_{By: Anne Tumlinson Innovations}

This fall, skilled nursing facilities (SNFs) will begin, in earnest, the transformation of their clinical service model under a radically different payment system. While the rest of the health care sector has long operated under payment rates that vary based on a patients’ clinical characteristics, SNFs have not. From October 1998 until October of this year, the Medicare fee-for-service payment system has largely determined payments for SNF services according to the amount of rehabilitative therapies (e.g., physical, occupational, speech) these organizations deliver.

That’s all changing as SNFs switch to the new Patient Driven Payment Model (PDPM), effective October 1, 2019. This payment system removes therapy minutes as the basis for payment and enhances payment accuracy for therapy, nursing, and ancillary services by making reimbursement dependent on a wide range of clinical characteristics. As a result, PDPM targets resources to beneficiaries with complex clinical needs (e.g., patients with multiple comorbidities, acute infections, or complications in their inpatient stay, or those in need of IV medications or ventilators).

The Evolving SNF Model to Support Complex Needs Patients

To date, the SNF industry has been preparing by building core competencies in a key area that hospitals and physicians take for granted: the ability to accurately collect and document clinical information on patients.

As SNFs achieve competence in the basics of this new payment system, they will turn their attention to achieving the real promise of PDPM: building new clinical capabilities and developing new programs that serve very complex care populations. In many markets, hospitals and even Medicare Advantage (MA) plans are waking up to the possibility that the new SNF payment system could produce entirely new, and much needed, SNF service lines. They recognize an opportunity for partnerships with SNFs, which, going forward — because of diagnostic-driven payments — may be  more prepared to admit previously hard-to-place patients whose inpatient lengths of stay are long and discharge options are slim.

Despite closer alignment of SNF reimbursement to complex patients’ clinical needs, hospitals should not expect new SNF programs to spring up overnight. Building these programs will require SNFs to carefully consider whether there will be enough new volume to generate revenue sufficient to cover costs (e.g., staff, drugs, equipment) of new programs. Hospitals that want to foster new options for post-acute SNF care in their markets should work to guarantee clinical integration, physician buy-in, and alignment with the discharge planning process.

Opportunities for Hospitals to Support New SNF Complex Care Programs

Following are suggested activities for hospitals that want to help build new SNF clinical programs in their market.

• Begin conversations with downstream clinical partners about the types of complex care programs (e.g., for patients who need inotropes or ventilators) that could be moved into SNF settings.
• Select SNF partners to develop complex care programs and ensure that discharge planners have the tools they need to share relevant information with patients and to work collaboratively with SNF care transitions teams.
• Build physician trust in SNFs by offering clinical support and by staffing physicians to the SNF on a regular basis.

There are many other ways that all hospitals can support their preferred SNF partners on this journey. In the short term, hospitals can improve information sharing with SNFs. Some SNFs report that it takes almost a week to get patients’ information from hospitals. Under PDPM, a SNF must capture the full clinical story of each patient in its admission assessment: documentation of all prior surgeries and nursing services required is critically important for payment. More SNFs will look to deploy nurses or liaisons to hospitals to help collect information more quickly. To streamline communication, consider designating a single point of contact for preferred SNF partners.

Longer term, hospitals may need to support their SNF partners in advocating for better Medicaid reimbursement. While PDPM may drive hospitals and SNFs to build programs for clinically complex patients to be reimbursed under Medicare, some of these patients will never go home. States with higher Medicaid reimbursement for clinically complex patients will be friendlier places to create clinically complex care programs for Medicare SNF benefits.

Conclusion

PDPM has potential to build stronger partnerships between SNFs and hospitals, and ultimately to deliver enormous value to communities and patients. It allows hospitals to find better places for patients to recover, reducing time in the hospital — which, for very frail, older adults, is best practice. Collaboration will extend hospital capabilities into the community, supporting lower rehospitalization rates and better overall health. PDPM will challenge every aspect of SNFs’ operations and finances, but it will improve their ability to get reimbursed for and thus care for more clinically complex patients coming from the hospital setting.