Unlike the facility-driven past motivated by reimbursement, the post-acute care patient-centric future will be based on clinical and operational effectiveness and efficiency, with information liquidity serving as the link among disparate providers of care continuum services.
Medicare Payments Essential
Opportunities clearly exist to slow the rate of hospital expenditure growth (see graphic) by further reducing post-discharge readmissions, improving the management of ambulatory care sensitive conditions, increasing patient and caregiver engagement (self-management), utilizing adjunctive remote monitoring and other technologies, treating complex patients at home and considering palliative and hospice care at the appropriate time.
Opportunities also exist for hospitals to discharge patients to the appropriate site of care based on emerging data-driven evidence.
Approximately 44 percent of the 13.7 million Medicare beneficiaries discharged from hospitals receive post-acute care (i.e., from skilled nursing facilities [SNFs] 20.3 percent; homecare 15.9 percent; inpatient rehabilitation facilities [IRFs] 3.5 percent; hospice agencies 2.7 percent; and long-term acute care hospitals [LTACHs] 1.2 percent). Determinants of discharge site include, “patient cognitive status, activity level and functional status; availability of family or companion support, transportation from hospital to home and for follow-up visits and services in the community to assist the patient with ongoing care; ability to obtain medications and services; and the nature of the patient’s current home and suitability for the patient’s conditions (e.g., presence of stairways, cleanliness).”
Medicare accounts for more than 60 percent of reimbursement to hospice, IRFs and LTACHs and is the major driver of profitability for SNFs.
It is important to recognize that the profitability associated with Medicare fee-for-service (FFS) payments varies considerably among segment providers. Volume (higher), location (urban), ownership (for-profit) and cost management (lower) are all determinants of profitability. Excluding LTACHs, opportunities exist for more efficient and quality-oriented providers to gain market share from local competitors. Consolidation is inevitable given the emerging infrastructure requirements.
Future Medicare Paradigm
The Comprehensive Care Joint Replacement (CJR) initiative, effective April 2016 for Medicare FFS beneficiaries in 67 metropolitan statistical areas (MSAs), includes all costs related to Medicare Part A (facility) and Part B (physician services, outpatient services, lab, emergency room [ER] visits, specialty drugs, durable medical equipment [DME], etc.) during a 90-day episode (bundle) starting from date of admission through surgery, hospitalization and recovery, including post-acute care. The CJR program is being expanded to include hip and femur fracture episodes, effective July 2017.
According to a 2013 Institute of Medicine report, post-acute care costs account for 73 percent of the total variation in Medicare costs. The key driver of DRG470 episode costs is hospital readmission.
All-cause hospital readmissions may occur as a result of procedural complications, health care associated infections, preventable adverse drug events, inadequate attention beyond the primary index admission diagnosis to comorbidities and other factors. According to the Medicare Payment Advisory Commission (MedPAC), the SNF avoidable hospitalization rate in 2013 was 15.1 percent, with the 25th percentile at 10.1 percent and the 75th percentile at 18.9 percent.
A new, mandatory 90-day cardiovascular bundled payment model for coronary artery bypass graft (CABG) and heart attack (AMI) patients, the latter treated either medically or via percutaneous intervention (angioplasty, stents), is to begin in 98 MSAs, effective July 2017. Incentives for cardiac rehabilitation are also being provided.
Cardiovascular bundled payment waiver policies include (a) allowing patients to be discharged into a (three-star or higher) nursing home without a three-day hospital stay, (b) allowing non-homebound patients to receive homecare services by a nurse (incident services as part of care plan) without a physician being present and (c) allowing beneficiaries to receive telehealth services at home irrespective of geographic and origination site requirements.
Effective January 1, the Center for Medicare & Medicaid Innovation implemented the Home Health Value-Based Purchasing Model among all home health agencies in nine states: Massachusetts, Maryland, North Carolina, Florida, Washington, Arizona, Iowa, Nebraska and Tennessee. An initial payment adjustment of +/- 3 percent in 2018 (based on 2016 performance) rises to +/- 8 percent by 2022; 29 metrics will be used: 10 process, 15 outcome and 4 new measures from the Outcome and Assessment Information Set (OASIS), Medicare claims data and the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS).
31 percent of Medicare beneficiaries are currently enrolled in Medicare Advantage (MA) plans. Penetration exceeds 40 percent in 5 states, and exceeds 30 percent in 17 states. MA plans tend to have more stringent facility entrance criteria, a lower reimbursement rate and a shorter length-of-stay than comparable Medicare fee-for-service patients.
Data-Driven Utilization and Case Management
Payment reform necessitates a care delivery model focused on the total cost of care, clinical performance and the experience of care. Utilization management (UM) represents an evidence-based, clinical support process to assist physicians, other providers and payers in evaluating the use of medical services based on medical necessity, appropriateness and efficiency.
Case management targets high-cost and moderate-to-high risk patients consuming a disproportionate amount of health care resources. Case managers focus on prevention, proactive intervention and transitions of care. They facilitate care for patients with complex chronic co-morbid conditions and/or psychosocial needs, coordinate care to assure quality outcomes in the most cost-effective manner, reduce avoidable hospital admissions, reduce gaps in care, impact practice quality scores and engender self-management capabilities.
The IMPACT Act of 2014 mandates the development and implementation of a standardized post-acute care assessment tool identifying (a) medical conditions, co-morbidities and impairments such as the ability to hear, see and swallow, and (b) the need for special services, treatments and interventions including ventilator use, dialysis, chemotherapy, central line placement and total parenteral nutrition. A formal CMS analysis of the relationship between risk-adjusted per Medicare beneficiary spending and outcomes will be completed in 2018.
Post-acute care is notable for its site of service, length of stay, complication and readmission rate variation. The advent of CMS payment reform, with the hospital increasingly at risk for the total cost of care, is likely to alter referral patterns to those facilities and agencies with lower costs and higher quality. Interoperable, cloud-based analytic systems able to extract electronic medical record data from disparate sources (hospital, post-acute care, community-based) and utilize validated predictive algorithms as decision support are increasingly essential for effective patient management across the continuum.