Kindred Hospital Update experienCed proviDers of extenDeD aCute Care septeMber 2006

MediCare ruling affeCts KinDreD Hospitals

T he nationwide network of Kindred long-term acute care (LTAC)

hospitals will be affected by the recent ruling from the Centers for Medicare and Medicaid Services (CMS) designed to ensure appropriate payment for services by LTAC hospitals to severely ill or medically complex patients.

Long-term care hospitals, in general, are defined as hospitals that have an average Medicare inpatient length of stay greater than 25 days. These hospitals typically provide extended medical and rehabilitative care for patients who are clinically complex and may suffer from

multiple acute or chronic conditions. Services typically include comprehensive rehabilitation, respiratory therapy, head trauma treatment and pain management.

Under the final rule, Medicare payments to LTAC hospitals are expected to be $5.3 billion for rate year (RY) 2007.

“Medicare’s goal is to ensure that those seriously ill beneficiaries who require hospital-level care get the care they need with appropriate payments,” said CMS Administrator Mark B. McClellan, MD, PhD. “The policies and payment rates in

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INSIDE THIS ISSUE:

The Benefits of Delivering Oxygen Transtracheallypages 2

Case Study—Patient Elizabeth H., 73page 3

Measuring Quality Will Help Prove Value of LTAC Hospital Carepage 4

Kindred’s long-term acute care

(LTAC) hospitals feature an

interdisciplinary environment where

physicians, nurses, therapists,

nutritionists, and social workers

combine their expertise to provide

quality care. Our hospital is part of

a nationwide system of 80 LTAC

hospitals. Kindred’s hospitals provide

care to medically complex patients

who require prolonged treatment

plans and extended recovery time.

Most of our patients are referred to

us by other hospitals because of our

ability to treat complex patients by

using sophisticated technology and

a combination of disciplines.

www.kindredhealthcare.com

a KinDreD patient’s testiMonial

in June, my mother was transferred to

your facility. since no one in our family

had heard of Kindred Hospital, we

were concerned about the quality

of care our mother would receive.

this letter is to inform you that we

are pleased to report the services from

the nurses, assistants and doctors

were exceptional. please understand

that we expected the medical staff to

meet her needs. However, we never

expected the kindness, warmth and

professionalism she received. since

our mother had been in other medical

facilities in the past—and unfortunately

experienced bad performance—we

had a gauge of good versus bad. as

an example, when mother would ask

for something, the nursing staff would

cheerfully say no problem and get what

was asked for. this did not happen

only once but rather it was the norm.

on behalf of my mother and our

family, please express our gratitude

to your employees.

sincerely,

louis p.

tHe benefits of Delivering oxygen TransTraCHeally

T ranstracheal augmented ventilation (TTAV) and transtracheal oxygen

(TTO) therapy, featured in some Kindred hospitals, delivers oxygen to respiratory patients in a way that is less invasive and more comfortable than a nasal cannula.

The oxygen is directly delivered into the lungs by a small transtracheal catheter inserted into the patient’s windpipe. The catheter does not affect a patient’s voice or swallowing because it is placed below the vocal cords. The size of the opening in the neck barely is larger than a needle. The opening is not necessarily permanent—it will close on its own if the patient later decides to stop using the catheter. The procedure often can be performed in as little as 10 minutes.

In TTAV, a humidified mixture of oxygen and air is delivered to the patient. In TTO, the patient only receives oxygen.

The procedure cosmetically is more acceptable to patients and provides greater comfort. As the oxygen directly flows into the trachea, it usually requires a lower flow rate so the portable oxygen tanks will last longer. This method also eliminates the common problem of nasal irritation from the oxygen flow through the nose. TTO also has been shown to decrease the work of breathing and to improve exercise capacity in some patients.

The therapy requires the patient to learn how to change and clean the

catheter daily, because it can become a source of infection. But patients usually elect to continue TTO because of the treatment’s benefits.

A TTO system can be used in conjunction with a demand-flow device to further reduce oxygen use, thereby permitting longer ambulatory periods away from a stationary oxygen source.

TTO delivery improves patients’ adherence to therapy; continuous oxygen use for 24 hours a day is attainable (Weg and Haas, 1998). Adherence is enhanced by the concealed oxygen delivery system. Exercise tolerance is increased, and studies have shown that the work of breathing is decreased. The TTO approach often is successful in patients who have refractory hypoxemia to oxygen delivered by nasal cannula. Reduced hospitalizations have been reported.

Short-term studies have shown oxygen savings ranging from 30 to 60 percent. With careful selection of the delivery device, detailed patient education and support from an experienced healthcare team, patient acceptance can be enhanced and complications minimized.

Some patients receiving TTO have been shown to benefit from the higher flow of TTAV (Christopher et al., 2001). (continued on page 4)

Case stuDy— patient elizabetH H., 73*

diagnosis: respiratory failure,

Malnutrition, ventilator Dependence

Treatment at Kindred: after many

unsuccessful attempts to wean her

from the ventilator, elizabeth began

daily weaning exercises conducted

by caregivers. she could only be

fed through a tube in her abdomen,

so she began a regimen of speech-

language therapy to ease her difficulty

in swallowing. she also began low-

tolerance physical and occupational

therapy that gradually increased her

strength and ability.

With encouragement from the Kindred

staff and support from her husband,

elizabeth was completely weaned

from the ventilator six weeks after

admission. at that time, she had

regained the ability to eat food again.

elizabeth also was able to walk

without assistance.

success stories like elizabeth’s

are common at Kindred hospitals,

where multidisciplinary teams work

together to achieve a common

goal—helping our patients recover

their independence.

* The name has been changed to protect

patient confidentiality.

this final rule reflect the input we have received from all stakeholders to achieve high-quality, efficient care.”

“As a health care provider, LTAC hospitals offer unique and much-needed services,” commented Paul J. Diaz, President and Chief Executive Officer of Kindred Healthcare. “The health care marketplace understands the value proposition of our services from a clinical and economic standpoint as evidenced by the growth in commercial and managed care payers seeking and utilizing our services.

“As we have indicated in the past, we view reductions in payment as a shortsighted method to address perceived issues with LTAC hospitals. We are hopeful that CMS will avoid further payment cuts and will now turn its attention to developing certification criteria to ensure that only the most medically complex patients are treated in LTAC hospitals and that facilities defined as LTAC hospitals have the resources and capabilities to treat these patients.”

In addition to the ruling, CMS is adopting the Rehabilitation, Psychiatric and Long-Term Care (RPL) market basket to replace the “excluded hospital with capital” market basket that currently is used as the measure of inflation for calculating the annual update to the LTAC hospital prospective payment system (PPS) federal rate. The RPL market basket is based on the operating and capital costs of inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs) and LTAC hospitals. Adopting the RPL market basket will result in an increase in the labor share, which is used in the adjustment for area wages, from 72.885 to 75.665 percent.

The final rule also would make the LTAC hospital payment system more efficient by revising the payment adjustment formula for short-stay outlier (SSO) patients. These are cases where the patient is discharged early and the hospital’s costs may be significantly

below average for the Long-Term Care Diagnosis Related Group (LTC-DRG) assigned to the case.

The final rule revises the existing payment adjustment formula for SSO patients by reducing the part of the current payment formula that is based on costs and adding a fourth component to the current formula, a blend of an amount comparable to the hospital inpatient PPS (IPPS) payment and the LTC-DRG per diem payment, so that payments for SSO cases would be the lesser of:• 100 percent of patient costs• 120 percent of the per diem of the LTC-DRG payment• the full LTC-DRG payment, or• a blend of an amount comparable to what would otherwise be paid under the IPPS computed as a per diem, capped at the full IPPS DRG comparable payment amount, and 120 percent of the LTC-DRG per diem payment. For each day, as the length of stay increases, the percentage of the IPPS comparable amount will decrease and the percentage based on 120 percent of the per diem LTC-DRG specific amount will increase. As the length of stay reaches the lower of the five-sixths SSO threshold or 25 days, the payment will no longer be limited by this fourth option.

CMS also will discontinue the surgical DRG exception to the three-day or less interrupted stay policy.

The final rule, which appeared in the May 12, 2006, Federal Register, will be effective for discharges occurring on or after July 1, 2006 through June 30, 2007. n

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Medicare Ruling Affects Kindred Hospitals

www.kindredhealthcare.com

Measuring Quality Will Help prove Value of lTaC HospiTal Care

W hile many of us are still absorbing the results of the 2007 rule

released by Centers for Medicare and Medicaid Services (CMS), we must continue to focus on the future.

Hospital quality is rapidly becoming one of the most important and discussed touchstones in hospital management witness initiatives related to pay-for-performance and patient experience. Both government and private payers are capitalizing on technological advances in data collection, which allow us to quantify performance of medical professionals and institutions in ways never before possible.

However, many aspects of performance measurement need further development and refinement. While there is a growing consensus supporting the concept of

“pay-for-performance” incentives and other quality-related initiatives because of the wide variety of patients, selected measures may not be applicable to all hospitals. In addition, long-term acute care (LTAC) patients as a group have been poorly studied; so making pay-for-performance measures evidence based is inherently difficult.

Medicare and Pay-for- Performance InitiativesPreliminary steps have been taken towards pay for performance. Congress included incentives for hospitals to publicly report quality measurements as part of the Medicare Modernization Act (MMA) of 2003, a move that many hospitals had made voluntarily prior to the legislation.

Also as part of MMA, Congress commissioned several studies on health quality by the influential Institute of Medicine (IOM).

One pay-for-performance program is already underway: the Premier Hospital Quality Incentive Demonstration,

a voluntary participation program conducted by the CMS. Launched in 2003, more than 250 nonprofit hospitals participate in a program to test the feasibility and outcomes of pay-for-performance within hospitals. Results released by the program showed both the power of measurements, noting improved quality at participating hospitals.

Given the momentum behind the increasingly sophisticated and public reporting of quality measurements, it is important for the LTAC hospital community to play its appropriate role in designing, implementing and monitoring results for quality indicators.

The push for increased attention to reporting standardized quality indicators and for pay-for-performance reimbursement plans is based on the belief that providing high-scoring care is more valuable, and, in the long run, less expensive than the consequences of poor-scoring care. The same reasoning should be used to support providing care in the most appropriate setting. n

by sean Muldoon, MDsenior vice president and Chief Medical officerHospital Division, Kindred Healthcare

The Benefits of Delivering Oxygen Transtracheally

Another study (Hoffman et al., 1992) compared the efficacy of transtracheal (TT) oxygen delivery to nasal cannula delivery in subjects with chronic obstructive pulmonary disease (COPD). Twenty subjects (14 men, six women) were followed for six months during nasal cannula delivery. A TT catheter was then inserted, and measurements were repeated during TT use. With TT delivery, subjects required 45 percent less oxygen at rest and 39 percent less during exercise

(p less than 0.0001). Oxygen use, measured by pounds of oxygen delivered to the home, also decreased, but the magnitude of change was less than anticipated (mean, 14 percent; range, +4 percent to -32 percent). Hospital days decreased from 12 +/- 10 during nasal cannula use to 4 +/- 6 during TT use (p less than 0.002). Exercise tolerance, as measured by a 12-min walk distance, was greater during TT use (p less than 0.0001). No change was seen in spirometry or acid-base balance. Also, no

change was seen in Profile of Mood States, Sickness Impact Profile or Katz Adjustment Scale scores. Some problems were encountered relating to use of the catheter (displacement, mucus balls), but they were minor, and most were confined to the initial two months of TT use when the tract was immature. The study concluded that the use of TT delivery may confer benefits that result in improved exercise tolerance and decreased hospitalization in patients with COPD. n

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