Surviving and Thriving in a Bundled Payment World

In last week’s post we covered the first of two risks to the Home Health industry, and those for whom we provided care. This week we will address the second, at risk relationships – ACO’s and ACO like concepts, as well as, other bundled payment concepts. In all of these “at risk” relationships Home Health has the opportunity to truly be the care setting of choice as Homecare often provides the most clinically appropriate care at the most cost effective price point. In this regard, the Home Health industry is uniquely positioned to capitalize on these bundled payment initiatives, as it is the most cost effective player within the post-acute continuum. However, in order to prove Home Health’s place in this future structure it must truly prove that it can control hospital re-admissions and that its care protocols can in fact have a predictably positive impact on total post-acute spending. As these payment models evolve over the next few years it is critical that the Home Health industry begin to build care models that can impact outcomes so that it is positioned to play a value added role in these evolving at-risk relationships.

No matter what the future holds or when the evolution in payment models occurs Home Health can be certain that the current model is changing and now is the time to prepare for that change by focusing efforts in a few key areas that will prove valuable regardless of exactly what form future reimbursement takes. In our opinion, Home Health’s primary areas of focus should be:

• Developing care transitions models that focus on how to ensure that patients avoid re-hospitalization by front loading care and even increasing visits early in the episodes of care.
•  Increasing the effective use of certified nurse aides and health coaches to provide more frequent interactions with the patients to proactively identify re-hospitalization risks
• Developing ways to touch the patient more often through enhanced use of tele-monitoring or telephonic contact
• Controlling cost per visit of all of our care giving staff by developing improved payment models and enhanced productivity controls so that the added investment in patient touch points can be managed without significant financial implications
• Developing protocol based care pathways that outline the right mix of visits by the right skill level staff member to achieve the desired decline in re-hospitalizations. In addition to frequency planning these pathways must also clearly address the areas of highest risk to be managed early in the episode.

Developing core relationships with physician house call programs to enhance the level of physician involvement for high risk patients.
Improving Home Health’s re-hospitalization rate should be its highest priority for the future and is the thing that will have the greatest impact on the industry’s long-term future. In the meantime, focusing on these models of efficiency and quality will have a minimal negative impact on our current cost structures and will ultimately position the industry for long term success in a future that will no longer be driven by fee for service models.

Sequestration’s effect on Home Health Reimbursements

My how time flies! I can’t believe that 1/3 of the year has already come and gone. Unfortunately, in the homecare industry the passage of time is doing little to bring clarity to our reimbursement future. With the recent implementation of sequestration it is hard to imagine that we are on the verge of more rate news but in just a few months we will have insight into CMS’s proposed rule for 2014 which may also include information on the implications of re-basing which is scheduled to kick in January 2014. Add to this pending concern the recent submission of the President’s budget proposal which included $100 per episode co-pays and it seems there is no end in sight to the challenges we will face in the coming years.

As a result, it is imperative that we remain diligent in our efforts to prove our value proposition both inside and outside of Washington and to separate our industry from the perceptions of fraud which still plague us and continues to place a bulls-eye on our chest.  If you have an opportunity to come in contact with your elected officials I would encourage you to help them see that although there are some bad actors in homecare, as there are in all industries, the reality is that we play a vital role in the health care system and that the vast majority of us are providing needed care at a very low cost of just $50 per day.  Then move on to painting a picture of our typical homecare patient who is on average 80 years old, taking 12 medications and living on a fixed income that is only slightly above the federal poverty level. It is important that legislators understand that these patients simply cannot afford a co-pay for homecare services and that to put one in place will result in needed homecare services being declined resulting in a spike in much more costly re-admissions to acute care hospitals. Another point to share with your legislators is the fact that when a patient accepts homecare services rather than some sort of facility-based care they continue to have 100% of their living expenses including the costs of their medications, their food and their other living expenses. As a result, in essence, these patients already have skin in the game by continuing to cover all of their own living expenses rather that choosing institutional care which may actually be cheaper for the patient after all cost is properly accounted for.

We will address the second risk next week, so remember to check back next Tuesday.