When discussing the alternative payment models being ushered into the long term care sector, the most prominent refer to Medicare programs started in the past few years by the Centers for Medicare & Medicaid Services (CMS), many of them under provisions of the Affordable Care Act.
These efforts and others made a priority by the Obama administration are part and parcel of the CMS goal to have 50 percent of all Medicare fee-for-service (FFS) payments made via alternative payment models by 2018. For 2016, the target has already been met to have 30 percent of these payments under alternatives to FFS.

Assessing The New Programs

The alternative payment programs are the Bundled Payment for Care Improvement (BCPI), Comprehensive Care for Joint Replacement (CJR) and Medicare Shares Savings Program (MSSP).
  • BCPI is a voluntary program that as of Oct. 1, 2015, had 1,500 providers involved in testing an average of nine unique episodes of care. Under the BPCI, hospitals, physician groups, and post-acute care providers accept clinical and financial risk for patients over specified periods of time.
Skilled nursing facilities (SNFs) and hospitals are the most common provider types participating, with almost 50 percent and 30 percent of all participants, respectively. The episodes are for 30, 60, or 90 days.

Interest in this program is said to be waning among providers in 2016, since prior to October 2015, pilot participants could test conditions but not be responsible for spending above a target price.

Providers taking part originally received access to Medicare claims data and target prices, allowing them to assess their opportunities under the program. But since October of last year, CMS has installed a requirement for downside risk to providers taking part, limiting enthusiasm somewhat.
  • CJR is a mandatory program that puts hospitals at financial risk if they do not make quality and care improvements for patients transitioning from surgery to recovery for knee and hip replacements in 67 markets.
Hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries and can result in lengthy recovery and rehabilitation periods. CMS said in 2014 alone there were more than 400,000 procedures in these two feature areas, costing more than $7 billion for the hospitalizations alone.

“Despite the high volume of these surgeries, quality and costs of care for these hip and knee replacement surgeries still vary greatly among providers,” CMS said.

“For instance, the rate of complications like infections or implant failures after surgery can be more than three times higher at some facilities than others, increasing the chances that the patient may be readmitted to the hospital. And, the average Medicare expenditure for surgery, hospitalization, and recovery ranges from $16,500 to $33,000 across geographic areas.”

The CJR model holds participant hospitals financially accountable for the quality and cost of a CJR episode of care and offers incentives for increased coordination of care among hospitals, physicians, and post-acute care providers.
Episodes are defined as the hospitalization plus any services delivered in the 90 days of post-discharge, including inpatient post-acute care, home health, and any associated outpatient care, such as rehabilitation therapy and physician visits.
  • MSSP is the voluntary accountable care organization (ACO) program managed by CMS. In recent months, the agency has sought to sweeten the pot to entice more participants.
CMS in June issued changes to base one of the MSSP payment factors on whether the ACO delivers high-quality care at a lower cost, compared with other providers in its region.

At the time, CMS said, “This change recognizes that health cost trends vary in communities across the country and will give ACOs more opportunities to be successful. The MSSP will also now allow quicker transition to the more advanced tracks in the program for certain ACOs by permitting an extra year under their first agreement before the organization takes on financial risk.” The MSSP program includes more than 430 ACOs in 49 states and the District of Columbia, serving some 7.7 million Medicare beneficiaries.

How Joint Initiative Is Doing

Of these three programs, the CJR model has drawn a lot of attention, given its potential to be a precursor for other mandatory programs covering other procedures and illnesses, like cardiovascular care.

James Michel, senior director, Medicare reimbursement and policy at the American Health Care Association, says SNFs are planning strategies around CJR, but there is not a lot of partnering activity with hospitals to report just yet.

“There is a lot of discussion being had, and hospitals are very much in the planning stages, too, even though CJR has gone live. But because there is no downside risk until January of 2017, it has caused hospitals to be more deliberate in their timing,” he says.

Another possible avenue for long term care providers for inclusion in new payment designs started this past January. The Next Generation ACO Model has 18 participants thus far. This initiative is for ACOs experienced in coordinating care for populations of patients, and allows them to assume higher levels of financial risk and reward than are available under MSSP or other prior CMS ACOs.

Growth in the Next Generation ACO Model may accelerate starting in 2017 when providers are permitted to execute non-FFS payment arrangements between and among others providers.

“This, I think, represents the biggest shift away from FFS that we have seen in these alternative payment models,” Michel says. There is discussion in the SNF community that post-acute care providers are planning to take advantage of the Next Generation option as the new year begins.