Congress has imposed readmissions standards on the profession, but providers that commit to quality have a chance not just to survive the new environment, but to thrive in it.
As part of a short-term fix to the perennial question of Medicare’s physician payment formula, Congress tacked on a whole new catalogue of regulations, requirements, and incentives aimed at making providers focus on needless trips back to the hospital.
\It’s what some policy wonks call “value-based purchasing.”

‘I Guess We Were Right’

The new regulations weren’t a surprise; lawmakers and policymakers have been focused on cutting Medicare expenses for years, and hospitalizations account for nearly half of the public’s health care spending. In fact, before Congress imposed its first readmissions standards on hospitals, long term and post-acute care activists had been coming up with their own answers to the problem.
It wasn’t just a matter of cost, either.
“We know that when people go back to the hospital, they often come back in worse condition than when they left,” says David Gifford, a medical doctor and senior vice president of quality at the American Health Care Association/National Center for Assisted Living (AHCA/NCAL). “They’re more debilitated. The acute illness that led them to go to the hospital—the pneumonia, the heart failure—that’s treated, but the person comes back in worse shape.”

AHCA/NCAL has tasked its members with finding ways to reduce avoidable readmissions by 15 percent no later than March of next year.

“To us, it was sort of a no-brainer,” Gifford says of the quality goal. “You could have better outcomes, lower costs, and offer a better quality of life. I guess we were right, because now everyone’s focusing on it, too.”

Reality Bites

If providers hadn’t been focusing on readmissions before, the new federal mandates should grab their attention. The new law means that, beginning in fiscal year 2019, officials will hold back 2 percent of providers’ Medicare cut each fiscal year. Up to 70 percent of that money will go into a reward fund, and providers that keep their rates low, or lower their readmission rates significantly, will get a chance to win the money back.
Provider advocates aren’t thrilled about it, but they say their lobbying efforts helped put a lot of incentives in the bill that may mean extra money for homes and centers that keep their eyes on the prize.
“It’s a cut. That is the reality,” says Clif Porter II, the top lobbyist for AHCA/NCAL. “However, what is positive about this is that our providers have some constructive goals before them. If they perform well—and frankly, our members perform better than most—they won’t get cut at all. They also may earn even more.”

Providers that improve their readmission rates, or maintain low rates from the get-go, will be given cash at the end of the fiscal year.

The Era Of Austerity

If that still seems too bitter a brew to swallow, recall that President Obama’s initial proposal would have cut the sector by 3 percent across the board. For many provider advocates, the sad reality is that they are living through the Era of Austerity. Whatever one’s politics, the fact is Washington doesn’t have a lot of money and isn’t in the mood to shell out much of it.

And it’s not entirely as if providers are being singled out. Hospitals have been forced to take much harsher readmission medicine since October 2012. (The penalties amount only to 1 percent at worst, but hospitals can’t get any more than 100 percent of their rates even for improving or excelling.) In the first year of the new regime, more than 2,200 hospitals were dinged for more than $280 million in penalties.

With that in mind, many leading advocates, such as AHCA/NCAL’s Porter, are hoping to build the kind of relationships with lawmakers and policymakers that will help blunt the worst effects of the Era of Austerity, while also banking the kind of favors they can call back on when (if) things improve. Hence, AHCA/NCAL’s advertising slogan, “We Are the Solution.”

Weighing In On Policy

“It’s a differentiator for us,” Porter says, “So policymakers know we’re very committed to working on both sides of the aisle. No one else in this sector is doing that in this town.”
In fact, the readmissions standards that were passed by Congress in March were largely shaped by AHCA/NCAL’s efforts. If cuts are inevitable—and they certainly seem to be—providers can say, “At least let us take a look for ourselves at where we can save,” Porter says.
Porter says he’s confident that the more constructive approach is paying off. “We’ve established credibility for the sector,” he says.

Science On Their Side 

If the new regulations were a long time coming (and still a long way off), providers should at least take comfort that science is on their side. And the solutions can be relatively straightforward.
Years of research show, for instance, that having nurse practitioners on staff makes a critical difference in cancelling those ambulance trips (see sidebar).
Many advocates and caregivers, for instance, sing the praises of the NTERACT system, which stands for Interventions to Reduce Acute Care Transfer.

INTERACT is a quality improvement program to help providers identify, document, and communicate resident needs and problems. The goal is to improve care and reduce the frequency of avoidable trips to the hospital.
INTERACT was first developed by Joseph Ouslander, MD, and a team of researchers at Florida Atlantic University, but it has grown into its own consulting and online resource system supported by private grants.
If it sounds complex, it’s really not, AHCA/NCAL’s Gifford says. The real goal of INTERACT and approaches like it, Gifford says, is to get providers talking to their residents—and to one another.

‘It Makes Total Sense’

“It’s less focused on specific disease management, but more on these broader systems of care,” Gifford says. “If you talked about management for each disease, you’d have to talk about hundreds of protocols, and hundreds of systems. The INTERACT system distills it down to its essence.”
Decades of research have shown that many hospitalizations could be avoided if residents and their caregivers were not only talking to each other, but making sure they were understanding each other, Gifford says. “Doctors and nurses are smart people,” he says. “But they just aren’t always able to communicate properly.”

Systems like INTERACT “really go to the root cause,” Gifford adds. “As soon as you read it and look it, it’s like, ‘Oh, yeah. That makes total sense.’”

‘We’ve Been Working … For A Long Time’

Tom Coble is one provider who sings INTERACT’s praises. A former energy company executive, Coble came to Elmbrook Management Co. in his hometown of Ardmore, Okla., knowing little to nothing about health care (see sidebar). But he did know systems and revenue, and he could see early on that, if his company were going to make any money, it would have to become Medicare-certified.

To do that, he recognized, it would have to deliver quality care. And a key component of quality care, Coble says he realized early in his education as a provider, was to keep people out of the hospital.

His company started putting nurse practitioners in its buildings in the early 2000s. It adopted INTERACT in 2005. In the fourth quarter of last year, one of his centers had a 0 percent readmission rate. “We’ve been working on readmissions for a long time,” Coble says. The key, he says, agreeing with Gifford, is open lines of communication—not just in the buildings, but beyond them.

Emergency Or ‘Stress Of A Family?’

Many hospitalizations, Coble saw quickly, stemmed from anxiety by residents or their families, the common stress of a new environment for an ailing relative. The company now puts “Stop and Watch” guides in admission packets and hands them out to residents, families, and loved ones from day one, Coble says. The cards are an early warning tool, a part of the INTERACT system that gives caregivers a checklist of physical changes in condition to watch for.

The choice, as Coble sees it, is to send a stricken person to the hospital needlessly, or “just deal with the stress of a family worried about their loved one.”

Additionally, Coble says, his staff have worked hard to develop “lines of contact” with local emergency rooms. In those nonemergency cases, “We can call [the hospital] and tell them, ‘We can handle this. This family just wanted to be comforted,’” Coble says. “Most often, we can get those residents back to our facilities without the admission.”

‘They’re Going To Fall Behind’

Gifford is cheered by examples such as Coble’s, but he hopes the rest of his colleagues won’t take too long in following Coble’s lead. The 2019 penalties are coming faster than anyone thinks.

“We’re trying to talk about instilling broader systems of care,” Gifford says. “They take time to implement. If people think it’s off on the horizon, they’re going to fall behind, and their center is going to suffer.”

AHCA/NCAL has been working on its quality goals since 2012. One of the things Gifford says he’s learned from the experience is that a targeted focus actually can have the broadest possible impact. Those centers that have reduced readmissions, for instance, have also reduced hospitalizations, he says.

“Clearly, we’re seeing improvement across the board,” he says. “The lesson is, if you focus on the root causes, you can change for the better. If you flit from problem to problem, you do end up doing nothing, and things don’t really change.”

Also, see The Bottom-Up Road To Quality