Early improvements are credited to physician gainsharing programs and efforts to work better with skilled nursing facilities.

Dec. 15—Hospitals that are part of Medicare’s first mandatory bundled payment program are seeing some early improvements in patient outcomes, according to industry advisers.

Sending fewer patients to skilled nursing facilities (SNFs) and instead sending lower-acuity patients home with the assistance of home health agencies is a major strategy in the Comprehensive Care for Joint Replacement (CJR) model, which launched in April. About 800 hospitals, based on location, are subject to the first mandatory payment bundle.

While the performance of individual hospitals tracked by DataGen, a subsidiary of the Healthcare Association of New York State, varied in the first quarter of the program, no change was apparent in the overall percentage of patients referred to SNFs at discharge, said Kelly Price, vice president and chief of healthcare data analytics at DataGen.

However, a positive sign among the 57 individual hospitals examined was that average days those patients spent in a SNF decreased by 20 percent, Price said in an interview.

“It’s very mixed; there were a tremendous number of providers that were not fully implementing strategies in that first quarter,” Price said.

The model places hospitals at risk for all Medicare spending associated with hip and knee replacements and any charges within 90 days of discharge. Among the DataGen client hospitals, 75 percent saved money under the target and 25 percent were over their target, which was based on a hospital’s past performance. In aggregate, the 57 hospitals were 6 percent under target.

“You have a lot of places where people are still a little bit above the target, even though that target is largely based on their own history,” Price said of the broader first-quarter results.

The 80 hospital CJR programs managed by Vizient saw about a 20 percent overall reduction in SNF use and an increase of about 15 percentage points in patients being discharged directly home, said Andrew Mancuso, a principal at Vizient.

That increase from about half to 65 percent of CJR hospital patients discharged directly home was seen as good initial progress toward Vizient’s goal of about 80 percent.

The hospital improvements were credited to better physician engagement strategies, such as the use of gainsharing agreements to incentivize better follow-up care by independent practices when patients go straight home.

“It’s really the hospital that’s at risk, and the doctor doesn’t necessarily have any downside risk as part of this program. However we know from experience that the programs that do best are those with physicians at the head driving them,” Mancuso said.

Strategies Needed

The second CJR data feed from the Centers for Medicare & Medicaid Services (CMS) was issued in early November to give affected hospitals insight regarding their performance. Hospitals face no penalties during the first year of the five-year pilot program, but a poor performance hurts their chances of obtaining bonus payments of up to 5 percent of their target price for the care episode. As much as 60 percent of the hospitals in the CJR model could face penalties in later years, according to a March analysis.

“Providers can now go back and look at what their strategies were that they implemented in that first quarter of the program and see if those strategies are producing the results that they expected,” Price said.

Donna Sabol, vice president and chief quality officer for St. Luke’s University Health System in Bethlehem, Pa., said such data reviews helped improve her system’s joint surgery performance in the predecessor Bundled Payments for Care Improvement (BPCI) initiative. The health system credited BPCI with cutting the average length of stay for joint patients going to post-acute care facilities (PACs) from 35 days to 10 days.

“When we got the data early on, our orthopedic surgeons were quite honestly shocked about the amount of time that the joint replacement patients were spending in the SNFs,” Sabol said in a media call. “They just didn’t realize it.”

Nancy Guinn, MD, medical director of Healthcare at Home for Presbyterian Healthcare Services in Albuquerque, N.M., which has hospitals in the CJR program, agreed that the data were critical to informing their meetings with PACs and generating interest in improving care.

“The data on the cost analysis and the length of stay was critical to the success,” Guinn said in a media call.

PAC Focus

The CJR model was expected to motivate hospitals to evaluate their relationships with PACs, a report from Leavitt Partners noted. Hospitals were expected to potentially consider partnerships, mergers, or a reduction of their PAC network.

Expanding and integrating high-value PAC networks to support the transition to population health management was cited as a key area of focus over the next three years by 95 percent of executives from 82 hospitals and health systems in a survey by Premier.

Although hospitals’ strategies under CJR are very “site-dependent,” common elements included increasing patient stays by a day or two to send the patient home instead of to an institutional setting, Price said. Others are increasing efforts to control chronic conditions before an elective joint surgery.

“It doesn’t necessarily mean losing volume, but it might mean delaying the surgery until the patient is in a more optimal condition so you can increase the number of patients who are safe to send home,” Price said.

Historically efficient providers are expected to face bigger challenges in finding savings “unless they are ready to make some very significant changes,” Price said.

Complicating factors include situations where the hospital owns some of its PAC providers. Most of DataGen’s clients rely on independent PACs. The smaller share of hospitals that own poorly performing PACs face the prospect of not using their own facilities or of paying that revenue back to CMS.

“That’s where people need to be ready to make much more significant changes in the way they see their business,” Price said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


Publication Date: Friday, December 16, 2016