Realignment of Nursing Facility and
Hospital Interactions
September 2012
Discussion Points
The Movement Towards Value-Based and Population Management
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 2
Value-Based and Population Management Reimbursement
Care Act
Value and
CMS VBP Process and
Accountable Care
Act will impact all
hospitals may
participate in new types
of reimbursement or
incentive structures – It
is important to know
and understand the
hospital’s financial
September 2012 ι 3
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.
 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 4
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
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 5
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 3year 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
September 2012 ι 6
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
September 2012 ι 7
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
September 2012 ι 8
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 9
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.,
September 2012 ι 10
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 11
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 12
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:;; and Improving Disposition Outcomes for Patients in a
Geriatric skilled Nursing Facility, J Am Geriatr Soc 2011, No. 3417
September 2012 ι 13
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 14
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
Focus on resolving the drivers of readmission
Include tracking and reporting, with proof of resident outcomes
September 2012 ι 15
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 16
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 17
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 18
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
September 2012 ι 19

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