Home Discharges How hospitals can succeed with bundled payments

How hospitals can succeed with bundled payments

The new discharge mantra: home, home, home

June 2016

Published in the June 2016 issue of Today’s Hospitalist

WHEN IT COMES TO alternative Medicare payments, hospitalists have begun racking up an impressive track record with one new methodology: bundled payments. Starting in 2013, the CMS launched four separate models of the Bundled Payments for Care Improvement (BPCI) initiative.

At this year’s Society of Hospital Medicine annual meeting, three hospitalist leaders with a great deal of experience in the new methodology shared the lessons they’ve learned on how physicians can succeed—and patient care can improve—with bundled payments.

Taking on risk
First up was hospital medicine veteran Win Whitcomb, MD, who is now chief medical officer of Remedy Partners, a company based in Darien, Conn., that contracts with the CMS. Remedy designs and implements bundled-payment programs as part of Medicare’s BPCI initiative.

“If data is king, documentation is queen.”

feature-payments-mitri~ George Mitri, MD, U.S. Acute Care Solutions

In that BPCI demonstration project, which won’t be complete until 2018, the CMS has collapsed about 180 DRGs into 48 episode bundles that last 30, 60 or 90 days, Dr. Whitcomb explained. The CMS has set a target price for the bundles that a hospital, health care system or physician group opts to participate in, then discounts that target price by 2% or 3%. About 1,500 sites—hospitals and nursing facilities—are involved in that project.

Hospitals or physician groups that choose to participate in the program take risk by managing those episodes against the discounted target price.

“If spending is lower than the target, they share in the savings,” he pointed out. “If spending is greater, they have to pay the CMS the difference.” Remedy works with hospitals and physician groups as an “awardee convener,” sharing risk and providing analytics, technology and resources for care redesign. It is the largest convener in the CMS program, which affects close to $13 billion of Medicare spending.

The first big lesson to learn about bundled payments, said Dr. Whitcomb, is how much Medicare spends on post-acute care and how variable post-acute costs can be.

“While an anchor admission accounts for 33% of the Medicare spend for a 90-day episode, SNF costs account for 22% and readmissions make up 17%,” he said. In addition, three-fourths of the variation in Medicare spending across health care systems is due to post-acute care, not the costs of hospitalization. “As hospitalists, we’ve gotten very good at working inside the four walls of the hospital. But our next challenge is understanding what happens when patients leave.”

New skill sets
To succeed with bundled payments, said Dr. Whitcomb, hospitals will need to reduce the number of patients being sent to SNFs and boost the number being discharged home. To do so, he added, hospitalists will need three new skill sets.

1. Palliative care. Palliative care “is clearly the right thing to do,” said Dr. Whitcomb, “and alternative payment models reward judicious use of palliative care, more than fee for service.”

Toward that end, hospitalists need to sharpen their skills at assessing patient risk, figuring out how to get the most out of discussions with patients and families, and how to best manage the symptoms—both psychological and physical—of patients with advanced severe disease.

2. Functional assessments. The next skill set hospitalists should cultivate is functional assessment. “This is brand new,” Dr. Whitcomb said. “We need information to be able to make a rigorous decision about patients’ next site of care after discharge.” Too often, he added, doctors defer to physical therapists who don’t believe a patient can be safely discharged home. Or they rely on a case manager who, after a brief conversation with a patient, believes the patient should go to a SNF or inpatient rehab.

“That paradigm is going to change,” he said. In the future, hospitalists will need to better understand patients’ functional and cognitive status and their ability to perform daily activities. They should also lead the dialogue with physical therapy and case management, raising questions like, “Why not home?” and “What does a patient need to get home?”

3. Transitionalist services. The third set of skills that hospitalists need to succeed with bundled payments focuses on what Dr. Whitcomb called transitionalist services. “I would define those as anything that bridges the gap between when patients are inpatients and when they’re stable and back in the primary care system,” he said. That could include preop clinics, a SNFist or home visit service line, or a post-discharge clinic.

New transitional-care roles
The next presenter was Robert Bessler, MD, the founder and CEO of Sound Physicians, a national physician-led company that is focused on improving quality and lowering costs throughout the acute episode of care. Dr. Bessler gave a big-picture view of how companies have had to pivot from fee for service to bundled payments.

According to Dr. Bessler, Sound Physicians practices around the country are now managing about $2 billion in risk under the BPCI initiative—about 17% of the program. As a client of Remedy Partners, Dr. Bessler said the data Remedy provided on episode costs were a real eye-opener.

Those data showed that average SNF episode costs ranged from about $17,000 to more than $31,000, while readmission rates varied between 20% and 60% from SNFs. The data revealed a similarly large variability in costs and readmission rates among home health agencies.

“It’s no longer acceptable to give patients just a list of five or six SNFs or home health providers,” said Dr. Bessler. “You have to give patients data to help them make an informed choice.”

Data also revealed what he called “an access crisis”: Patients who aren’t able to see a primary care physician within 30 days of discharge run a six-fold greater risk of being readmitted.

Dr. Bessler agreed with Dr. Whitcomb that hospitalists have to bring more evidence to the discharge process. They also need to “be involved in discharge in a much more aggressive way” to make sure patients being referred to post-acute care really need those services.

To lower post-acute length of stay and “to get rid of lazy medicine in nursing homes,” Sound Physicians has now set up its own post-acute care network in which physicians and NPs round daily. “We found that we have to use separate providers,” Dr. Bessler said. “In general, our hospitalists prefer to work in the hospital, not in SNFs.”

To further reduce readmissions, Sound Physicians hired more than 100 transitional care NPs nationwide to make home visits to high-risk Medicare discharges. It also hired transitional care RNs to work in hospitals with case management. The payoff has been substantially reduced rates of readmissions, Dr. Bessler pointed out. One Sound Physicians’ program at Trinity Mother Frances Hospital in Tyler, Texas, with more than 40 hospitalists, saw its readmission rate fall from 28% to 10%.

“You need clear definitions of what success looks like for each of these roles so people aren’t tripping over each other,” said Dr. Bessler. “But our mantra for transitional care is ‘home, home, home.’ ” Patients in the hospital want to be home, and they do better at home, he pointed out.

“If they are in a SNF, our goal is to get them home safely as early as possible,” he added. “And if they are already at home, our goal is to keep them at home and to work to reduce their risk of readmission.”

Needing data
The session’s third presenter provided a detailed look at the on-the-ground changes individual hospitals must make to succeed with bundled payments.

George Mitri, MD, is now chief medical officer of the integrated acute care division for U.S. Acute Care Solutions, a national physician staffing company based in Canton, Ohio. But he spoke about his former experience as vice president of hospital medicine at Aultman Hospital, a tertiary care center in Canton that has more than 600 beds.

At the end of 2013, that hospital decided to take part in Medicare’s bundled payments project. “We figured the bundled payment is the way of the future, and we wanted to learn,” said Dr. Mitri. “We picked the stroke bundle and we said, ‘Let’s experiment with that.’ ” That bundle encompassed DRGs 061-066.

Dr. Mitri said his group learned just how important cost data are when managing a bundle. “We spent all of 2014 without any data from the government,” he said.

Once the data arrived, the group realized that the hospital had lost money that year on several of the DRGs in the stroke bundle, particularly for stroke patients with no comorbidities or major comorbidities. For one DRG, 065, the hospital had spent more than $150,000 above what it took in for those patients.

And, as the other two presenters had pointed out, the CMS data drove home how variable post-acute care facilities are in terms of costs, length of stay and readmission rates. “We hospitalists keep thinking about length of stay in the hospital,” said Dr. Mitri, “but we have to pay attention to the post-acute skilled costs.”

Focus on documentation
To turn that losing position around, Dr. Mitri’s group looked at their documentation. “If data is king,” he explained, “documentation is queen.”

For patients in the stroke bundle, some patients who should have—with appropriate documentation—been coded as a 064 were instead being coded as a 065, which pays less. “You’re going to lose money because you’re using too many resources,” he explained.

To that end, the hospital put together a team that included a hospitalist, CDI nurse and coder to review the charts of stroke patients while they were still in the hospital. By improving documentation, the hospital boosted the payment for each 90-day stroke bundle by $1,000.

The hospital also established a neurohospitalist program, with two dedicated physicians treating stroke patients. It standardized protocols and hired an RN coordinator to follow high-risk stroke patients.

It put in place a protocol-driven palliative care consult, based on a patient’s risk for readmission. “With that, we were able to significantly cut our costs for high-utilizer, high-cost stroke patients.” Between 2014 and 2015, he added, the involvement of palliative care among stroke patients rose from 8% to 14%.

The hospital also optimized patients’ care transition. “Any patient discharged home got one appointment with the neurologist,” said Dr. Mitri, “and one with a primary care physician within a week.”

In 2014, the hospital discharged only 13% of its stroke patients to home, a percentage that jumped to 29% in 2015 while the percentage of stroke patients discharged to SNFs fell from 44% to 30%. Because the hospital also narrowed its SNF network to include only better-quality facilities (see “Steering clear of the one-stars“), the average length of stay for stroke patients in SNFs between 2014 and 2015 fell by four days while the average SNF payment decreased 14%.

As a result, the hospital turned its negative bundle performance in 2014 around without reducing the spend on the acute-care side.

We’ve got to change our mindset in the hospital,” said Dr. Mitri. “When we meet patients in the ED, instead of saying, ‘You’re going to go to a facility,’ it should be, ‘Be prepared, we want to get you back home.’ ”

Phyllis Maguire is Executive Editor of Today’s Hospitalist.

Steering clear of the one-stars

WHILE HOSPITALISTS are very familiar with the five-star scale used to rank patient satisfaction scores for hospitals, they may not know that Medicare uses a similar scale for skilled nursing facilities and nursing homes on its Nursing Home Compare Web site.

As George Mitri, MD, who now works for U.S. Acute Care Services, a national physician staffing company, explained during a presentation on bundled payments at this year’s Society of Hospital Medicine annual meeting, those ratings have been based on three criteria: state inspections, quality data reported by the facilities themselves and nurse-staffing ratios. (In April, the CMS also announced that it was going to publicly report on the Nursing Home Compare site measures derived from hospital Medicare claims, including the percentage of short-stay residents who have an ED visit or are re-hospitalized.)

Of the 15,700 nursing facilities in the country, Dr. Mitri pointed out, 40% have only one or two stars, the lowest rankings. Because SNFs and nursing homes are treating around 1.4 million patients at any given time, “we have about 560,00 patients in nursing homes providing poor quality.”

Furthermore, states vary in their number of higher-quality facilities. “In Texas, more than 50% of the nursing homes have only a one- or two-star rating,” he noted. “But in California, that percentage is only 28%, so patients there have better access to quality.” The same is true, Dr. Mitri added, for home health agencies and rehab facilities.

As part of the changes he helped make at Aultman Hospital in Canton, Ohio (where he used to work) to successfully manage a stroke bundle, clinicians discharged more stroke patients home and fewer to SNFs. They also relied on such rankings to cut in half the number of post-acute facilities they sent patients to, from more than 30 down to 15.

Dr. Mitri urged hospitalists to become familiar with SNF options—and their rankings—in their communities. “Ask your case managers about the ratings for the nursing homes you use,” he said. “Where do you want to send your patients? It’s not just the nursing home next door.”

One audience member pointed out that hospitals are obligated to give patients a choice of post-acute facilities where they can go. But as Dr. Mitri said, doctors and hospitals can certainly drive those decisions toward better-quality facilities.

“Hospitals can’t self-refer patients only to facilities that they own,” said Dr. Mitri. “You have to give patients choices, but that’s very different than just handing them a piece of paper with dozens of facility names and asking, ‘Where do you want to go?’ ”

Stroke patients treated at his former hospital who may need to go to a post-acute facility are given a list of preferred sites. “We explained that we’ve selected these specific SNFs based on quality and utilization criteria and perhaps on patient satisfaction,” he said. “Medicare fully supports trying to narrow networks based on performance.”

Part of narrowing those networks is educating hospital case managers. “Many case managers feel they’re protecting patients by giving them a wide range of choices,” Dr. Mitri said. “I would argue that they’re hurting patients by not giving them better information.”


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