'Site-neutral' pay proposal has providers taking sides

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James M. Berklan
James M. Berklan

Terms about the value-based pay movement tend to spill into one another: bundled payments, accountable care organizations, managed care, site-neutral payments, and on and on.

The last might be creating some of the most heat and anxiety.  Prodded by the Medicare Payment Advisory Commission, site-neutral aims to keep post-acute patients flowing to the lowest-cost, clinically appropriate setting. A payment system centered on patient characteristics, rather than care settings, would “dampen incentives” for facilities that might selectively admit some patients over others, MedPAC commissioners note.

On the acute-care side, hospitals have been fighting back with position papers and statements extolling the virtues of inpatient rehabilitation facilities (IRFs).

SNFs have position-papered back, naturally. 

Then there's also home health providers, which hope to be seen as the lowest-cost provider. They're licking their chops at the prospect of catching any leaks out of SNFs' bucket.

Many observers, however, are not so sure site-neutral payment will be the boon that some predict it will be for skilled nursing. First of all, getting it more thoroughly into play will mean winning a battle against the well-armed and well-funded hospital lobby. That type of fight usually doesn't end well for SNFs.

Beyond that, SNFs have some catching up to do. Of all the players who might take part in the caregiving chain, it is only SNFs that are not well versed yet in episodic care. They'll also have to beef up their clinical capabilities.

The American Health Care Association issued its own proposed payment system based on episodes of care, but CMS doesn't think much of it. That's because it would incentivize quicker discharges to downstream settings, much like hospitals were incentivized to do when diagnostic-related groups came into being.

In other words, while higher-acuity patients might start being treated more at SNFs, more also would be sent to home health and other downstream settings. “We don't really get ahead,” one veteran lamented to me.

The angst could be temporary, however. The site-neutral campaign could cool off if some of the other alternative payment models show progress, several experts predicted. 

That could be the best alternative of all.