Bun­dled-pay­ment demo has nurs­ing homes see­ing stars

Modern Healthcare - - NEWS - By Me­lanie Evans

Hos­pi­tals in more than five dozen met­ro­pol­i­tan ar­eas will soon have no choice but to take bun­dled pay­ments from Medi­care for hip and knee re­place­ments. And the skilled-nurs­ing fa­cil­i­ties that do busi­ness with them face a stark re­al­ity of their own.

Medi­care will give hun­dreds of hos­pi­tals more flex­i­bil­ity in let­ting pa­tients re­cover from such pro­ce­dures in brief nurs­ing home stays, which are sig­nif­i­cantly less ex­pen­sive than hos­pi­tal care. But only nurs­ing homes that rank av­er­age or bet­ter on na­tional qual­ity scores will qual­ify for a waiver. That will ex­clude 1 out of 3 nurs­ing homes in the 67 cho­sen ar­eas from get­ting re­fer­rals for ser­vices cov­ered in the pay­ment bun­dles, ac­cord­ing to an anal­y­sis of the mar­kets, and the lat­est scores on Medi­care’s fives­tar qual­ity rat­ings. In some ar­eas, as many as 80% of nurs­ing homes will be dis­qual­i­fied.

The pay­ment pro­gram will make hos­pi­tals fi­nan­cially ac­count­able for the cost and qual­ity of all med­i­cal ser­vices re­lated to lower-joint re­place­ments dur­ing a pa­tient’s hos­pi­tal stay and for 90 days af­ter. Hos­pi­tals win by hold­ing costs be­low what they’re paid un­der the bun­dle.

The pro­gram waives lim­its on us­ing skilled-nurs­ing fa­cil­i­ties—specif­i­cally, a pa­tient can be re­ferred to a nurs­ing home with­out a hos­pi­tal stay span­ning at least three days. But the fa­cil­ity must have at least three stars on the CMS’ Nurs­ing Home Com­pare web­site.

The CMS has in­cor­po­rated the strat­egy in other ini­tia­tives, but its use in the new manda­tory demonstration is a sig­nif­i­cant ex­pan­sion, and un­der­scores the Obama ad­min­is­tra­tion’s ea­ger­ness to tie more Medi­care spend­ing to qual­ity. It also may ac­cel­er­ate the con­sol­i­da­tion al­ready un­der­way among post-acute providers.

“This is the new re­al­ity,” said David Grabowski, a Har­vard health pol­icy pro­fes­sor. “You can’t play here if you’re not a three-star fa­cil­ity.”

The pol­icy high­lights the wide vari­a­tions in qual­ity pro­vided to pa­tients too frail to go home but too healthy for the hos­pi­tal. Medi­care ben­e­fi­cia­ries with new hips and knees fre­quently be­long in that cat­e­gory, and lower-joint re­place­ment is the most com­mon surgery for Medi­care pa­tients. Medi­care spend­ing for skilled nurs­ing varies by as much as 50% from mar­ket to mar­ket. The manda­tory bun­dle starts in April for hos­pi­tals, but the new skilled-nurs­ing pol­icy takes ef­fect in 2017. Pa­tients will still be free to choose a nurs­ing home out­side the hos­pi­tal’s re­fer­ral net­work, but those re­fer­rals heav­ily in­flu­ence pa­tient choices. Plus, Medi­care won’t pay for skilled nurs­ing at a fa­cil­ity with fewer than three stars un­less the pa­tient has been hos­pi­tal­ized for three or more days be­fore be­ing trans­ferred.

That means nurs­ing homes with lower qual­ity rat­ings could see a sig­nif­i­cant loss in pa­tients and rev­enue, cre­at­ing pres­sure in the com­ing year to bol­ster per­for­mance be­fore the pol­icy takes ef­fect.

“The hos­pi­tals, and dis­charge team at the hos­pi­tal, and the physi­cian, they have very sig­nif­i­cant sway into where that pa­tient goes,” said James Michel, se­nior di­rec­tor of Medi­care re­im­burse­ment pol­icy for the Amer­i­can Health Care As­so­ci­a­tion, a trade group for skilled-nurs­ing, as­sisted-liv­ing and sub­a­cute-care fa­cil­i­ties.

Fif­teen nurs­ing homes op­er­ate in West Mon­roe, La., one of the ar­eas where hos­pi­tals will be com­pelled to man­age care for joint-re­place­ment pa­tients un­der the pay­ment bun­dles. But just three of those fa­cil­i­ties have at

least three stars.

With­out the nec­es­sary stars, “you may not even be al­lowed to com­pete,” said Ed­die Gard­ner, vice pres­i­dent of oper­a­tions for Comm­Care Corp., a not-for­profit com­pany with 11 Louisiana nurs­ing homes, in­clud­ing one in West Mon­roe with one star. Comm­Care is work­ing to im­prove qual­ity across the com­pany so none of its homes for­feit the chance for new rev­enue. The com­pany has two nurs­ing homes in the New Or­leans area in­cluded in the pro­gram. One has one star and the other has four. But nurs­ing homes may find it hard to im­prove their qual­ity scores, Michel said.

Medi­care’s five-star rat­ing com­bines scores in three cat­e­gories: qual­ity, staffing, and health and safety in­spec­tions. The last cat­e­gory drives more than half of the over­all rat­ing. How­ever, stars awarded for in­spec­tion re­sults are based on statewide rank­ings, so nurs­ing homes that rank at the bot­tom com­pared with peers get one star, re­gard­less of per­for­mance. The bun­dled-pay­ment pro­gram also creates in­tense pres­sure for hos­pi­tals to care­fully co­or­di­nate care af­ter pa­tients are dis­charged, and to choose high-qual­ity providers for re­fer­rals.

Un­der other Medi­care re­form ini­tia­tives with sim­i­lar poli­cies on skilled nurs­ing, some hos­pi­tals have ag­gres­sively vet­ted nurs­ing homes to de­velop high­qual­ity net­works. Part­ners Health­Care in Bos­ton added ad­di­tional re­fer­ral cri­te­ria, in­clud­ing nurs­ing staff ten­ure and how quickly doc­tors meet with new pa­tients.

Some hos­pi­tals in ar­eas the CMS picked for the new pro­gram have al­ready started work­ing on sim­i­lar strate­gies. In Flint, Mich., ad­min­is­tra­tors at Hur­ley Med­i­cal Cen­ter met in Septem­ber and ap­proached four skilled-nurs­ing fa­cil­i­ties to dis­cuss a pos­si­ble re­fer­ral net­work. Six of the 15 SNFs in the mar­ket have just one or two stars.

Catholic Health Ini­tia­tives, with 19 hos­pi­tals in­cluded in the pro­gram, has de­vel­oped an ex­ten­sive process to as­sem­ble pre­ferred net­works of posta­cute providers. The En­gle­wood, Colo.-based health sys­tem starts with a re­quest for pro­pos­als, then re­views qual­ity data, con­ducts on-site sur­veys and in­ter­views can­di­dates.

Such strate­gies sug­gest hos­pi­tals are re­spond­ing ex­actly as pol­i­cy­mak­ers in­tended. The bun­dled pay­ment is de­signed to change their cul­ture, said Robert Me­chanic, ex­ec­u­tive di­rec­tor of Bran­deis Univer­sity’s Health In­dus­try Fo­rum. “What they do can’t stop at the hos­pi­tal wall,” he said.

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