How Skilled Nursing Facilities Need To Prepare For Value-Based Care
By Kathleen Riordan and Apurva Subramanian, healthcare experts, PA Consulting.
Over the next decade one in five US residents will be over the age of 65, over 70 percent of whom will require some form of Long-Term Services and Support (LTSS) as they continue to age. The resources required to meet the care needs of our senior generation will triple by 2040.
The industry is reaching a tipping point and CMS – the primary payer for these services – is going to look for innovative ways to curb costs while maintaining high-quality, patient-centric care. Value-based payment models in other health service organizations incentive providers to do just this. Historically, LTSS have been left out of value-based care payment arrangements; however, with the increase in use and cost of LTSS, CMS is gradually incorporating value-based care models in this industry to nudge providers into more innovative ways of delivering care.
For example, in 2019, skilled nursing facilities began receiving quality-adjusted payments for all Medicare Fee-For-Service (FFS) patient-stays. CMS is now withholding 2 percent of all Medicare FFS payments and giving facilities the opportunity to earn this back through an assessment of its performance on the 30-day all-cause hospital readmission quality measure. Recent results show that 73 percent of nearly 15,000 skilled nursing facilities reporting data received payment penalties for performance on the hospital readmission measure, with 20 percent receiving the maximum penalty of the entire 2 percent withholding.
Now is the time for long-term care organizations to act, as the initiatives CMS is proposing will significantly affect the industry. On the agenda for CMS is a range of payment incentives including:
- Adding two new quality measures in 2020 to assess health information sharing from skilled nursing facilities to other providers and to patients.
- Transitioning all Medicare Part A payments to skilled nursing facilities into a new model that reimburses based on the clinical condition of the patient and their service needs.
- Implementing new payment rules for all Medicare-certified home health agencies to incorporate home health services into value-based payment models by eliminating therapy thresholds in determining payments and reimbursing based on the clinical condition of the patient.
- Potentially expanding the Home Health Value-Based Purchasing model across the US.
- Increasing payment adjustments up to 8 percent by 2022 for Medicare-certified Home Health Agencies operating in 9 HHVBP pilot states.
The payment models in both skilled nursing and home health represent a shift that CMS is making to include all ancillary providers into the value-based care arena. Long-term care organizations can learn from hospitals and physician groups who proactively approached this coming wave of value-based payment reform. Organizations that are collecting and acting on data in a timely manner, establishing efficient cost-reducing processes, and integrating effectively within the care continuum will thrive in the new financial environment.
So how can long-term care providers implement an effective value-based care model? Follow these four steps.
- Understand value-based program requirements and determine the necessary people, processes, and technologies needed to adjust operations to achieve program success. The challenging part for long-term care is going to be in operationalizing new value-based care program requirements. Those organizations that can effectively arrange the right people, processes, and technology stand to soar above the rest. Advancements in technology have enabled organizations to progress further, faster. Currently, many vendors in the market offer telemedicine technologies and remote patient monitoring applications to care for high-acuity patients in more effective ways. For example, long term care providers can use telehealth to provide support to elder patients allowing them to stay in their homes longer. A great example is the Argenti care technology program in the UK that placed a configured Amazon Echo device in on-demand senior care services, the pilot was highly successful and improved outcomes and reduced cost. Some skilled nursing facilities are even investing in putting in motion detectors in patient rooms to assess movement anomalies to ensure patients get the right care when they need it. Investing in the right technologies to ensure a high-quality care experience can accelerate a LTSS provider’s ability to adapt to value-based care models.
- Use data and processes improvement methodologies to recognize and reduce unnecessary costs and develop best-practice processes. Long-term care service providers should already be collecting and using data to generate insights to inform best-practices in both the cost and delivery of care. The Visiting Nurses Association of New York, the oldest nonprofit home and community-based health organization, is already using robust data analytics to drive clinical and operational decision-making by creating a model to proactively predict when a patient may benefit from a different or higher level of care. For those organizations without a robust data analytics strategy, steps can be taken to capture, track, and analyze clinical and claims data to understand population-based characteristics and care needs. In doing so, LTSS organizations can establish benchmarks and reporting to create the drive toward more clinically and cost-effective approaches to care.
- Build relationships with providers across the care continuum to create open lines of communication and develop smooth processes for patient care transitions. Crucial to the success of long-term care organizations in transitioning to value-based models is the ability to develop clear processes and means of communication with providers along the patient care continuum to ensure smooth transitions in and out of care and a streamlined flow of information among providers. Currently, NYU Langone Health is partnering with 11 high-quality skilled nursing facilities to create a preferred network where organizations are coming together to improve care transitions by openly sharing quality, readmission, and length of stay data. In doing so, these organizations are learning from one another to improve their own performance standards and proactively prepare for additional upcoming incentives created through value-based care payment models. The transition to a culture of continuous improvement is often a challenge for organizations, as employees at all levels have to recognize and work to overcome the ineffectiveness in largely entrenched processes and procedures. However, in building a culture of continuous improvement where all employees have the capacity and ability to step outside of their daily whirlwind of job demands and look for efficiencies ultimately leads to innovative and productive ways of thinking and acting.
- Partner with local community organizations to enhance your current service offerings. Value-based care models are intended to keep costs down while ensuring patients continue to receive high-quality medical care. The elderly population is a vulnerable population and requires additional support systems in place to have all their health care needs met. Building connections with local community organizations to help patients as they transition out of nursing care to their home or while receiving in-home care can set your organization up for success. Local area agencies on aging can connect long-term care providers with the right community resources to support their patient populations. Local community organizations can provide support with social care needs like transportation, fall-risk assessments, nutrition and meal preparation, community-based engagement, all of which have been shown to not only reduce hospital readmission rates, but also improve the health and well-being of the elderly.
Long-term care service providers need to invest time and budget into comprehensive data collection and analysis, implementation of process improvement methodologies, and advanced technological devices to proactively adjust to payment reform. Navigating the integration of value-based care models for long-term service and support organizations can seem like a dauting journey. But we have seen that organizations that prepare effective strategies for implementing the four activities outlined above are more likely to experience a smoother transition.