Well, it’s definitely 2019 — a number much higher than I ever expected to see — and this year promises to bring some significant changes to the world of skilled nursing facilities, especially in the post-acute (or skilled, Medicare Part A) arena. This fall, both Phase 3, the final phase of the revised Requirements of Participation (RoPs) for SNFs released in 2016, and the new paradigm for calculating a facility’s per diem payment (PDPM, the Patient-Driven Payment Method) go into effect. Elsewhere in this issue, we share insights from leaders of AMDA — The Society for Post-Acute and Long-Term Care Medicine about what they think is on our horizon.
Those of us who have been around PALTC medicine for a long time remember the ’90s, when the Prospective Payment System (SNF PPS) initially went into effect, and the Resource Utilization Guidelines (RUGs) began to define how nursing homes were paid for skilled post-hospital care. Unlike hospital Diagnosis-Related Groups (DRGs), which allow for a set dollar amount based on the patient’s condition (and provide an incentive to discharge patients as early as possible), the RUGs define a set per diem payment that encompasses almost all care provided by the facility, including nursing, therapy, medications, and equipment. This has generally created an incentive to keep patients as long as is reasonable and to not strive for early discharge.
Over the decades since the inception of RUGs, there’s been an evolution of their specific parameters; we are now up to the fourth iteration (RUGs-IV), but the basic payment mechanism has been similar. The arcane crosswalk of the seemingly innumerable RUG categories, with their inscrutable, completely unintuitive alphanumeric designations (for example, RVA10 for a resident receiving very-high therapy on her 5-day Minimum Data Set), are determined via a complex calculus of therapy minutes, level of functional dependence (presented as an Activities of Daily Living score), medical complexity, and required interventions. But the main driver of the RUG scores has been therapy minutes. Facilities get paid a lot more per day for providing more minutes of therapy, which makes intuitive sense to some degree. Anyone receiving over 720 minutes of therapy a week is considered ultra-high level, and these residents command the highest per diem rates.
Perhaps not surprisingly — especially since it seems reasonable to assume that more therapy is better for most patients and unlikely to be harmful — not long after the RUG rehabilitation levels were published, many facilities began to provide the ultra-high level of therapy for a majority of their patients. Some facilities and chains ran afoul of federal regulators or the Office of Inspector General for their perceived overutilization of the highest RUG levels. There were concerns that residents were receiving amounts of physical, occupational, and/or speech therapy in excess of what was reasonable and necessary for their medical conditions, prior level of function, and current needs for assistance with activities of daily living. Some nursing home operators were fined or opted to enter into Corporate Integrity Agreements because of these alleged overutilization issues.
We are moving from RUGs to the Patient-Driven Payment Model, which will focus more on medical complexity vs therapy minutes. This new model will be better at capturing some of the serious medical conditions we now see commonly in our post-acute population.
In the last several years, with the greater focus of the Centers for Medicare & Medicaid Services on value — including the advent of Accountable Care Organizations (ACOs) and analytics companies calculating “correct” lengths of stay based on complicated algorithms — the lengths of stay for post-acute (skilled) nursing home residents have declined across the board. This has been true not only for fee-for-service Medicare A beneficiaries but also for Medicare Advantage, ACOs, and other insurers. In the past many Medicare A patients would stay 20, 30, or 40 days after a hospitalization; now many skilled admissions only span 10 to 14 days. A decade or two ago most elective joint replacement patients spent a few weeks in rehabilitation in a SNF; now the great majority go straight home with home health and outpatient rehabilitation. Additional considerations — such as measuring and imposing financial consequences based on parameters like Medicare Spending per Beneficiary (MSPB) and the whole Bundled Payments for Care Improvement (BPCI) initiative, which covers an episode of care with a discrete dollar amount — will further push the needle toward less expensive services and hence shorter stays in institutional care.
It’s sensible for us to shoot for the optimal length of stay for our patients, whatever care setting they are in. We are looking for that Goldilocks length of stay: not letting our patients go when they are unsafe or unstable to go to a lower level of care, but not keeping them any longer than they need to stay in a health care institution. It’s hard to say just where the sweet spot is for an individual patient, and there are many variables — functional status, residential situation, psychosocial supports (especially caregivers), and goals of care — to factor into this equation. Clearly, there’s a gray area.
We, as clinicians, and our patients and their families have to weigh the risks versus benefits of discharge from a hospital or nursing home on any given day and at any given level of functional and medical improvement. This is not hard science — and pretending that it is goes against the very spirit of person-centered care, which we all profess to practice. We certainly do not want to concentrate too much on keeping patients out of the hospital because there’s some evidence that this strategy can result in excess mortality rates — related not only to palliative care services or a change in the goals of care, but also to patients being discouraged or prevented from going back to the hospital for financial reasons. Please, all of us, let’s stay clear of that trap, no matter what the pressures are to avoid (re)hospitalizations.
Getting back to our specific paradigm shift, we are moving from RUGs to the Patient-Driven Payment Model starting October 1, which is a new, complex system to calculate a SNF’s per diem rate for skilled-care patients. This system will not be primarily based on therapy minutes; instead, it will focus more on medical complexity. Without going into the minutiae of the categories, I’ll just say that this new model will be better at capturing some of the serious medical conditions we now see commonly in our post-acute population.
One good thing that will come of this change is that physicians, other practitioners, and facility medical directors should become more involved in diagnosing, documenting, and treating medical conditions because there are many conditions that will allow for additional compensation. A potential unintended consequence may be that some residents may not get as much therapy — but let’s hope that our facilities can be wise stewards of therapy time rather than growing overly skimpy when compensation is no longer tied to therapy minutes. Either way, there is still going to be a per diem payment, so financially it will be to a facility’s advantage to keep residents longer.
The Society would like to see more robust categorization of some patient characteristics, including those pertaining to frailty and dementia (two conditions we see a great deal of in our care setting), taken into account in reimbursement schemes. These conditions contribute significantly to morbidity, level of assistance required, and costs of medical care. We have multiple workgroups devoting time, research, and effort to improving the ability of health care providers and payors to prognosticate and appropriately compensate for the care of this challenging population of seriously and chronically ill patients. For almost 15 years CMS has promulgated the Hierarchical Condition Categories (HCCs), which do take certain conditions into account and allow for increased payments, especially in Medicare Advantage plans, and other insurers have followed suit. I suspect we’ll see more and more focus on these kinds of metrics and incentives in the years to come, and I hope that these will help address the caregiver shortage in geriatrics and palliative medicine and encourage clinicians to enter this challenging and complex field, with its very vulnerable, high-risk, labor-intensive, and multimorbid patient population.
Phase 3 of the RoPs also requires a formal ethics and compliance program for every facility with a required annual review. Unfortunately, this requirement really is limited to trying to ensure that facilities and their employees comply with laws and regulations, and it has nothing to do with bioethics or the types of ethics committees most of our readers are familiar with.
The recently implemented Phase 2 included the requirement for an overall facility assessment and a global quality assurance/process improvement (QAPI) program, ensuring QAPI will become a required element of the operation of nursing homes. This is a more rigorous requirement and will probably be a focus for state surveyors. We hope facility medical directors, through their administrative duties in the facility’s Quality Assurance & Assessment (QA&A) committee and their clinical observations, will be important leaders in the QAPI process. For our readers who have not familiarized themselves with QAPI, I highly encourage you to do so soon. This data-driven, rapid-cycle process strategy has the potential to make major improvements in a facility’s overall efficiency, productivity, accuracy, and quality of care.
Change in health care, especially the regulatory arena, is generally slow, but things are certainly heating up in the PALTC world. I for one am hoping that the changes we expect to see starting later this year will turn out to be positive ones, enhancing the care we deliver to our patients and even resulting in greater recognition of the work we do — and perhaps, eventually, improved reimbursement, too.
Dr. Steinberg is chief medical officer for Mariner Health Central in California and a longtime nursing home and hospice medical director. He is editor in chief of Caring
and chairs the Public Policy Committee for the Society. The views he expresses are his own and not necessarily those of the Society or any other entity. He may be reached at [email protected]
and he can be followed on Twitter @karlsteinberg