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What Payment Reform Means for the Future of Long-Term and Post-Acute Care

Published on 7/2/2018
Several years ago, Neal Patterson, the late co-founder of Cerner, commented that the electronic health record (EHR) was becoming a commodity. The basic infrastructure needed to digitize and collect data was in place. Organizations can capture data effectively, but the true benefits today and in the future rest on what organizations will do with all the data that they are capturing.  

The value of data analysis in long-term and post-acute care 

Shockingly to some, there are long-term and post-acute care (LTPAC) organizations today that don’t use a modern EHR, the tool that has been called a commodity. Those organizations are already behind, and will find themselves at serious risk in this rapidly evolving and changing environment.  

Using the information housed in EHRs, organizations can look across their organization and their long-term and post-acute partners to analyze costs, referral patterns and identify leakage. They can use that information to drive improved clinical results for their patients. They can better identify and position themselves amongst their referral partners.  

The Centers for Medicare and Medicaid Services (CMS) continues to rapidly propose sweeping overhauls. Our current payment system is unsustainable, and over the next several years we can expect to see CMS continue to shift models from fee-for-service to value-based payment systems. The current methodology, with separate LTPAC providers delivering patient care in silos, is obsolete. It’s time to start thinking differently about treating patients across the continuum of care.  

Transitioning to patient-driven methodologies 

Inpatient care can be extremely expensive and often is not the best place for patients to recover. Taking care of the patient at home, or in another post-acute venue, can increase patient satisfaction, avoid costly care and, with active monitoring systems, avoid rehospitalizations.  

Medicare fee-for-service, which has historically accounted for the majority of post-acute care, is on its way out. Today, as CMS is pushing for more value-driven and patient needs-driven systems, we’re beginning to see providers adjusting their own practices.  

The most recent example of this is the patient driven payment model, scheduled to be rolled out to skilled nursing facilities in 2019. We are seeing similar changes in home care as well.  For rehabilitation providers, those changes will also likely come sooner rather than later. 

LTPAC Medicare providers are already operating on razor-thin margins, so there is little room for error when transitioning to a value-based payment model. We see the push toward value-based payments at the federal level and state level as many states now support Medicaid Accountable Care Organizations and Managed Care Organizations to administer these value-based payment arrangements.  

CMS is advocating states to commit to their own value-based payment systems through State Innovation Model (SIM) grants and the Delivery System Reform Incentive Program (DSRIP) for Medicaid, which require states, as a condition of participation, to develop a payment reform strategy. For example, beginning in 2013, Idaho’s State Healthcare Innovation Plan began pushing equality measures by transforming the state’s methodology from volume to value, and they are not alone

Promoting interoperability 

In the last few years, acute and ambulatory providers have seen the Meaningful Use program transform from an incentive-based opportunity to adopt EHRs to a demand for interoperable health data. In April 2018, CMS proposed to rename its Meaningful Use program to Promoting Interoperability to reflect the importance of these changes.   

LTPAC providers have been living this shift to interoperable data since the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act). LTPAC providers across nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term care hospitals have been required to standardize patient assessment data to promote interoperability and improve the quality of care.   

To ensure a consistent and interoperable future, IMPACT also requires CMS and the Medicare Payment Advisory Commission (MedPAC) to develop a unified post-acute care payment model by 2023.  

Value-based care 

As we make the transition to value-based care, value needs to be thought in terms of outcomes, not cost. By standardizing assessments and methodologies, committing the time and energy to measure value within care venues and then comparing cost and quality simultaneously, we are able to lower readmissions and create more affordable care.  

Post-acute care can be the largest contributor to patient costs per episode in value-based programs, and risk-bearing entities in value-based care models are looking for ways to provide efficient care at lower costs.  

Post-acute organizations must provide value through higher outcomes and present those results to their risk-bearing partners. LTPAC providers can utilize resources, such as their EHR, to find efficiencies, measure value and determine their “sweet spot” of services. Referrals should be carefully reviewed with the care team to determine the right fit for the patient goals. 

Without a doubt, the health care environment is moving toward a world that rewards value over volume. The patient needs to be at the center of all care decisions, and future regulatory changes will be focused on this philosophy.  We now find ourselves at the apex in this shift, a point of no return, and organizations must adapt rapidly to flourish in the coming years.  

Organizations should survey their positions across the continuum of care to identify where they are best positioned to succeed in patient care and outcomes in this new environment. By understanding and utilizing resources and aggressively pursuing interoperability with care team partners, organizations will be well positioned to capitalize on successes in the future. 

As the patient record becomes a commodity, it’s the analytics, the data warehouses and the connections that are going to define the winners in the future. Only a few HIT providers in today’s landscape are well-positioned to deliver this functionality to the providers who desperately need it. 

We share a commitment with long-term and post-acute care (LTPAC) providers to help make care management better than it is today. Learn more here.