Provider Networks’ Role in Expanding Patient Choice

Guest post by Cheri Bankston, RN, MSN, director of clinical advisory services, Curaspan.

Cheri Bankston
Cheri Bankston

When determining a discharge plan, hospitals must provide a list of home health agencies (HHAs) or skilled nursing facilities (SNFs) that are available to care for the patient; this comes as part of the Conditions of Participation (CoPs) for Discharge Planning. In the case of a HHA, the provider must be able to serve the patient in the area where the patient resides, or in the case of a SNF, the area requested by the patient.

Acute care providers have been struggling on how to set up a high quality provider network to support patient choice as we move from volume to value. Provider networks aim to gather more information to assist beneficiaries with selecting a high-quality post-acute provider. CMS has not outlined any specific criterion that deems a provider “high quality,” but the end goal is to provide the patient more information on quality performance and resource use at the time they are making a decision. Through the Center for Medicaid and Medicare Services’ (CMS) Star Rating program, discharge planners or case managers working for hospitals are able to highlight those provider networks that will best fit the needs of the patient. The networks are able to counsel patients about their available choices, while more importantly upholding the patient’s right to choose.

Under the Affordable Care Act’s value-based purchasing initiative, hospitals are at financial risk for the outcomes of care its patients receive from post-acute care providers, leading hospitals to work towards establishing high-quality provider networks. For many, upholding the standard of Medicare policy – patient freedom of choice – is challenged by potential financial incentives and penalties for the bottom line – the quality of care provided to the patient after discharge impacts the reimbursement levels for hospitals and ACOs. Although provider networks may appear to narrow patient choice, they actually create a set of higher quality post-acute providers that improve patient outcomes without impeding access to care.

Payers have been using “provider networks” for years, but being applied to hospitals is a brand new concept. An ACO’s success depends on using a provider network that has a demonstrated history of high quality of care outcomes. For example, SNFs that have a high rate of patients going to emergency rooms and not being admitted must be evaluated to determine the variance from other providers with the same level of care and fewer emergency room visits. Quality outcomes and patient satisfaction are going to drive the definition of provider networks.

Key Takeaways:

  1. Explaining provider networks to a patient/family may look like “favoritism,” so it is important to train discharge planning staff on counseling strategies for patient choice. However, Setting up a policy on how to develop a provider network must be done by hospital leadership. The concept of provider networks may look like “steering” a patient to one provider over another, so hospital policy and specifically defined criteria with a process for ongoing evaluation will play a crucial role. Tracking outcomes of patients such as readmission rates of a specific HHA must be monitored, reviewed and actioned.
  2. If a physician writes an order for a specific provider, whether the provider is in a network or not, the patient must be notified and allowed to consider the physician’s preference when making their choice. Physicians should be involved in the process of developing the provider networks whenever possible and made aware of quality monitoring of all providers.
  3. Using provider networks is not a mandate. The needs of the patient always trump provider network referrals. For example, star ratings are part of the information that is used for setting up networks. However, star ratings are only one variable to be used as a tool in discussions with the patient.
  4. Hospitals should prepare by having a well-thought-out strategy that includes how to get into a network, how to stay in a network and how to meet the responsibility of offering patient choice among appropriate and available providers.
  5. The overarching purpose of networks is to improve quality of care for patients and to forge strong relationships with post-acute providers.

What your organization can do:

  1. Develop a team who can define policy for other organization members and can continuously monitor for updates on provider networks.
  2. Educate and train staff on patient choice and how to counsel patients using additional quality measures.
  3. Partner with all providers (both in and out of network) to monitor performance metrics, outcomes and patient satisfaction with post-acute care in an ongoing manner.

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