Every day, hospitals assume more risk as they enter into payment arrangements that directly tie their reimbursements with care quality and cost containment.
This is clearly apparent in the Centers for Medicare and Medicaid Services (CMS) Comprehensive Care for Joint Replacement (CJR) model that went into effect on April 1, 2016. Up to this point, participation in similar bundling models has been optional, but this is the first time that CMS is requiring hospitals to participate in a value-based care initiative without the ability to opt out.
The CJR model promotes coordinated, patient-centered care for hip and knee replacements—the most common types of inpatient surgery for Medicare patients. Within the model, hospitals take on the risk for quality and cost for the entire care episode, ranging from the point of admission through 90 days post-discharge. This means is that no matter where the patient goes after discharge— back home, to a hospital-affiliated post-acute facility or to some other facility of the patient's choice— and whatever care the patient receives – doctors visits, physical therapy, home health, wound care, etc. - the hospital is held accountable for patient care during the entire three month post-acute period. So, for example, if a patient has a knee replaced and discharges to a skilled nursing facility (SNF) to recover, the SNF will be paid directly from Medicare on a fee-for-service basis, but the hospital will still be held accountable for the patient's care episode up until that 90 days expires. At year's end, CMS will calculate the average episodic cost for care and either penalize or reward the hospital for holding care costs below a specific cost benchmark, set as a function of historical data and care quality. As a result, even though they cannot dictate the specific care received, the hospital is responsible for all associated costs of care that occur, even in the event of a complication, relapse or readmission.
To date, many healthcare organizations that participate in risk-based models, such as ACOs or other bundled payment initiatives, have looked to form partnerships with entities across the continuum to share in both the risk and potential savings. Although hospitals can pursue a similar approach to CJR and commit to partnering with post-acute providers, by law they cannot require patients to use certain providers. In other words, although healthcare organizations can set up risk sharing networks, they cannot require patients to stay within those networks. In some ways, this can put hospitals in a tight spot, holding them responsible for a patient's care but not allowing them to control how or where that care is delivered.
Clearing a Path Forward
Navigating this newly-required payment model will certainly be challenging for hospitals; however, there are some steps organizations can take to lay the groundwork for success. These strategies will not only improve performance with CJR – and whatever additional DRG's CMS decides to add to the mandatory bundling program - but will also prepare organizations to handle other risk-based arrangements that require comprehensive care coordination.
Pinpoint the right network outside your walls. With any model that requires hospitals to assume risk, having other care providers you can trust and rely on to do the right things is critical. Much of our care for complex or chronic conditions happens outside the walls of the hospital and in a myriad of different settings, so the right network of providers and seamless care transitions among them become extremely important. A key element in a seamless transition is identifying the best possible provider fit for the patient—one that not only meets a patient's physical needs but psychosocial ones as well. Even though hospitals cannot dictate that a patient moves to a particular provider after discharge, they can certainly present a list of well-vetted options for the patient or family to consider. Oftentimes, if a hospital tells the patient and family that positive experiences and outcomes have been documented with certain providers, and if the hospital has determined those providers match the specific needs of the patient, there is a higher likelihood that these types of recommendations will be seriously considered and followed.
Technology can help hospitals more easily identify appropriate post-acute providers that can fully meet the patient's needs. Leveraging discharge planning software, for instance, a case manager can enter in specific parameters to narrow the search and find the most suitable matches. If the patient requires physical, speech and occupational therapy following a stroke; is looking for a facility that is within 10 miles of his daughter's home; and wants a place where his spouse can stay overnight, the case manager can input these conditions into the system, and the technology can quickly provide a list of relevant facilities. Staff can then electronically reach out to those facilities and receive referral responses back within minutes – allowing the patient to quickly move to the lowest cost, clinically appropriate level of care. This process allows the hospital to provide a targeted list of possibilities to patients and families that will ensure care continues after discharge at the level the hospital expects and the patient deserves.
Ensure relevant clinical data is readily available. Another factor in a smooth transition is providing the right information to the post-acute provider in a timely fashion so treatment can begin immediately and care lapses or duplicate therapies that can impact quality and cost performance can be avoided. Merely sending a copy of the patient's health record along to present to the care team on arrival is not sufficient or practical. Instead, hospitals should send a concise document that has just the information the receiving facility requires to adequately treat the patient. Again, technology can help by extracting pertinent information directly from the patient's electronic health record (EHR) and automatically delivering it to the post-acute provider before a patient is even transferred. The receiving facility can be ready to continue treatment and implement the patient's care plan the moment they arrive.
Risk stratify patients to focus on the most critical. Not every patient leaving the hospital after surgery requires intense follow up. There is a difference between the 65-year-old knee replacement patient who wants to continue running and thus requires a new knee and the 85-year-old patient who has had a hip replacement due to a fall, which occurred while she was disoriented. Segmenting patients into different risk categories allows a hospital to monitor the recovery of high-risk patients more closely so it can detect when care milestones are missed or the patient has concerning health changes. This enables the care team to proactively deploy interventions before the patient returns to the acute setting. For example, if a patient misses a follow-up appointment, the hospital and the patient's physician can be notified so they can decide the appropriate care intervention. Similarly, if a patient has significant changes in blood pressure or pain, the hospital can receive an alert so it can respond before the situation spirals and results in outcomes that negatively affect quality and cost.
The Future is Here
The CJR model is just the opening act for required value-based care. In all likelihood, CMS will expand the program beyond the two diagnoses that are affected now. In the coming years, hospitals will be called on to assume even more risk, and they must be prepared. By finding ways to better connect patients with the most appropriate care, no matter the setting, and elevating communication and coordination across providers, hospitals can adjust to the new fee-for-value models.
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