Post-Acute Strategies for Managing Risk with Hospital, ACO, and Payer Partners

February 9, 2022 | Written by: Dr. Steven Stein, Chief Medical Officer

Value-based care (VBC) continues to gain momentum throughout the healthcare landscape, demanding better patient care over quantity of services delivered. According to the Health Care Payment Learning & Action Network, 40% of healthcare reimbursement is value-based and 45% of those VBC payments are made under risk-based arrangements.

While an important component of the delivery system, few post-acute care (PAC) providers participate directly in VBC programs, particularly those featuring risk/reward payment models. However, real success in value-based care – measured by improved outcomes and lower expenditures – is achieved with the active participation of each segment of the healthcare continuum.


From “In-Network” to “Partner” Status – Rewarding High Performing Providers

As trusted providers for the country’s most vulnerable, complex, and often most costly individuals, PAC providers, particularly skilled nursing facilities (SNFs), have great potential to drive clinical performance and reduce the total cost of care, aligning themselves with ACO, hospital, and health plan value-based care initiatives. Such high performing PAC providers are now thinking beyond traditional ‘in-network’ status to establish formal partnerships as preferred providers. And those that want to participate in VBC are considering alternative payment arrangements to share in the risk and reward of providing such care in collaboration with their healthcare partners.

Another way SNFs can participate in value-based contracting is to develop mutually accountable relationships with other PAC providers, such as home health agencies, as payers are motivated to improve quality and reduce non-value added costs for the entire post-acute episode of care.


Determining the Right Value-Based, Risk/Reward Model

Regardless of the payment or program structure, SNFs must come to the negotiating table with a thorough understanding of VBC and shared risk arrangements and what would be mutually beneficial to them and their partners. Key strategies to consider in developing such a program include the following:

  1. Assess and evaluate clinical, quality, and financial strengths backed by timely data like readmission rates, length of stay, and other clinical indicators to validate performance. Also, highlight the innovations, emerging technologies, data analytics, staffing solutions, and care coordination efforts that show value.
  2. Determine how other SNFs perform in the local marketplace by comparing results against the competition based upon metrics such as volume, case mix index, length of stay, rates of SNF acquired infections, direct SNF to IP and 30-day readmission rates, SNF costs and 30 days post-SNF costs, and potentially preventable 30 days post-SNF readmission rate.
  3. Understand the challenges, achievable goals, and scalability of various risk/reward options, such as:
    • Bonuses based upon specific quality measures.
    • Shared savings with only upside risk: Payer retains most of the savings for the SNF’s utilization and quality outcomes with the SNF earning a small portion of the associated savings.
    • Shared savings with upside/downside risk: If partner performance does not meet expectations on costs related to SNF care (e.g., ALOS, readmit rate, etc.), the SNF absorbs some or all of the financial losses. When performance exceeds expectations, the SNF typically receives a larger share or all of the savings because it took downside risk.

Regardless of the risk/reward arrangement, it is critical that SNFs define process measures and outcomes, and review and report on them monthly. To be most effective, SNFs should use leading indicators that can be tracked and measured through real-time post-acute analytics while “true-ing” up outcomes using MDS and claims data.


Leveraging Live Post-Acute Analytics to Demonstrate Quality and Value

Real Time equips SNFs with live post-acute analytics and actionable data to help them improve the quality of patient care and ensure appropriate reimbursement – the core tenets of value-based care.

Through our clinical alerts, readmission risk scoring tool, and suggested interventions, SNFs can prevent hospitalizations and ER visits by intervening in the patients care earlier, before an adverse event occurs. With Real Time’s timely reports, driven by live data found in the post-acute electronic health record, SNFs know exactly where they stand today in meeting or exceeding quality and utilization metrics – they no longer have to wait for months-old, lagging indicators from MDS or claims data to identify improvement opportunities. This way, facility staff have actionable insights at their fingertips to inform clinical decisions and the nimbleness required to reassess care plans, make process changes, manage workflows, and reinforce training to correct less than optimal performance.

Using Real Time’s interventional analytics solution, SNFs can reduce the total cost of care and share in earned savings by breaking the cycle of hospitalizations and ER visits, decreasing length of stay, and improving other clinical quality outcomes. With a clear strategy for managing risk, backed by live post-acute analytics, SNFs can establish themselves as essential providers in the value-based payment system.


About the Author

With an extraordinary career entrenched in care management, Dr. Steven Stein’s vast knowledge of both the post-acute and payor markets guide the clinical advancements of Real Time Medical System’s Interventional Analytics platform for post-acute providers, health systems, ACOs, physician groups, and managed care organizations. As Chief Medical Officer, Dr. Stein draws upon his innovative successes to continually shape and refine solution offerings to advance care management across the continuum. 

Prior to joining Real Time, Dr. Stein held Chief Medical Officer positions at both Trinity Health Continuing Care and UnitedHealthcare, leveraging his expertise in population health, strategic planning, managed care, and high-risk patient program development to improve care outcomes. Dr. Stein also proudly served on the White House Council on Aging for both the Clinton and Obama administrations.

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