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How physicians should change thinking to deal with bundled payments

For bundled-payment systems, physicians need to change the way they think, says an article in NEJM Catalyst. Among the recommendations:

“Assume leadership of the ‘next site of care’ decision during hospital discharge planning.”

“Physicians can no longer default to the discharge team — case managers, physical therapists, nurses, and social workers — when deciding on the next site of care. Instead, physicians will be called upon to be the team leader as next site of care planning is carried out. This involves understanding the patient needs that determine the most appropriate next site of care and grasping the differing capabilities of home health agencies (HHAs), skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term acute care hospitals (LTACs).”

“Ensure that patients are mobilized early and often.”

”Regardless of a patient’s principle diagnosis and co-morbid illnesses, functional status has a major impact on recovery. During hospitalization, patients remain in bed too often, as the staff focuses on delivering medications and other treatments. The deleterious effects of immobility are well documented. Bundled payment models provide new incentives to avoid keeping patients in bed needlessly, as immobility and deconditioning increases the chances for facility-based care after discharge.”

”Ensure that patients’ goals of care are elicited, and when appropriate, palliative or hospice care is delivered.”

”Physicians must have the conversational skills to draw out patients’ goals of care, especially where advanced or severe chronic illness is involved. Patients are often relieved when their physician brings up the matter of care goals. In some cases, onerous interventions like hospitalization, emergency room visits, or procedures may be avoided in keeping with a patient’s wishes.”

To read the whole piece, please hit this link.

MedPAC backs higher rates for certain hospitals, physicians


The Medicare Payment Advisory Commission has recommended that acute-care hospitals and physicians get higher payments in 2018 but not ambulatory surgery centers, skilled-nursing facilities and inpatient rehabilitation facilities.

MedPAC commissioners recommended that the government boost Medicare payments for hospital inpatient and outpatient services by 1.85 percent and 0.5 percent for physicians.  Acute-care hospitals and physicians both had slight increases in their Medicare volumes in 2015.

In recommending against raises for nonhospital-linked ambulatory surgery centers, the commissioners noted that those outpatient facilities seem to be very financially healthy at current reimbursement rates.

MedPAC also argued that   skilled-nursing facilities, hospices and long-term-care hospitals don’t need higher rates and suggested modest cuts for home-health agencies and inpatient rehabilitation facilities because both groups  have profit margins ranging from 18 percent to 41.5 percent. The average profit margin for companies in the S&P 500 is about 8 percent.

For inpatient rehabilitation facilities specifically, MedPAC says that Medicare payments substantially exceed the costs of care.

Now expect an avalanche of lobbying of politicians and regulators in Washington so that these groups can maintain their very high profit margins.

To read more, please hit this link.


Nursing homes stressed as move to value-based reimbursement intensifies

In a new report, Stackpole Associates has commented on and summarized  data  that the nursing-home industry has been avoiding for several years.
Of particular interest to Cambridge Management Group is the effect on nursing homes of moving from volume to value, since CMG has been spending a lot of time in helping clients do that in recent years.
 Among Stackpole’s observations:

“Declining demand in long-term care markets is not a popular topic, but the inaugural SNF {skilled nursing facility} report from the National Investment Center for Seniors Housing & Care (NIC) clearly shows this trend. The occupancy rates in long-term care markets have been dropping, and in the SNF category, occupancy fell from just under 85% in October 2011 to 82.8% in December 2015, according to NIC. The decline in occupancy in this specific long-term care market would have been worse if owners and operators had not been removing capacity (taking beds off-line) from the system progressively over the same period of time. When both the number of beds is declining, and occupancy is decreasing, how can this be described as anything but a late mature, early declining market?”

“The biggest single factor in the decline in demand in the long-term care markets is the Demographic Dip or Birth Dearth. Demographics are like gravity; you can learn to work with it, but you can’t deny it.”

We at CMG take issue with part of Stackpole’s  remarks below. The implication  that nursing homes will only be available for rich people is not correct.    Strong skilled nursing facilities are emerging in the Medicaid sector.

“Compounding the challenges of declining long-term care markets, are the initiatives by CMS and … managed care organizations to reduce utilization, and ‘squeeze out’ margin in the sector. The transition from volume-based payments to value-based payments through such mechanisms as Accountable Care Organizations (ACOs) and Bundled Payment for Care Improvement (BPCI) are laudable and needed, but these will have devastating effects on the sector. The shift from volume to value will benefit the strongest (i.e., SNFs with the best quality payor mix) and disproportionately hurt SNFs serving the most vulnerable populations in our society. As intermediaries and value-based payment initiatives reduce utilization, and margin from the sector, the weakest will be forced to either close or merge with other, bigger and stronger systems.”


Closing in on unified payment system for post-acute care


The Medicare Payment Advisory Commission  (MedPAC) will vote on a formal report next month that outlines a unified payment system for post-acute care.

The new policy will change how Medicare reimburses skilled-nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term-care hospitals, establishing  rates according to specific patient conditions instead of the kind of post-acute-care setting hosting the beneficiary.HHS will have until 2022 to develop an actual pay prototype.

“A unified post-acute-care payment system will have the most adverse impact on inpatient rehabilitation facilities and long-term-care hospitals, according to a MedPAC analysis. That’s because many of the types of stays treated in these settings are also treated in lower-cost settings,” reported Modern Healthcare.

“Therefore, the predicted costs for these settings will be lower than their actual costs because the model will average out payment, MedPAC said. A transition period would give long-term-care hospitals and inpatient rehabilitation facilities time to adjust their costs.”

“Skilled-nursing facilities will benefit because payments would consider the medical complexity of patients often treated there.”


Medication reconciliation cuts readmissions


Riya Pulicharam, M.D., and her colleagues, writing in Hospital Impact, have found that medication reconciliation between care encounters with clinicians is a good way to lower hospital readmissions and save money.

They discuss an initiative implemented by HealthCare Partners-California. The program connects  a team of pharmacists and pharmacy students with patients discharged from participating skilled-nursing facilities.

Dr . Pulicharam writes that within 72 hours of the patient’s return home, a member of the pharmacy team “reviews medication discrepancies, discusses possible interventions and develops an action plan, which often includes contacting the discharging physician and providing comprehensive education to the patient and his or her family.”

She adds:  “Results of the pilot program, to date, have been remarkable. Of 226 patients discharged during a six-month period in 2014, 79 percent required reconciliation of their medication lists and 53 percent needed some sort of change or intervention to their therapies….”

“HealthCare Partners saw lower 30-day all-cause readmission rates (8.20 percent) compared to other SNFs in California with similar patient compositions and characteristics, but without a pharmacist medication reconciliation program (15.32 percent). Year-over-year analysis of the intervention program showed a decrease in 30-day acute readmission rates from 10.43 percent in 2013 (pre-intervention year) to 8.20 percent in 2014 (intervention year).”

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