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ACOs and Long-Term Care – Prepare to Be a Partner of Choice

May 29, 2014

Ann Spenard, MSN, RN-BC, WCC

Since 2011, provisions in the Affordable Care Act (ACA) have established Accountable Care Organizations (ACOs) throughout the nation.  An ACO is a group of coordinated health care providers that agree to be responsible for delivering quality, appropriate, and efficient care to groups of patients. It is characterized by a payment and care delivery model that ties provider reimbursement to quality metrics and reductions in cost of care for assigned populations. 

Long-term care providers need to identify how they fit within this new model of care as ACO leaders and their hospital and physician groups are determining which post-acute providers they want to include in their coordinated system.  Many ACOs are already selecting  long-term providers as their “partners of choice” and determining the criteria for continued participation in the ACO.  Without a strategic plan to attract the ACOs, long-term providers risk significant referral reductions to competing nursing facilities that make the ACO cut. For some facilities, such reductions may have devastating results on the facility’s bottom line.

Readmissions and Emergency Room Visits – Long-Term Care’s Vital Role

A major goal of ACOs is decreasing services that carry significant cost, such as emergency room visits and hospital readmissions. Quality long-term care is vital to preventing hospital readmissions. Statistically, one in four patients who are admitted to a skilled nursing facility is readmitted to the hospital within 30 days and 45% of these readmissions could have been avoided.  Due to hefty readmission penalties, hospitals are seeking skilled nursing facilities to send their patients to with consistently low readmission rates. Skilled nursing facilities that provide effective chronic disease management in-house while keeping residents in a comfortable, familiar setting have demonstrated that preventable re-hospitalizations and emergency room visits are possible.  The readmission scores of skilled nursing facilities will be posted to the Nursing Home Compare website beginning in 2017, and the Value-Base Purchasing program will begin Oct. 1, 2018. For the first time, skilled nursing facilities will not just face financial penalties, but will receive incentives to reduce readmissions. Implementing the processes to prevent avoidable re-hospitalizations among their residents NOW is highly advantageous for skilled nursing facilities to prepare their organizations for the future.

Length of Stay, Why Does it Matter?

The focus on reducing length of stays for patients has been a challenge for hospitals and historically, there has not been an incentive to reduce the length of stays in skilled nursing facilities until now.  In Connecticut, the length of stay in a sub-acute unit is 28 days, which means that a 30-bed sub-acute unit is turned over once a month. In the world of ACOs, skilled nursing facilities that can decrease patient length of stay to approximately 14 days will create capacity for discharged patients in the sub-acute units.  So, in this scenario, a 30 bed sub-acute unit would have a monthly capacity of maximally 60 patients without increasing the unit size.  The key to high performance in an ACO will be to decrease the length of stay and maintain quality outcomes. As the nation moves towards bundled payments, the cost of care and the length of stay will be important factors in being positioned as a partner of choice.

Data, Data, Data…

For skilled nursing facilities to be included in an ACO, they will need quality data that can be trusted and analyzed appropriately.  Currently, the primary metric that is measured is preventable re-hospitalizations, however, attractive ACO partners will also be able to monitor quality performance metrics (e.g., infection rates, ED visits) and demonstrate continuous improvement.

Bundled Payments are Coming

Bundled payments are emerging and bringing a great challenge to skilled nursing facilities. A bundled payment, or episode-based payment, is when hospitals will accept a complete rate for a certain diagnosis that includes all care–from the hospital to post-acute for beneficiaries. With this type of reimbursement, skilled nursing facilities face both an upside and a downside risk.  The upside, if a team of providers accept a bundled rate and then provide quality care that costs less than the reimbursement, positive profit margins are possible.  However, outliers represented by poor outcomes and extended stays represent downside risk that erode margins.

Planning for the IT Future

While it’s a costly endeavor, long-term care providers should start thinking about their future IT infrastructure and coordinate data exchange with local hospitals and physicians. For example, secure messaging offers patients and providers the ability to effectively communicate and electronically share information.  For years, hospitals and physicians have made heavy investments in their electronic systems so that data can be securely and efficiently exchanged.  Long-term care providers who will be able to share resident and patient data electronically will not only make meaningful contributions to improving patient care transitions, but will also be favorable partners to ACOs. As health information networks are established, skilled nursing facilities will have to implement an electronic health record to effectively participate in the sharing and exchanging of patient data.

Ann Spenard is the Vice President for Consulting Services at Qualidigm.  She has over 23 years of experience as a Long Term Care and Geriatrics Specialist and serves as Clinical Coordinator to the National Nursing Home Quality Initiative as well as independent Nurse Monitor in nursing homes under the Connecticut Department of Public Health.  Ann’s areas of professional specialization include patient safety, training and development, assessment, nursing home quality improvement tools, electronic data collection systems, and workflow design.




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