Realignment of Nursing Facility and Hospital Interactions

September 2012

September 2012 ι 2

Discussion Points

The Movement Towards Value-Based and Population Management Reimbursement

Readmissions, Hospitalizations, and Emergency Care

Hospital and Nursing Facility (NF) Admission Drivers

Taking a Seat at the Table - The Role and Expectations of NFs from a Hospital Perspective

September 2012 ι 3

Value-Based and Population Management Reimbursement

ACOs

CMS VBP - Process and

Outcome Measures

Accountable Care Act

Value and Population

Management Reimbursement

Highlights

The Accountable Care Act will impact all hospitals

Some hospitals may participate in new types of reimbursement or incentive structures – It is important to know and understand the hospital’s financial incentives

Bundled Payments

IPA

Delegated Risk

Models

September 2012 ι 4

Locally Approved ACOs

Accountable Care Organizations are groups of doctors, hospitals, and other health care providers, who voluntarily collaborate to coordinate care for the Medicare patients they serve.

ACOs ApolloMed in Glendale: 130 physicians Meridian Holdings in Hawthorne: 60 physicians Torrance Memorial Integrated Physicians in Torrance: hospital and

398 physicians

Pioneer ACOs Healthcare Partners Medical Group Heritage California Monarch Healthcare PrimeCare Medical Network Sharp Healthcare System

September 2012 ι 5

CMS Bundled Payment Programs

CMS has accepted letters of intents form providers to develop models to bundle payment for services that patients receive across a single episode of care, such as hip replacement surgery.

Bundled payment concept has been tested in demonstration programs and CMS anticipates significant cost savings and improved quality

Currently the program is around a single hospital stay, but it could be expanded to other types of health care services in the future

To date CMS has not announced the approval of new bundled payment programs

September 2012 ι 6

Affordable Care Act (ACA)

Section 3025 of the Affordable Care Act added section 1886(q) to the Social Security Act establishing the Hospital Readmissions Reduction Program (HRRP), which requires CMS to reduce payments to IPPS hospitals with excess readmissions within 30 days of discharge effective for discharges beginning on October 1, 2012.

Readmission ratio is based on discharges occurring during the 3-year period of July 2, 2008 to June 30, 2011

Focuses on Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN)

Other diagnoses will be added in 2015

IMPORTANT

September 2012 ι 7

Why these Three Conditions to Start

The most frequent diagnostic categories accounting for both total admissions and readmission:

Heart Failure – 1st Pneumonia – 2nd AMI ranks 9th in frequency of admissions and 8th in frequency of

readmission

September 2012 ι 8

Four Types of Readmits

Related and Unplanned. Some readmissions can be considered both related to the initial admission and unplanned. For instance, a person may be readmitted to a hospital to address an adverse event caused by an infection or sepsis, which resulted from problems occurring during a surgery. Another example is a person with heart failure who is readmitted for chest pain.

Related and Planned. Other readmissions are those that are related to the initial hospitalizations and are scheduled in advance by a hospital to deliver follow-up medical care, perform medical procedures, or both. For example, a patient may be admitted for heart failure and readmitted later for the placement of a cardiac stent. Such readmissions are often part of the treatment plan for certain conditions.

Unrelated and Planned. Still other readmissions are those that are unrelated and planned. An admission for chronic obstructive pulmonary disorder (COPD) that is followed by a readmission for a scheduled hip replacement surgery.

Unrelated and Unplanned. Finally, some readmissions are unrelated to the initial hospitalization and are also unplanned. For example, readmissions for burns or traumas that are caused by accidents can be both unrelated and unplanned. Another example might be an initial admission for a gastrointestinal disorder and a later readmission for skin cancer.

September 2012 ι 9

ACA Provisions Take Effect October 1, 2012

Provides for penalties to hospitals whose re-hospitalization rates exceed levels as determined by CMS:

Re-admissions are above national average for AMI, Heart Failure and Pneumonia, beginning with discharges on or after Oct. 1, 2012

The penalties are 1%, 2%, and 3% of Medicare payments graduated from 2013 to 2015

Many hospitals have an exposure CMS has stated that “64% of re-hospitalizations are patients

discharged without a post-acute referral”

September 2012 ι 10

Nursing Facilities’ Impact on Hospital Readmission Rates

One in 4 Medicare patients admitted to skilled nursing facilities from hospitals is readmitted to the hospital within 30 days

Studies have estimated that 30% to 67% of hospitalizations among nursing facility residents could be prevented with well-targeted interventions (Jacobson, et. al., 2010)

45% of hospital admissions among Medicare-Medicare enrollees receiving Medicare skilled nursing or Medicaid nursing facility services could have been avoided (Walsh et. al, 2010) 314,000 potentially avoidable hospitalizations $2.6 billion in Medicare expenditures in 2005

Past interventions have proven effective: Evercare reduced hospital admissions by 47% and emergency

department use by 49% (Kane, et. al, 2004) Nursing facility-employed staff provider model in NY reduced Medicare

costs by 16.3% (Moore & Martelle, 1996) INTERACT II reduced hospital admissions by 17% (Ouslander, et. al.,

2011)

September 2012 ι 11

Drivers of Readmits

Being male 47 events per 100 people per month; women 29 events per 100 people

per month Men less likely to complete follow-up appointments with their PCP Less likely to understand importance of follow-up appointments Less compliant with medications Higher rate of emergent care use Contributing: Not married; positive depression screen

Source: Project RED (Re-Engineered Discharge)

September 2012 ι 12

Hospital Drivers of Readmissions (That Impact on NFs)

Inadequate discharge planning for significant numbers of patients (budget constraints, appropriate staffing, poor processes, etc.)

Inability to identify all “at risk” patients

Late day or weekend discharges by physicians without notification

How busy hospital is at time of discharge

Lack of a post acute service component to prevent re-hospitalizations with 30 days of discharge

September 2012 ι 13

NFs Drivers of Readmissions

Inadequate assessment upon admission Inability to identify “at risk” patients

Risk factors include prior recent hospitalization, specific diagnoses (e.g., congestive heart failure), and indices such as carbon dioxide levels for patients with chronic obstructive pulmonary disease, renal function, and other clinical parameters. Clinical instability, lack of medication reconciliation, depression, and multiple other factors also contribute to re-hospitalization risk.

Lack of consistent protocols and follow-up for high risk patients Medication adverse drug reactions and therapeutic failures Lack of the availability of physicians, NPs, and Pas Lack of diagnostic tools Concern with legal and regulatory sanctions for attempting to manage acute illnesses

in a non-hospital setting Patient and family preference Lack of clarity regarding life-sustaining treatments

Source: www.interact2.net; http://www.innovations.cms.gov/Files/slides/rahnfr_hospitalizations_slides.pdf; and Improving Disposition Outcomes for Patients in a Geriatric skilled Nursing Facility, J Am Geriatr Soc 2011, No. 3417

September 2012 ι 14

Hospitals Believe

Reducing readmissions cannot be done only within the walls of the hospital The quality of nursing home, home health agency, and primary care drive

both admission and readmission rates Practice patterns in non-hospital settings lead to readmissions

September 2012 ι 15

Types of Actions to Consider

Have software tools to ensure that residents receive clinical therapy based on specific care plan needs

Focus on avoidance of clinical problems with result in poor outcomes as well as the need for ED or hospital care

Ensure a rapid response team for urgent clinical assessments and interventions--rather than default to hospitalization or ED visits

Provide medication therapy management throughout the course of a resident’s stay

Create transition of care communication and sharing of clinical data with hospitals

Focus on resolving the drivers of readmission Include tracking and reporting, with proof of resident outcomes

September 2012 ι 16

Which NFs will Sit at the Hospital Table

Those who understand and respond to the pressures on hospitals

Have low re-hospitalization and ED incidents

Can contribute to improving hospital’s CMS Hospital Compare measures

Will participate with hospitals on patient transition of care processes

Can identify and reduce adverse events (drivers of hospitalizations)

Maintain an excellent track record of quality measures

September 2012 ι 17

Creating a Dialogue with Hospitals – Who to Contact

Creating a Dialogue with Hospitals

Who are key decision makers

Who to contact

Actions to Consider

Embed a case manager in hospital to assist with transfers of care to LTCs

Facilitate electronic sharing of clinical records with hospitals

Serve on hospital re-admission and transition of care committee

Track and report on hospital re-admissions from your facility

September 2012 ι 18

Profile – Donald Lorack

Chief Executive Officer of AHMC Anaheim Regional Medical Center, Anaheim, California, a full-service regional medical center.

Prior to joining AHMC Healthcare, Mr. Lorack served 5 years as President and Chief Executive Officer of Irvine Regional Hospital and Medical Center, Irvine, California, a subsidiary of Tenet Healthcare Corporation.

Prior to joining the Tenet system, Mr. Lorack served 13 years as President and Chief Executive Officer for the Hillcrest HealthCare System, Tulsa, Oklahoma, comprised of 39 corporate entities, including 18 hospitals, over 2,000 physicians and more than 6,000 employees.

Mr. Lorack previously served as Administrator for the Desert Hospital District Board and Executive Vice President of Desert Hospital Medical Center in Palm Springs, California. He also held executive positions with Health West (UniHealth) in VanNuys, California, and American Health Group International out of Seattle, Washington.

Mr. Lorack holds a bachelor's degree in management, and a master's in business administration from the University of Redlands; and earned certificates in health care administration and health systems management from both the University of California, Los Angeles and Harvard University in Cambridge, Mass.

September 2012 ι 19

Profile – Steve Nahm

Senior Vice President, Companion Management Group Companion Management Group owns and manages post-acute care services,

including: hospice, home health, skilled nursing, and the Outreach Care Network (OCN). OCN coordinates and manages the care-plan for palliative-care and chronically ill patients; both in the home and in post-acute care settings

Vice President, The Camden Group The Camden Group is a national health care advisory company serving health

systems, medical groups, and other types of healthcare organizations. Mr. Nahm assisted organizations with hospital-physician related issues, hospitalist programs, and strategic positioning

Vice President, CompMed CompMed was a physician practice management firm operating in twenty states,

providing organizational and operational services to primarily hospital-based medical groups. Mr. Nahm was responsible for services provided to clients of twenty or more physicians

Hospital CEO, Doctors Memorial Hospital and Riverside Medical Center in Florida Mr. Nahm holds a Master of Business Administration, in Health Care Administration,

University of Florida