What Is the Patient Driven Payment Model: How Skilled Nursing Providers Can Get Ahead of PDPM

By Jayne Warwick, director of market insights, PointClickCare.

Jayne Warwick
Jayne Warwick

The Patient Driven Payment Model (PDPM) is more than just a new name attached to Medicare payment reform. The shift from Resource Utilization Group (RUG) IV to PDPM moves the skilled nursing reimbursement model away from therapy provision as its main driver. Instead, payment will be determined by the provision of nursing care with higher rates being attached to more clinically complex patients.

PDPM will also align reimbursement with the industry-wide shift to value-based care (as opposed to volume).

It is designed to:

 Why do we need it?

The skilled nursing industry has advocated for payment reform for years. In response to requirements in the IMPACT act of 2014 and the resulting PAMA act, post-acute care must have a unified prospective payment system by 2024. Different post-acute settings use different data to determine payment. PDPM is the beginning of unifying the data tied to reimbursement.

In addition, the Medicare Payment Advisory Commission (MedPAC) and the Office of the Inspector General criticized the current RUG IV system for incentivizing therapy over the provision of clinical care. Essentially, the more therapy minutes provided, the higher a skilled nursing facility would be reimbursed. Since the majority of minimum data sets (MDS) that were submitted in the highest RUGs categories were within five minutes of the 720-minute threshold, the RUG IV system was scrutinized for promoting the threshold as a goal for care, rather than the outcomes of the therapy.

Also, RUG IV has been criticized for its strenuous administrative requirements. Providers needed to complete many assessments for a single Medicare A stay.  For many years, CMS has been under pressure to reduce the administrative burden associated with RUG IV.

These factors illustrate the need to link reimbursement to patient need, as well as the imperative to focus on good clinical care.

 Timeline

The Resident Classification System, Version 1 (RCS-1), was proposed in May 2017. In May 2018, RCS-1 was replaced with PDPM. It was finalized on July 31, 2018 and will go into effect on October 1, 2019.

Benefits

How you can start preparing now

To adequately prepare for PDPM, there are several activities facilities can begin performing to ready themselves for the transition. These steps to change management for PDPM will help any facility succeed through the immediate shift in payment. They will also strongly position a facility to readily adapt to future payment reforms or shifts that may be imposed as all payors transition to the PDPM methodology.

To start, facilities need to understand the plan and the financial, cultural and operational impact it will have on their business. Providers need to consider their current state, as well as areas they want to be successful in once PDPM goes into effect. Homes should be looking at staff skills and competencies to support the shift to a more clinically driven patient population and determine where changes, education, or upskill training is required.

Facilities need to understand the impact of the conversion. For example, will they have the right mix of residents and needs to support revenue goals? This is also the time homes should examine how they capture required documentation and ICD-10 coding practices. Do they have the right information to code appropriately? To get the right code? To accurately code the MDS? This is the foundation for being successful with PDPM.

After facilities understand PDPM and its impact on their business, it is crucial that they standardize their processes and content to capture the right data elements. This will better enable facilities to gain insights into what else they may need to change to be successful, as well as identify gaps, level the playing field for staff care provision, and make possible the measurement of expected outcomes against actual outcomes. This standardization will also serve homes well in the future. PDPM affects Medicare A residents in 2019, but when CMS retires the PPS item set in 2020, homes that have mastered the move to standardization will find the shift to PDPM for all payers much smoother.

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2019 MedTech Predictions: Unlocking the Potential of Digital Health

By Amy Sklar, SVP of advanced manufacturing communities, UBM.

As reported by Rock Health’s Midyear Funding Review, 2018 got off to a roaring start with $3.4 billion for digital health funding in the first six months of the year. All indicators point to continued momentum in 2019, as startups and veteran companies alike work to unlock the potential of digital health technology to increase efficiencies in healthcare delivery and improve patient outcomes.

In the coming year we will see innovations including smart, connected products offering opportunities for new functionality, consumer engagement, and higher product utilization. The industry will additionally see startups enter the space leveraging new capabilities for data collection and analytics to better apply insights to make medicine more precise. To learn more, a panel of experts will expand on this topic, speaking to the evolving nature of digital health at MD&M West Anaheim 2019.

Miniaturization

While nanotechnology isn’t anything new, we will see continued interest in developing the space with an anticipated move toward more catheter-based and minimally invasive procedures. Medical devices are getting smaller with the demand for technology-driven advancements, and rapid developments are being made in design options to enable drug delivery. In particular, breakthroughs in new drugs and biologics are increasingly seeking localized delivery for better therapeutic effects.

Surgical robotics

Medical robotics has an exciting future. At the Medical Design and Manufacturing (MD&M) 2019 conference in Anaheim, we are seeing a significant increase in companies impacting the surgical robotics field. A few key players include Intuitive Surgical, TransEnterix, Medrobotics, Medtronic with its acquisition of Mazor Robotics and Neural Analytics. Robotic-assisted surgery has the potential to improve patient care and vastly increase the efficiency and accuracy of healthcare teams. We are entering a world where surgical robots are more than just a robotic arm. It consists of intraoperative-imaging, surgical navigation, 3D imaging, pre-surgical planning software, among others, that all mesh seamlessly into the surgeon’s workflow to enable improved outcomes.

Augmented reality and virtual reality: Changing the face of healthcare

One of the most exciting areas of development in the medical technology arena is augmented and virtual reality. While augmented reality (AR) and virtual reality (VR) have a variety of benefits, we will see these technologies expanding access to healthcare in 2019. Telemedicine is still in its infancy, but with population health on the forefront of medical technology conversations, 2019 will see major strides in advancing virtual care to support the two thirds of the world’s population that doesn’t have access to safe or affordable surgery.

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Continued Value of Observation in the Modern Age of Medicine

The technology available to diagnose and treat a wide variety of illnesses and ailments continues to improve with every year. While these developments are undoubtedly contributing to increased rates of recovery and preferred patient outcomes, doctors and other medical professionals continue to rely on a relatively basic set of guiding principles when determining the probable causes of disease and the best methods of treatment.

Simply put, physicians learn to pay attention to their patients and watch closely for the signs and symptoms of various illnesses and ailments. More times than not, a trained doctor can make an accurate diagnosis based on physical examination and conversation.

With this in mind, regular folks can easily improve their ability to monitor loved ones for signs of illness by simply improving their observational skills. While we do not advocate for armchair diagnosis — the opinion of a licensed physician is always recommended — the ability to pay attention to the right clues can go a long way in making sure you and those around you are not turning a blind eye to something serious.

For instance, if you’re married to someone who suffered from alcohol or drug dependence in the past, there may be numerous telltale indications of relapse. According to a leading center for drug rehab in Georgia, addicts often retreat from the people in their lives. They often start making excuses for things and neglecting their responsibilities. They often become alienated from their relatives and from society in general. If your husband or wife behaves oddly any time he or she consumes alcohol, then that may denote an issue with alcohol addiction. Addiction to alcohol is a problem that plagues people all around the globe. It plagues people young and old as well. Pinpointing common signs of addiction can do a lot for people who want to help their loved ones nip serious issues in the bud.

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What To Look Out For In The Healthcare Industry During 2019

Dock, Apple Watch Dock, Iphone DockWith AI increasingly playing a role in healthcare, and the cost of insurance continuing to rise, it’s no surprise that people might be feeling a little bit disillusioned and confused as to what to expect this year. However, as the pace of technology continues to accelerate, as does the political situation, it’s all the more reason to keep a sharp focus on where the technology and healthcare in general is heading.

Last year, the new Apple Watch proved that it could potentially save lives by offering an ECG function, and Google has, of course, acquired its own technology with DeepMind. While Facebook had previously dipped its toe in the market with plans of sharing data with health organizations, it has pulled its ambitions after concerns over its use of user data.

Amazon to be involved with healthcare

We all use Amazon for last-minute Christmas presents, book wish-lists and the odd bits and bobs, and Amazon Prime has proven to be a hit among its regular customers. Citi analyst Mark Mary predicted that their subscribers will reach 275 million, up from 101 million at the end of 2017. With that in mind, it might not necessarily come as a surprise that Amazon Prime will not only continue to exist and grow in its current form, but also for healthcare. According to Anurag Gupta, a VP at tech analyst Gartner: “Amazon likes to target two kinds of industry: the first is where they see an opportunity to reform, where it’s not the most user friendly of industries, where there’s a lack of trust. In the case of healthcare, intermediaries like pharmacy benefit managers, drug wholesalers and distributors are ‘sucking a lot of money out of the system.'”

According to Gupta, the reason a lot of big tech industries have such a big focus on healthcare is because, like any commercial business, they have their eyes on any holes in the current market. Unfortunately, the current gap appears to be customer service. Giants like Amazon have experience in customer service where some healthcare brands don’t, which means they are quickly honing in on that market.

According to ZD.net, Amazon Web Services is planning on extending its Comprehend language processing service to medical records. It reported that in a blog post, Amazon Web Services claimed that it was also planning on building a new version that could account for “medical terms, anatomy, conditions, medications and various healthcare terms.” The news site also reported that Amazon had also acquired PillPack, a company that delivers medicines to people’s doors and refills their prescriptions.

Although Amazon isn’t the first to join this market, they certainly seem to be getting everything in order to correspond with their other services.

Petitions to end work-based health insurance

Although half of all Americans get their health insurance through their employers, this still leaves half of US citizens having to cover the costs themselves. Some US citizens even have to take on two or more jobs or get help from wealthier relatives to cover the cost. More than ever, people are campaigning for this to end, as it currently stands as a block (with the exclusion of the current government) to people from potentially receiving healthcare from the government. For those enjoying the benefits of full-time employment and an employer that covers them, 83 percent said their insurance was excellent or good. For those who are not sponsored by an employer for their healthcare, unexpected emergencies can be costly. Investigating alternative finance options and research may be the best option for some.

IBM continues to push Watson

IBM’s CEO Ginni Rometty announced in an interview in January that IBM Watson Health is still “a very important part” of their business. Rometty re-iterated how well their oncology software after it was seemingly being publically criticized for not being up to scratch. She insisted on Watson’s success during a Keynote speech at the Consumer Electronics Show in Las Vegas, despite turning down interviews with other magazines.

STAT news reported some alarming quotes from IBM’s health division, as well as a number of employee layoffs. A big criticism of this software that recommends cancer treatments is that it prioritizes American treatment methods. That said, IBM has reportedly said that it plans to add regional treatment guidelines as well as some expanded real-world data on patient outcomes.

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Next Generation BAA Management Applying: Automation and AI To Reduce Costs and Ensure Compliance

By Greg Waldstreicher, CEO, PHIflow.

Greg Waldstreicher
Greg Waldstreicher

Healthcare organizations face unprecedented compliance challenges when it comes to managing business associate agreements (BAAs) amid frequent data breaches, heightened federal scrutiny and anticipated privacy legislation. Actions by the Office for Civil Rights (OCR) have clearly demonstrated stricter enforcement of HIPAA rules in recent years, and the industry has already witnessed a notable uptick in public shaming and fines associated with missing just a single BAA.

In December 2018 alone, OCR announced two notable settlements. Advanced Care Hospitalists (FL) entered into a $500,000 no-fault settlement with OCR, and Pagosa Springs Medical Center (CO) agreed to pay $111,400, both for missing a single BAA.

Simply put, BAAs have become a cornerstone of OCR compliance initiatives. And the outlook is not likely to change as trends point to continued advancement of privacy laws. As of close of 2018, 12 states had already updated their privacy laws regarding notification to patients, shortening the standard 60 days from the federal guidelines to 45 days, and in some states (CO, FL), the breach notification window is down to 30 days.

Breaches involving protected health information (PHI) are typically reported publicly at the Covered Entity (CE) level. When a breach involving a third party, or Business Associate (BA), occurs, one of the first things the federal government investigates is whether a BAA is in place with the CE. If a BAA does not exist, it typically sets off a chain reaction of investigations into other areas of HIPAA compliance.

While most headlines related to BAA compliance relate to CEs, HIPAA experts predict that 2019 will usher in greater focus on BAs and their management of these agreements as well. Many believe that unprepared BAs—especially small and mid-sized companies that lack resources to address HIPAA compliance—will become targets, increasing industry concern over proper BAA compliance.

Healthcare’s BAA management conundrum

Today’s healthcare organizations are feeling the heat, yet most are challenged to effectively manage BAAs due to limited resources for reviewing and managing massive and growing numbers of these agreements—reaching upwards of several thousand in larger organizations and health systems. Exacerbating this challenge is the current consolidation trend, which creates a fragmented landscape for BAA oversight that extends across multiple departments, facilities, affiliations and a multitude of different owners.

Consequently, manual, inconsistent workflows common to BAA management in today’s organizations open the door to significant risk. In truth, the most basic information often eludes the executive suite in most CEs and BAs, including the total number of existing agreements, where they are located and the terms of each.

BAAs are also the subject of intense negotiations between CEs, BAs and other subcontractors that often result in obligations that go beyond HIPAA and HITECH, causing contractual obligations to vary significantly between agreements. Subsequently, when organizations need to know the terms of these agreements, they must manually extract the information one agreement at a time. Within a framework of manual processes, the resources required to conduct this kind of data extraction across hundreds or thousands of BAAs is simply unfeasible for many organizations.

Yet, compliance professionals need quick and easy access to this information to ensure optimal response to breaches, which have become the norm for healthcare organizations as opposed to the exception. Consider the findings of a 2018 Black Book Market Research study: 90 percent of healthcare organizations have experienced a data breach since the third quarter of 2016, and nearly 50 percent have had more than five.

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Access To Health and Wellness Information and Products Is More Than Ever

Apple Watch, Iphone, Apple, TechnologyNow that it’s January gym memberships are bought by the thousands and cutting sugar becomes popular. And now that its January of 2019, times have changed. Technology has become advanced in ways that health-related resolutions have actually become more manageable. You no longer have to juggle the paper and pen while flipping through a booklet to calculate calories. Improving one’s health means the use of incorporating some of the following technological advances:

Google it

If you’ve ever had a question, chances are you have used Google to find the answer. So there is no reason to not include Google when planning. For example, if you’re looking to lose weight, use Google Maps to find the nearest gym. But, don’t stop there. Take it one step further and check the gym location for fast food or other temptations. For instance, this gym in Corona, CA isn’t surrounded by burger joints and convenience stores, making it less likely for someone to pick up some junk on the way in or out. Google has also developed a specialized feature called “Google Fit” for coaching you to a healthier and active life. Google Fit is the result of collaboration with the American Heart Association (AHA) and focuses on improving heart health.

Breathalyzers

If your health resolution is to cut back on alcohol consummation, this handy device can help. Personal breathalyzers are compact and often Bluetooth enabled to track results to your smartphone. Just pair the device with your smartphone and blow into the device. Sensor technology quickly estimates your blood alcohol content and takes care of any guesswork on your part. Breathalyzers can also be installed to a car to help deter driving under the influence. However, breathalyzer installation should be overseen by a professional to ensure proper function and prevent any damage to the vehicle.

There’s an app for that

Nowadays, there’s an app for just about anything from instant messaging to ordering fast food. So it’s no surprise that there are many fitness trackers and apps available to help with motivation. Wearable fitness trackers such as Fitbit or Apple Watches are great for tracking your steps, calories burned and heart rate during workout sessions. Also, many come with their own apps for cellphones to help record and graph your progress over time. If you’re on a budget you can also look into the following brands of fitness trackers under $50:

If you find yourself lacking motivation, check out the following apps. Several are game based and is sure to get your heart racing:

Nutritional information online

Thankfully with the internet being so widely available, people seeking to eat better can find nutritional information easily available online. Not to mention this makes meal planning around your diet a lot easier. For example, U.S. Department of Agriculture (USDA) Nutrient Database is the ultimate guide to nutritional information and nutrient data for over five thousand foods.

Becoming healthy has changed in the modern year and real signs of progress have made changes easier and convenient. There is no reason not to take advantage of the various technologies available and to find an enjoyable path to a healthier you.

The 340B Drug Pricing Program: A Federal Court Enters the Fray

By Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

The 340B Drug Pricing Program was created in 1992 to give safety net providers — those that deliver a significant level of both healthcare and other health-related services to the uninsured, Medicaid, and other vulnerable populations — discounts on outpatient drugs to “stretch scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” In brief, the program requires drug makers participating in Medicaid and Medicare Part B to provide discounts on outpatient drugs to 340B providers, which include various types of hospitals and certain federal grantees, such as federally qualified health centers and comprehensive hemophilia treatment centers.

For years, the 340B program has been fraught with controversy, with concerns raised about the program’s lack of accountability and oversight, and findings of widespread diversion of benefits (discounted drugs) to ineligible patients.

The nonpartisan Medicare Payment Advisory Committee (MedPAC) found that hospitals in the 340B program receive a minimum discount of 22.5 percent of Average Sales Price (ASP) for drugs paid under the Medicare Hospital Outpatient Prospective Payment System (OPPS). The Office of the Inspector General of the U.S. Department of Health and Human Services (HHS) found that the average 340B discount was 34 percent of ASP, and at least two organizations with 340B members estimated that 340B discounts could be as high as 50 percent of ASP.

Based in part on these findings, in 2017 HHS proposed and finalized a rule implementing a sharp reduction in 340B reimbursement of hospitals by the Centers for Medicare and Medicaid Services from ASP plus 6 percent to ASP minus 22.5 percent, along with an offsetting payment rate increase for non-drug items and services. It was estimated that 85 percent of 340B hospitals would see overall net payment increases in 2018 as a result of these changes, and that 340B hospitals would continue to benefit financially from the program.

Nevertheless, the American Hospital Association (AHA), America’s Essential Hospitals, and the Association of American Medical Colleges—all non-profit hospital associations—filed suits against HHS to block the change.

On Dec. 27, 2018, Washington, D.C. federal district court judge Rudolph Contreras (a Democrat nominated by President Barack Obama), issued a 36-page ruling in favor of the AHA, et al. and struck down the 340B payment reduction, contending that HHS Secretary Alex Azar exceeded his statutory authority by issuing a policy that would “fundamentally rework the statutory scheme.”

Contreras issued a permanent injunction of the new reimbursement policy, but he did not grant the plaintiff’s request for retroactive OPPS payments based on the original reimbursement formula. (HHS is unable to come up with the monies to pay back the hospitals, as they have already been spent.) Contreras ruled that the plaintiffs “are entitled to some relief,” but, recognizing “the potentially drastic impact of …[his] decision on Medicare’s complex administration,” he ordered a supplemental briefing to come to a “proper remedy.”

There are two issues in dispute:

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Why Healthcare Companies Should Better Protect Medical Data

By Brooke Faulkner, freelance writer.

With new technology comes to new terminologies, like cybersecurity. Unfortunately, this new technology also spawns the creation of new methods to bypass security measures. And while data breach may not be a new term or even a new problem, in 2019, it’s become a massive issue, particularly in the healthcare industry.

In 2015 alone, there were more than 750 cyber data breaches, with the top seven cumulatively involving 193 million personal records that were available for hackers to use for fraudulent activities and identity theft. The top three data breaches that year were all in the healthcare industry.

Healthcare records are full of highly sensitive information, from social security numbers and other personal data to medical histories and health insurance information — everything a hacker needs to steal someone’s identity. But besides the wealth of juicy details these records include, it’s the vulnerability that exists in the industry that attracts trouble.

Cybersecurity breaches in healthcare were a problem in 2015. And it’s a problem that has grown in size and frequency since.

Cyberthreats are common in healthcare

Besides being a repository of vital information that hackers need, the healthcare industry has been particularly vulnerable because of the weak link philosophy. You’ve probably heard that a chain is only as strong as its weakest link. This is also true when it comes to cybersecurity. And it’s something hackers prey on.

According to a 2016 Healthcare Industry Cybersecurity Report, the healthcare industry had the fifth highest amount of ransomware counts of all industries. The report also stated that more than 77 percent of the entire industry was infected with malware. According to the report, the most prevalent weaknesses existed in “health treatment centers, insurance providers, manufacturers and hospitals.” In other words, everywhere.

The authors of the report mention how the industry is facing pressure from both sides ? from hackers who specifically target them and employ different methods in doing so, and from regulatory agencies who are trying to prevent this from happening.

The problem doesn’t rest with the IT departments in most cases, but rather with the employees who aren’t prioritizing, or even aware of, security issues and with those who have been tasked with training and managing them.

“The low social engineering scores,” the report states, “among a multitude of healthcare organizations show that security awareness and employee training are likely not sufficient and this poses a real risk to those organizations.” Hackers know that these employees represent low-hanging fruit. This is why they’ve become such a target.

The main risks, according to the report, are the wireless devices so prevalent in the industry and the amount of information that’s exchanged through them. While these devices are beneficial for their speed and access to information, the way in which they’ve been mishandled and implemented is resulting in added security risks.

How these breaches affect consumers

A survey by Accenture in February of 2017 revealed that healthcare security breaches affect 26 percent of U.S. consumers. And 50 percent of those had their identity stolen, resulting in an average out-of-pocket cost of $2,500 per person. That means for every eight people, one person has had their identity stolen as a result of a healthcare data breach. But perhaps the greater aspect of this problem is reach, as in nearly everyone has health records in the system.

In the largest healthcare data breach to date, Anthem Blue Cross, in January of 2015, had 78.8 million patient records stolen. This included information such as dates of birth, addresses, and social security numbers ? the information hackers most need to steal someone’s identity.

In the case of the Anthem Blue Cross breach, consumers weren’t told about the breach by law enforcement or Anthem themselves. They found out the hard way: by noticing something was wrong on their bank and credit card statements.

How healthcare companies can improve security

The need to take extra precautions when dealing with sensitive healthcare data is obvious. But if the problem was easy to solve, it wouldn’t be a problem to begin with. And unfortunately, for every zig in security measures, there are a hundred hackers ready to zag.

Healthcare Finance News recommends the following precautions when it comes to protecting data:

  1. Assess the larger risk as it pertains to the entire system, rather than relying on specific vulnerability analyses.
  2. Always know where your sensitive data is being stored.
  3. Improve training across the board. Impart the risks and precautions to employees, and make certain all understand policies and procedures before handling any consumer data.
  4. Address the issue of third-party vendors. Make sure they’re handling your sensitive data properly.
  5. Reinforce the infrastructure, including all software, with extra cybersecurity measures.

While the theft of information that leads to someone’s identity being stolen is the main risk, it isn’t the only risk. When sensitive medical conditions are made public, it can affect a person’s ability to get or keep a job and their professional and personal relationships.

The impact on businesses and organizations is also dire when leaks occur, as their trust, credibility, and reputation suffer dramatically. They also open themselves up to the possibility of massive fines and lengthy investigations.

The FDA recently issued new guidelines for securing data in medical devices, such as smartphone apps. This is especially important, as the HIPPA (Health Insurance Portability and Accountability Act) Journal has stated that 91 percent of cyberattacks are the result of personalized phishing emails sent to employees.

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How Technology Saves Lives Every Day

While you may think of technology in terms of the CT scanner, the advancements made in recent years in cardiac monitors, portable x-ray equipment, sonography, bedside lab testing, even IV needles are all part of how tech is improving healthcare.

Just ask the medical staff of inpatient and outpatient rehab centers. Point of care testing allows blood testing to be done at the bedside. Results for electrolytes, hemoglobin and hematocrit, glucose, blood gases and several other essential blood tests can be in the doctor’s hands in the time it used to take to run the blood to the lab.

Every discipline of medicine is evolving because of the changes in technology. First, there were x-rays then CT scans and MRIs. Now PET scans routinely diagnose very early cancers because they scan the body at a cellular level, often finding tiny areas of increased activity that wouldn’t show up on a CT scan or MRI. Speaking of pets, tech has helped improve the health of our dogs and cats. Whether simply treating a constipated dog or detecting cancer in a cat, the same image scans that serve to help people are being used to help their pets. Robotic surgery sounds like science fiction, but the discipline is gaining acceptance everywhere. Very small incisions have replaced long scars as surgeons control miniaturized instruments from a monitor with magnification that enables very precise work.

Even common health problems, such as diabetes and asthma, are affected by improved technology. Advanced diabetic pumps and monitors help to control blood sugars more exactly as well as improving the quality of life for many diabetics. The newer asthma inhalers deliver a more accurate dose and are easier to use, especially for elderly and young patients.

Computers connect health care agencies and allow researchers to gather data in real time. The diagnosis of a case of influenza or meningitis can be reported to the CDC within minutes to hours, helping to stop the spread of epidemics.

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How Home Health Agencies Can Use Virtual Care with Rural Patients

By Lee Horner, CEO, Synzi.

Lee-Horner
Lee Horner

Rural healthcare organizations and their patients are up against a myriad of challenges, from minimal funding and resources to limited access to care, social determinants of health, and more barriers that stand in the way of effective care delivery. Unfortunately, nearly half of rural hospitals operate at a negative margin and are struggling to survive, according to iVantage’s 2017 Rural Relevance Study.

The number of rural hospital closures has risen to 87 in the last eight years, according to the National Rural Health Association (NRHA). The closures create a large gap in healthcare resources available in rural communities, as the residents cannot always drive or fly great distances to access needed care. Virtual care technology can address gaps in care and help rural providers continue to deliver care for the vast populations and geographies they support.

Increased re-admission rates amongst rural patients are driven by inadequate care and support after the patient returns home. Home health organizations now play a critical role in helping hospitals reduce these rates by providing care to rural patients, especially during the initial thirty days after discharge. Home health organizations are actively implementing virtual care platforms to automate the post-discharge follow-up with a rural patient by sending reminders to schedule appointments for post-discharge virtual visits via the communication channel of the patient’s choice – e.g., text, SMS, email or even a phone call. Follow-up care can be provided in a cost-effective video call (for home health providers and patients) which optimizes the caregiver’s productivity by minimizing excessive transportation time, travel costs and related liabilities typically associated with driving to/from patient homes.

To help home health agencies, there has been a longstanding Medicare rural add-on for home health services. Federal add-on payments through the Center for Medicare and Medicaid Services (CMS) have been crucial to these agencies operating in rural regions of the country. The 3 percent payment modifier to reimbursements for services provided in rural and underserved areas helps these agencies which face higher overhead expenses through factors such as increased travel time between patient visits and demands for extra staff. This payment modifier is imperative so that rural agencies will be able to keep their doors open and provide necessary care to home-bound patients.

However, the Centers for Medicare & Medicaid Services (CMS) has proposed payment rules which may impact the delivery of home health care in rural communities. The shift was mandated by the Bipartisan Budget Act of 2018. Under the new methodology, CMS is varying add-on amounts depending on a rural county’s home health utilization, population density and other factors. Unlike the current standard of a 3 percent three percent rural add-on, CMS’s proposed payment rule segments counties into “high utilization,” “low population density” and “all other” categories:

High-utilization counties are “rural counties and equivalent areas in the highest quartile of all counties and equivalent areas based on the number of Medicare home health episodes furnished per 100 individuals who are entitled to, or enrolled for, benefits under part A of Medicare or enrolled for benefits under part B of Medicare only, but not enrolled in a Medicare Advantage plan under part C of Medicare.” Low population-density counties are designated due to their population density of six individuals or fewer per square mile of land. The all-other category includes counties and areas that don’t fit into either definition.

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