Changing Payment Models: Shifting Focus on Post Acute Care

Introduction

Many health care providers receive little to no training or education with regard to Post Acute Care (PAC) options for their patients. In fact, some have difficulty naming the four PAC options for their patients defined by Centers for Medicare and Medicaid Services (CMS): Long Term Care Hospitals (LTCH), Inpatient Rehabilitation Facilities (IRF), Skilled Nursing Facilities (SNF), and Home Health Care (HHC).¹ The expenditures for these services are not inconsequential. In 2014, a total of 59.2 billion Medicare dollars were spent on PAC services. The highest amount was spent on SNF care ($29.1 billion), followed by Home Health ($17.9 billion), Inpatient Rehabilitation Facilities ($7.1 billion), and Long Term Care Hospitals ($5.1 billion).² As physician, hospital, and system payment models change from volume to value, it is critical for physicians to understand the services, costs, and outcomes each of these settings provide for their patients.

Current

There is little doubt that PAC utilization, spending, and variation of care is receiving greater focus from providers and payors. In fact, a recent Institute of Medicine (IOM) report on geographic variation in Medicare spending found that post-acute care spending is the largest driver of variation for Medicare spending.^3,4 Initially, this may be surprising to some; however, that shouldn’t be the case when one realizes that each PAC setting has different regulator y, payment, patient criteria, and patient assessment tools (See Table 1).^5,6,7,8 These different levels of post-acute care provide very different levels of medical and rehabilitation care. Physicians need to be aware that each setting has different levels of services and costs to the payor.

Table 1.

Post Acute criteria

Location	Facility/Patient Eligibility	Payment	Assessment Tool
Long Term Care Hospital	Acute Hospital need Length of stay >25 days	Prospective payment system per discharge rate	Medical issues
Inpatient Rehabilitation Facility	Patient generally tolerate and benefits from 3 hours of therapy	Case max group (CMG) adjusted; payment per discharge	Functional Independent Measure (FIM)
Skilled Nursing Facility	Need short term skilled care (nursing or rehab) following hospital stay of at least 3 days	Daily rate adjusted by resource utilization group (RUG)	Minimum Data Set (MDS)
Home Health	Beneficiaries generally restricted to their homes and need skilled care (nursing, PT/OT, speech, medical social work, home health aide)	60 day episodes and service needs	Outcome and Assessment Information Set (OASIS)

The goal of PAC is to provide the appropriate level of medical and rehabilitative care at the right time. This requires matching medical, functional, situational (social), financial, geographic location, and each patient’s choice (See Table 2) with the level of rehabilitation intensity, coordination of care, and comprehensiveness that each PAC setting provides. In many instances, the decision to treat a patient in a particular PAC setting is relatively clear. In instances when it is not clear, clinical judgment plays a major role in the selection of the appropriate PAC setting based on the patient’s medical and functional needs, while taking into account the totality of the patient’s situation and potential to live independently with or without family support.⁹

Table 2.

Post Acute Care Patient Screen

Medical	What are the patient’s critical needs/monitoring/care? Level of medical supervision required, social programs Wound care, ventilator, cardiac, other
Functional	Therapy and mobility needs, access to special equipment, tolerance to therapy
Social	Structural barriers, at home, family/caregiver assistance and support, reasonable chance to return to the community setting
Financial	Not all payers cover all PAC settings Most PAC settings require payor clearance for transition to a new level of care
Geographic	Not all areas have the same PAC services available Greater number of SNFs than IRFs or LTACs
Choice	Where does the patient want to go? Is it an informed choice? Does the patient understand the different services he/she may or may not need and what is provided by each setting?

If patients are transitioned to a PAC setting “too soon” from an acute care hospital or to a setting not equipped to handle their medical needs, the chances for readmission to an acute hospital increases.¹¹ Unplanned readmissions often are considered a quality failure resulting in added morbidity to the patient and costs to the system. In fact, CMS has a readmissions reduction program that places monetary penalties on hospitals that have excess readmission ratios for specific conditions (e.g., heart failure, pneumonia, acute myocardial infarction, and others).¹⁰ One strategy to improve patient care and decrease readmissions is to educate providers regarding the different levels of PAC and their services. It has been demonstrated that knowledge deficits about PAC have been implicated in poor care transitions resulting in adverse outcomes such as higher rates of readmissions, increased use of hospital services and increases costs.^11,12 However, there is little formal education provided in medical school or residency curricula about transitional care and PAC settings.¹³ At most institutions these subjects are part of the “hidden curriculum,” the knowledge and skills that are not explicitly taught but that learners are expected to “pick up” along the way.^13,14

At the University of Missouri, the Department of Physical Medicine and Rehabilitation completed a study to evaluate internal medicine residents’ knowledge of post-acute care options. It revealed an opportunity for educating physicians. After one lecture, residents increased scoring on PAC educational assessment by 35%. Subjectively 91.7% believed that education on these subjects would lead to safer and timelier discharges.¹⁵ As a result, a more formalized educational program is being developed with the goal of improving patient care.

Change and the Future

As the national policy goal of paying for value rather than volume continues to shape the health care system, many strategies are being pursued to improve patient outcomes and quality while reducing the cost of care. The level of change and innovation to achieve these goals is unprecedented. This is evident as CMS alone implements and oversees many programs: shared savings programs, Accountable Care Organizations (ACOs), Pioneer ACOs, the Bundled Payments for Care Improvement (BPCI) initiative, Medicare Advantage, the Comprehensive Care for Joint Replacement (CJR) mandatory bundling program, the proposed cardiac care bundling program, as well as other value based programs.⁹ Whether these programs are meeting expectations or achieving their desired goals is just starting to be evaluated. Patient experience and outcomes from care are simply not known in any reliable or consistent manner. These issues are especially difficult to evaluate in the PAC setting. As noted earlier, each setting has different payment, regulatory, patient assessment tools, and other measures making comparison difficult (See Table 1). The enactment of the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act) in September 2014 has initiated some standardization of data across the four PAC settings.¹⁶ The goal is that this data will assist with reforming the siloed PAC payment and delivery system in a manner that assists with choosing the right setting of care at the right time for patients. Without this data, the concern of many is that payment and delivery reforms might have the effect of diverting patients to the least common denominator or the least expensive setting regardless of outcome. If this occurs, it could suboptimize the care that our patients receive.

Two of the newer payment concepts that are gaining traction in the PAC world are Bundled Payments and Medicare Spending Per Beneficiary (MSPB). While MSPB has its place in measuring resource use in PAC, using it as the sole measure for PAC Value Based Purchasing (PAC VBP) could be dangerous for our patients. Without balance measures such as accurate risk adjusters, functional assessment, and quality of life measures there is the risk that if this is the sole method to determine whether providers receive incentive payments, this might encourage some providers to only use less costly levels of PAC.¹⁰

The BPCI and Mandatory CJR have been adopted or mandated in multiple areas. It is important to note that not all bundles are the same. CMS has set up four different types of bundled payment models. In both models two and three, the post-hospital costs for patients (that would include any PAC services) are part of the bundle (See Table 3).¹⁷ These bundles are encouraging models of care coordination as facilities are being placed at risk both financially and for patient outcomes. Hospitals and sponsoring entities have employed several strategies to monitor and impact care. In several systems, one strategy has been to develop relationships and to meet with individual PAC providers (SNF, IRF, LTAC, HHC) in their local area. There has been development of care transition protocols and care coordinators to assist with care within the PAC setting. Quality scorecards for individual PAC providers also are being developed based on factors such as: readmission rates; length of stay; number of therapy visits; discharge to community; weekend admissions; time to first home health visit; or multiple issues.

Table 3.

Bundled Payment Models

Model	Definition	Payment
Model 1	Inpatient acute hospital stay	Discounted payment back to facility Physicians paid separately
Model 2	Includes acute inpatient stay plus post acute and related services up to 90 days post hospital discharge	Retrospective bundle Actual expenditure reconciled against target price Physicians paid separately
Model 3	Triggered by acute hospital stay but begins with an initiation of PAC…LTAC, SNF, IRF, HHC	Same as Model 2 but does not include initial acute hospital stay
Model 4	Prospective payment Hospital, physicians, other practitioners	Single prospective payment encompassing all services at the inpatient stay (including physicians)

As with all care, patient choice must always be respected. However, patients, just like physicians, may not be educated about the differences among different PAC providers. As a result, patients often rely on their health care team. A recent study done by the University of Missouri Department of Physical Medicine and Rehabilitation revealed that 61% of patients at a local IRF and 43% at a selected SNF stated they were at their respective facility based on physician recommendation. These results point to the importance of the patient-physician relationship in PAC placement.¹⁸

Conclusion

As payment models change to penalize readmissions, reward care coordination and quality, and place risk on providers, it is critical for systems and physicians to develop integrated PAC programs. Understanding and knowing where your patients go, what services they receive, and quality of service has always been essential. However, with new and evolving payment models that put systems and physicians at financial risk for patient care, the understanding and use of PAC is gaining even greater focus. This is true especially since physicians still play a critical role in influencing patient and family choices in regards to PAC. Based on these facts, in order to deliver the highest quality and cost efficient care, physicians need to have an understanding of each patient’s PAC needs and options. It is and will continue to be a turbulent time for all of medicine; however, as physicians we need to advocate for the right care and right PAC options for our patients.

Biography

Claire Finkel, MD, is a Resident in the Department of Physical Medicine and Rehabilitation, University of Missouri Health Care. Gregory M. Worsowicz, MD, MBA, MSMA member since 2003, is Chair, Department of Physical Medicine and Rehabilitation, University of Missouri Health Care, and Medical Director, HealthSouth Rusk Rehabilitation Center.

Contact: worsowiczg@health.missouri.edu