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Climbing the Post-Acute Preferred Provider List

7/10/2017

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:

· 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.

Electronic Health Records, The Most Important Part is Deployment

6/21/2017

The CMS (Center for Medicaid and Medicare) incentive program is being rolled out in 3 stages. Stage 1 requires the use of Electronic Health Records or (EHRs) by 2015. Stage 2 requires integration with Clinical Decision Support systems (CDS). Then Stage 3 requires providers to demonstrate outcomes with the data collected. The idea behind CDS is to use the data collected and have it assist physicians with all elements of care. Many physicians contend that it makes the process more convoluted. Others say that it helps them ask the right questions, and has the potential to prescribe more effective affordable drugs thus reducing cost.
There are studies on both sides of the argument making their case. One important thing to note is that the studies demonstrating a reduction in cost and improved care, based on EHRs, are extremely large studies. They often show that Hospitals using EHRs have better outcomes and reduced costs. The flaw with that correlation is that these hospitals willingly incorporated the system into their workflow without being required to. These are hospitals that were ahead of the game and often times trailblazers in their field. Many articles correctly point out that the most important part of a Clinical Decision Support System is its deployment. If the model of your organization is not based around this CDS system, then it will not work. If you need to go into separate systems to bill, order tests, or still rely on dated material, this will merely be a time waste. More often than not it ends up costing the hospital money. Numerous studies involving individual hospitals and their deployment show that they have increased administrative time spent, and no positive care received correlation.
It is for that reason that it is more important now than ever for hospitals to analyze their work flow and truly incorporate these systems into their operation. Many interviews with Doctors find that they are are willing to use this technology but not if it is merely something else they need to do. It needs to integrate with your current systems, or replace them. Otherwise it will end up taking more time and costing the hospital money. If your organization is implementing an EHR system merely to avoid penalties on reimbursements, then it will likely not produce its intended results. It will leave your doctors feeling frustrated with its complexities and it will end up costing your organization money. It is for that reason that we must take some time to map out the work flow and ensure that the integrations are seamless. Then, and only then, will it do what it is intended to do for your organization.

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Long-Term Care and Medicaid in NJ

5/16/2017

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At the moment in New Jersey, the medicaid payment process for nursing homes and assisted living facilities works the way you would expect. The state has a qualification process for skilled nursing care and Medicaid qualified patients are able to select from those facilities that best suit them, whether it is due to location, size, friends, or just the atmosphere. This means that when you are looking for a facility for mom or dad, you get to choose the facility that suits them best.

The major change happening is that the Medicaid Managed Care Plans in New Jersey (Horizon, United, AmeriGroup) will soon be allowed to negotiate contracts with these facilities and they will have the ability to not contract with all Medicaid qualified facilities. There are many reasons that it makes a lot of sense for the MLTSS (Medicaid Managed Long Term Service and Support) to make this change. The main reasons for it can probably be attributed to consistent quality of care, and frankly it makes fiscal sense for them. This means there will be a lot more restrictions of which facilities you can choose for your loved ones.

As far as the implications for those facilities, the fact that these MCO's will not need to contract with all of the Medicaid qualified facilities, means that small independent facilities should be very conscious of their next moves. Many independent long-term care facilities will have a lot of difficulty accepting the reimbursement rates that the MCO's will be offering Medicaid reimbursement. Additionally the less beds you have in the Medicaid Plan, and the less reach you have to regions within NJ, means that you will have a lot less negotiating power with the MCO’s and in many cases, will be subject to their whim.

That is not to say these facilities will no longer be able to survive, or even that they will significantly suffer. This just means that they will likely have to begin to rely less on a Medicaid model and more on other possibilities. Many have already begun to shift their focus to higher acuity rehabilitations (which are covered under Medicare) and others have begun to focus on a private payer model.

Either way it is something that will be changing in New Jersey and it is certainly something to keep our eyes on.

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Patient Protection and Affordable Care Act

3/21/2017

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All health care providers are striving to comply with the many changes required by the Patient Protection and Affordable Care Act. DKA has been very successful in helping clients identify the many emerging opportunities that will result from the changes resulting from the Act, including:

Post Acute network development
Market share expansion
Quality enhancements
Re-admission prevention plans
Service coordination

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Trends

2/27/2017

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Prior to 2001, all New Jersey acute care hospitals were owned by not-for-profit entities. Today, five New Jersey hospitals are owned by for-profit entities and there are at least five additional hospital transactions pending with for-profit entities. All of the pending transactions involve a partnership between the existing not-for-profit hospital with a for-profit partner as the managing entity and source of capital.

Most New Jersey hospitals are evaluating their strategic options regarding merging or integrating their organization with other New Jersey or regional health care providers to increase their regional market share and integrate the cost of managing services.

Nearly all hospitals are involved in the evaluation of all aspects of their operation by outside experts to insure maximum efficiency.

Post acute providers are under increased scrutiny to more effectively manage their admissions and discharges. At the same time, post acute providers are also seeing a dramatic increase in the acuity level of patients in their facilities, resulting in more frequent re-admissions to area hospitals.

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Solutions

1/17/2017

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Services that are no longer cost effective should be phased out or merged with area providers. Many of the ancillary and post acute services offered by hospitals are inefficiently operated, but still have significant asset value. In many situations, joint ventures with sole-service providers will insure maximum efficiency and immediate cash returns. In addition, all options, including a non-inpatient campus, should be considered before reaching a crisis point.

Access to capital is one of the greatest challenges to existing hospitals and will be the determining factor for surviving entities. The emerging partnerships between for-profit and not-for-profit entities offers a mutually beneficial structure that provides investment capital, efficient operating expertise and a community driven mission that will insure the survival and growth of the hospital. A careful evaluation of the best alternative is critical.

In the emerging health care environment, market share growth is essential to leverage the hospital's position with managed care payers. All hospitals and systems should carefully solicit and evaluate their strategic options with other systems. Outside experts provide the most discrete and objective data to determine the best possible partners.

There are many reputable companies evolving to assist hospitals in the evaluation of billing, operations and administration. They are highly specialized and are able to identify, with specific data, dollars that are rightfully owed to the hospital or services that are provided that may be inappropriately billed. These services are provided on a contingency basis, with minimal disruption to hospital staff.

Many New Jersey hospitals have initiated working groups with area post acute providers to develop mutually beneficial protocols for referrals, care models, medical leadership and re-admission policies. Third party facilitators have been very successful in meeting the needs of both the hospital and post acute provider.

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Climbing the Post-Acute Preferred Provider List

Electronic Health Records, The Most Important Part is Deployment

Long-Term Care and Medicaid in NJ

Patient Protection and Affordable Care Act

Trends

Solutions

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