Having survived the fall 2019 long-term care convention season is no small feat if you’ve been on the road as much as some of the staunch LTC professionals I’ve seen over the past two months.
For many, now is the time to get back to work “at home” and prepare for the future — a future with the Patient Drive Payment Model in play. The natural reaction, of course, is worry: What comes next?
First, we have to know what’s actually happening now. That’s going to take a good two to four months by just about everyone’s estimation. The more you want to know, the longer you have to wait. But nothing too meaningful is coming before Thanksgiving.
What’s going to happen if there are swings in the amounts or modes of therapy? It shouldn’t really matter — as long as there’s documentation backing up any swings. We’ve heard this several times from American Health Care Association President and CEO Mark Parkinson, and again just this week from Russ DePriest, senior vice president and general manager for the skilled nursing division at PointClickCare.
I was intrigued to hear DePriest add that in all of his talks with providers in the run-up to PDPM, he hasn’t heard any of them say they thought the new payment system would be a negative. With PCC serving well over half of the nursing home market, that observation set off math alarm bells in my head, and DePriest’s too.
If more than half the market thinks they’re going to make out well under PDPM — and there’s ample indication that those providers who have prepared properly can do just that — that could mean the government is going to be paying more than it had envisioned.
That’s not exactly how a budget-neutral proposal is supposed to work.
So the biggest question is this: Will PDPM truly be revenue-neutral? The list of those wondering this includes yours truly, DePriest and leaders at the Centers for Medicare & Medicaid Services. The last group has stated numerous times that while budget-neutral is the intent, they don’t really know how things will shake out until, well, things have been shaking for a while.
Zero-sum game?
Of course, there is no possible way statistically that this thing is going to totally be a zero-sum game. So to which side of the ledger will the most coins fall, and how many dollars’ worth will it add up to?
That leads to what the actual biggest question will be: What will CMS do about unexpected payment levels? Nobody’s predicting another drastic takeback, like in 2011-12 when CMS didn’t wait even six months to tear $500 million out of providers’ pocketbooks after RUGs-IV was exposed as something that could be easily taken advantage of.
And that’s what makes the coming months so interesting. What will be the vulnerabilities in the system that operators can legally, morally and ethically exploit to remain viable businesses? How much tolerance will CMS have for such entrepreneurship? And when will the readjustments come?
When DePriest and I spoke at his company’s user conference this week in Dallas, he expected 2021 might be when readjustments would be enacted.
Right now, it’s time for providers to knuckle down and prove they have good intentions under PDPM. That means focusing more on clinical standards, and getting the facility’s data story in order so they can easily adapt, DePriest believes.
The mantra that data is the new currency has been en vogue for several years now, but thanks to heightened regulation and payment policies, hospitals — and payers — now have more of a stake in getting it straight from their potential skilled nursing partners.
Beyond that, DePriest noted, the need for evidence-based care is going to give rise to more than reactive analytics. Try predictive analytics on for style, and you may never turn back.
Before parting, he gave four things for providers to focus on for the future:
- Be able to prove your outcomes and levels of quality provided. “It’s getting real,” when it comes to value-based pay and quality drives.
- Recognize your caregiving strengths and weaknesses and specialize in what you do best. The “nursing” aspect of nursing homes is more prominent than ever in the more clinically driven PDPM, so operators who can tackle more clinically complex patients should do so. Or find something else they can do so as not to waste time, effort ad resources.
- Medicare Advantage is here to stay. When something like that comes between the payer and provider, you can expect about 20% getting drained out of the system, DePriest explained. That means those pursuing I-SNPs (essentially another form of Medicare Advantage, in some ways) or otherwise taking on more risk in an effort for more reward, must proceed carefully. Many operators will need others to make a go of it with a risk-sharing model, and it will be imperative to have trustworthy partners.
- Finally, relationships with hospitals and various provider networks have to grow stronger. By building confidence that way, it will create more transparency — for what you represent and for what you see in return.
And if there’s anything that’s already transparent about this new PDPM age, it’s this: It’s going to be harder and harder to hide if you’re not doing things the right way. There’s nothing in question about that.
Follow Executive Editor James M. Berklan @JimBerklan.
