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BOTTOM LINE BLOG & RADIO

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A year from now, on Oct. 1, 2018, the skilled nursing and rehab worlds will start getting a taste of the medicine that CMS has been spooning out to hospitals since 2012: Facilities with higher than average rates of readmission to hospitals will take a penalty on their Medicare reimbursements.

This will be the first step in the gradual migration of reimbursement from fee-for-service toward value-based payment. The rollout and transition will take years, but it is likely to change the ways SNFs do business and think about patient care. Leaders of rehab and skilled nursing facilities will have to alter operating priorities, just as hospital executives and physicians have done over the past five years.

As hospitals take on more financial responsibility for reducing unnecessary acute-care readmissions, they are obligated to ensure that downstream providers are operating on the same wavelength, namely, that quality patient-care must involve reaching out to the patient after discharge.

SNFs that have a workable, proven protocol to reduce readmissions are going to be favored in two ways: First, they’ll avoid Medicare’s reimbursement penalties, and perhaps qualify for an incentive payment. Second, they will become more desirable partners for hospitals.

Hospitals Have Been Hands-Off – Until Now

Though now on the hook financially for assuring good follow-on care, hospitals have not been in a position to influence the patient’s selection of who provides that care. Traditional Medicare mandates that patients and families be given complete freedom to choose where they go. At some hospitals this has led to a hands-off approach. Patients are given a list of local post-acute providers and left to their own devices. Other hospitals and systems have been less shy. They make available to patients at discharge the names of providers that they believe offer higher-value post-acute care. But the final choice rests always with the patient.

In an effort to help patients make more informed choices, CMS does collect data on quality of care in the post-acute space. The Nursing Home Compare web site aggregates information on health inspections, staffing, and quality measures to derive a rating of one to five stars. However, evidence is scarce that the star rating web site is affecting consumer decision-making or reshaping the market. Patients aren’t aware of it and it doesn’t meet their needs. The tool is not especially helpful for patients and families looking for rehabilitative services.

Turnabout at MedPAC

There are indications these federal policies might change. Noting the wide variation in quality of care among SNFs, the Medicare Payment Advisory Council is considering modifying discharge planning rules to let hospitals recommend specific post-acute facilities. As part of the changes, MedPAC is thinking about allowing discharge planners to take into account a SNF’s quality rating, and to talk about it with patients.

Under such a protocol, hospitals might be required to provide quality data to beneficiaries seeking post-acute care. Sometimes these quality differences are not trivial: According to MedPAC, the average SNF rehospitalization rate was twice as high among those in the bottom quartile compared to the top quartile.

Given the performance and financial pressures they are under, it seems safe to assume that hospitals will increasingly move toward establishing networks of preferred providers for post-acute care. And if hospitals are permitted to take a more active role in directing patients how to select a post-acute provider for rehab or other therapy, then the post-acute facilities will have to up their game. Quality metrics, patient satisfaction, staffing, and other factors will surely rise to prominence as factors in the decision. The landscape will become more competitive, and in different ways, than it is today.

When this happens, SNFs and rehab facilities that can demonstrate superior outcomes and higher patient satisfaction scores will emerge as the stronger candidates to be included on the hospital’s list of preferred locations. Discharge planners will be able to drive business toward those better-qualified providers.

Referral Networks Make a Difference

A recent study published in Health Affairs affirms the benefits of establishing a preferred referral network. The researchers found that “rehospitalization rates can be reduced by concentrating patient referrals to a limited number of SNFs (that is, to a preferred network).” The adjusted rehospitalization rate in hospitals with networks declined by 3.7%, compared with 2.1% in comparison hospitals without a post-acute referral network.

Thus operators of SNFs need tools and systems to demonstrate their commitment to quality and help reduce the likelihood of readmission. Technological innovations, such as platforms that enable providers to extend their reach with patient-oriented multimedia programs and interactive phone calls, can partly fulfill these requirements. These tools enable SNFs to deliver consistent, credible information, engage family caregivers and gain insight into patients who might be at risk for readmission. And, to the extent that they lessen the burden of patient education and outreach on caregivers, these innovations can improve the productivity and morale of facility staff.