CaringForward

Wednesday Roundup: CMS Launches Bundled Payment Program; LeadingAge Calls to Fight Medicare Cuts

Mid-week roundup of news and views in post-acute care and LTC:

• Last week, CMS announced that more than 500 providers are on board to test four new models for payment bundling in 2013. Under the Bundled Payments for Care Improvement (BPCI) initiative, participants will have 48 care episodes to choose from. 
• LeadingAge issues a call to action to prevent looming automatic Medicare cuts from sequestration, reminding us that the cuts would trim $11 billion in Medicare spending, $18 million in Section 202 housing funding and $86.7 million from the Administration on Aging
• Jacqueline Vance, the "Real Nurse Jackie" over at McKnight's, offers a thoughtful clinical perspective about what "meaningful flow of information" means for reducing unnecessary patient transitions, and shares a vision of a day when secure patient records are available in accessible systems the same way our financial account information is today.
• An older link but interesting analysis of the top five healthcare IT trends for 2013, including the rapid adoption of tablets for more and more healthcare applications

Data Doesn't Confirm that Quality Programs Reduce Readmissions: A Second Look at the Data

A few days ago we linked to a McKnight's post about how hospitals and post-acute providers were collaborating to reduce readmissions. The numbers seemed rosy: The "14 communities [studied] saw a 5.7% mean reduction in readmissions within 30 days of discharge per 1,000 Medicare beneficiaries."

Alas, those sneaky numbers. When we posted this to our LinkedIn groups, reader Don Ridenour, the owner of Always Best Care in Indiana, commented challenging McKnight's interpretation of the original study from the The Journal of the American Medical Association. 

And he's right. 

Here's the conclusion from the abstract posted on JAMA:

Among Medicare beneficiaries in intervention communities, compared with those in uninvolved communities, all-cause 30-day rehospitalization and all-cause hospitalization declined. However, there was no change in the rate of all-cause 30-day rehospitalizations as a percentage of hospital discharges.

Emphasis added. If I'm reading this correctly, the study did not indicate any statistical improvement in readmission rates for the communities analyzed. Readmissions declined at the same rate that discharges declined, an expected result that nullifies the statistical significance of the overall 6 percent drop in readmissions.

Again, I welcome any corrections, but I interpret the results this way: Let's say in one month-long sample a hospital discharged 100 patients, and 20 were readmitted within 30 days. That's a 20 percent readmission rate.

Let's say we then study a different month a year later, after the hospital has participated in quality improvement initiatives. In that month, the hospital discharged 80 patients, and 16 were readmitted within 30 days.

One accurate but misleading conclusion? Readmissions declined 20 percent in the second month studied, from 20 readmissions in the first month to 16 in the second.

But the most important variable is the decline in overall patient discharges. The percentage of total patients discharged who were readmitted within 30 days remained constant at 20 percent (20/100 and 16/80), reflecting no statistical improvement in readmission rates.

We can cut McKnight's some slack for reporting the more positive angle, as did many, many other industry observers and media outlets. 

And we can see how editors might have focused on the positive numbers. The Colorado Foundation for Medical Care, the quality improvement organization that coordinated the study, issued a press release and media fact sheet that emphasized the overall reductions in readmissions, without mentioning the constant in readmission percentage.

We understand why healthcare observers and participants want to focus on the positive potential of quality initiatives and improved patient outcomes through provider collaboration. We believe that these efforts ultimately will lead to improved care and clinical outcomes, and reduce hospital readmissions. But the numbers in this widely circulated study just don't support that conclusion yet.

One other twist to consider: The quality efforts could also be contributing to an overall decrease in hospital admissions, which would be a net positive outcome that others have observed in considering how CMS and the industry should measure progress. But there's still no analysis to support that correlation.

Just the anecdotal information about how these quality improvement organizations have operated and the results they have seen should prove instructive and valuable to other healthcare systems and providers. But we'd all be wise to consider research like this cautiously and thoughtfully, so we can learn and apply the correct lessons that will best benefit both patient care and provider reimbursements.

Are SNF Providers "Heartless Bottom Feeders"? We didn't think so, either.

A bold headline from John O'Conner over at McKnight's: "More evidence that long-term care operators are not simply heartless bottom feeders." He notes the extensive reader interest in recent stories about big clinical issues affecting long-term and senior care, including the flu epidemic, norovirus and aspirin issues for elderly users. We have long observed that the top performing SNF providers focus relentlessly on both clinical care and business performance. Sustained financial success depends on exceptional clinical care, which drives patient experience and satisfaction and builds the quality reputation SNFs depend on to maintain census. And consistent quality care depends on financial health to maintain high caregiver-to-patient ratios, invest in clinical systems and resources, and keep facilities modern and comfortable for patients and residents.

How Skilled Care Providers are Reducing Readmissions

McKnight's reports about a study in The Journal of the American Medical Association documents how post-acute providers are successfully reducing hospital readmissions by communicating and collaborating more closely with hospitals and other healthcare providers. The research, funded by CMS, studied 14 communities where hospitals collaborated with post-acute providers to improve care transitions, with a 5.7% drop in readmissions withing 30 days. It also noted benefits from nursing homes applying the Interventions to Reduce Acute Care Transfers (INTERACT) model.

This coincides with another study by Columbia University Medical Center (also published in The Journal of the American Medical Association) that "long-term care providers have to treat patients holistically rather than zero in on a specific illness," because Medicare rehospitalizations were so frequently caused conditions different from the original admission.

“Strategies that are specific to particular diseases or periods may only address a fraction of patients at risk for rehospitalization," the study concluded.

 

PPS eBook “The Sky Isn’t Falling” Says SNFs Are Thriving Even With Medicare Cuts

Patient Placement Systems (PPS) announced the publication of “The Sky Isn’t Falling,” a provocative analysis of how many top skilled nursing facility (SNF) providers have thrived since 11.1 percent Medicare cuts took effect in October 2011.

Click here to learn more and download ...

Has the Tablet Revolution Finally Arrived for Post-Acute Care? SNFs Embrace Mobile Strategies and Devices

We are seeing a trend in the long-term care industry towards the use of mobile devices as a tool to manage patient care. Many providers are seeking alternatives to the traditional manual processes involved with capturing and accessing patient data.

A recent McKnight’s article, Quality Care at Hand, discusses the benefits that tablet solutions offer providers in the long-term care industry. “For us, it's important to leverage technology that allows us to do our jobs more accurately and efficiently. Handheld devices have allowed us to stay on top of our day-to-day responsibilities, while keeping resident care our number one priority,” said Edgewater Director of Nursing Angela Holman. http://www.mcknights.com/quality-care-at-hand/article/220757/

Over the past several months, we have worked to gather feedback from our current customers’ about their plans to use mobile devices within their organization. In a large percentage of the clients we spoke with, there is a strong interest in equipping their users with tablets to improve response and turnaround times. As a partner that strives to deliver, PPS is committed to providing innovative solutions for long-term care providers to achieve improvements in performance and productivity.

In an upcoming release, PPS will enable the use of our Web-based Referral Management System (RMS) with tablet devices to empower liaisons in the field with access to unique performance tools for marketing, census management and admissions. By connecting online to RMS via a tablet device, providers may enter referral information/documentation online, begin the assessment and approval process, check bed availability and more!  

Post a comment to share your thoughts about your plans for adopting tablets or other mobile devices.

Tuesday Links: Improving Care for Dual Eligibles Could Lower Rehospitalizations, Considerations When Transitioning to an eMAR system, and more

Here are some recent items of interest for skilled nursing facilities:

• A recent article in McKnight's reports that research has found that more focused treatment of common illnesses among dually eligible Medicare and Medicaid beneficiaries could cut costs and lower hospital readmissions.  
• According to a recent McKnight's article, Medicare panel seeks enhanced payments eligibility for the PACE program
• Patricia Sheehan with Long-Term Living published an interesting article that discusses key considerations when transitioning to an eMAR system.
• Pamela Tabat's recent article in Long-Term Living discusses the LTPAC HIT Summitt roadmap for 2012-2014.

Royal Health Group Increase SNF Referrals 19.6% with the Referral Management System

Yesterday we posted an update on Greystone Healthcare Management's big gains in Medicare census through improved marketing, referral management and admissions processes, enabled by the Web-based Referral Management System.

Today we look at Royal Health Group, a six-SNF provider in Massachusetts that also has documented significant improvements in operations and census performance since partnering with PPS to use the Referral Management System. Royal Health group previously documented how automation and live census trend and analysis reports have improve conversion rates, dropped response times by 80 percent, and driven overall revenue growth.

Royal Health Group recently provided some interesting new data: It's overall number of referrals handled has increased by 19.6 percent since it started using the RMS system at all six facilities in summer of 2010. In an increasingly competitive market, in which many SNFs report diminished referrals, a nearly 20 percent growth in less than two years marks a performance milestone.

Royal Health Group attributes the increase to the efficiency realized with the Web-based RMS solution, which enables the six facilities to handle more referrals and strengthen relationships with hospital referral sources. Those stronger referral source relationships make a huge difference, as Royal Health Group noted previously: “Case managers know they will get a decision and place patients faster.”

This quote from the original Royal Health Group success story, from Chief of Business Development James Mamary Jr., sums it up nicely:

“The system gives us unprecedented power to respond faster, outcompete other facilities and report trends and analysis we simply couldn’t capture before. The benefits have exceeded our expectations. We anticipate significant revenue growth through increased referral volumes and conversion rates, as well as a stronger reimbursement mix. That’s money we invest right back into our people and facilities to ensure exceptional care and quality of life for our residents.”

 

 

 

RMS Helps Greystone HCM Increases Medicare Patient Days By 11.5%

Greystone Healthcare Management has long documented significant returns and performance results from using the Web-based PPS Referral Management System. Within the first year of using the system, Greystone HCM reported the following:

• 73% faster referral response times, from 30 minutes to eight minutes
• 5% increase in overall census
• Referral conversion rates increased to 88% from 56%

That was in late 2010. Greystone HCM recently reviewed new performance data and documented continued performance gains, specifically related to increased Medicare market share. This data confirms that automated census management and live, accurate reporting help deliver continuous operational and financial results for SNF organizations. 

The New Data

Most recently, Greystone HCM compared Medicare patient days from January–October, 2010, with the same 10-month period in 2011. Across 27 skilled nursing facilities, Greystone HCM increased skilled patient days (Medicare and Medicare HMO) by 11.5 percent, or more than 20,000 total patient days, giving upward swings to total revenue.

This performance reflects Greystone HCM’s focused effort to offer specialized care delivery programs to attract and engage Medicare and HMO beneficiaries in their patient centered recovery programs. Greystone HCM credits the Referral Management System for helping its facilities and corporate managers adopt improved marketing, referral management and admissions processes. These processes improve speed and competitiveness, while providing reporting and business intelligence to document performance and guide successful strategies.

 

 

 

Analysis: 7 Months Later, What Has Been the Real Financial Impact of 11.1% Medicare Cuts? (Part 1)

Publicly traded Kindred Healthcare in February reported some bleak financial results for Q4 of 2011, with losses of $72.8 million (compared to a profit of $19.7 million in Q4 of 2011). It revised its 2012 earnings forecast down by $0.30 per share, and announced that it would not renew it lease with Ventas for 64 facilities, including 54 skilled nursing facilities.

Kindred associated the results and the changes, at least in large part, to the notorious 11.1% Medicare reimbursement cuts that went into effect October 1, 2011. In the announcement Kindred said that the "initial quarter under new RUGs IV and rehabilitation therapy rule changes [was] more challenging than expected," further projecting the annual impact to be $150 million.

“Our 2012 earnings outlook reflects a more difficult than expected operating environment under the recent RUGs IV and rehabilitation therapy Medicare rule changes," said Paul J. Diaz, Kinrdred's president and CEO. "While we continue to believe that federal policymakers have over-reached in their attempt to adjust the RUGs IV rules, we must intensify our efforts to adjust our operations while still maintaining the quality of our services.”

But did Kindred really lose $72 million dollars in Q4 2011 solely because of the October 1 Medicare cuts? In a word, no.

$102 million of Kindred's Q4 2011 reported losses were "impairment charges." That's when the book value of certain company assets exceeds the actual value, and the company adjusts the books and takes a loss on the difference. 

Kindred attributed $54 million of the impairment charges to "certain hospital and nursing and rehabilitation center intangible assets," which is a large but pretty typical write down by a large company in assessing impairment. The company wrote off another $2 million in what it termed "leasehold improvements." Kindred doesn't attribute either charge to Medicare reimbursement changes, nor is there any indication they would be.

Kindred attributed another $46 million to goodwill impairment charges to "the worse than expected decline in operating results in the Company’s rehabilitation division related to Medicare reimbursement changes that became effective on October 1, 2011."

This almost certainly reflects the high-profile 2011 acquisition of RehabCare, and it means this: At the end of the year, Kindred assessed the intangible "goodwill" value of RehabCare to be about $46 million less than what Kindred paid for it. That diminished value could well be attributable to observed and projected decreases in reimbursements.

But that's much, much different than saying the Medicare reimbursement cuts diminished Kindred's revenue so much in Q4 that it lost $72.4 million. That's not remotely the case, but as the market remains gripped with panic about cuts, it probably is the unfortunate perception.

The fact is, operationally, not counting the impairment charges, Kindred did quite well by many measures in Q4 2011 and on the year:

• Record Q4 revenue of $1.5 billion, up 36 percent compared to Q4 of 2010
• Record annual revenue of $5.5 billion, up 27 percent from $4.4 billion in 2011
• Operating income grew 25% in Q4 2011 compared to Q4 2010, up to $200 million

Overall operational profits and earnings per share were still down from the year before, but Kindred is hardly limping toward the grave based on these financials. But what about the lease bailout on the 64 Ventas facilities? Diaz explains the reasoning:

"While in general the individual Expiring Facilities are good assets, these bundles as a whole do not satisfy our targeted investment returns or fit within our strategic operating plan. The majority of the Expiring Facilities are outside our cluster markets and many of the nursing and rehabilitation centers that are predominantly chronic care and Medicaid dependent are not well suited for our higher acuity, transitional care strategy."

I would argue that every condition that guided this decision existed before October 1, 2011. The facilities aren't within Kindred's strategic geographical markets. Many are chronic and Medicaid dependent facilities--facilities that have been challenging to maintain profitably for years. It's fair to suggest that it's scary for the industry to see a huge player such as Kindred shed financially challenging high-Medicaid facilities. But that has nothing to do with last year's Medicare rehab reimbursement cuts.

NEXT POST: What about the impact on providers besides Kindred?