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Targeting Skilled Nursing Facility, ESRD Care Saves ACO $15M

For the third consecutive year, a New Jersey-based MSSP ACO realized healthcare savings by improving skilled nursing facility and end-stage renal disease care.

A MSSP ACO in New Jersey realized $15 million in healthcare savings after focusing on improvements to skilled nursing facility and ESRD care

Source: Thinkstock

- A Medicare Shared Savings Program (MSSP) accountable care organization (ACO) realized over $15 million in healthcare savings between 2014 and 2015 by improving skilled nursing facility utilization and targeting end-stage renal disease care, a new American Journal of Accountable Care study stated.

Hackensack Physician-Hospital Alliance ACO, LLC (Hackensack Alliance ACO) increased healthcare savings from $10.7 million in 2013 and $6.4 million in 2014 to reach a total of $33 million in cost reductions.

“This approach should help an ACO increase the quality of care while reducing expenses at the same time,” wrote Hackensack Alliance ACO providers. “Once an ACO is on this path, it is likely that savings will continue to accumulate over time. As the savings occur over time, bonuses are paid out and aggregate spending is reduced. Medicare itself has achieved a net savings.”

The MSSP ACO of 329 providers and over 23,000 assigned beneficiaries aimed to build on prior healthcare savings by improving skilled nursing facility discharges.

Using data from the healthcare collaborative Premier, the MSSP ACO leaders found that the costs, days, and discharge rates at skilled nursing facilities used by the ACO were significantly greater than the facilities used by their peers.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

Skilled nursing facility utilization already tends to be greater than hospital or physician services use. Claims reimbursement incentives differ for skilled nursing facilities compared to the hospitals. Skilled nursing facilities are reimbursed on a per diem basis versus based on diagnosis like hospital reimbursement. Therefore, skilled nursing facilities were incentivized to increase lengths of stay.

However, the additional costs associated with longer lengths of stay harmed the MSSP ACO’s potential to earn shared savings.

To resolve skilled nursing facility challenges, Hackensack Alliance ACO leaders required that patients be discharged once skilled nursing facility providers identified them as potential discharges rather than waiting for the maximum number of days that Medicare will reimburse.

The ACO also deployed nurses as care coordinators in the skilled nursing facilities. The nurses attended daily rounds in which patient discharge decisions were made.

Under the skilled nursing facility strategy, the number of days spent in the skilled nursing facility dropped from 3,064 days in the first quarter of 2015 to 2,484 days by the fourth quarter, representing a 19 percent decrease.

READ MORE: How Pioneer ACOs Earn Shared Savings, Improve Care Quality

Additionally, Hackensack Alliance ACO leaders focused on reducing healthcare costs for end-stage renal disease patients.

Despite representing a small portion of total ACO expenditures, end-stage renal disease patients proved to be expensive on a per-beneficiary basis.

“We looked into it and realized that almost half of the expense was related to the widespread use of ambulances to transport the patients to and from the dialysis facility,” ACO providers explained.

In conjunction with the recent Medicare ruling on ambulance charges, the ACO decreased ambulance use per assigned beneficiary by almost 55 percent in 2015.

As a result, per-capita spending on end-stage renal disease patients fell from over $136,700 to $103,686 in 2015, accounting for a 24 percent drop.

READ MORE: ACO Incentives, Coordination Improve Complex Pediatric Care

In addition to their 2015 initiatives, Hackensack Alliance ACO providers noted that they continued to strengthen older initiatives that targeted healthcare utilization.

Since the ACO formed in 2012, providers aimed to decrease short-term inpatient admissions and emergency department visits. Building on this work, the ACO reduced short-term inpatient admissions per 1,000 person-years by 14 percent and emergency department visits per 1,000 person-years by 9 percent.

The ACO also did not lose sight of its care transition initiatives. From the start, the ACO focused on reducing 30-day all cause readmissions and ambulatory care sensitive condition discharge rates.

The ambulatory care sensitive condition project aimed to target medical conditions that had the highest chances of a preventable hospital admission. Conditions monitored at the ACO included chronic obstructive pulmonary disease, asthma, congestive heart failure, and bacterial pneumonia.

While improving skilled nursing facility discharges, end-stage renal disease costs, and older initiatives generated an increase in 2015 savings, the MSSP ACO providers attributed the organization’s overall success with healthcare savings to their providers.

Hackensack Alliance ACO mandates that participating providers are patient-centered medical homes as certified by the National Committee for Quality Assurance.

The ACO also employed nurse-level care coordinators to help participating practices manage high-risk patients and to ensure the practices complied with the 33 quality measures.

In addition, the ACO increased the number of providers and assigned beneficiaries to boost healthcare savings. The number of providers grew from 234 in 2014 to 329 in 2015, representing a 40.6 percent increase.

Consequently, additional providers drew in more assigned beneficiaries. The number of assigned beneficiaries increased 48.4 percent between 2014 and 2015, which generated greater healthcare savings.

“Compared with 2014, we were able to multiply the per-beneficiary cost savings by a much larger number of beneficiaries (or person-years) in 2015,” explained the authors.

Moving forward, the MSSP ACO providers noted that the organization plans to expand post-discharge care improvements to other post-acute care settings. The ACO also anticipates exploring cost-saving opportunities related to durable medical equipment and supply use as well as condition-specific care delivery improvements.

“In general, we tend to focus on areas where our expenses appear excessive or the quality of care appears to need improvement,” the authors wrote.

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