Why providers aren't elated about new pay-for-quality goals

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James M. Berklan
James M. Berklan

You can forgive long-term care providers if they weren't outwardly jumping for joy at Monday's announcement that Medicare is going to start paying for quality, and not quantity, of services.

Oh, long-term care operators are fine with the quality part. They have, after all, been beating the drum to receive pay based on outcomes for a while.

The problem is, they've been down this road before. They know the government makes noble gesticulations about quality. But they also know its dramatically waving arms often land in pockets that are too deep. Providers want quality just like everyone else, but they also want to know they'll get paid appropriately.

Unlike hospitals, which still receive much of their payment from private sources, skilled nursing is overwhelmingly funded by government programs, especially Medicaid and Medicare. It would not be unprecedented if Uncle Sam were to call for better results while paying less.

One has a hunch that's why the leader of the largest nursing home association in the country described the administration's new goals as “aggressive.” “We're with you, but just make sure you give us the funding we need so we can keep up with this quest for quality,” Mark Parkinson, CEO of the American Health Care Association, seemed to be saying.

Put another way, it's like the top military brass sitting at comfy command headquarters while telling the infantry at the front to conquer new territory. The foot soldiers just want to know they'll be well supplied during the battle ahead.

If you look closely, comments from other provider groups also expressed caution about yesterday's big announcement. Directly coming out against quality and performance-based pay would be akin to dissing Mom and apple pie.

But while nobody will say pay based on outcomes is a bad idea, providers of all stripes want to make sure they get their piece of the pie. And they want reasonable expectations along with it.

The devil will, indeed, be in the details.

Talk of saving dollars and lowering lengths of stay is fine, but how will officials measure quality? Will risk-adjustment factors and operators' specific characteristics be taken into account?

Also, government payers will have to own up to the fact that nurses, aides and everyone else who works in a long-term care also have bills to pay. Fund them, and you fuel the quality that is, after all, the whole point of this healthcare gig.

The good news is that LTC advocates were not caught off guard by this shift toward value-based purchasing. It's been a mantra at conferences and trade shows for what seems like a couple of years.

That means refrains about quality outcomes that providers have been hearing need to be paid more attention. LTC providers need to build even stronger relationships with hospitals, physicians, rehab providers and other potential partners for accountable care organizations and other alternative payment models.

It's the new reality. And the clock is ticking.

James M. Berklan is McKnight's Editor. Follow him @JimBerklan.


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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.