Post-acute providers have had a host of regulatory and payment changes to contend with this year, and they should prepare for more of the same in 2019. CMS’ current initiatives demonstrate a strong commitment to transforming care delivery and reimbursement in post-acute settings. CMS is also committed to connecting providers across the continuum. Therefore, to succeed on key CMS initiatives in 2019 and beyond—the Value-Based Purchasing Program, the Patient-Driven Payment Model, and the Quality Reporting Program—PACs will need to develop a strategy that both improves the quality of care in their own setting and aligns them more closely with upstream and downstream providers.
Value-Based Purchasing Program
Payment models have been slower to change in the post-acute space than in acute settings, but the SNF Value-Based Purchasing Program (and its sister program, the Home Health Value-Based Purchasing Program) shows that CMS intends to transition PACs to value-based reimbursement. SNF providers now have up to 2% of their Medicare fee-for-service (FFS) revenue tied to performance on a readmission measure called the SNFRM. The program was not designed to be budget neutral, so while some SNFs are realizing additional revenue through the program, most providers have received payment modifiers that result in net loss of Medicare payment. The readmission measure is calculated based on Medicare FFS claims data, which means that the measure will only capture a portion of the patients cared for by SNF providers. More importantly, the measure will be calculated long after performance has actually taken place, given the long turnaround time for CMS to collect claims data and calculate the rates. While it’s too late to impact FY 2019, SNFs can avoid incurring penalties down the road by strengthening discharge planning processes and communicating with downstream providers like Home Health to prevent unnecessary hospital readmissions. (Note: CMS is expected to publicly release rates for the CY 2017 performance year later this year—providers should monitor Nursing Home Compare for this announcement to see how they rank against peers.)
Patient-Driven Payment Model
The Patient-Driven Payment Model (PDPM), which will radically change the way SNFs are paid under Medicare FFS, goes into effect on October 1 of 2019 (its sister program in Home Health, the Patient Drive Payment Groupings, will also see changes next year). The current RUG-based payment model has been criticized for incentivizing SNFs to overutilize therapy services to place patients in higher-paying RUG groups to maximize their Medicare reimbursement. In contrast, payment under the new PDPM is based off the patient’s clinical characteristics reported on the MDS, placing a burden on SNFs to accurately assess needs upon admission and creating an incentive to connect with acute providers referring patients into the SNF. The PDPM also introduces variable per diems that decrease over the patient’s stay, which increases the pressure on SNFs to transition patients back into the community more quickly and creates an incentive to also connect with downstream providers caring for patients after discharge.
SNF Quality Reporting Program
Late in October, a whole slew of new quality measures was posted on Medicare’s Nursing Home Compare website pertaining to CMS’ SNF Quality Reporting Program (QRP). Unlike quality measures that have been publicly reported in the past, the QRP measures can be used to compare SNFs to other types of PAC providers in their market, increasing competition and putting pressure on SNFs to provide higher quality care at lower costs. In addition to the focus on quality in the SNF, two of the QRP measures also put pressure on SNFs to look beyond their four walls—a measure on discharge back to the community and a rehospitalization measure that begins at the point of discharge from SNF (this measure was held back in October but looms on the horizon). The entire period of measurement for the rehospitalization measure occurs outside of the facility, which will make it vital for SNFs to strengthen relationships and share data with lower acuity providers taking on patients after their discharge from SNF.
A Strategy for Success in 2019
All three of these CMS programs emphasize the importance of continuing to improve quality in post-acute care settings. They also show the momentum behind the transition to value, not strictly in the sense of new payment models (although it’s certainly clear that reimbursement at this end of the continuum is starting to move away from FFS), but in providing effective and consistent care across the entire patient journey.
PACs need to start looking outside their own walls in 2019. On the one hand, they need to understand what’s happened with their patients prior to being admitted to their facility, which they can do by building partnerships with the acute providers who are sending them referrals. On the other hand, they need to invest in what’s happening to patients after they discharge them, by strengthening their discharge planning processes and building partnerships with downstream providers. Communication and data-sharing are critical in both cases.