Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Value-Based Care News

Post-Acute Care Network Key to Value-Based Purchasing Success

Healthcare executives agreed that health systems should partner with, not own, post-acute care facilities for value-based purchasing success, a survey revealed.

Partnering with high-quality post-acute care providers will help health systems succeed in value-based purchasing models, a survey suggested

Source: Thinkstock

By Jacqueline LaPointe

- Health systems should develop a post-acute care network and strategy to succeed in value-based purchasing models, a recent Deloitte survey indicated.

The survey of 36 executives from health systems, payers, post-acute care organizations, and professional associations showed health system leaders are increasingly turning to post-acute care providers to improve cost and quality performance under alternative payment models.

Improving post-acute care can help health systems reduce healthcare costs and spending variations. Medicare reportedly spends almost $60 billion per year on post-acute services, but around 73 percent of differences in total Medicare spending stemmed from post-acute care variations.

Quality performance also significantly differs across post-acute care organizations, resulting in additional and unpredictable spending. For example, top-performing skilled nursing facilities averaged a Medicare length-of-stay of fewer than 24 days, while their low-performing peers had an average of over 34 days.

The length-of-stay variation across the skilled nursing facility spectrum represented a $4,000-per-admission cost difference.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

With many value-based purchasing models holding health systems financially accountable for up to 90 days post-discharge, establishing a high-value post-acute care network is crucial to controlling performance.

“Because value-based payment models increasingly focus on costs and outcomes occurring inside and outside hospital walls, now is the time to rethink post-acute care strategies to drive value,” the organization wrote. “Market pressures—including the expansion of bundled payment programs, the Medicare Access and CHIP Reauthorization Act’s (MACRA) incentives for providers to join risk-bearing payment models, and readmissions penalties—further reinforce the need for organizations to take a new look at post-acute care.”

To implement a post-acute care strategy, executives agreed that health systems should partner with, rather than acquire, preferred post-acute care organizations and select the appropriate partners through a data-driven approach.

Health system execs emphasize post-acute care partnerships over ownership

The surveyed healthcare executives stated that the first step to developing a post-acute care strategy for value-based purchasing success is determining whether to own or partner with organizations.

Most executives leaned toward partnering with post-acute care facilities because their health systems lacked the experience and capital to own a facility. Claims reimbursement for post-acute care is also usually lower than hospital or physician services, making it harder to justify owning a post-acute care organization.

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

In addition, health system and post-acute care facility partnerships were usually more affordable and faster to implement. Executives expressed concerns about the regulatory requirements for post-acute care facility ownership, especially since the laws are different than ones that govern hospitals.

By deciding on a partnership strategy, health system leaders felt they could still focus on their own business operations while leveraging the post-acute care facility’s specialized resources.

Deloitte detailed three health system and post-acute care facility partnership types. Depending on the health system’s post-acute care strategy maturity, level of investment, and desired control, leaders can choose the following collaboration models:

• Joint venture partnerships: Health systems and large post-acute care organizations invest capital and have joint ownership as well as collaborate to manage business operations, clinical functions, and combined financial risk arrangements

READ MORE: Exploring Two-Sided Financial Risk in Alternative Payment Models

• Leasing beds: Health systems can lease between 10 to 20 beds in post-acute care facilities for their patients while still gaining more control over care quality and healthcare costs

• Preferred network for referrals: Health systems informally partner with a select group of post-acute care facilities to refer most of their patients to the facilities while sharing data, staff, and technologies

Although the interviewees noted that post-acute care facility collaboration may bring some challenges. Top obstacles were absent or incompatible EHR systems, limited data analytics capabilities, insufficient communication, and misaligned incentives.

Only a few executives expressed interests in owning post-acute care organizations. The health systems these executives represented tended to have already worked with post-acute care facilities, implemented population health management strategies, and engaged with full financial risk value-based purchasing models.

The health systems were also large integrated delivery systems with a broad patient population, their own health plan, and a wide geographic reach.

Identify high-quality post-acute care partners using data

When creating a post-acute care strategy, the survey showed that establishing a narrow network is crucial to ensuring value-based purchasing success. The narrow network should include high-quality partners that can provide affordable services.

However, executives shared that data analytics is not always used to identify high-value partners. Although the interviewees agreed that length-of-stay and readmissions data are the most important factors to examine.

Deloitte explained that post-acute care data has historically been limited or unavailable. Traditionally, Medicare Star Ratings provided some post-acute care data, but the information was usually dated. Health plans also do not usually share post-acute care performance data, the executives added.

Post-acute care data access may not be robust, but the survey report identified the following data sources health systems can use to identify high-quality providers and value-based purchasing opportunities:

• CMS claims data through an alternative payment model, such as the Medicare Shared Savings Program or the Bundled Payments for Care Improvement initiative

• Health system data on their hospital’s readmissions by specific post-acute care facilities, conditions, and providers

• Self-reported data from post-acute care providers, especially on readmissions and length-of-stay rates

• Qualitative clinician feedback on their experience with certain facilities, which is usually gathered by the health system

Medicare Star Ratings, especially as the performance data system continues to mature and improve

• Commercial claims data on post-acute care facility quality and cost performance

Healthcare executives also agreed that health systems should base their partnership strategy on three criteria.

First, post-acute care organizations should share a vision with the health system, especially in terms of value-based purchasing participation. One interviewee warned the systems that many post-acute care organizations have not started the value-based reimbursement transition.

Second, health systems should choose post-acute care facilities with data analytics capabilities. The facility should be willing to share healthcare data and their performance comparisons with peers.

Third, the executives suggested that health systems select post-acute care providers with a broad geographic footprint that aligns with the system’s service area and their patient needs.

“Some health systems and health plans have mature post-acute care strategies, while others are still developing their approach,” the survey concluded. “Even with challenges and constraints emanating from the current reimbursement structure, all interviewed executives believe that a robust post-acute care strategy is critical for implementing value-based care and population health.”


Join 30,000 of your peers and get free access to all webcasts and exclusive content

Sign up for our free newsletter:

Our privacy policy

no, thanks

Continue to site...