Hospitals must begin to view nursing homes as “equal partners” to ensure success in a unique state-federal partnership that aims to reduce costs and improve care, according to one advocate involved in expanding the program.
Joseph DeMattos Jr., (pictured) president and CEO of the Health Facilities Association of Maryland, said he is “cautiously optimistic” as officials from Maryland and the Center for Medicare and Medicaid Services Innovation Center ramp up negotiations on the third installment of the state’s Total Cost of Care Contract.
The goal is to have a signed agreement in place by the end of the year with “in-depth participation” from nursing homes likely to start in 2025.
“Maryland has the opportunity to exhibit for the nation that the quality of care can be increased, and the total cost of care can be decreased if nursing homes are not simply viewed as downstream destinations by hospitals,” DeMattos told McKnight’s Long-Term Care News Friday.
At this point, it’s undetermined whether the value-based program would be mandatory for skilled nursing providers.
DeMattos sees three pathways for the state to financially incentivize providers who meet cost-reduction and quality-of-care targets (or lose Medicaid dollars if they fall short). One approach would create a voluntary partnership; another would name specific facilities to a pilot program; and a third could require participation from all 225 nursing homes regardless of their ability to meet proposed targets.
The Maryland All-Payer Model – the Total Cost of Care Contract – went into effect on Jan. 1, 2014. It is the only model of its kind in the nation and limits Maryland’s all-payer per capita hospital growth for inpatient and outpatient care to 3.58%, per CMS’ Innovation Center.
Per capita hospital cost growth rate was required to stay below the national rate between 2015 and 2018. In addition to reducing costs, the initial contract called for quality improvements such as reducing hospitals’ 30-day readmission rates and an annual aggregate reduction among 64 preventable, hospital-based conditions over five years.
While the first five years of the partnership led to significant Medicare savings, the second phase was impacted by soaring healthcare costs related to COVID-19. The state missed its targets.
But as state and federal officials dive into the next round of contract negotiations, one goal is to bring nursing homes into the mix to help reduce costs and improve outcomes, which will require hospitals to make a paradigm shift and view facilities as partners instead of vendors, DeMattos said.
“The reality is that change in healthcare is almost always difficult,” he added. “But when you are guided by not the single mandate of improving care or the single mandate of reducing cost, but the dual mandate of reducing cost and improving care, the care becomes manageable.”
While there is excitement among government, hospital, nursing home, and even home-health leaders about the new model, some remain concerned about who will call the shots when it’s up and running.
“As long as the parameters are focused, are set, are known in advance, and that providers in each setting can control their destiny by being clinically driven in their decision-making, [industry leaders] are excited about the prospects going forward,” DeMattos said.