Top Value-Based Payment Challenges for Skilled Nursing Facilities
Value-based payment models need to include skilled nursing facilities and offer incentives for high-quality, not limited, LTPAC care, industry experts say.
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By - As long-term and post-acute care (LTPAC) programs transition to value-based payment options, various challenges arise for skilled-nursing facilities (SNFs) and other long-term and post-acute care (LTPAC) clinicians, according to an Advancing Excellence in Long-Term Care Collaborative report on VBP programs.
Chief among the challenges is lack of inclusivity, stated the report based on a multi-stakeholder panel and participant discussion.
Value-based payment programs generally exclude SNFs from sharing in risk and savings or encourage the facilities to adopt a one-size-fits-all model, which is a problem because patients who are a part of a program served by LTPAC providers are most often the sickest and most costly. By excluding SNFS from VBP programs, like bundled payments, value improves for the payer and provider participant, with SNFs receiving no formal credit for improving quality of care, the panelists explained.
Value-based payment programs also encourage provider participants to bypass or limit SNF care, excluding the providers are participating and influencing value of care. Limiting SNF care is a quick win for many value-based payment participants who receive incentive payments or shared savings based on the amount of costs they reduce. For example, a 2019 study found that care for joint replacement cost savings were “nearly exclusively related to reductions in the use of post-acute care services in skilled nursing facilities and inpatient rehabilitation facilities.”
However, inappropriately limiting or even bypassing SNF care “may be incompatible with care plan goals and timelines required in the regulations and encourage inappropriate early discharge to the community,” the report stated.
READ MORE: Skilled Nursing Facility 3-Day Rule Behind $84M in Improper Pay
As a result, value-based payment models may lead to fewer services needed because they offer a single dollar amount for a particular population “regardless of the actual cost to the providers,” the report stated regarding another major challenge for SNFs. Patients who could benefit from high-cost, yet effective treatment may see an adverse outcome without mechanisms to ensure the highest quality.
These adverse outcomes can also lead to high patients costs, the report explained.
Patients that bypass LTPAC services because providers want to reduce costs may experience an avoidable hospital readmission or emergency department visit, which translates to higher costs for patients and the healthcare system. These patients may also need transportation, homemaker services, and other home care offerings.
If modifications aren’t in place for these patients, these services become out-of-pocket costs, the report explained. This may not lead to value for the patient.
Some programs require providers to meet a certain level of performance to retain savings, but if patients don’t find these measures to be meaningful or believe the focus isn’t on the most important care outcomes, they may not suffice. In addition, reducing the number of services may not locate the main cause of high healthcare spending in the US, which research shows is price.
READ MORE: Paying LTCHs Like Skilled Nursing Would Save $4.6B, Analysis Finds
These value-based payment incentives may also push providers to avoid high-cost and high-needs patients. This problem can be reduced by adjusting payments or quality calculations for patient acuity and socioeconomic status, but must be done carefully to avoid accusations of providers “gaming the system.”
Aside from the cost issues revolving around value-based payment, another challenge with the programs is lack of interoperability. Limited interoperability may affect a SNF’s ability to deliver value-based quality care. EHR adoption may not guarantee the ability to exchange data with other providers because current health IT infrastructure does not support the exchange fully.
“When multiple settings are included in a VBP model, the ability to track a patient throughout the continuum and share critical care information across provider settings is a critical component to giving patients needed care and improving outcomes,” the report stated.
In order to address the current challenges of value-based payment implementation for SNFs, panelists advocated for the development of more inclusive programs that have specific roles for SNFs. They also recommended that these programs counter incentives to reduce costs by building risk adjustment and relevant quality measures, move from payer- to patient-focused definitions of “value” by measuring quality and outcomes, and minimize provider burden through aligned requirements and resource support.
Value-based payment options for SNFs may be limited. But Medicare is attempting to tie SNF reimbursement to value.
READ MORE: CMS Proposes Patient-Driven Pay for Skilled Nursing Facilities
CMS launched the Patient-Driven Payment Model (PDPM) for SNFs on October 1, 2019. The model established a new classification system to shift payments from the volume of therapy services provided to patient care needs. CMS has voiced that this shift will bring a more “value-based, unified post-acute care payment system.”
Although PDPM has been utilized for over a month in the healthcare space, there hasn’t been significant data on the outcomes. But HealthPRO Heritage did report that they saw “exceptionally strong outcomes” in markets, even those dominated by managed care after switching to PDPM. High-quality care performance also earned recognition among industry leaders.
“All that training is paying off,” HealthPRO emphasized. In addition, PDPM helped provide affordable therapy costs for clients, and its long-view strategy assures a model that creates a win-win-win scenario for clients, patients, and therapists.
The therapy provider also predicted that 60 percent of SNFs will see a positive reimbursement impact under the new Medicare payment model.
“We are proud to report our teams and our clients are optimistic about the future under PDPM & Beyond,” the provider highlighted.
PDPM is the first value-based payment step for many SNFs. But stakeholders participating in talks with the Advancing Excellence in Long-Term Care Collaborative are pushing for SNFs to walk the path to value.
Although stakeholders had diverse experiences with value-based payment, the consensus stood that there needs to be steps taken to improve care for SNF and their patients. By incorporating the recommended solutions in various programs, SNFs, other LTPAC facilities, and clinicians will be able to provide quality care and reduce costs, which is a common goal among healthcare stakeholders.
