Guest Columns

How's Your M-4 power? No it's not the latest gadget, but a strategy for success!

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Steven Littlehale
Steven Littlehale

As the year comes to a close, we naturally reflect on how much has changed and, conversely, how much remains the same. This year it seems easier to identify the changes that post-acute providers have encountered and how they impact on the future of the industry.

For SNF providers, the Final Rule provides the regulatory guidance to the Centers for Medicare & Medicaid Services to withhold 2% of your traditional Medicare prospective payment dollars starting in FY 2019.  Assuming you want to get your 2% back, think about M4  — “Measure, Manage, Market and Mitigate”!

How low will your facility's risk-adjusted rehospitalization rate need to be for you to get your money back? Maybe you're thinking this doesn't apply to you as your traditional Medicare patient population dwindles as managed care and alternatives take its place? The same concepts apply: High rehospitalization rates do not win, no matter who is paying the bill.

Measure — Using a NQF-endorsed MDS-based measure is an essential first step that allows you to compare yourself to other providers and to know where you rank overall. With standardization comes valid comparison of performance across all providers. Everyone is working from the same metrics or measures. Well over half of all SNFs and dozens of payers use the same MDS-based rehospitalization metric.

Manage — You have to manage those risky residents and, bravo, obviously many of you are! We have seen reduction of the national observed and risk-adjusted rehospitalization rates over the last several years. Through the industry-wide efforts to adopt vetted metrics and data-driven root-cause analysis systems, coupled with evidenced-based best practices to manage at-risk populations, fewer residents returned to the hospital.

What we've also seen is that one person's high-risk resident is not necessarily another's. We all have strengths and weaknesses and the right metrics can identify this for you.

Marketing — Transparency between payers, providers and consumers yields better understanding of care needs and brings superior outcomes. Sharing your successes and plans for improvement using population-based rehospitalization rates and process improvement tools becomes one of best new marketing options.

Mitigate — How much of the financial withhold will you have to mitigate? Where will you stand in the rankings when all 15,400 SNFs are racing you to the top? At the end of the day, you want to be among the best 60% of SNF providers in the nation in order to collect at least some of your 2% “pay for performance” bonus. That means you want to have a risk-adjusted rate lower than 18.4% — the lower the better!

Our analytics team studied the national performance of all SNFs for the 12 months ending after the first quarter of 2015. From this time period, the best-percentile SNF providers had risk-adjusted rates of rehospitalization at 5.4% while the very worst percentile had risk-adjusted rates of 30.4%. That's a range of 25%!

As 2015 comes to a close, remember to measure your rehospitalization rate using the industry standard MDS-based metric, manage your risk and market your results so you can be likely to be among the top performers when CMS seeks to pay for your performance in FY 2019.

Steven Littlehale is a gerontological clinical nurse specialist, and executive vice president and chief clinical officer at PointRight Inc.

Guest Columns

Guest columns are written by long-term care industry experts, ranging from academics and thought leaders to administrators and CEOs.