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3 value-based purchasing strategies to help you get ahead

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Sally Rodriguez
Sally Rodriguez

Your new best hook for securing strong referral relationships with hospitals is also one of the biggest secrets hidden in the slew of value-based payment reforms coming out of the Affordable Care Act. You are probably aware that new conditions will be added to the hospital readmissions penalty program in October. But, did you know that — also starting in October — the Centers for Medicare & Medicaid Services will impose financial penalties on hospitals with relatively high episode spending, and that these episodes may include 30 days of post-acute care?

In its efforts to shift providers' focus to the value, rather than volume, of services they provide, CMS is incrementally implementing a reimbursement program for hospitals that fundamentally shifts the conversation between hospitals and post-acute care providers. An upcoming addition to the Hospital Value-Based Purchasing (VBP) Program — a spending efficiency measure called the Medicare Spending Per Beneficiary (MSPB) — will soon expand hospitals' responsibility for care provided in the post-discharge period.

Like the Medicare bundled payment demonstration, this measure considers total spending across an episode of care and gives hospitals and PAC providers another compelling reason to collaborate. Because the MSPB Measure includes spending that occurs during the 30 days after a hospital discharge, PAC is a significant contributor to hospitals' MSPB scores. In addition, the widely acknowledged growth and variation in PAC payments make PAC providers critical actors in the management of risk inherent in this episode-based measure.

By creating another challenge for hospitals already navigating this new payment paradigm, the MSPB Measure also provides an opportunity for savvy and high-performing PAC providers to improve their value proposition. PAC providers who can communicate an understanding of the pressures facing hospitals — particularly under the readmissions reduction program and this new efficiency measure — and showcase data proving their ability to reduce spending and readmissions are well-positioned to establish or reaffirm key hospital relationships.

Three post-acute care value-based purchasing strategies to help you take advantage of this opportunity include:

  • Know the score. Know your referring hospitals' MSPB scores and know whether they will be penalized or rewarded this year. You should not go into a meeting with a hospital without this information. It's available on CMS' Hospital Compare website.
  • Bring Market Intelligence. The hospital's post-acute care efficiency is related to three things: rehospitalizations, skilled nursing facility length of stay, and use of high-cost PAC settings (for example, long-term acute care hospitals and inpatient rehabilitation facilities instead of SNFs, or SNFs instead of home health). Come prepared with suggestions for the hospital's opportunity to improve and become a strategic partner for more than just your building.
  • Demonstrate Your Efficiency. Finally, present your efficiency and quality story. Even if you have a higher length of stay, explain how your care can prevent rehospitalizations. Be ready to explain how your clinical and financial management of patient risk can be part of the hospital's post-acute strategy going forward.

Hospitals' 2012 MSPB results are already in. Learn how your referring hospitals' post-acute spending compares. Know which hospitals will be penalized. To secure mutually beneficial partnerships, demonstrate an understanding of the problem and your ability to be the post-acute care solution.

Sally Rodriguez is Senior Manager at Avalere. She provides analytic and strategic support to clients in the post-acute and long-term care sectors by using data analysis and policy expertise to help them navigate the healthcare market. 

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