0. Post Acute Care Collaboration & Network Development
Andy Page, Partner
DHG LLP
DHG Healthcare

1. Session Overview
- Introduction - Significance of Post‐Acute Care - Impacts of Post‐Acute Care Performance - Mandatory Elements of Reform - Understanding PAC Performance - Managing a Post‐Acute Care Network

2. Basic Concept
Building an effective post-acute network is essential to success under the rapidly accelerating shift from traditional fee-for-service to value-based reimbursement.

3. Impacts of PAC Networks – 2 Way Street
Acute care providers are significantly impacted by the performance of its post-acute care partners
Readmission Volumes
Clinical Outcomes & Patient Satisfaction
Mortality Rates
Financial Performance with Bundled Payments /CJR
Post-acute care providers are significantly impacted by Reform Elements and Referral Source
Revenue Cycle
Compressed Length of Stay
Referral Volumes & Backfill Admissions
Patient Acuity / Diagnoses

4. Significance of Post‐Acute Care

5. Importance of the Post-Acute Care Continuum
~ 90%

6. Post Acute Care – Aggregate Dollars $$
Post Acute Medicare Benefit $$ - Helicopter View
14,500,000
Medicare Hospital Stays
x 35%
Post Acute Discharge Rate
5,075,000
Total Medicare Post-Acute Discharges
$10,000
Average Post-Acute Stay
$50,750,000,000
Total Post Acute Care Spending
1,015,000,000
2% Reduction Impact???
$ 1B

7. Post Acute Care Within the Continuum
Mitigating payment reform risk and succeeding in alternative payment models.
Success in any episodic payment model is based on the ability to manage and control post‐acute care spend.
Managing post‐acute care must include an effective care transition process, the ability to monitor care, and visibility into progress against expected outcomes.
Up to 60% of episodic spending occurs post‐acute

8. Impacts of Post‐Acute Care Performance & Mandatory Elements of Reform

9. Post-Acute Care Performance Impacts

10. Mandatory Elements of Reform
Readmission Reduction Program
9% of Current and Future Medicare Reimbursement at Risk
3% penalty of Medicare Reimbursement at risk each program year
Measured Populations 30 days from DISCHARGE
AMI, HF, PN, COPD, THA & TKA, CABG
August 2014: CABG Added to FY 2017
Performance Periods: 3 Year Rolling Program
– FY’16: July 1, 2011 – June 30, 2014 – 3%
– FY 17: July 1, 2012 – June 30, 2015 – 3%
– FY 18: July 1, 2013 – June 30, 2016 – 3%
– FY 19: July 1, 2014 – June 30, 2017 – 3%
– FY 20: July 1, 2015 – June 30, 2018 – 3%
Currently Participating in 2 Performance Phases

11. Mandatory Elements of Reform
Value‐Based Purchasing
Clinical Outcomes Component (Mortality)
FY17 Performance Period – October 1, 2013 – June 30, 2015
Currently in 2 Performance Periods applicable to FY 2019 & FY 2020
Assess UNEXPECTED deaths: AMI, HF and PN that occur within 30 days after admission; which, depending on the length of stay, may occur after discharge from the post acute setting.

12. Mandatory Elements of Reform
Value‐Based Purchasing
Efficiency Component:
Medicare Spend Per Beneficiary (MSPB)
Captures total Medicare Spending Per Beneficiary relative to an episode of care, bundling hospital sources with post‐acute care
Bundles the cost of care delivered to a beneficiary for an episode across the continuum of care:
3 days prior to admission to acute
Hospital Inpatient Stay
30 days post‐discharge (including Post Acute Setting)

13. DRG Inpatient and PAC Fee-for-Service Model
Bundled Payment / CJR Example
Total Joint Replacement (DRG 470)
DRG Inpatient and PAC Fee-for-Service Model + + +
$3,207
$10,129
$8,965
$616 =
$22,927 x
98%
Home Health
SNF
IRF
OP Rehab
Home MD
$22,468
Readmission
Bundle
Note: Any aggregate payments lower than $22,468 can be shared with providers

14. BPCI / CJR - Impactable Spending by Episode

15. Understanding PAC Performance

16. Discharge Practices

17. ALOS vs Readmission

18. Average Length of Stay by SNF

19. Readmission Rates by Skilled Nursing Facility

20. Evaluating SNF Performance - MSPB
Facility
Discharges
% of Discharges
Readmissions
Readmissions %
Avg Medicare Cost
Avg. LOS
SNF 1 60
9.66% 23
38.3%
11.92%
$ 16,341
29.40
SNF 2 59
9.50% 18
30.5%
9.33%
$ 13,698
25.75
SNF 3 35
5.64% 15
42.9%
7.77%
$ 16,444
29.94
SNF 4 8
22.9%
4.15%
$ 17,567
32.31
SNF 5 33
5.31% 7
21.2%
3.63%
$ 12,855
28.06
SNF 6 28
4.51% 5
17.9%
2.59%
$ 7,718
14.79
SNF 7 27
4.35% 10
37.0%
5.18%
$ 16,892
32.63
SNF 8 24
3.86%
29.2%
$ 13,268
28.54
SNF 9
3.70%
30.4%
$ 14,757
30.57
SNF 10 22
3.54%
45.5%
$ 15,765
30.09

21. Developing and Managing a Post‐Acute Care Network

22. Concepts Building a Post-Acute Care Network Current state assessment
Market dynamics
Reform Element performance
Service line trends
Discharge practices
PAC performance
Identify high-performing PAC providers
Determine Performance Guidelines
Build Care Transition Programs
Internal and External Stakeholder Education/Communication
Performance Monitoring

23. Post Acute Provider Perspective
Think about it from the “other side”
Challenges of the PAC Providers
Different Business Model
Different Payer Sources & Revenue Streams
Less Sophisticated Technology
Lower level Clinical Staff
Primarily a For-Profit Industry

24. Policy & Regulatory Changes for PAC Providers
Medicare Payment Advisory Commission (MedPAC)
Medicare Hospital Readmissions Reduction Program (HRRP)
Focused on 30 Day Readmissions for:
Heart Failure, Heart Attack, Pneumonia
IMPACT Act of 2014 – Enhanced reporting of Quality Measures
Revision to FIVE STAR RATINGS (SNF) – Executive Action from President
Implementation of STAR Ratings (HHA)

25. Hallmarks of an Effective Post-Acute Care Network
Rigorous selection process
Staff support & buy- in at affiliates
Performance monitoring of network partners
Clear expectations for discharges
Objective rotation & measurement system for rejected cases
Real-time market availability
Quality transparency
Electronic patient information transfer
Compliant patient education
Resources for case management and physicians
Staff education
High-Quality
Partners
Standardized
Transfer Protocols
IT Connectivity
Empowered
Patients and Staff

26. Remember the Shift In Payment Methodology
“…HHS goal of 30 percent traditional FFS Medicare payment through alternative payment models by the end of 2016… 50 percent by the end of 2018”
HHS Press Office
Today

27. Post Acute Care Collaboration – Recap
Remember….
The importance of the post-acute care continuum within the healthcare delivery system
The effect of mandatory and voluntary elements of Health Reform across the continuum of patient care
The key performance indicators to measure quality, financial metrics, and patient outcomes
The importance of an Implementation & Monitoring team to ensure accountability

28. ? ? ? ? Thank You! Andy Page, CPA Questions… Partner – DHG LLP
DHG Healthcare
Thank You!