In a decade that will go down in history as the era of healthcare reform, continuing to do business as usual is a formula for failure. Operational and policy changes that can lead a home healthcare agency onto a survival path, on the other hand, sometimes is brought about only through the most unwelcome means. At last week's "Healthcare in Transition" seminar in Scottsdale, Arizona, featured expert Michael McGowan left some of his audience cheering, others shaking their heads in dismay.
Those who have already decided to adapt to the new way payers want home care to operate -- fewer consecutive episodes, fewer, more productive visits, greater reliance on technology, bundled payment arrangements with ACOs -- had their strategies affirmed. "Today's ADR's, FMR's and ZPIC's of will sort out those who will be providing care tomorrow," McGowan asserted. "Those who fail to understand or adapt will become irrelevant, deemed a waste of the payers' time. If you have had an audit, you are well on the way to a successful future. If you have not had a ZPIC, FMR/TMR, you are actually at a handicap and legacy thinking is probably still deeply rooted in you."
Case in point: McGowan's analysis of a typical Midwestern agency found that it is ripe for a ZPIC audit. Why an audit has not happened yet is anybody's guess. The management, however, refused consultative services to help them make operational and policy improvements with the message, "Medicare pays us to do care this way, so it must be OK."
Let the reader decide if this is OK:
Nor does the excuse hold up that this agency likely serves an unusually severe patient population. Deeper analysis revealed that the percentage of patients on service for two, three or four episodes, remains at the same level whether their initial assessment found them to be C1F1, C2F2, or C3F3. In other words, it appears to be company policy to keep people on service as long as possible no matter what, exactly the kind of agency ZPICs have been contracted to fix.
Agencies that have been through Focused Medical Review or a ZPIC audit, McGowan told the audience, have learned that such a policy, no matter how common prior to healthcare reform, is not the appropriate way, not even the most effective way, to keep cash flow healthy while payment rates ratchet down.
Toxic Census Syndrome
He has even given the practice a name. "Toxic Census Syndrome," McGowan declared, "is what happens when your sales and marketing efforts are ineffective and you have to cling to old patients because you are not getting new ones." So it is not a clinical problem, it is a sales problem. Develop a stronger sales team, he advised, instead of finding excuses to care for C1F1 patients for six months. With the former solution, you know you get to keep the money. With the latter, you are never sure.
He had a severe message for agency owners who operate the way the sample agency does. "CMS needs maybe 24 to 36 regional home health providers to service 50 million Medicare beneficiaries, even as the Baby Boomers begin to inflate that number. At that level, it will be easier for them to administer the program, control costs, and modify the behaviors of contractors.
"CMS looks at 12,500 agencies and sees 12,500 CEO salaries," he continued, "when fewer than 100 are necessary. With a handful of providers, we will still have the same number of clinicians meeting the needs of the same number of patients, but they will be working under much tighter controls."
Echoing the message of co-presenter Arnie Cisneros (see HCTR, 4/22, "Healthcare in Transition Message Harsh, Helpful"), McGowan referenced the changes hospitals were forced to make 15-20 years ago, changes that are now visiting home care. "They were beaten to death by CMS to get costs down and focus on results vs. patient desires. Average hospital stays went from an average of 13 days to four."
Successful hospitals, he continued, conceded to the demands of the payer and learned that inventing new care protocols was preferable to fighting, resisting, or declaring the payer's demands to be unfair and unreasonable. "It's not about protecting your turf, maintaining the status quo," Cisneros had said. "They don't care about your turf; they care about your patients."
Just as CMS found hospitals willing to find a way to do what they needed and disregarded the unwilling as irrelevant to the mission, they will find home health agencies willing to thrive and disregard the rest. About 20 percent of hospitals nationwide closed during the last 20 years. CMS did not grieve over them but remained focused on their patients. If they could not change as the needs of CMS changed, they were not worth saving in the eyes of CMS. Home health will be no different.
Take patient's perspective
For a moment, McGowan asked his audience, do not look at it as a home health administrator. Look at it as a patient would. You have decided to have a medical procedure. Your research shows that, for that procedure, one hospital discharges people in 14 days, another in 4 days. Which one would you choose for yourself?
Ask the question another way. Is there any basis for thinking that the 14-day hospital provides better care than the 4-day hospital? The only reasonable answer is "of course not." In the same way, no home healthcare agency should be bragging about its inability to stabilize patients in 60 days or less. The new goal is to get them stabilized in as few days and as few visits as possible and move on to the next admission.
Where the message becomes difficult
"We are not a respite care provider, as legacy home health practices have been. Many will argue that the Jimmo v. Sebelius decision opened the door to keeping home health patients on service as long as necessary to keep them out of the hospital. Keep in mind that Ms. Jimmo is a wheelchair-bound woman with uncontrolled diabetes that rendered her blind and caused the
amputation of one leg. Are your two- and three-episode patients like her? (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-FactSheet.pdf)
"CMS does not care about our internal problems, just outcomes and cost of care. Making the necessary changes demanded by healthcare reform requires that your staff behaviors change. This can get sticky...and personal. Compare yourself to other care providers again. Doctors and hospitals cannot fathom why we have issues getting an admit done and a plan of care back to them in 48 hours. Hospital nurses do it every day, in hours, not days. We are not meeting the needs of our referral sources when we take a week to complete an admission and 21 days to get a plan of care to the physician.
"It is not for lack of adequate tools. It is, and has been for years, an HR issue. A "patient first" policy demands that clinical practice must evolve. Clinicians not willing to call and coordinate care during the SOC visit, clinicians not willing to case conference about the 26 OASIS case mix questions to assure accurate assessment of acuity, clinicians not willing to recognize that a C1F1 patient is probably not homebound, may not be appropriate employees for the agency trying to survive healthcare reform."
"If you need to reduce capacity for a short while to gain compliance, so be it. Your referral sources do not care about your HR problems. CMS expects you to solve them. They look at hospitals and never see a clinician refuse to chart before end of a shift, never see approval for overtime to pay for charting, never see nurses missing patient visits when making rounds, coming back later when it is more convenient for their own schedule. We get the behaviors we accept."
Self-interest motivates, not altruism
If preserving the Medicare Trust Fund for another generation is not motivation enough, or if thriving through the healthcare reform era is not motivation enough, McGowan concluded, look to your profit margin. "Medicare pay rates are not destroying your profits," he declared. "Out of control costs are." To illustrate his point, he outlined the costs related to a typical, 60-day episode of payment with a payment of $2,400. Considering costs of marketing, start of care visit, QA reviewers, and management of physician and claims documents, he estimates Week 1 costs at $513, Week 2 visits and QA "touches" at $490, Weeks 3 and 4 at $320 each.
At day 30, hospital readmission avoidance has been achieved and profit is $657. If the case manager has not brought the patient to self-management and decides not to discharge at this point, additional visits and QA touches bring the 60-day profit to $138. If a second consecutive episode is provided, the numbers do not improve in the likely event that the patient is improving and the next payment level is lower.
It may be fair to summarize Mr. McGowan's keynote presentation in a few words. Bolster cash flow by admitting new patients, not by clinging to existing patients long after you should. Otherwise, you reduce profits and attract the attention of Medicare contract auditors. Promote productive visits, not clinician productivity. Establish a culture that prefers getting patients well and self-reliant in as few visits as reasonable, not in as many as possible. Be prepared to let go of clinicians who cannot adapt to the demands of the new era, even if it means temporarily allowing your census to shrink.
Agree or disagree -- and even those who heard him in person came down on both sides -- it is clear that healthcare reform demands that home healthcare providers make strategic changes in order to thrive.