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Ohio Presentation Glitch – Fixed
I was informed that the presentation from LeadingAge Ohio did not download for some. Apologies to anyone inconvenienced by the glitch. The post now contains a PDF of the presentation which, is working and can be downloaded.
August 11, 2021 Posted by Reg Hislop III | Assisted Living, Policy and Politics - Federal, Senior Housing, Skilled Nursing	| Leave a comment
LeadingAge Ohio Presentation
Last week I had the pleasure of speaking/presenting at the LeadingAge Ohio Annual Conference/Meeting in Columbus. It is always a treat to be with these folks and even more so this year – in-person!
Thanks to everyone at LeadingAge Ohio and the session attendees.
You may access/download the presentation at the link below.
Covid Marketing Strategy ReimaginedDownlod
August 10, 2021 Posted by Reg Hislop III | Assisted Living, Policy and Politics - Federal, Senior Housing, Skilled Nursing	| CMS, COVID, Industry Outlook, Management, Marketing, Senior Housing, Strategy | Leave a comment
Site Neutral Payment Update
In early October, I wrote an article regarding CMS 2019 OPPS (outpatient PPS) proposed rule, specifically regarding site neutral payments. The purpose of the article was to address the site neutrality trend that CMS is on, streamlining payments to reduced location of care disparities for the same care services. Succinctly, if the care provided is technically the same but the costs by location are different due to operating and capital requirements, should payments vary?
Yesterday, CMS pushed forward the OPPS final rule, maintaining the concept of site neutrality despite heavy hospital lobbying. The gist of the rule is as follows.
Hospital off-campus outpatient facilities will now be paid the same as physician-owned or independently owned/operated outpatient facilities for clinic visits. No longer will there be a hospital place-of-care premium attached to the payment.
Off campus is defined as 250 yards or more “away” from the hospital campus or a remote location.
For CY 2019, the phase-in/transition is a payment reduction equal to 50% of the net difference between the physician fee schedule payment for a clinic visit and the same payment for a hospital locus clinic or outpatient setting. The amount is equal to 70% of the OPPS (hospital outpatient PPS rate).
For CY 2020, the amount paid will be the physician fee schedule amount or 40% of OPPS rate, regardless of location.
Final Rule text is here: 2019 OPPS Final Rule
What CMS noted originally as the need stemmed from a Medpac report where a Level 2 echocardiogram cost 141% more in a hospital outpatient setting than in a physician office/clinic setting. This final rule is part of an expected and continuing trend to simplify and streamline payments among provider locations. Similarly, CMS is following a path or theme laid forth by Medpac concerning payments tied to care services and patient needs rather than settings or places of care. The 2019 OPPS payment change is a $760 million savings in 2019 expenditures.
Finalization of the OPPS rule with site neutral payments cannot be overlooked in significance. As I wrote in the October article, this is a harbinger of where CMS and Medicare policy makers are heading. Hospitals lobbied hard and heavy against this implementation claiming a distinction in payment was not only required by dictated by patient care discrepancies. Alas, there appeared to be no common ground found within that argument.
I suspect now that the door is opened just a touch wider for site neutral post-acute payment proposals to advance. Under certain case-mix categories, there truly is very little difference in care delivered and no difference in outcomes (adversely so) between SNFs, IRFs, and LTAcHs yet there is wide payment difference. With lengths of stay declining and occupancy rates the same (declining) among these provider groups, CMS will no doubt (my opinion) push forward a streamlined proposal on site neutral payments in the next three years. I anticipate the first proposal to concentrate almost exclusively, on SNFs, IRFs and perhaps, some home health case mix categories. If hospitals can’t budge CMS away from the site neutral path, there is zero likelihood that IRFs and LTAcHs can divert CMS from site neutral proposals in the near future.
November 2, 2018 Posted by Reg Hislop III | Policy and Politics - Federal, Skilled Nursing	| CMS, Economics, Hospitals, Industry Outlook, Management, Medicare, Payment, PPS, Reimbursement, SNF, Strategy, Trends | Leave a comment
Post-Acute, Site Neutral Payment Upcoming?
In the 2019 OPPS (outpatient PPS) proposed rule, CMS included a site neutral payment provision. With the comment period closed, the lobbying (against) fierce, it will be interesting to see where CMS lands in terms of the final OPPS rule – maintain, change, or abate. The one thing that is for certain, regardless of the fate of this provision, site neutral proposals/provisions are advancing.
CMS has advanced a series of conceptually similar approaches to payment reform. Site neutral approaches are a twist on value-based care as they seek to reward the efficiency of care by de-emphasizing a setting value. This is loosely an approach to “payment follows the patient” rather than the payment is dictated by the locus of care. Assuming, which isn’t always in evidence, that for many if not most outpatient procedures, the care required is the same such that one setting vs. another isn’t impactful to the outcome, then a site neutral payment seems logical. Managed care companies have been using this approach overtly, attaching higher cost-share to certain sites or eliminating payment altogether for procedures done in higher cost settings. In the OPPS proposal, the savings is rather substantial – $760 million spread between provider payments and patient savings (deductibles). To most policy watchers, there is a watershed moment possible with this proposal and its fate. The fundamental question yet resolved is whether hospitals will continue to have a favorable payment nuance over physician practices and free-standing outpatient providers. Hospitals arguing that their administrative burden and infrastructure required overhead, combined with patient differences (sicker, older patients trend hospital vs. younger, less debilitated patients trending free-standing locations), necessitates a site different payment model (such as current).
In the post-acute space, payment site neutrality has been bandied about by MedPAC for some time. Up to now, the concept of payment site neutrality has languished due to disparate payment systems in provider niches’. SNFs and their RUGs markedly different from Home Health and its OASIS and no similarity with LTACHs in the least. Now, with post-acute payments narrowing conceptually on “patient-driven” models (PDPM and PDGM) that use diagnoses and case-mix as payment levers, its possible CMS is setting a framework to site neutral payments in post-acute settings.
In its March 2015 report to Congress, MedPAC called for CMS to create site neutrality for certain patient types between SNFs and IRFs (Inpatient Rehab Facilities). While both have separate PPS systems for payment, the IRF payment is typically more generous than the SNF payment, though care may look very similar in certain cases. For IRFs, payment is based on the need/extent of rehab services then modified by the presence or lack of co-morbidities. IRFs however, have payment enhancements/ additions for high-cost outliers and treating low-income patients; neither applies in the SNF setting.
The lines of care distinction between the two providers today, certainly between the post-acute focused SNFs and an IRF, can be difficult to discern. For example, both typically staff a full complement of therapists (PT, OT, Speech), care oversight by an RN 24 hours per day, physician engagement daily or up to three times per week, etc. Where IRFs used to distinguish themselves by providing three hours (or more) of therapy, SNFs today can and do, provide the same level. As a good percentage of seniors are unable to tolerate the IRF therapy service levels, SNFs offer enhanced flexibility in care delivery as their payment is not predicated (directly) on care intensity. What is known is that the payment amounts for comparable patient encounters are quite different. For example, a stroke patient treated in an IRF vs. an SNF runs $5,000 plus higher. An orthopedic case involving joint replacement differs by $4,000 or more. Per MedPAC the difference in outcomes is negligible, if at all. From the MedPac perspective, equalized payments for strokes, major joint replacements and hip/femur related surgical conditions (e.g., fracture) between IRFs and SNFs made sense, at least on a “beta” basis. With no rule making authority, MedPac’s recommendation stalled and today, may be somewhat sidelined by other value-based concepts such as bundled payments (CJR for example).
So the question that begs is whether site neutral payments are near or far on the horizon for post-acute providers. While this will sound like “bet-hedging”, I’ll claim the mid-term area, identifying sooner rather than later. Consider the following.
Post-acute care is the fastest growing, reimbursed segment of health care by Medicare.
The landscape is changing dramatically as Medicare Advantage plans have shifted historic utilization patterns (shorter stays, avoidance of inpatient stays for certain procedures, etc.).
Medicare Advantage days as a percentage of total reimbursed days under Medicare are growing. One-third of all Medicare beneficiaries were enrolled in a Medicare Advantage plan in 2017. Executives at United Healthcare believe that Medicare Advantage penetration will eclipse 50% in the next 5 to 10 years. As more Boomers enter Medicare eligibility age, their familiarity with managed care and the companies thereto plus general favorability with the product makes them quick converts to Medicare Advantage.
Managed care has to a certain extent, created site preference and site based value payment approaches already. There is market familiarity for steering beneficiaries to certain sites and/or away from higher cost locations. The market has come to accept a certain amount of inherent rationing and price-induced controls.
At the floor of recent payment system changes forthcoming is an underlying common-thread: Diagnoses driven, case-mix coordinated payments. PDPM and PDGM are more alike in approach than different. IRFs already embrace a modified case-mix, diagnoses sensitive payment system. Can homogenization among these be all that far away?
There are no supply shortage or access problems for patients. In fact, the SNF industry could and should shrink by about a third over the next five years, just to rationalize supply to demand and improve occupancy fortunes. There is no home health shortage, save that which is temporary due to staffing issues in certain regions (growth limited by available labor rather than bricks and mortar or outlets). Per MedPac, the average IRF occupancy rate pre-2017 was 65%. It has not grown since. In fact, the Medicare utilization of IRFs for certain conditions such as other neurologic and stroke (the highest utilization category) has declined. (Note: In 2004 CMS heightened enforcement of compliance thresholds for IRFs and as a result, utilization under Medicare has shrunk).
Despite payment reductions, Home Health has grown steadily as has other non-Medicare outlets for post-acute care (e.g., Assisted Living and non-medical/non-Medicare home health services). Though the growth in non-Medicare post-acute services has caused some alarm due to lax regulations, CMS sees this trend favorably as it is non-reimbursed and generally, patient preferred.
Demonstration projects that are value-based and evidence of payment following the patient or “episode based” rather than “site based” are showing favorable results. In general, utilization of higher cost sites is down, costs are down, and patient outcomes and satisfaction are as good if not better, than the current fee-for-service market. Granted, there are patient exceptions by diagnoses and co-morbidity but as a general rule, leaving certain patients as outliers, the results suggest a flatter, site neutral payment is feasible.
If there is somewhat of a “crystal ball” preview, it just may be in the fate of the OPPS site neutral proposal. I think the direction is unequivocal but timing is everything. My prediction: Site neutral payments certainly, between IRFs and SNFs are on the near horizon (within three years) and overall movement toward payments that follow the patient by case-mix category and diagnoses are within the next five to seven years.
October 2, 2018 Posted by Reg Hislop III | Home Health, Policy and Politics - Federal, Skilled Nursing	| CMS, Economics, Home Health, Hospitals, Industry Outlook, IRFs, LTAcH, Management, Market Trends, Medicare, Payment, Post-Acute, Reimbursement, site neutral, SNF, Strategy, Therapy, Trends | Leave a comment