Managing and Coordinating Non-Acute Care in an ACO Environment

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1 Managing and Coordinating Non-Acute Care in an ACO Environment

2 By Glen Roebuck, Vice President of Business Development, Health Dimensions Group Hospital and health care systems across the country are engaging in significant activity in preparation for the regulatory and quality expectations set to be enforced by the implementation of the Affordable Care Act (ACA). Conversations with progressive health care executives consistently indicate that positioning their systems for future successful performance both qualitatively and financially is at the forefront of their strategic planning and policy development. 1 In the past two years, many systems have worked closely with physicians to ensure coordinated and more closely controlled physician service delivery models are structured to leverage physician time for effective treatment and patient follow-up. A focus on managing rehospitalizations is becoming a more common topic. However concrete, collaborative steps established with other providers are seldom found. Beyond these issues is the broader vision of some system leaders to ensure a streamlined effort to address population health: moving their systems beyond caring for those who are ill and instead caring for the community, focusing on prevention of illness and minimizing unnecessary use and hospitalizations. Regardless of the outcome of the Supreme Court decision around the ACA, one issue is clear: health care systems and managed care organizations have embraced the qualitative and financial advantages of many components of the ACA. Regardless of the court s decision, systems will implement many new practices which will change the landscape of how health care is delivered. As these changes are implemented, it is important to recognize the need for community partnership and accountability beyond the local hospital system. In most communities, it will be hospitals bringing other care providers to the table to create a comprehensive and accountable care model, breaking down the current silos within the health care system. The information below is meant to serve as a guide to hospital system executives in the development of a system to bring providers together, addressing quality care, efficient care delivery, and innovative and collaborative partnerships. Senior health care represents significant challenges and opportunities to all providers. By 2030 it is predicted that there will be 72.1 million Americans over the age of 65, nearly three times as many as in Seniors regularly see multiple physicians, take many medications, and are not always accurate reporters of information between care practitioners. The silo system of Medicare, with payments made separately to doctors, hospitals, skilled nursing facilities, home health agencies, etc., does not promote coordinated or efficient care delivery. Systems are now recognizing, and data is supporting, that the emergency department of an acute care hospital is not an appropriate place for the elderly to receive timely and effective assessment and care. 1 The Unsettled State of the ACO, April 2012, HCPro 2 Administration on Aging. A Profile of Older Americans: Washington, DC: United States Department of Health and Human Services

3 For hospital executives oriented to acute care delivery, adapting to and understanding the nuances within the various non-acute settings and how they can actively participate in accountable care delivery can be a daunting task. The topics below are offered as strategic actions to be taken to structure successful partnerships within your health provider community. Leadership Unless located within a small rural community, efforts to coordinate post-acute services across a larger hospital or system, as well as multiple providers, will require the dedicated time of one executive level position. To ensure full collaboration with hospital system leaders, and in recognition of the significant impact this leadership will have on change and collaborative care delivery, this position must be part of the system s executive leadership team. Depending upon other activity within your health system, these functions could possibly be driven by a current business development executive. For many systems, ACO/ network development is the primary business development initiative. Whether or not the person currently in this position has the prerequisite skill sets necessary for success is an important and separate consideration. In many circumstances, hospitals with non-acute care assets place acute care professionals in managerial roles, overseeing these assets and their operations. This is not a recommended strategy for the leader of a system s non-acute care management initiative. Successful leaders for non-acute care management will have the following experiences and core competencies: Experience in the operation and management of non-acute assets Experience in multi-site management Understanding of reimbursement structures for non-acute as well as acute care A thorough understanding of the ACA, its components and strategies for success Ability to promote and drive change Empirical decision making talent, basing critical decisions upon data analysis Collaboration expertise to bring people from different camps together for a common purpose Communication talent and experience to publicly and privately convey the urgency of the need for change as well as lay out steps to make this change a reality Adaptability and agility. Nothing is more constant in health care today than change. This leader needs to be consistent with implementation and accountability while recognizing the need to adapt as policy, legislation, and regulations evolve 2

4 Own, Affiliate or Partner? The development of some ACOs is being facilitated by the acquisition of other service providers in a variety of different structures. It is not uncommon for hospitals to also own skilled nursing centers, home health care and hospice services, and/or senior housing. While ownership may appear to bring a level of control that may seem desirable to a hospital system, experience has shown that while hospital system-owned skilled facilities may have excellent survey results and ratings, they often do not excel at the provision of rehabilitative services in the skilled setting to optimize services and prevent rehospitalizations. Hospitals are also required to assign certain overhead and administrative costs to skilled facilities, creating an expense structure that cannot be sustained by the revenue stream of most skilled nursing facilities. For these reasons and others, many hospitals and health care systems are divesting their skilled facilities. It is important to note that ownership is not necessary to create a successful care delivery network with non-acute providers. In a partnership model, shared desires to work beyond a silo model as well as address consistent clinical pathways and the management of rehospitalizations are the initial catalysts bringing providers together. Each partnership requires leadership and management, which would fall to the ACO. There is mutual agreement and understanding of the need for change and a consensus on the need to bring about change for the community. This also leads toward preferred referral agreements. As ACOs mature and shared risk or bundled payment methodologies are implemented, these partnerships become a more leveraged relationship between the ACO and the non-acute providers. ACOs are able to obtain greater participation by bringing non-acute competitors to the table and challenging those providers for improved cooperation and synergy with ACO initiatives. While this may be an acceptable model in some communities, it is important to note that this mutual partnership requires a strong commitment as well as an understanding of the ACA and the future of health care delivery. For non-acute providers who are familiar with the traditional fee-for-service payment methodology, it may be difficult to gain commitment. It is important for ACO leaders to consider that the non-acute providers in the market have, in most cases, not yet envisioned the impact of the ACA and its subsequent implementation for their facility and may rely upon an organization for direction and education. A more complex but perhaps more effective strategy is the formal development of affiliated relationships between the ACO and the non-acute providers in the market. Affiliations work well in markets where the ACO has a strong, positively established brand whereby affiliation by non-acute providers would prove advantageous. In this model, an ACO brings the various non-acute providers together and establishes specific performance criteria for meeting the requirements for affiliation. The ACO is clear from the beginning that they are selecting the strongest providers and not all providers will be eligible for affiliation. 3

5 While consumers continue to have choices as to where they receive non-acute care services, nonacute providers that are not part of the affiliated provider may not be paid in the bundled/shared risk payment methodology of the future. All ACOs are paid under the Medicare Shared Savings Program (shared savings with all providers paid under Medicare FFS rules). Bundled payment will be a separately negotiated arrangement with CMS. Since the bundled payment initiative applications have already been submitted, ACOs will have to wait until 2013 to submit an application for the bundled payment pilot when it is announced. The rules will specify whether or not the participants in the bundle can be limited to certain post-acute providers. As part of fulfilling the affiliation criteria, partnered providers receive the benefit of shared data with the ACO, quality assurance education and support, and information technology support to attain interoperability between the hospital system, physicians and the affiliated partners. This affiliation is similar to a hospital s acquisition of physician practices with the provision of IT and billing support for those practices. In this model ACOs benefit from the improved quality of coordinated services in a structured model, leading to fewer rehospitalizations, improved financial performance and the ultimate goal of improved population health. Each of these strategies, including ownership, partnership or formal affiliation, offer different opportunities to meet the differing circumstances and needs of various ACOs and the communities they serve. It is certainly possible that an ACO may develop alliances across all of these spectrums. Selecting the most appropriate model for your system and community requires careful planning and engagement of your non-acute partners. Identifying where those potential partners are in their health care reform development will assist ACOs in determining the most appropriate structure. Criteria for selecting non-acute partners Thomas P. Tip O Neill, former speaker of the U.S. House, received sage advice from his father on the eve of his only election loss and coined the phrase, All politics are local. This speaks to the need of politicians to understand and influence their constituents. As we move forward in health care reform, many have already stated that all health care is local. It will be essential that ACOs and their non-acute partners have a clear understanding of the local health care challenges and needs of all members of their community. As hospitals begin to partner with certain non-acute providers, this understanding will be a critical component of selection criteria. For example, a partner who does not provide services to Medicaid recipients may have a limited role in serving the greater community s needs. Non-acute partners must have a clear understanding of their role in population health care, not just a profitable niche they may have created for their own business plan. While not all partners can or will provide all needed services, they all must understand that affiliation with the ACO is a commitment to health care beyond their walls to serve their community while maintaining their individual financial performance. 4

6 In order to advance the delivery of local health care, benchmarks used to measure quality need to evolve. It is important for ACO leaders to recognize that the benchmarks used by regulatory providers have undergone only modest changes in the past 20 years. Regulatory agencies and facilities are measuring their performance on largely the same historic criteria with no consideration for changing needs, acuities or health care reform. In order to achieve the broader goals and targeted outcomes of an ACO, new performance criteria must be established that reflects the standards and needs of today s health care environment. Many hospitals today are relying upon the Centers for Medicare and Medicaid Services (CMS) Five- Star system to identify quality care providers within skilled nursing facilities. While there are merits to this system, it does not address population health, rehospitalizations, clinical pathway performance or other key drivers that must be in place to achieve future success. In addition, the Five-Star system leaves out key variables such as optimizing a patient s entitled therapy services under Medicare. Providers often have the ability to provide more therapy time and treatments with patients, resulting in improved care, and yet forego this obligation to optimize the patient s Medicare benefit. Yet these centers have very high ratings. It is important to note that the Five-Star system was never meant to be an all-inclusive litmus test for measuring skilled services quality and care. It is also important to note that 87 percent of families experience overall satisfaction with their current facility regardless of their respective Five-Star rating. 3 Other criteria for selection of non-acute partners should include: Risk adjusted rehospitalization rates per non-acute center. While some non-acute providers are measuring rehospitalization rates, the measurement is often inconsistent among providers in the same community. A provider who readily admits patients from the hospital s emergency department 24 hours a day, seven days a week, every day of the year, as well as cares for patients with a higher acuity, may have a higher rehospitalization rate. However, when risk-adjusted, their performance may lead your market and be more comprehensively meeting your population s needs. Established admission criteria for all partners. While some non-acute providers may not be able to care for some higher acuity patients, the ability to admit 24 hours a day, seven days a week, every day of the year, admit from the emergency department and physician offices, and directly from home with physicians orders must be an expectation. While there may be reimbursement issues to address in some circumstances, the ACO and their partners need to proactively work through potential issues to facilitate the appropriate placement for a patient. Three-day inpatient stays to activate skilled benefit. As long as the required three-day hospital stay to activate a skilled Medicare stay remains in place, hospitals and non-acute partners will have to continue to coordinate services closely to ensure Medicare beneficiaries are not denied access to their benefits. Criteria for partnership with an ACO must also include the ability to work creatively and the flexibly to ensure care is received in the right location and at the right time. ACOs would National Survey of Customer and Employee Satisfaction, in Nursing Homes, 2011, National Research Corporation, Inc. 5

7 benefit in some cases from providing a higher level of reimbursement otherwise provided to a skilled center to prohibit an unnecessary hospitalization. Data sharing and quality assurance. Non-acute partners must be expected to share specific metrics with the ACO as well as other providers within the ACO. This is aligned with the quality assurance and program improvement (QAPI) initiatives within it. This will be a significant paradigm shift for unaffiliated non-acute providers, meaning a system s affiliated providers will know each others successes and challenges from a qualitative perspective. The data will be used for the improvement of health care delivery in your community and cannot be used in any manner beyond that which is approved by the ACO. Working beyond today s boundaries. Non-acute partners must agree to meet regularly to review successes, issues and challenges. They must be prepared to commit to an active role in the full ACO integration within your community. Addressing technology innovations and challenges. Non-acute partners must commit to working with the ACO to address IT interoperability. It is important to note that while physicians and hospitals received significant financial support and incentives to address IT issues in recent years, non-acute providers have not received this funding. While there is no shortage of choices for software, the connectivity between skilled care, physicians, hospitals, home health, etc. is extremely challenging. Just as IT implementation has been a significant focus for hospitals in recent years, a similar intensive, focused effort will need to occur between ACOs and their non-acute partners to find solutions to various systems interoperability. Reimbursement reform. Members of the network must be prepared and willing to take part in a different reimbursement structure, including shared risk and bundled payments arrangements. It is important to clearly convey this to the non-acute provider network and ensure everyone clearly understands the risks and rewards inherent in this process. Non-acute providers who are not comfortable with the reimbursement structure should be encouraged to carefully consider whether or not they are prepared to take part in an ACO network at this time. Ongoing management considerations The collection, analysis and action upon data collected will drive improved care and efficiencies within a partnership. This will require technical support within the ACO to develop collection methodologies that are effective, easily shared, and operational for those non-acute centers in the network. This data must be transparent within the organization and drive initiatives with your quality assurance process. Quality Assurance and Performance Improvement will be a required component for skilled facilities under the ACA. While quality assurance/quality improvement (QA/PI) has been a required component for skilled services for over 20 years, new guidelines are being written and early indications are that 6

8 this will be a substantive change. Astute ACOs will work with all non-acute providers to ensure a meaningful QA/PI is in place and that key metrics associated with ACO success and population health are incorporated into these center-specific plans. QA completed within the ACO network of non-acute providers should be transparently observed when reviewing the QA/PI work plans within affiliated facilities. The combination of data analysis and quality improvement must lead to partnership-based solutions which are mutually beneficial to the ACO, non-acute partners, and the population s health. Once data is received and analysis completed, this information must translate into operationally sound change that benefits all constituents. It will be the responsibility of the executive leadership to ensure all parties, hospitals, physicians, non- acute providers and most importantly patients, experience positive benefits from the actions taken. When appropriately executed, the community should experience positive, evolutionary change in their health care delivery and satisfaction. Once non-acute provider networks are established, ACOs must consider the following: When and how does the criteria to remain in the network change? As performance improvement evolves, so must the criteria to remain within the network. Can other providers join the network? If so, when? How many non-acute providers of specific services do the ACO and community need to function appropriately? Are there political considerations that must be considered before moving forward with a selected network? What are the criteria for removal from the network? Our recommendation is that the criteria for admission must be the same as criteria for termination. ACOs are cautioned to avoid knee jerk responses from media coverage, isolated regulatory results, and other issues that may arise. If criteria is selected appropriately, and quality improvement is managed consistently, a network provider with isolated regulatory issues should not prove to be a detriment to the ACO s ability to meet their goals. Temporary suspension of network participation is an option that can serve to mitigate risk and more closely investigate potential issues which may arise. Establish consistent guidelines and parameters to efficiently move patients across service sectors within the network. Specific referral expectations and processes must be established to maximize the efficiencies and value of the network. The effective use of care coordination personnel can facilitate movement between care delivery sectors, creating a smooth linear model of care delivery. 7

9 Conclusion While groundwork has been laid in many areas for ACO development, hospitals and health care systems, in general, lag behind in developing structured networks of other providers to manage rehospitalizations, clinical pathways and overall population health outside the walls of the health system. Whether owned or otherwise affiliated, the creation of a non-acute care delivery network with specific structures and performance parameters works toward actively engaging others in the health care community to address the area s needs for health care reform. This allows systems to create an efficient and integrated care delivery model, control health care costs for all constituents and positively impact patient satisfaction. This effort requires dedicated resources, strategy and commitment, and will yield positive results for all involved. With this implementation, health care reform is actively practiced across multiple services within the community. Glen Roebuck is Vice President of Business Development with Health Dimensions Group, a leading provider of consultation and management services in senior health care and hospital systems. For further information on Health Dimensions Group please visit 8

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