Climbing the Post-Acute Preferred Provider List

The Affordable Care Act created a dramatic increase in Medicaid eligibility. While this has decreased the amount of uncompensated care for providers, it has prompted the Center for Medicaid/Medicare (CMS) to implement a gradual reduction in the reimbursement rates for Medicaid patients. Additionally, with the potential for the American Health Care Act (AHCA) to be passed, the Medicaid reimbursement rates are in serious jeopardy. For these reasons, it has become very important for long-term care facilities to diversify their payer mix.

While many facilities have already taken steps in order to create a diversified payer mix, this will prove to be an increasingly difficult task over the course of the next few years. With Medicare’s implementation of Bundled Payments for Care Improvement (BPCI) in full swing, hospitals are now extremely invested in the outcomes of their referrals. We have seen preferred provider lists being implemented at acute care hospitals with a number of measurables to weigh outcomes of patients throughout the entire process of their care. While these preferred provider lists contain a lot of measurable, it was often only utilized to determine a minimum acceptable level of care to be on the list. As the bottom line is becoming more and more important in an outcome based healthcare environment, we are seeing efficiency and results taking precedence over personal relationships. It is for that reason that post-acute facilities must do everything they can to put their facility in a position to continue getting discharges from hospitals that they may have worked with for years. These are the categories that many acute care hospitals:

Quality
The first priority when assessing post-acute facilities is that of quality. There are a number of different measurables that nursing homes can point to, but the most widely accepted standard is the 5-Star system via Nursing Home Compare’s quality metrics. More often than not 5-Star facilities will receive discharges before lower rated facilities. It is for this reason that many 3-4 star facilities are working diligently to get their ratings up, and therefore raise their status on the provider list.

Acuity
The more comprehensive care a facility has the ability to provide, the more likely they will be selected by a hospital. If a higher acuity Medicare patient is being admitted, it is important that the facility be able to meet that need. This will reduce the possibility of readmissions and therefore cost the discharging hospital less money.

Medical Director
This is the one area where relationships still play a major role in preferred provider lists. It is for that reason that the medical director is most important individual at a post-acute facility. The relationship the medical director has with discharging hospitals will be very important to them. It is important that the surrounding hospital(s) feel(s) comfortable discharging their patients to your facility’s director. In many cases successful Medical Directors have worked either directly or in-directly with the surrounding hospitals for a number of years. Additionally, it is important that the director have the ability to work with the hospitals on specific length-of-stay goals and treatment plans.

Location
This is one of the most obvious criteria for post-acute providers working with hospitals. Close proximity to the hospital often means that the post-acute provider will have similar clientele. Additionally, when choosing a post-acute partner, it is important that the patients family be able to visit. Location is often important however it usually a box check to be deemed “close”, rather than the closer the better.

Readmissions
Not having high readmission rates is one of the most important things a post-acute provider can do. The major reason that re-admissions are so low on the list is because it rarely sets you apart from your competition. Re-admissions have become increasingly rare amongst preferred providers as the relationship develops. This is really the lowest bar that must be achieved in order to become a preferred provider.

Additional factors that should be considered:
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· Staffing levels will often set providers apart if they are either on the high or low end, though it is often indicative of the results that are reflected above.

· The ability to have compatibility with the discharging hospitals electronic medical records.

· Hospitals wills often show favor toward those who partner on community health and charity care initiatives.

· The ability to perform diagnostic services without readmissions such as: lab-work, diagnostics, and imaging.

At the moment, many acute-care hospitals are merely collecting all of this data, it is observed but rarely used. Deciding which post-acute provider to discharge to based on quality, competency, relationships, and location aren’t exactly revolutionary ideas. The issue is that up until this point those ideas were judged individually by each doctor. In the future with hospital networks growing larger, there will be a much more stringent process and each hospital will drastically cut down their list until they have a few strong relationships. Much like many Requests for Proposals, if you respond after the RFP is issued you may already be too late. It is important to discuss Medicare discharge processes before the referrals dry up. Speak with anyone who knows the corporate structure, get market analyses on where the Medicare referrals are coming from, and project where the referrals will be coming from in the next 5 years. It’s important to learn the market so you can know where to allocate your facilities resources.