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Long term and post-acute care (LT/PAC) providers are accustomed to tracking the many rules and regulations that guide their business strategies when it comes to the Medicare program, from deciphering annual payment rate rules to meeting new quality incentive guidelines.

In recent years, providers have had even more added to their plates to understand Medicare oversight and guidelines.

This is because the program is moving away from fee-for-service (FFS) reimbursement methods to those under the wide umbrella of value-based purchasing (VBP).

The demands of VBP are many and affect the very foundation of how stakeholders in the health care system plan, execute, and deliver care and services.

The LT/PAC profession backs efforts to move to VBP systems for post-acute care delivery, but there is caution on how this is achieved given the low-margin businesses LT/PAC providers operate and concerns that it may be overlooked in some VBP system designs.

Still, when it comes to the recent spate of VBP-based legislation that has been signed into law, the LT/PAC sector has supported major new initiatives, like those incorporated in the Protecting Access to Medicare Act of 2014 (PAMA).

The Skilled Nursing Facility (SNF) VBP program written into PAMA offers a readmissions incentive program that creates a payment adjustment of up to a 2 percent reduction applied to a SNF’s Medicare Part A payment for a year. 

PAMA may just be another in a long list of acronyms to some, but for SNFs, the VBP program that came from the law will have a direct dollars-and-cents effect on bottom lines by linking care outcomes to financial incentives.

How it works is that starting on Oct. 1, 2018, all SNF Medicare Part A rates will be cut by 2 percent to fund an incentive payment pool. At that time, the Centers for Medicare & Medicaid Services (CMS) will adjust payments and return some amount to providers based on how well they do in managing hospital readmissions by meeting or exceeding certain performance standards.

Separate from other programs like MACRA (the Medicare Access and CHIP Reauthorization Act), the VBP program will allow providers to earn back part of their 2 percent payments based on a center’s rehospitalization rate in calendar year (CY) 2017, or its improvement rate between CYs 2015 and 2017.

CMS will use an all-cause measure to identify rehospitalizations within 30 days of admission to a SNF.

If skilled nursing providers think they don't have to focus on the SNF VBP program this year because it does not affect payment until 2018, they would be wrong, according to the American Health Care Association (AHCA). This is because the program data collection has already begun for the VBP program, following a timeline to collect the following:

AHCA said providers should know how they are trending and put plans in place to improve their scores by:

PAMA is just one of the laws that have presented challenges and opportunities for LT/PAC providers over the past five to 10 years.

For instance, there is the eponymous Affordable Care Act (ACA), which affects LT/PAC providers indirectly on a health care basis and directly on an employer basis.

At the time of publication, the future of the ACA was in doubt, given the actions in Congress where the House of Representatives on May 4 passed the American Health Care Act (HR 1628), a proposed bill to repeal and replace large parts of the ACA, including the elimination of its individual and employer mandates.

But, a law much more pertinent for LT/PAC operators is the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act). This 2014 statute attempts to remove silos between the various health care settings by standardizing assessment data gathered by post-acute care providers. By using a uniform set of metrics for standards, the intent is for Medicare to ultimately develop one prospective payment system for all PAC settings. Standardized reports to meet the requirements of the IMPACT Act start in 2018, with unified payment envisioned by the year 2023.

MACRA is also of interest to LT/PAC providers, not necessarily because it is written for them, but because it furthers the case of value over volume at one of the most important levels: for clinicians.

Does MACRA directly impact the facility owner? Yes and no. MACRA the law mentions nursing centers in the LT/PAC setting when it comes to rehabilitation, but CMS in setting its rules does not, a point that has generated much discussion from the LT/PAC profession as it seeks to be rolled into the MACRA incentives system.

However, the law offers a twist, says Alex Bardakh, director of public policy and advocacy for AMDA – The Society for Post Acute and Long Term Care Medicine, which represents physician practices and physicians who practice in LT/PAC. The direct impact, he says, is on physicians who are billing in Medicare Part B, even though their patient population is mainly residing in skilled nursing care centers.

“The physician and facility are very, very different under MACRA. A lot of times this is confusing and can lead to misunderstandings and misperceptions about how penalties and programs apply,” he says.

In MACRA’s Quality Payment Program there are two payment options for participating clinicians to choose from by 2019 if they are conducting business in the Medicare program. One is called the Merit-Based Incentive Payment System (MIPS), derived from traditional FFS payment, and the second comes under the Alternative Payment Model (APM) heading.

Clinicians who bill Part B services in a nursing center, home health setting, or even in their office practice are subject to participation in the MIPS program, along with the rewards or penalties that come with it, which this year amount to plus or minus 4 percent.

“The majority of physicians who practice in this setting will be subject to MIPS,” Bardakh says. (See sidebar, below.)

Technically, CMS says clinicians are included in MIPS if they bill Medicare Part B more than $30,000 a year in allowable charges and provide care for more than 100 Medicare patients a year. Clinicians include physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists.

“What you have right now is that in 2017 you have an option for physicians, et al., who are able to participate. But none of your rehab providers is able to participate at this point,” says Joanne Wisely, vice president of legislative advocacy for Genesis Rehab Services/Respiratory Health Services.

Rehabilitation providers are going to be able to participate in the incentives and payments in two years, but even then, the CMS regulation is written in such a way that only rehab practitioners in private practice can participate.

“So, your skilled nursing facility and your Medicare outpatient therapy rehab agencies are not able to participate even when the rehab private practitioners begin their participation because of the way CMS says claims are being processed,” Wisely says.

In simple terms, this is because CMS says it cannot process the LT/PAC claims, the so-called institutional claim. Up to this point, Wisely says, there have been two explanations from CMS on the matter. One is the aforementioned claims processing system limitations, and the other is that—particularly for SNFs—their population is already captured under a consolidated billing rule. “From my perspective, I cannot tell you if both or either of those are fully aligned with MACRA law, but I am hard-pressed to understand how we can be written into the law but written out of the process,” she says.

“I do know that AHCA and the National Association for the Support of Long Term Care have both commented repeatedly because the original MACRA law wrote all rehab providers into it,” Wisely says. The overarching theme on the matter, from her viewpoint, is that when someone thinks of the patients that utilize skilled nursing care, and the rehab agencies that work in the LT/PAC setting, it is these people who have the most problematic medical needs, which makes it puzzling that some stakeholders in this mix are in MACRA and some are not.

“They are the more medically complex population that is treated and then discharged to be provided services by the other Medicare rehab providers who are able to participate in MACRA and can submit the essential information on their claims,” Wisely says.

The fact that LT/PAC centers are not directly part of MACRA comes down to CMS making the law’s implementation about claims processing and not about patient care, she says.

While Bardakh says skilled nursing operators have their own value-based programs to be concerned about—like PAMA and the IMPACT Act—MACRA remains part and parcel of a movement that requires attention since it puts clinical provider payment changes at the doorstep of a SNF owner.

Even with the seeming oddity of being sort of in and sort of out of MACRA, it is a law that LT/PAC providers should be aware of, Bardakh says. “It is beneficial to be ahead of the curve. As an owner of a facility, they need to be cognizant of the entire system and understand how physician group practices that serve their buildings operate,” he says.

This is because MACRA impacts how many times physicians see patients in their buildings. No longer will the number of visits be an incentive to see patients as they do under FFS, but rather the focus will now be on outcomes, which may affect the number of times a physician makes rounds in a LT/PAC setting.

“[SNFs] need to be proactive in reaching out to physician groups and saying, ‘How can we work with you to maximize your potential in caring for these patients?’” Bardakh says. “It is all about becoming part of one system.”

One way for getting ahead of the curve on VBP programs is for LT/PAC providers to improve their technology to coordinate patient records on a similar basis as do acute-care hospitals with physician groups. This may involve more than straightforward electronic health records (EHRs), given the complexities and demands of coordinating care with acute-care hospitals and physician networks.

A new report by Leavitt Partners, a health care consultancy, finds there is an intense new interest on the part of hospitals to coordinate care for patients after they leave their buildings to transfer to the post-acute setting, be it in a nursing center or to their homes. This is because they need to get positive outcomes from their post-acute care providers in order to meet the incentives offered in the value-based environment.

“The trend toward value-based payments increasingly holds health systems accountable for post-acute spending and care, and a health system’s success relies increasingly on PAC providers’ cost, quality, and overall ability to manage patient care,” the Leavitt report says.

The roadblocks in arranging efficient PAC management programs to get a patient from the hospital to the home are many, Leavitt says. These start with LT/PAC coordination issues, many of which are associated with technology gaps between acute and post-acute settings, and also include variation of cost and quality at each PAC setting.

And with new statutes, like MACRA, PAMA, and IMPACT, there is even more pressure on LT/PAC providers to show hospitals their worthiness as partners through their patient outcomes data.

To do so, providers must be on top of the reporting requirements for all types of providers in these laws, and see how as a skilled nursing care center or other LT/PAC operator they can display quality outcomes if their facility is made part of the care continuum, says David Muhlestein, PhD, vice president of research at Leavitt.

Andy Edeburn, principle performance partner at Premier, a health care improvement organization based in Charlotte, N.C., tells LT/PAC clients they should be attuned to all VBP developments, no matter the source.

For MACRA, he says, the law is simply an extension of the ideas of VBP to the clinician level. Accountable care organizations (ACOs) and bundled payments “really served to impact the acute-hospital industry in the last five to seven years as a result of the ACA,” Edeburn says. “And, what MACRA does is it creates the same arc and trajectory for physicians.

“MACRA shifts toward quality and outcomes, and the payment formula under MACRA will serve to improve quality and reduce cost.” This is the same way the skilled nursing care profession is facing SNF value-based purchasing as a result of PAMA and IMPACT, he says.

Edeburn also notes the way physicians tend to their patients in the LT/PAC setting will likely change as well, given the focus on outcomes over volume in MACRA and other VBP models. “The physician following the patient in these settings has always been focused on volume, to see as many patients as possible during the one day or two days, etc., that they are in the nursing homes,” he says.

“Now in the future after the year 2020, because of the nature of outcomes for patients being measured by MACRA, this will affect physician payments.” They can still see as many patients as they want, but the outcomes and quality results and the performance characteristics around those patients will be a deciding factor on payment, he says.

“In the past it has always been, I saw a patient, I send a bill for the visit, and I get paid.

“Now it’s I saw a patient, what is the outcome for the patient and the total cost of spending on the patient…and that will have an impact on payment,” Edeburn says.While some of the programs in laws like MACRA seem to be something to worry about well into the future, he says, LT/PAC players should be adjusting their thinking and investing in new IT now because VBP is here to stay.

“It remains the wave of the future regardless of who is in the White House,” Edeburn says. “While there has been a lot of focus on ACA repeal and replace—that is what is politically significant right now—on the Medicare side, the momentum toward quality-based payment will not change.

“If you keep putting off getting into this space, the opportunity to get into this space gets narrower and narrower all the time,” he says.

LT/PAC providers should not only bring their EHR systems up to snuff, they must be prepared to present their quality outcome data to acute-care hospitals and physician groups setting up ACOs and bundles, among other alternative payment models.

 

“Nursing homes cannot create an ACO, but some organizations have gotten into them….Earlier adopters are positioned to succeed when the paradigm shift [like value-based purchasing] becomes the new normal,” Edeburn says.

 

ACOs and bundles mean jumping in feet first for the SNFs that have acted thus far, tying into preferred and contractual relationships and taking on risk to be more directly engaged.

“The longer people try to stay outside the pool, the smaller the pool gets,” Edeburn says.