McKnight's Roundtable: The new world of post-acute care

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McKnight's Roundtable: The new world of post-acute care
McKnight's Roundtable: The new world of post-acute care
The long-term care landscape is shifting. The implementation of the groundbreaking MDS 3.0 resident assessment system, the dawn of accountable care organizations (ACOs) and competition for Medicare reimbursement dollars are collectively altering the way skilled nursing facilities operate and compete.

These were just a few observations eight long-term care owners and operators shared during a recent McKnight's Roundtable Forum. The participants, who manage organizations based from Los Angeles to Manchester, CT, also addressed the importance of rehabbing outdated buildings, updating technology and other challenging issues facing the field.

McKnight's Associate Publisher John O'Connor and Editor James M. Berklan moderated the discussion.

Peoplefirst Rehabilitation, the therapy division of Kindred Healthcare Inc., sponsored the two-hour forum. The event was held Oct. 10 in Long Beach, CA.

MDS 3.0, a game changer

There is no question that MDS 3.0 implementation has affected operators' business strategies, participants agreed. The expansion of Resource Utilization Groups (RUGs), in particular, will reward the competent treatment of clinically complex patients, they believe.

“This is changing 15 years of rehab behavior,” noted Lane Bowen, president of Kindred Healthcare Inc.'s nursing home division. “Rehab has to respond more succinctly, more quickly, and, quite frankly, all day long and seven days a week.”

Conventional wisdom holds that the new system will hurt nursing homes because reimbursement rules will discourage the admission of rehab residents, noted Neil Pruitt Jr., chairman and CEO of UHS-Pruitt Corp.

“I disagree with that premise,” he said. “You're going to have just as much focus on the rehab patients as you ever did. The only difference now is there's an opportunity to take patients with more complex needs,” he noted, adding that providers will fare well financially if they admit such patients.

Operators indicated they were cautiously optimistic about the new version of MDS.

“It looks like we'll be OK,” said Tim Phillippe, president of Christian Homes in Lincoln, IL. “We may come out ahead on it—when you look at the type of resident you have—so we're hopeful.”

Bill Levering, president and CEO of Levering Management Inc., of Mount Vernon, OH, agreed.

“We spent a lot of time trying to manage a smooth transition [to MDS 3.0] and we think we'll be OK as well.”

Changing relationships

Changes in therapy groupings and the reimbursement structure in MDS will alter the provider-vendor relationships, they said.

“It really is more of a strategic relationship than a vendor relationship,” Phillippe offered. “I think it's a mistake to look at a rehab supplier as an outside supplier or vendor and look at nothing but price, while ignoring the bigger value of the relationship.”

Christopher Bird, president of Peoplefirst, concurred. MDS 3.0 is ultimately about helping residents receive “what is clinically appropriate from a rehab standpoint,” he said.

“You need a partner to figure out how to do this differently,” he added. “[That includes} putting in place more sophisticated scheduling, providing specialized rehab to medically complex patients, streamlining administrative paperwork and other processes, getting more productivity out of our staff, and, where need be, hiring staff.”

Changes in therapy payment—specific to how concurrent therapy is counted on MDS 3.0—will require providers to approach therapy differently.

“Therapists' time will be more precious,” Pruitt said. “So nursing's going to have to contribute to scheduling the most appropriate therapy at the most appropriate time using the latest technology.”

There will be more contact between the MDS coordinator and the rehab department, noted Paul Liistro, CEO of Manchester Manor Health Care Center in Manchester, CT.

“We've moved the MDS coordinators to be next to the rehab manager,” he explained. “They are joined at the hip. Discharges won't happen until communication is talked about.”

This team-based approach implies providers will have to know more about rehab, and vice-versa, participants said.

“[It's about] the disease management process and rehab working with nursing,” said Dale Zaletel, CEO of Lexington Health Care in Lombard, IL. “Nursing home administrators for years have washed their hands of rehab. They just let it go. You can't do that anymore.”

Conversely, Mary Van de Kamp, senior vice president of clinical services for Peoplefirst, pointed out that therapy providers need to know more about the nursing component and helping nursing capture data.

“Therapists have to care more about the ADL (activities of daily living) score now and does it reflect that need?” she said.

Indicators of MDS success

So how will operators know if they have succeeded in adopting MDS 3.0? The consensus among the group was receiving appropriate reimbursement for appropriate care and positive care outcomes.

“We'll know by measuring satisfaction levels—not just with our patients but with their families and physicians and with regulatory agencies,” Levering responded. “We'll know we've been successful by making sure the resources are available so the patient care is provided at the expectation and the level needed and that it fits the reimbursement system that needs to be available.”

Surveys are also a key indicator, said Michael Torgan, president and CEO of Country Villa Health Services in Los Angeles.

“I'm really concerned how these surveyors are going to be able to interpret the 3.0 and how it plays into the survey process,” he cautioned.

Ultimately, nursing homes have to start taking control of the reimbursement discussion, asserted Frank Romano, president of Essex Group Management Corp. in South Dartmouth, MA.

“I have this feeling that CMS (the Centers for Medicare & Medicaid Services) sort of dictates the game,” he said. “I think it's incumbent upon us to put a plan together that pays providers an incentive for not sending people back to the hospital. We've really got to change the paradigm.”

Accountable care

If MDS 3.0 is forcing providers to think differently about their businesses, so is the new and still opaque healthcare reform law. The Patient Protection and Affordable Care Act includes provisions that have serious implications for long-term care. Among them are the creation of accountable care organizations (ACOs), which give provider groups responsibility for the cost and quality of care delivered to a specific population of patients cared for by the groups' clinicians.

The concept, while still vague and in its beginning stages (a voluntary program for ACOs will not take effect until 2012), already has sparked concerns and angst among long-term care providers. Payment bundling, an increasingly talked-about topic, is closely tied in with the concept of ACOs. Bundling would designate a healthcare provider, such as a hospital, as the gatekeeper of funds to post-acute providers.

Operators at the roundtable said they already were considering a future dominated by accountable care organizations. And preparation for this seismic shift has already begun.

“Clearly, as you move forward with healthcare reform, the accountable care organizations will define more clearly where the competitive landscape falls,” said Torgan, of Country Villa Health Services. “Twenty years ago, hospital-based skilled nursing facilities were big. There's a distinct possibility that if bundling takes off and ACOs take off, hospitals may see an opportunity to get back into that business.”

Noted Bowen: “We're starting to be measured on avoidable rehospitalizations. Whether we have a traditional skilled facility or a sub-acute [facility], our industry has to play in the space successfully.”

The sentiment among the group was that long-term care providers who deliver the best post-acute care at the lowest price will fare well in this looming environment.

“Someone's going to figure out how to be the Walmart of the business—by driving down the costs and getting the outcomes,” summed up Romano.

Skilled nursing facilities that provide good care at the lowest cost will attract managed care providers, which determine where patients will go after leaving the hospital.

“I think to survive you'll have to do that,” Kindred's Bowen said. “By the way, if you do that, you'll be invited to be part of an ACO wherever that may occur. We have many acute-care hospital systems approaching us today about what the options are and wanting to understand this business they don't understand. They realize this is a significant opportunity.”


Part and parcel of this new emphasis on post-acute care and the ongoing need to attract Medicare funds is service specialization.

“I think there'll be two classes of providers in the future: those doing sub-acute and traditional nursing homes,” Zaletel commented. “As hospitals get smart now and start discharging by diagnosis, your sub-acute providers are going to have to push clinical programming if they're going to survive. I think hospitals really are in the driver's seat for us in many ways. If we're not in-network, we'll be out-of-network.”

It's already a good idea to start building better relationships with area hospitals, Zaletel said.

“As the hospitals start to select their providers, they'll discharge by diagnosis and by programs and by subspecialists you've aligned with on the physician specialist side,” he said. “These ACOs are selecting their networks right now.”

This specialization of services may shove traditional mom-and-pop shops by the wayside, operators suggested.

“I think the days of the freestanding nursing home are certainly numbered,” Romano said. “We clearly have to have diversified services that are lower cost, such as assisted living, adult day care, home care, delivering medication to home, and transportation to and from the doctor's office. We've got to change.”

Christian Homes' Phillippe noted that the focus on post-acute care already is changing what a traditional nursing home looks like.

“Long-term care is kind of a dead term now,” he said. “Our building is like a hospital with separate sections. Care is delivered in different ways. For us, we're moving toward a more managed care model. It's one doctor handling all the residents. In our markets, people aren't used to that. It will be a change, but the care will be better.”

It's not a secret that the short-stay population has affected the way nursing homes design their buildings, the operators said.

“Patient populations going home don't want to mix with the long-term care patients,” said Bowen, commenting on a well-established view. “They don't want to see what might happen if they don't get better and go home.”

Besides accommodating short-stay residents—those who have received hip or knee operations, for example—nursing homes increasingly have been catering to more medically complex patients. These include residents with respiratory and cardiac problems.

“We do bedside dialysis,” noted Torgan. “If you would have asked me about that 10 years ago, I would have thought you were crazy. That's the evolution moving forward.”

As facilities move toward an acute-care model, operators need to act like acute-care providers with more physician involvement and higher nurse-to-patient ratios, Lane said.

“In many respects, we are an acute-care hospital in terms of scheduling and in terms of services that need to be in place and immediate addressing of patients' needs upon admission,” Bowen said.

Who do the leaders think the skilled nursing resident of the future will be?

“It'll be the utmost medically complex,” Torgan said. “The additional caveat is they'll have psych issues.”

Upgrades, technology

Because of new patient populations, it was no wonder several roundtable participants emphasized the importance of upgrading physical plants, especially since many nursing homes were built in the 1970s.

“It's absolutely necessary to modernize if you're going to compete for these types of patients—the more clinically complex,” Pruitt said.  

Now may be a prime time for long-term care facilities to invest in physical plant upgrades, Romano believes.

“This is probably the best time to refinance buildings because the interest rates are what they are,” he said. “This is the time a lot of us can do the upgrades we want to do.”

Still, Torgan cautioned that making a building look attractive is not the same as upgrading buildings to accommodate new populations.

“You can always make a building look good,” he said. “The problem is you still have the same layout. You still have the same design. You still have the same problems with office space and you still have three-bed rooms in many of your facilities.”

It's also important to stay on top of technology because of new systems such as MDS 3.0 and other changes, participants said.

“Technology is going to be a matter of aptitude, ability and willingness,” Liistro said.


During the discussion, providers were eager to weigh in on concerns they have with regulations, claims and audit procedures.

“As we move toward more person-centered care, there will be issues that the regulatory agencies won't embrace and will see as a problem,” Levering said.

He added that data collection takes away the fear of compliance.

“One aspect we have found successful was to take a paperwork compliance approach and neutralize that by increasing data collection and analysis,” he said. “It was like a breath of fresh air as we started that.”

Liistro agreed that the more data providers can amass and organize, the easier it will be to receive appropriate reimbursement.  

In the end, participants agreed that strong care delivery wins—whether you are talking about surviving a Recovery Audit Contractor audit or complying with programs such as the Five-Star Quality Rating System.

“If you give good care, if you build your companies off a quality initiative, you can win the bulk of audits,” Bowen said. “As painful as it may be in pulling records charts, the fact of the matter is you can win the audits if you've got the outcomes.”


Neil Pruitt Jr.

Lane Bowen
Kindred Healthcare

Frank Romano
Essex Group
Management Corp.

Michael Torgan
Country Villa Health

Chris Bird
Peoplefirst Rehabilitation

Timothy (Tim) Phillippe
Christian Homes

Mary Van de Kamp
Peoplefirst Rehabilitation

Bill Levering
Levering Management

Dale Zaletel
Lexington Healthcare

Not pictured:

Paul Liistro,
Manchester Manor
Health Care Center