No one is an island: Managing post-acute care in the 21st century

Health Care Current | March 21, 2017

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory, and legislative changes.

My Take

No one is an island: Managing post-acute care in the 21st century

By Steve Burrill, Vice Chairman, US Health Care Providers Leader, Deloitte LLP

A physician executive recently said that post-acute care has long been an archipelago of small islands, with no bridges, poor transportation, and limited communication options to the rest of the health care system.1 When someone needs rehabilitation or additional services after a hospital stay, there currently is little rhyme or reason as to why a patient is discharged to a skilled nursing facility (SNF), home health agency, inpatient rehabilitation facility, or long-term acute care hospital. It may be a choice based on convenience to the patient’s home, what the patient is familiar with, or just the hospital discharge planner’s or other clinician’s preferences.

Post-acute care is often “fragmented and siloed” from the rest of the health care system, which can result in poor coordination of care, higher than normal readmission rates, and suboptimal patient outcomes. One-in-five patients are admitted to post-acute care after being discharged from the hospital (about 8 million patients annually).2 On average, 22.8 percent of SNF patients end up back at the hospital within 30 days.3 Moreover, variation in post-acute care services accounts for 73 percent of Medicare spending variation – the single greatest contributing factor.4

For years, there was often no real incentive for hospitals to direct patients to the highest quality, most appropriate post-acute care facility, coordinate care, or continue to track the patient. Like Ed Murrow, the broadcast journalist, many hospitals would say “good night, and good luck” to their patients as they left the hospital. They had no accountability for what happened to patients afterward. Now, under the Hospital Readmissions Reduction Program, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), and the Medicare Bundled Payments for Care Improvement Initiative (BPCI), hospitals are penalized if their patients are readmitted or have poor outcomes. Hospitals have a financial reason to care about what happens to their patients after leaving the hospital and should be paying close attention to post-acute care.

Despite hurdles, like the fact that post-acute care was not included in a number of CMS programs to adopt and modernize electronic health records (EHRs), hospitals can make some smart next steps and think strategically about post-acute care. Limited data about what happens at facilities can make it hard to compare quality across facilities. In the face of these barriers, some forward-looking health systems are working with post-acute care facilities to create their own quality metrics, share data, and steer patients to certain facilities based on clinical need, quality, and outcomes. We saw this in our recent paper, “Viewing post-acute care in a new light: Strategies to drive value.”

Our conversations with key post-acute care stakeholders revealed that there is great potential for innovation in post-acute care. Directing patients to receive care at home with an aide or to a high-quality post-acute care facility, for either a short, intentional visit at a lower cost setting than the hospital or for a longer-term rehabilitation stay, could improve patient outcomes and reduce costs. The key is figuring out how a health system responsible for the outcomes of a patient can steer that patient to the best option for them. We explored two different ways health systems can work with post-acute care providers:

  • Own: One option for health systems is to buy or build post-acute care services. By owning post-acute care, health systems can control the type and quality of care their patients receive, integrate the information into their EHR systems, and better manage care from a population health perspective. This, however, may not make sense for many health systems. There are scale, expertise, and capital requirement considerations to be made. Additionally, many post-acute care facilities have very narrow margins or are not performing well. This may pose a risk to well-established, large health systems.
  • Partner: The preferred option from our research was for health systems to partner with post-acute care providers. Relationships can take different forms, such as joint ventures, leasing beds, and/or preferred referral networks. This could mean identifying the high performers with quality care, patient satisfaction, and low readmissions and developing relationships with them that encourage accountability and high-quality outcomes. Many established partnerships use their relationship as a platform to focus on quality initiatives for post-acute care. These efforts often focus on care transitions, augmenting clinical staffing, broadening the medical director role, reducing readmissions, developing patient-centered models, and enhancing clinical staff education.

While building the systems to capture this data may take time and the industry is just in the first stage of reconfiguring post-acute care, some of the interviewees said that even small, simple changes – such as getting the health systems on the phone with the admitting post-acute care facility to discuss what the patient needs in the next two to 12 hours – have huge potential for improving quality and keeping patients from being readmitted to the hospital. Additionally, more strategic use of post-acute care – not everyone should be discharged to a facility, because being at home could be helpful for recovery – could reduce costs and improve outcomes. As post-acute care evolves, post-acute care 2.0 could include greater integration with acute care, risk-based contracting, and more automation for referrals and patient care.

In the current environment, financial incentives often are misaligned, cost controls can be inadequate, and outcomes and patient experience can suffer. But we are moving to a new world of value-based care, and under new payment models health systems may need to take a hard look at their post-acute care strategies. That’s a challenge before all stakeholders – how to construct the necessary bridges and communication networks from the disparate health care islands. Patients depend on guidance from their doctors, hospitals, and health plans to make the right choices in a process that can be lengthy and frustrating. Health systems may need to be better at drafting horizontal networks that don’t leave patients – and each other – stranded on their own island.

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1 Deloitte Center for Health Solutions, Viewing post-acute care in a new light: Strategies to drive value
2 Wen Tian, An all-payer view of hospital discharge to post-acute care, 2013
3 Robert E. Burke, Emily A. Whitfield, David Hittle, Sung-joon Min, Cari Levy, Allan V. Prochazka, Eric A. Coleman, Robert Schwartz, and Adit A. Ginde, “Hospital readmission from post-acute care facilities: risk factors, timing, and outcomes,” JAMDA: The Journal of post-acute and long-term care medicine 17, no. 3 (March 2016), p. 249-255, DOI: 10.1016/j.jamda.2015.11.005
4 Robert Mechanic, “Post-acute care—the next frontier for controlling Medicare spending.” New England Journal of Medicine (2014).

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Implementation & Adoption

Stakeholders recommend ways to improve future bundled payment models

At last week’s meeting of the Physician-Focused Payment Model Technical Advisory Committee (PTAC), US Centers for Medicare & Medicaid Services (CMS) officials and stakeholders involved in implementing bundled payments discussed strategies for improving the BPCI initiative and concerns about the future of the program.

CMS officials and organizations who were BPCI conveners presented how the models work and lessons learned from implementation. Conveners provide technical and administrative assistance to health systems and physician groups; some assume financial risk (for more information on BPCI and conveners see Deloitte’s analysis, “Navigating bundled payments”).

The stakeholders said going forward, CMS should consider:

  • Keeping payment models voluntary: Stakeholders said that innovative value-based payment models should support provider choice and be voluntary. The new Secretary of the US Department of Health and Human Services (HHS), Dr. Tom Price, also supports this approach.
  • Creating additional gainsharing waivers: New models must reflect gainsharing restrictions, which were intended to protect against fraud and abuse but unintentionally restrict value-based payments. CMS can issue waivers that protect providers participating in bundled payment initiatives from anti-kickback statute violations. Expert testimony suggested that the limited scope of these waivers could discourage organizations from participating in bundled payment initiatives.
  • Sending more feedback reports: While CMS provides quarterly feedback reports to participants, monthly reports could be more useful. CMS should consider that delays in feedback may make it difficult to implement changes quickly enough under value-based payments.
  • Change triggers for bundles: Currently, bundled payments are based on episodes, which start at acute inpatient admissions. Some stakeholders want new models where the episode starts earlier – at patient diagnosis.

Background: MACRA established PTAC to review and consult on innovative payment models to be considered as advanced alternative payment models under MACRA’s Quality Payment Program. The committee advises on the models and sends recommendations to HHS for approval.

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12.2 million enrolled in coverage during open enrollment, half a million less than 2016

The HHS open enrollment report shows that approximately 12.2 million people signed up for coverage through the public health insurance exchanges in 2017. This is roughly 500,000 less than the 12.7 million people who enrolled last year. The final report covers the 39 states that used and the 12 states that run their own.

Other key findings from the report:

  • Approximately 8.4 million people re-enrolled from 2016, and 3.8 million people were new to the marketplaces.
  • Nearly 10.1 million people (84 percent) qualified for advanced premium tax credits, and 7 million people (58 percent) were eligible for cost-sharing reductions.
  • Approximately 74 percent of people in states selected a silver plan in 2017; 71 percent selected a silver plan in 2016.

The 2017 open enrollment period ran from November 1, 2016 to January 31, 2017.

(Source: HHS, “Health Insurance Marketplaces 2017 Open Enrollment Period: Final Enrollment Report,” March 15, 2017)

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CMS launches campaign to remind physicians about funds for coordinated chronic care

Though CMS pays physicians to coordinate care for Medicare patients with chronic conditions, many are not billing for these services. CMS estimates that 70 percent of Medicare beneficiaries – or 35 million people – have two or more chronic conditions and qualify for this program. However, as of the end of 2016, CMS only received chronic-care coordination related claims for 513,000 beneficiaries. The campaign encourages physicians and patients to take advantage of these federal funds.

The program began in January 2015. Medicare pays physicians a per-patient-per-month fee to furnish chronic-care management services for patients with two or more chronic conditions. Physicians can bill CMS if they spend at least 20 minutes of non-face-to-face time coordinating care for these patients. To encourage physicians to bill for these services, CMS increased payment rates (these range from approximately $43 to more than $141, depending on the complexity of the patient’s condition) and is launching a national awareness campaign.

Physicians say that it is not unawareness that is keeping them from billing for coordinated care, but rather patient concerns. Physicians must obtain patients’ permission, and patients have been vocal about not wanting to pay copayments for care coordination services. The national campaign will educate patients that their supplemental coverage helps pay for much of the out-of-pocket expenses.

(Source: Virgil Dickson, Modern Healthcare, "CMS to launch national campaign to promote coordinated-care program,” March 14, 2017)

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Meta-analysis compares findings of several medical home initiatives

Implementing a patient-centered medical home (PCMH) model is not enough to improve quality of care, according to a new study published in Health Affairs. The PCMH model aims to improve how primary care is organized and delivered by providing comprehensive, patient-centered, coordinated, and accessible health care. Researchers looked at the cost, utilization, and quality results for 11 PCMH initiatives over the past 10 years and concluded that outcomes vary significantly due to differences in the design and implementation of each model.

Among the findings that PCMH models did not affect:

  • Most utilization and quality outcomes, including primary care, emergency room visits, inpatient visits, and several quality measures.
  • Four of the six quality measures the researchers looked at (colorectal cancer screening and three of the tests for patients with diabetes).
  • Most of the utilization measures (primary care, ambulatory care, inpatient visits, and emergency room visits).

However PCMH models did:

  • Increase cervical cancer screenings by 1.2 percent and decrease specialty care visits by 1.5 percent.
  • Decrease total spending (except for pharmacy) by 4.2 percent.

For the analysis, the authors applied a methodology that allowed for comparable results even though not all the studies had data on every measure. The many differences among PCMH models suggests that the specific context of a PCMH initiative likely matters to influencing results.

(Source: Sinaiko et al. “Synthesis of research on PCMHs brings systematic differences into relief,” Health Affairs, March 2017)

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On the Hill & In the Courts

Trump Administration releases first draft of FY2018 budget cutting HHS, NIH budgets

Last Thursday, the White House released the first draft of the national budget for fiscal year (FY) 2018, which outlined the Trump Administration’s priorities. The budget, called a “skinny budget,” is usually not a line-by-line appropriations document. The skinny budget does not include funding proposals for entitlement programs, like the Medicare and Medicaid programs.

The Trump Administration would set the HHS budget at $69.0 billion, a $15.1 billion (17.9 percent) decrease from 2017 levels. The National Institutes of Health (NIH) would see the largest reductions ($5.8 billion lower than FY2017). According to the document, the administration plans to move the Agency for Healthcare Research and Quality (AHRQ) under the NIH and eliminate the role of the Fogarty International Center, which supports global infectious disease research.

The budget would:

The administration would also increase funding to the US Department of Veterans Affairs (VA), requesting $78.9 billion (a six percent increase from 2017). This includes a $4.6 billion investment in discretionary funding for the Veteran’s Health Administration (VHA). It would also give an additional $3.5 billion to the Veterans Choice Program, which helps pay for care that veterans get from private providers.

HHS Secretary Dr. Tom Price said he supports the priorities outlined in the budget, including consolidating and streamlining agency activities to reduce administrative burden and redundancy.

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House Budget Committee advances AHCA

Last Thursday, the House Budget Committee voted to advance the American Health Care Act (AHCA), a budget reconciliation measure that would amend policies in the ACA, with a focus on the individual market, Medicaid, and taxes used to pay for the ACA. The bill, which was introduced on March 6, was previously marked up and advanced by the Energy & Commerce and Ways & Means committees (see the March 14, 2017 Health Care Current). The Budget Committee voted 19-17 to advance the bill; three Republicans voted against the measure.

AHCA will now head to the House Rules Committee and if approved will advance to a full floor vote. If approved by the House, ACHA will then be sent to the Senate.

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Senate confirms Seema Verma as CMS Administrator

Last Monday, the Senate confirmed Seema Verma as CMS Administrator. Formerly a health care consultant in Vice President Mike Pence’s home state of Indiana, Verma has extensive experience with the Medicaid program. Verma is the architect of Indiana’s Medicaid expansion program, Healthy Indiana Plan 2.0, and helped build and implement expansion programs in several states using CMS’s 1115 Demonstration waivers. Brian Neale, the new director of the Center for Medicaid and CHIP services, was selected March 1.

According to Verma’s confirmation hearings before the Senate Finance Committee, her priorities will include allowing greater flexibility for states in their Medicaid program designs, addressing fraud and abuse in the program, and modernizing CMS programs (see the March 7, 2017 Health Care Current).

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Around the Country

Price, Verma signal increased flexibility and changes for Medicaid

HHS Secretary Tom Price and newly confirmed CMS Administrator Seema Verma sent a letter to governors saying they promise to remove barriers and give states more flexibility in the design of their Medicaid programs. They also said that HHS will conduct a full review of managed care regulations (see the May 3, 2016 Health Care Current) and will delay enforcement of the Home and Community-Based Services rule. While the letter is not considered formal guidance, it forecasts actions the Trump Administration is interested in taking.

In the letter, Price and Verma said that the ACA’s Medicaid expansion departs from the program’s main mission. They said that the expansion may be taking limited resources away from other, more vulnerable beneficiaries. They added that they are committed to working with both expansion and non-expansion states to find a solution for helping the most vulnerable populations.

Price and Verma also say that CMS:

  • Recommends states use Section 1115 waivers to encourage non-disabled adults to obtain and keep employment.
  • Will help states redesign Medicaid benefits for non-pregnant, non-disabled adults to make it more like private insurance. Many of the suggestions, including the use of health savings accounts, premiums, and co-payments for emergency room visits, are signature elements of the Healthy Indiana Plan that Verma helped design.
  • May create a “fast track” for review and approval of 1115 waivers and extensions of demonstration projects. Notably, they say that the budget neutrality requirement will still apply to waivers and demonstrations.
  • Remains committed to helping states address the opioid epidemic, a major cost-driver for Medicaid.

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Secretary Price encourages states to use 1332 waivers to stabilize markets

HHS Secretary Tom Price sent a letter to governors saying they should use Section 1332 State Innovation waivers to slow premium growth and stabilize the small group and individual markets. He held out as an example Alaska’s 1332 waiver request to fund a state-operated high-risk pool and reinsurance program. Price wrote the letter in response to President Trump’s executive order directing federal agencies to alleviate the burdens of the ACA.

When Alaska discovered that premiums would increase by 42 percent in 2017, the state created the Alaska Comprehensive Health Insurance Fund, a reinsurance program to support the one health plan participating in the individual market. Funding came from a 2.7 percent tax on health insurance premiums. In response, the health plan lowered its premium increases to seven percent. The state is now applying for a federal waiver to get federal funds for its reinsurance program. The proposal is under review and has not yet been approved.

As discussed in Deloitte’s policy brief, “State health coverage innovation and Section 1332 waivers: Implications for states,” to be approved, a state must demonstrate that its waiver will not reduce access to care, will cover at a comparable number of residents as would be without a waiver, and will not increase the federal deficit. Alaska says that funding a reinsurance program, which lowers premiums, reduces the need for federal tax credits for insurance premiums, driving down costs.

Price’s letter encourages more states to pursue 1332 waivers that include high-risk pools or state-operated reinsurance programs, noting that pass-through funding may be available to offset the cost to states. Price also said that HHS will provide additional resources to assist states in applying for waivers.

(Source: Trish Riley and Jane Horvath, “HHS Invites More 1332 Waiver Requests Citing Alaska,” National Academy for State Health Policy, March 2017)

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Breaking Boundaries

Startups set ambitious goals to prevent and treat diabetes

A group of entrepreneurs from technology and medicine recently launched a new virtual medical clinic with the goal of reversing type 2 diabetes in 100 million people by 2025. The startup, Virta, is an online specialty medical clinic that connects patients with diabetes with a care team that helps them make lifestyle changes to ultimately eliminate the need for diabetes medications. The service involves a physician, health coach, access to telehealth, text messaging, plus artificial intelligence and real-time measurement of vital signs like blood pressure and blood sugar through the app.

The team timed the announcement of the new company with the publication of a study two of the cofounders published in JMIR Diabetes. The study focused on whether individuals with type 2 diabetes participating in an intensive nutrition and behavioral counseling delivered remotely could improve outcomes. The study involved 238 participants who completed the first 10 weeks of the program. At the start of the study, most participants (90 percent) were on one or more diabetes medications. At the end of 10 weeks:

  • The majority of the patients had one or more diabetes medications reduced or eliminated (57 percent).
  • The average participant lost 7.2 percent of his or starting weight.
  • The percentage of individuals with an HbA1c level of <6.5 percent increased from 20 percent to 56 percent.

The authors concluded that these initial results indicate that an individualized program delivered remotely can improve glycemic control and weight loss and decrease the need for medication in this population.

According to the CDC, one-in-three Americans could be diagnosed with diabetes by 2050. It is not surprising that many entrepreneurs in the technology and medical space are focused on preventing and treating diabetes. Another startup, Siren Care, has created “smart socks” equipped with temperature sensors to detect inflammation in patients with diabetes. Patients with type 1 and type 2 diabetes are at risk for foot swelling and other issues that can lead to infection, and in serious cases, amputation. Early detection is vital to avoid serious complications. The sensors are woven into the fabric of the sock to detect when there is inflammation. All information is uploaded to a smartphone app that can alert patients to any issues. Rimidi, an Atlanta-based digital health company, is tackling the disease through its Diabetes + Me platform that offers diabetes management for patients and primary care clinicians. The program aims to identify gaps in care management and help patients track their blood glucose. The platform is a combination of remote-patient monitoring and clinical decision support capabilities.

Analysis: Deloitte’s 2016 Survey of US Health Care Consumers showed that 70 percent of consumers are likely to use at least one of the health technologies presented to them (which included telemedicine, remote patient monitoring/sensors, drones/robotics, and Internet of Things (IoT) technology that makes objects “smart” via embedded sensors and links them through wired and wireless networks). Across the board, consumers with chronic conditions are the most interested in using technology-enabled care. Those reporting a major impact from their condition report even greater interest.

(Source: Amy L. McKenzie, A novel intervention including individualized nutritional recommendations reduces hemoglobin A1c level, medication use, and weight in type 2 diabetes, JMIR Diabetes, March 7, 2017)

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