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Payment reform: Ready! Set! Don't go! No, I mean go!

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Steven Littlehale
Steven Littlehale

Old News. On April 27, 2017, CMS released an Advance Notice of Proposed Rulemaking (ANPRM) that solicited comments on potential revisions to the SNF payment system. This system is called RCS-1, which stands for Resident Classification System.

This was a bit of a bombshell, but a bombshell that was long foretold (which, therefore, by definition is not a bombshell at all, but don't let that stop me).

RCS-1 has three goals: (1) more accurately compensate SNFs; (2) reduce incentives for SNFs to deliver therapy based on financial considerations, rather than resident need; and (3) maintain simplicity. RCS-1 represented the greatest example of “moving the cheese,” that the SNF industry has seen for quite some time.

Well, perhaps you think that bombshell turned out to be a dud. I hope to make the point that it was not.

We all heard on the March 8, 2018, CMS Open Door Forum that stakeholder comments are still being reviewed. This delay is caused by the requirement from the IMPACT Act to evaluate how the  Unified Post Acute Care PPS (Unified PAC-PPS) may harmonize with RCS-1. It is unlikely that RCS-1 will be implemented in time for fiscal year 2019's start (Oct. 1, 2018).

In preparing for the opening general session at next week's LTC100, I had the opportunity to think about RCS-1 and Unified PAC-PPS and overall payment reform along with my co-panelists. If you're waiting for payment reform to happen … it already has. Marc Zimmet of Zimmet Healthcare, and co-panelist has said it best:

“It would be wrong to consider that we're not already in payment reform. Think about it. The emergence of value-based care within traditional FFS, Medicare Advantage growth, ISNP, along with ACO and bundles demonstrates this point. A business as usual approach is short-sighted.”

If you tease apart the inherent values expressed in RCS-1, Unified PAC PPS and the IMPACT ACT, unending comments from CMS, MedPAC, OIG and etcetera on therapy utilization, you get a “tell me what you really think about me” feeling.

Whatever the next step is in payment reform, it will be value-driven and not volume, and success will require deep relationships with upstream and downstream providers. It will absolutely not be about therapy minutes, and will most likely emphasize rehabilitation of patients with complex medical needs.

Another colleague and upcoming co-panelist is David Tucker, president & COO of Commonwealth Care of Roanoke. David has this insight:

“In recent years, we have seen a trend toward home care and other care avenues for many of the orthopedic patients we had cared for … through our commitment to remain nimble and adjust rapidly to a changing environment we have been able to adjust strategies and focus on those that are consistent with what our upstream partners need.  I like to use the quote by Gordon Livingston … ‘If the map doesn't agree with the ground, the map is wrong.' Too often we find ourselves so married to our strategies that we are inflexible and that can have devastating consequences.

With a fair amount of uncertainty, what should you do next and what are your opportunities? Four concepts emerge:

1.  Rethink your business model. Is it predominantly therapy driven without centers of demonstrated excellence in complex medical management? Can you demonstrate that it meets the needs of your referral sources?

2.  Assess how nimble or ready for change your environment is. Were you pleased by how your organization readied itself for the potential of RCS-1? How about the new Requirements of Participation (RoP)? These are bellwethers of nimbleness.

3.  Educate on key concepts of payment reform. How is value demonstrated within ACO relationships, bundles, Medicare Advantage? How do post-Affordable Care Act VBP initiatives align across care settings?  They do, and herein lies a key to success.

4.  Ensure your data house is in order. What data do you track and trend that demonstrates both your success and improvement opportunities? Are your data and metrics third-party validated and easily understood by stakeholders?

The third panelist, Chris Chirumbolo, the CEO of Carespring Health Care Management, ties these four concepts together with ease.

“We utilize rehab in-house in an effort to better control and utilize this key resource. This gives us tremendous flexibility in testing care models that otherwise might be prohibited by an inflexible contact.”

Whether it is RCS-1 or Unified PAC-PPS or any other hybrid model, we are most certainly deep within payment reform. There are ways to ensure success today and in the future; but opportunity is not a lengthy visitor and action is required.

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.

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