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Post Acute Network Development in the Era of Healthcare
ReformRCPA Annual Conference
October, 2014Michael J. Soisson, MS, MHA
Senior Vice President, Vibra Healthcare
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AgendaPost Acute Care: Definition
Post Acute Care History and Evolution
Regulatory and Financial Environment
Post Acute Partnerships
Demonstrating Value
Keys to Success
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Post Acute DefinitionLTACH
IRF
HHA
Hospice
CCRCLTC
Asst Living
Indep. Living
Group Home
Home
SNFMedical
Residential
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Post Acute Care (PAC) by the Numbers
PAC
25%20-25% of the total medical
expense for a Medicare
beneficiary. PAC spending, with
annual growth in the last decade
outpacing other service
categories by 50% or more, now
accounts for a significant portion
of overall Medicare expenditures.
$65 Billion
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CMS Believes
• Over-utilization of SNF days
• 25% of SNF admits could go home
• Amount Saved by Medicare annually if patients utilize the appropriate PAC setting
• The rate at which Medicare spending for SNF, LTC, and Home Health grew annually from 2001-2012
Up to 40%
$10 Billion
Over 8%
Post Acute Care (PAC) by the Numbers
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$4.5 billion
$13.1 billion
$8 billion
Medicare’s Annual Post-acute Expenditures: $65 billion
Medicare PAC Spending 2012
Post Acute Care (PAC) by the Numbers
SNF50%
HHA31%
IRF11%
LTACH9%
Percent spending by Medicare on Post Acute
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CMS SpendingIn 2010, 57% of all spending was on 10% of the
enrollees
82% of all spending was on the top 25% of the enrollees
27.3% of the enrollees were in the 75 – 84 age group but this group accounts for 32.1% of the cost.
And Enrollment in Medicare is going to EXPLODE47.4 million enrollees in 201063.9 million by 2020 (35% increase)
And Medicaid grow is projected at 20%
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Financial/ReimbursementHistorical Payment (HCFA – CMS)
TEFRAPPS
This model promotes silos of care
TodayLTACH $40,000/case IRF $14,500/caseSNF $450 per day ($10,000 per case)HHA $2800 per episode of care (60 days)
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Current Regulatory Environment
LTACH Revised Patient admission criteria (2015)
IRF Presumptive compliance change (2015)
SNF Readmission Penalties
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Acute Care Hospitals
Value Based Purchasing (quality metrics)
Readmission Penalties
Penalties for poor outcomes/hospital acquired conditions
Reduced/elimination of DSH payments
Physician shortage and employment wars
Pressure to merge/acquire or be acquired
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Post Acute Need
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Post Acute Partnership Evolution
Phase I Build it and they will come
Phase II Preferred Providers
Phase III Hospital within Hospital
Phase IV Joint Venture Facilities
Phase V Post Acute Networks
Future Shared Risk/Reward
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The Future Is Now
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ACA = ACO338 Medicare Shared Savings ACO’s (end of
2013)
4.9 million assigned beneficiaries in 47 states
In 2014 15.4 Million Medicare enrollees shifted to Medicare Advantage plans20 Million Medicare Enrollees are now in some kind
of “managed” plan
Managed Medicare is very different from managed commercial (healthy) careMedicare patients = managing chronic diseaseChronic disease management = post acute need
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Post Acute Projects (CMS) Bundled Payments
Model 2 Hospital + MD + Post Acute Provider + readmissions
Model 3Post Acute Provider + readmissions
Medicare CARE Tool Common Assessment Tool for Post Acute
IMPACT Legislation Coordination of Standardized Post Acute data Requirement of a Standardized Assessment Tool Define Reporting Provisions and Quality measures Define Post Acute Payment Systems
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STAC Hospital ChoicesDevelop their own Post Acute Continuum and
prepare to go at risk
Partner with Post Acute Providers who would manage the Post Acute Process and go at riskPreferred Provider Agreements Joint Ventures (Shared risk/reward)
Partner with Payer Sponsored ACO’s and let them manage the care
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Post Acute Provider Options
Do Nothing and hope to be included in all equations
Establish Preferred Provider affiliations with STACH and growing local ACO’s
Be proactive and present Post Acute Management to STACHs and ACOs.
Options Bundled Payment (part of Model 2 with STACH) Bundled Payment (Model 3 Just for Post Acute) Case Rate for ALL post acute service including home Capitation for all post acute service
CREATING VALUE WILL BE KEY TO SUCCESS
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PAC Value Calculation
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Post Acute Partnership:Value
Shorten LOS Reduced Costs Improve patient throughput
Reduce Readmissions
Keep patients within the system
Manage chronic disease
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LOS Impact AnalysisLOS ImpactTotal Patients LOS > 6 & GMLOS 1,016Total Excess Days 5,755Variable Cost Per Excess Day $600Total Savings Potential $3,453,000 25% Capture $863,250
New Patient ReplacementTotal Patients LOS > 6 & GMLOS 1,016Total Excess Days 5,755ADC of Excess Days 15.8Replacement Patients 1151Net Rev per Admission $6,500Total New Revenue $7,481,500
Reducing LOS reduces census. Cost savings are on variable cost and requires actual reduction in staff/supplies; etc to achieve savings
New Patient replacement assumes additional patients are available to fill beds that are open due to reduced LOS. (Estimate 1151 new patients (at ALOS of 5 days)
ACOTotal MC & MA Discharges
% Readmitted from PAC
# Readmitted from PAC
$ Saved by Readmission Avoidance of 1% (ACO savings potential)
Total PAC Discharges
# Touched per Month
% MC & MA Discharged from IP to PAC
2560
$24,000 per case, savings $3.8 mil 1% savings
35,90016,000
44%
1334
16%
Reduce Readmission Impact
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Reduced Readmission (STACH Impact)
Medicare Discharges 11,189
Total Medicare Payment $77,204,832
Payment at Risk (3%) $2,316,145
Readmissions previous Year 1,902 (17%)
Readmission Penalty per discharge $1,218
Readmission Savings if reduce 1% $135,744
1% Reduction in readmissions = 1702 v 1902. 112 fewer readmissions @ $1,218 penalty per readmission = $135,744
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Keys to SuccessShared Goals/Shared Philosophy
Clinical Information;- at the patient level
Understanding cost;- at the facility level and at the patient level
Control (or at least a seat at the table) of Acute Care Discharge Planning Process
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TodaySTAC Hospital is paid on per discharge basis
+/- $6,000 per case regardless of LOS (until cost outlier)
Penalized for readmission within 30 days Incentive is to discharge the patient (ANYWHERE)
as quickly as possible while avoiding 30 day readmissionDischarge to home if possible and manage there or
discharge to Post Acute Facilities that can best manage patient and not readmit
Example: If patient can be discharged in 4 days, hospital receives $6,000 payment ($1,500 per day) vs discharged in 6 days or $1,000 per day
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FutureUnder a managed care, per member per month, or in the ACO model
If paid per member per month basis: Incentive is to:
1. Avoid acute care admissions if possible Only critically ill patients will be admitted
2. If admitted, shortest LOS possible (again, avoiding readmissions) and ideally, discharged HOME.
3. If not home, discharge (as quickly as possible) to the Post Acute Bed that is the BEST VALUE
Discharge to facility that will get the patient home and keep them home as quickly and as low cost as possible
Key to success will be MANAGING the Care
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Some Examples for the Future
SNF @ $600 per day and it takes 20 days to get the patient home ($12,000)
Average SNF discharge to home = 35%
Average SNF readmission rate is 30%
IRF @ $13,000 per case (ave for orthopedic case) with ALOS of 12 days
Average IRF discharge to home = 75%
Readmission Rates for IRF nationally are < 10%
Now
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Future (Catastrophic Cases in Acute)
Patients on Vents for longer time or in the ICU, consider:LTCH
ICU cost is $3,000 per day v LTCH at $1,800 per day for a ventilator dependent patient
Goal would be to keep moving patient to lower cost service that will get and keep the patient homeLTCH, IRF, SNF, Home
Example: Ventilator Patient in an ICUService LOS cost/day Total cost
ICU 20 $3,000 $60,000SNF 20 $600 $12,000Total 40 $72,000
Ventilator Patient transitioned from ICUService LOS cost/day Total cost
ICU 6 $3,000 $18,000LTCH 21 $1,800 $37,800IRF 12 $1,000 $12,000Total 39 $67,800
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Post Acute DefinitionLTACH
IRF
HHA
Hospice
CCRCLTC
Asst Living
Indep. Living
Group Home
Home
SNFMedical
Residential
Under ACO will Residential be included?
Ultimately: Case Rate of $___ from STACH D/C to 90 days at Home
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The Future Is Now
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The Future is Now?Bundled Payment for Post Acute Care By
Diagnostic (chronic) condition
Part of a Bundled Payment for Diagnostic Condition with STACH from admission to home
Case Rate for ALL post acute care by Diagnostic Condition
Capitation for all care?
