Post-Acute Care Transformation Taking Hold in SNFs

Payment reform, new regulations, and opportunities to boost quality of care for older patients with comorbidities are revolutionizing skilled nursing facilities.

Transformational change has reached a critical mass in the post-acute sector in general and at skilled nursing facilities in particular, a pair of experts in the field says.

"The skilled nursing facility industry has migrated from an industry that was based on residential services to an industry that is based on healthcare services," says Philip Glassanos, vice president for business development at Norwell, MA-based Welch Healthcare & Retirement Group.

About 75% of patients at Welch's skilled nursing facilities (SNFs) have lengths of stay less than 20 days, he says. "The industry has fundamentally changed."

An ever-increasing number of SNFs nationwide are embracing the shift from fee-for-service medicine to delivering quality care at the lowest possible cost, says Kris Mastrangelo, MBA, president and CEO of Harmony Healthcare International, a post-acute care consultancy based in Topsfield, MA. Mastrangelo was recruited to work as an occupational therapist at a post-acute care facility in the late 1990s, when quality was problematic at many SNFs, she says. "They had such a tainted reputation"

Now, payment reforms such as hospital readmission penalties and bundled payment initiatives are spurring change in post-acute care, Mastrangelo says. "The driving factor is reimbursement. No one is going to improve quality unless there is reimbursement… This is the revolutionary change—Tying the payments to the outcomes. It's not the display of five stars or the display of quality outcomes. It's about the reimbursement. Everybody's toes are going to be held to the fire on outcomes and payment."

The Centers for Medicare & Medicaid Services is set to revamp regulations for SNFs and other post-acute settings, she says. In July, the agency released a proposed rule that includes several new regulations, with the Final Rule expected in November. In the Proposed Rule, CMS officials note that regulations for post-acute care facilities have not been comprehensively reviewed and updated since 1991.

The proposed regulations include several significant changes:

• New protections against resident abuse and neglect such as specifying that "facilities cannot employ individuals who have had a disciplinary action taken against their professional license by a state licensure body as a result of a finding of abuse, neglect, mistreatment of residents, or misappropriation of their property"
• "Visitation requirements to establish open visitation, similar to the hospital conditions of participation"
• Resident rights revisions such as "addressing roommate choice"
• A declaration that "quality of care and quality of life are overarching principles in the delivery of care to residents of nursing homes and should be applied to every service provided"

"This document is fascinating," Mastrangelo says. "The concepts are excellent, but the cost implications are enormous."

Pace of SNF Change Accelerating
The growth of accountable care organizations in Massachusetts since passage of the Patient Protection and Affordable Care Act in 2010 has accelerated cooperation between hospitals and SNFs significantly, Glassanos says. "What's different now is the pace of change has moved dramatically. The pace is much more compelling."

Pioneer ACO Program Saves $384 Million, OK'd for Expansion

The Pioneer ACO program, which CMS launched in 2012, has helped push SNF reforms in the Bay State, Glassanos says, noting that there are fewer than two dozen Pioneer ACOs nationwide and five of them are located in eastern Massachusetts. "The ACOs have tried to pick a select number of skilled nursing facilities to whom they make a commitment, and we have made a commitment to them. There are real opportunities to improve quality and reduce cost at the same time."

He says one major opportunity is that Pioneer ACOs have an exemption from the CMS rule requiring patients to spend at least three days admitted at an acute-care facility to qualify for the highest rate of Medicare coverage at SNFs. "The upside for us by working in these relationships is we have been able to improve what we do clinically. Our goal is to say we can do more. We can take patients right out of the emergency room, and they don't have to be admitted into the hospital."

Although SNFs are getting the opportunity to work with more medically complex patients, they also are losing patient volume to home health agencies as hospitals strive to discharge more and more patients to the home setting for procedures such as hip and knee replacements, Glassanos says. "Most of these patients should be going home."

Bundled Payments' Disruptive Effects Detailed

Particularly in the sphere of bundled payments, hospitals also are pushing their SNF partners to drive down length of stay, he says. "Length of stay has gone down dramatically. The financial impact has been significant. We still get paid based on days."

Until payment reform efforts catch up with care redesign initiatives, SNFs will face a daunting financial challenge.

"Getting from here to there is the painful part," Glassanos says. "The transition piece is difficult. We're seeing a lot more patients, but they're staying for a shorter period of time."

SNFs are being confronted with an adaptation imperative, Mastrangelo says. "You are going to need savvy leaders. They are going to make or break this transition… They need to adopt an evolutionary philosophy."

Key SNF Survival Strategy
A crucial area for SNF leaders is managing partnerships between their organizations and hospitals, she says. "Tighter relationships with hospitals ensure patient census levels at skilled nursing facilities, but it's easier said than done. Not everyone gets a tighter relationship with a hospital."

Mastrangelo says one way SNFs can make themselves an attractive partner for hospitals is to boost their star ratings on Nursing Home Compare, the online assessment tool administered by CMS. The star ratings have three primary components: state surveys, staffing levels, and a quality rating based on a dozen metrics. "If I'm running a SNF, what can I impact immediately? It's the quality indicators," she says.

Just like a consumer seeking to improve credit scores, the first step SNFs need to take to improve their Nursing Home Compare star ratings is to make sure their quality documentation is free of errors, she says. SNFs need to ensure proper preparation of each patient's Minimum Data Set document, which establish a detailed clinical assessment at the time of admission to a skilled nursing facility. "That's low-hanging fruit… then you see how you can improve individual quality indicators such as pain and wound care," Mastrangelo says.

For many SNFs, improving quality of care to attract hospital partners will require a leap of faith, Glassanos says. "There is no way to ensure anything. All you can do is provide quality services and be a facility that others want to do business with."

While acknowledging the existential challenge that faces SNFs with limited resources, Mastrangelo says post-acute care innovators have the potential to achieve success as organizations and caretakers for older patients with comorbidities, who constitute the country's most vulnerable patient population. "In a time of change, don't panic. You need to sit back and see the opportunities."