursing providers can provide their value to payers, what they need to do differently in order to gain entry to payment conversations, and what he sees as the future of the skilled nursing payment landscape.
Skilled Nursing News: What do healthcare providers need to do differently when it comes to payment evolution?
Anthony Laflen: They need to embrace the shift from fee-for-service to capitation. Fee-for-service is literally that, you’re paid per appointment, or per procedure, or even per patient day. Whereas with capitation, you’re given a lump sum and assumed to manage all the costs associated with the care of the individual. I believe that most providers do not fundamentally understand that difference, and to fully understand the objectives and rules of the road, they need to be willing to accept the risks and rewards associated with capitation.
How can skilled nursing providers prove their value to payers?
I see this in two basic areas. First, they need to understand the critical role that they truly play. As a health plan, I may have members in my enrollment file that span a variety of age brackets. For example, my 65-year-old female tennis-playing individual who’s in the health plan is going to cost me far less than an 83-year-old man with chronic conditions and has frequent visits to the Emergency Department. Because of the disparity and because of the focus that skilled nursing homes have on the latter and not the former, they need to understand that they have a greater impact on the overall margin and financial wellbeing of the health plan.
The way we treat a skilled nursing facility cost is far more than the costs associated with anyone else within an enrollment file. The need for these skilled services is directly correlated to these higher costs. If you can demonstrate an ability to manage costs through a reduction in length of need, or more importantly, a successful discharge to a lower, less expensive level of care, these should be factored into your annual negotiations and they should become critical elements in proving your value to a payer.
The second piece is that most providers need to learn the new language. I’ll start with the basics. For all the skilled nursing homes that operate a facility, do they understand which health plans have the highest population in a market? Do they know which health plans they should be contracting with? Do they understand the basics of what they’re doing on a day-to-day basis and how it has an impact on that health plan?
For example, when I was in the provider space, we took the time and energy to become a health plan. We were both a skilled nursing home operator and a Medicare Advantage special needs plan. As soon as I could see the impact that my facility was having on a day-to-day basis to the costs to my plan, it became very obvious to me that the way with which I was approaching annual contract negotiations with Humana or Aetna or Blue Cross should be changed.
I should be able to speak their language. I should say things like, “Hey, can I see the number of members you’ve sent me in the last year? Did you know that we had a reduction in antipsychotic medications of this percentage?” or “We were able to see forms of adherence to vaccinations for this percentage of your patients,” or maybe, “We were adhering to specific disease protocol management around diabetes. I know that’s a key element for you and your HEDIS scores or five-star ratings for the health plans and understanding the dollars that I’m creating.”
What is something you think most SNF providers would need to change in order to keep up with the payment evolution?
A part of that goes to something I mentioned. I don’t think most providers even know which health plans have the most seniors in their enrollment file. Here’s what I mean. We track this on a monthly basis, and I’m shocked at how enrollment shifts from one plan to the other. UnitedHealthcare may be running a heavy ad campaign around lower copays and that becomes enticing to Blue Cross members, so they abandon ship and jump over, but I don’t think that providers really keep tabs on that.
I make the distinction because when I was running the facilities, I always was evaluating: Who has the dominant market share? Whom should I be contracting with? Then once I knew the who, I would pick the phone up and find out the what. “Hi, X, Y, Z health plan, I’m noticing an uptick in enrollment. I’d like to explore contracting with you. Can you tell me a little bit about your plans and objectives for seniors in the 80-plus bracket? What are you trying to achieve that might be different than, say, Blue Cross or others?”
Now, in the special needs plan world where I came from, that’s easy; we had to submit a model of care, we had to be very clear and we had to articulate both to CMS and to the general populace what it was that we were trying to achieve. Normal MA plans don’t do this, but you can have a very frank conversation with these folks and you can find that out.
Now that you know the who and you know the what, the question becomes, do I have the reporting tools that are going to track the things that I’m doing on a day-to-day basis with their members so that I can measure my performance? With this, I can not only hold myself and my staff accountable, but I can capture all of that good work so that at the end of the contract period, when it comes time to renegotiate, it’s not, “Hey, Anthony, we’re going to pay you X, Y, Z percentage of Medicare rates or we’re going to see a reduction of whatever,” it’s “You sent me this many thousand patients and I did the following things which I know echo back to your goals and/or have a direct impact on your HEDIS scores and your Five-Star ratings.” It’s really understanding the language that’s being articulated between the two parties and connecting the dots.
How does healthcare technology support the shift to new payment models?
Technology has to be the backbone for benchmarking, for accountability, even for contract management. It has to be live data, period. It is so frustrating as a provider to be held accountable or measured against claims data, or worse, Medicare claims data. I look at things like interoperability standards and access to patient data. I see this as the fundamental foundational steps that are going to lay down a level playing field. It’s going to allow for us all to truly go at risk and go back to those plans and say, “I’ll tell you what, instead of these titrated approaches to reimbursement, why don’t you just give me X amount of dollars and I’ll manage the risk. Give me a capitated payment. Pay me $12,000 per member you send my way and I’ll manage the outcome.
“I’ll manage the length of stay, the drug adherence, I’ll hit the HEDIS measures you want. I’ll manage around readmissions, and for those carve out elements like HEDIS scores or medication management or length of stay or readmissions, if I do well, let’s use technology to hold me accountable and then we can all agree that we would get a bonus payment.” That becomes fundamental value-based care, and that’s something that without technology at the core of the narrative, is impossible.
Complete this sentence: If I could change one thing about the healthcare payment landscape it would be…
I’d like to see Medicaid embrace value-based care. I’ll elaborate. When I look at population trends on a state-by-state basis, I’m struck by the number of states that do not have steady cost increases to Medicaid reimbursement for their members in a long state population. In some states, it’s woefully underfunded. I understand the political nature of the narrative. I understand that there are a finite number of dollars, but let’s look at value-based care as a way to incentivize providers for doing a good job.
Imagine a world where the state Medicaid office had a fairly reasonable base rate, but then said, “OK, everybody, we’re going to share live data. We’re going to grab that information and we’re going to hold everybody accountable. If you can show the following reductions in these areas or improvement in these areas, let’s use this live data to hold everybody accountable and let’s have some kind of reward system.” To me, that becomes the future. That becomes what I think the government really intended around value-based care.
Complete this sentence. The future of healthcare payment is…
Value-based care.
What is the most misunderstood aspect of skilled nursing payments that you would like to debunk?
That the cost associated with a stay in this setting is excessive or unnecessary. I think that efforts to divert away from skilled nursing settings were driven early on largely by the financial incentives that were put in place by CMS and the early forms of bundled payment programs. If you think about those programs when they first rolled out, they were overly focused on the financial outcomes and they were often championed by a third-party convener.
The convener usually was not the provider nor upstream or down, it was a third party who was brought in to reward themselves around saving money and achieving better outcomes. It played itself out. Early on, conveners were diverting patients out of skilled nursing settings because they perceived the setting as being unnecessary or expensive and pushing patients into lower-cost settings.
I understand the financial dynamics, but the problem is the data they were using —which was claims data, outdated, and generally not well thought out. I was in many conversations early on where a convener was saying things like, “Hey, here is the number of patients you’ve accepted in the last year, here are the patients broken down by diagnosis group, and here’s your average length of stay. We’re going to change that so that your new length of stay for a COPD patient or AMI patient is lower.”
All of us in the room are raising our hands and saying, “How do you know that’s the appropriate time or length of need for the patients in the setting?” They couldn’t give an articulate or good answer. This dart throw approach at saving money really put a bad taste in the mouth of a lot of providers.
In my mind, we really need to use value-based care and we need to be using live data to assess the appropriate length of stay — or I should say length of need — in a skilled nursing setting because it is a highly critical and important part of the patient’s journey in the continuum.
