When it comes to understanding the complexity of today’s payment models, PointClickCare’s Steve Buslovich boils it down. His technology platform Patient Pattern, recently acquired by PointClickCare, is geared specifically toward aligning payers and providers in care management for the best interest of all players involved.
In this Payment Perspectives interview, Buslovich shares his outlook on value-based care models, including some of the blind spots for skilled nursing providers, as well as his wish list for today’s payment landscape.
Skilled Nursing News: In your view, what do healthcare providers need to do differently when it comes to payment evolution and all the changes taking place?
The pressures in the market have drastically evolved. CMS has instituted a policy mandating that every single provider participate in a value-based care model of some nature by 2030. That doesn’t leave us with a lot of time, and they’re pushing a lot of buttons to accelerate that transition.
COVID has also accelerated that thought process, particularly with the changes in cost containment, census reduction, and changes in acute stay referrals, and the need to drive additional reimbursement to health care facilities. Health care operators are really trying to understand what other revenue sources exist. As that reimbursement landscape continues to evolve, there’s great opportunity to take advantage of some of these newer models. Some examples of these models include things like institutional special needs plans (ISNPs), institutional equivalent special needs plans (ieSNPs), ACO, and ACO REACH. Programs of All-Inclusive Care for the Elderly (PACE) are growing as well.
We’re seeing an explosion of Medicare Advantage growth in this market. What providers really need to do differently is, first, understand the population that they’re managing. Ask yourself, who’s in my building, what kind of risk exists, and can I assume that level of risk? There are two ways to look at it. One is financial risk. Whether providers think about it this way or not, they’re already taking risk for individuals and residents in their facilities through PDPM. They are accepting a daily rate for a patient with certain characteristics based on conditions and diagnoses. They have to be able to manage expenditures within that daily rate model. If the costs exceed the daily rate, they’re on the hook, and they can lose their shirt if they don’t really manage utilization and drive favorable outcomes.
These other risk bearing models take it to a more sophisticated level. As you get to the spectrum of what we consider active risk management where you become a health plan, there’s a fairly wide spectrum along the risk continuum where you can form a joint venture with health plans, or one can contract and share in some of the upside and the shared savings. As you assume different levels of risk, there are different levels of opportunity from a financial standpoint. What facility operators often need to do differently is assess this risk and understand whether they can manage and handle the population that reside in their facilities. Do you possess the capital it takes to launch and withstand multi-year financial risk?
Ultimately those are the first two steps. The third is asking whether you can operate and fulfill all the administrative requirements of a health plan. That really requires institutional knowledge of how health plans code, which is very different from how facilities code. You need to look at your data and evaluate your onsite medical services. Are you able to drive outcomes today in the fee-for-service world that would position you well to evolve into a value-based care payment model? That’s a different ideology and approach to operating.
What is something you think most skilled nursing providers need to change in order to keep up with this evolution, or to take advantage of some of those value-based programs?
The first thing to consider is scale. Even some of the larger chains out there don’t have enough scale to be able to handle risk — meaning with just a few catastrophic events they’re upside down. You need scale and that would require partnership of some nature with other providers in the market, such as an MSO or a plan that’s in multiple markets to be able to distribute some of that risk.
We hear of many operators that come to us for guidance as they express interest in getting involved in some new payment model, but they don’t have enough of a population on their own to do it themselves. There are partners out there that are actually growing fairly quickly by partnering with senior living and institutional providers to be able to practically help them participate in some of these new payment models that are otherwise unavailable to them as stand alone.
How does healthcare technology support the shift to new payment models?
We are living through a fascinating new era where technology is accelerating the growth and operations of new payment models. Technology is playing an increasingly important role in health care payment. For example, during COVID we saw telemedicine and remote monitoring technologies take off with the idea to reduce costs and improve outcomes through increased access. Additionally, there’s a need to streamline data flow when you are participating in value-based care models, or any type of risk-bearing arrangement.
The most important thing is to understand where your patients are all the time. They may be transitioning in and out of buildings, to and from hospitals and communities. You need to be able to track them through technology, which Collective Medical Technologies — now part of PointClickCare — offers across the country. You need to then be able to understand claims data, in order to understand your expenditures and your total cost of care.
You need to be able to process claims as a health plan and understand utilization and your coding. In a value-based care model you’re typically coding HCCs which are hierarchical coding categories. Those HCCs are very different coding libraries from PDPM associated ICD-10 codes.
What happens currently is if you have a Part A Medicare patient that comes into a building, the building is coding them for a PDPM type of reimbursement model. Many ICD-10 codes that have value in a PDPM environment do not translate to HCC equivalent values. That HCC aggregate creates a RAF score, the risk adjustment factor, and the RAF score is what drives your monthly payment as a Value-Based Care Program.
The RAF determines your per member per month reimbursement for the health plan as a way to gauge actuarial risk of future expenditures. The building needs to share data and documentation around those diagnoses in order to receive credit for the patient risk they are assuming. The way a value-based care model has typically worked is that you only get credit for what you code this year. Codes expire annually and you essentially start from scratch
The way Medicare thinks about it is — and this is a crude example — if you had an amputation in 2022, but you didn’t code it in the same period in 2023, it’s as if your leg grew back. That’s not typically how facility operators have ever had to think about coding. You need technology to be able to connect all those dots so that you are credited for conditions that you’re probably managing and providing care for and taking risk on.
We don’t underestimate the challenge, particularly as you have multiple payment models to manage in a single care setting. You have your Part A fee-for-service, then you have your ACO, ACO REACH models, institutional special needs plans, and you have Medicaid-related coding. Being able to keep track of that and even understand who the payer is for a particular resident at a particular time is very difficult without the right technology.
On top of that, you now have to document your encounters and follow a model of care that CMS approves for your at-risk members, which is more of a medical care plan than a nursing-level care plan. A lot of facility operators might think, we’re already care planning for this population in the building, however, those care plans are nursing-level care plans that are designed to meet a regulatory need for the nursing facility.
The plan has a medical model care plan, a model of care that they have been approved for that they have to follow. Being able to understand the cadence of when certain visits need to occur, when certain documentation needs to occur, when interdisciplinary communication needs to occur is really challenging without the right technology. That was the thesis behind Patient Pattern coming together with PointClickCare to bridge the data gaps, reduce administrative workflows, and fulfill the Model of Care reporting needs.
Today, the incentives are misaligned for multiple stakeholders involved in these processes. In order to achieve success, the operational needs, both clinically and administratively between the facility, the health plan, and the practice provider groups that are either contracted or employed by these organizations need to all be aligned. What we’re trying to do with PointClickCare is really bring everybody together to create automated reporting, reduce administrative burden, and align incentives.
Complete the sentence. If I could change one thing about the health care payment landscape it would be…
… to seamlessly integrate Medicare and Medicaid programs. I think this is a huge struggle nationally. Every state has their own Medicaid program, with different requirements, different assessments, and different coding and reimbursement mechanisms. If I had a wish list that would be my number one wish: to align and integrate state Medicaid and federal Medicare requirements.
The future of healthcare payment is …
…likely to evolve in response to changing needs and advances in technology. I think there are several trends already shaping the future of health care payment including value-based care, technology-driven payment models, increased transparency, and interoperability. The growing need for data exchange and continuity of information so that you’re really following the patient, not necessarily the care setting.
What is the most misunderstood aspect of skilled nursing payments you would like to correct?
I would say that the most misunderstood concept is the way Medicare Advantage is reimbursed. Healthcare delivery organizations like skilled nursing providers sometimes don’t always understand the value their long-term residents can bring to the organization.
I think the more providers understand how health plans are reimbursed and the mechanisms and the levers that they can influence, the more successful they’re going to be in taking on risks for residents in their facilities as VBC becomes the rule, and no longer the exception.