Wind of Change

Over 440,000,000 views on Youtube?!  The Scorpions’ Wind of Change music video (below) has been viewed a lot. It’s probably not the best anthem for the post-acute world, but the title sure seems to fit.  If there’s anything that’s constant for skilled nursing providers, it’s that things are always changing.


BPCI/CJR Loses Steam

Last year, I wrote about how the best operators are able to adjust or “change tack” to shifting winds/regulations. (mixing boating metaphors)

I also wrote specifically about one such shift that was causing a lot of concern for providers (and investors), Bundled Payments.

In recent days, we’ve seen the wind change direction again.  And, while nobody should be surprised, I think most of us are surprised.

  1. CMS is Overhauling the Medicare Fraud Audit Process
  2. CMS is canceling the expansion of CJR
  3. CMS is eliminating the Mandatory nature of CJR
  4. CMS is reducing the number of CJR markets from 67 to 34

It’s critical that operators who are currently being affected by the CJR program to get in touch with their hospitals to discuss what, if any, impact this will have on how the hospital is operating or is preparing to operate vis-a-vis these patients.

Skilled Nursing groups are applauding the news.  IF this gives providers more time to get their BPCI act together, then that’s great.  But, the point is … they still need to act like BPCI is coming.  BPCI behavior that better health plans and hospitals are looking for is:

  • Proactive communication around readmission and outcomes
  • Integration of hospital’s modalities into the SNF
  • Strong reporting systems
  • Proactive cost containment (shortening length of stay if possible)
  • Partnering with the best home health agencies who understand BPCI as well

Investors are looking for operators who are not just fluent in BPCI but has already (or is actively) implemented those BPCI Behaviors.


RUG IV to RCS1

In my opinion, a much bigger wind of change, if implemented on October 1, 2018 as targeted, is the shift from RUG IV to RCS1.  I attended a conference on that last week by Zimmet Healthcare Services Group in Atlantic City, NJ.

According to Mark Zimmet (https://www.zhealthcare.com/), the announced pre-rule for RCS by CMS (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html) earlier this year will dramatically change the way SNFs are operated — specifically replacing the REHAB/Minutes economic engine of operations with a Patient Characteristics economic engine.  Now, Medicare A reimbursement is driven mostly my rehab minutes (type and quantity).  In the proposed RCS 1 model, rehab minutes are completely excluded from the calculation. There is a PT/OT and an ST component in the formula.  But, minutes are NOT part of it.  In other words, under RCS 1, the facility will be paid the same amount for Patient John Doe whether the SNF provides 10 minutes of therapy or 1,000 minutes.  Panelists predict therapy spend will shrink AT LEAST 50%.

The driver of reimbursement shifts away from rehab minutes to patient clinical characteristics. RCS starts with WHY is the patient here.  Which of the 10 categories?

  1. Major Joint or Spinal
  2. Non-Orthopeadic
  3. Acute Neurologic
  4. Non-surgical orthopedic/Musculoskeletal
  5. Orthopedic Surgery (Except Major Joint)
  6. Cancer
  7. Acute Infections
  8. Pulmonary
  9. Cardiovascular & Coagulations
  10. Medical Management

Then, it looks at the functional and cognitive scores, co-morbidities, non-therapy ancillaries.

Remember …

  1. The change isn’t final and may very well change before it’s implemented.
  2. There’s time to recalibrate your structure and competency to hit the ground running if/when the change is made.
  3. I would be talking now with your rehab provider about this.  The message from this conference is that Rehab Co’s in skilled nursing are Dead Man Walking.
  4. Stay up to date on the CMS conference calls, updates.

Goodbye Therapy?

If RCS 1 is implemented as structured today, I would expect the use of therapy services to change and be reduced.  In a word, I believe therapy will be more EFFICIENT. Unfortunately, CMS now incentivizes inefficiency since providers are paid for the minutes they take to deliver therapy.  Does this get abused?  Sadly, yes.  Do we sometimes see a patient who needs rest to recover from illness get dragged into the rehab gym to get our minutes in?  Sadly, yes. I’m totally open to viewpoints on this …  Is this better for the patient or worse?  Can you see operators cutting the newly labeled “cost center” of rehab and giving less than what the patient could benefit by since Medicare isn’t paying for minutes anymore?  I can.  But, I can also see operators providing a lot of therapy (but still less than before) under RCS 1 since they’re ultimately judged based on outcomes.  Almost all admissions to SNFs now are for short-term rehab to get strong enough to go home.  If you cut rehab to save money, you might benefit in the very short-run, but after a couple months, your readmission rate and patient satisfaction and length of stay will suffer.  I can’t imagine a world without Rehab being an essential part skilled nursing, RCS 1 or not.

So, look at Nursing under the RUGs system.  Nursing minutes/hours are not currently reimbursed — like rehab won’t be in the future.  The way operators staff their nursing departments, I believe, will be a predictor of how they staff their rehab departments under RCS 1.  Some Medicaid shops run as lean as possible b/c there simply isn’t enough revenue to support more.  Yet, short-term rehab shops, staff way higher than state minimums because quality care/outcomes/readmission rates/etc. demand it. I believe that will be the case for Rehab.

CMS is infamous for unintended consequences.  They consistently underestimate operators ability to quickly adapt to the moving goal posts.  So, while CMS predicts this will be budget neutral, I wouldn’t be surprised if it resulted in an increase in Medicare spend (and bottom line performance for SNFs), resulting in quick adjustments like we saw in 2011 and 2012.


Here are 3 videos I took of the presenter going through the calculator that shows the new formula at work (note: no input in the new calculator for minutes):

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This ballroom was packed for both days of presentations. Highly recommend Zimmet for learning about the latest changes to reimbursement & regulation in LTC
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The Silent Treatment vs. The Iron Chef

I asked: How do you know you’re doing a good job?

: No complaints.

I wrote on the white board in front of all the staff: Silence = Approval

I asked: Is that right?  Can anyone argue an opposing explanation for silence?

: They’re frustrated.  They don’t believe you’ll do anything.  They’re tired of talking/asking.  They don’t trust you.

Man, I could take this several directions, huh?  (That happened about 7 years ago in a very different setting than a skilled nursing facility, but it applies as you’ll see in a bit)

But, the reason for tonight’s post is to illustrate the oft-untapped power of scoreboarding in our skilled nursing facilities.

I get too preachy.  So, tonight (while writing at 35,000 feet on my way home to Baltimore), I’ll try to be brief and let the case study do the preaching.

At a recent facility, we had a problem with the food.  The main problem was it didn’t taste very good according to our patients.  Yep.  That’s a problem.

Here’s how scoreboarding helped to fix that …

First, data is power.  It’s one thing to have a lot of anecdotal evidence (often by other complaining department heads, second hand).  It’s a totally different ball game when you’re able to say, “last month we conducted 70 discharge satisfaction surveys.  On a scale of 0-10, satisfaction with food scored a 6.25 while nursing and therapy and everything else scored in the 8s and 9s.”

So, do you do DC satisfaction surveys for all your Discharges?

Now that we have data, we can set objective goals to celebrate successes and judge our decisions by.

I asked our Dietary Supervisor to put up a scoreboard of the things she wants to perfect in the kitchen.  Her team needs to be able to see it.  There should be Daily, Weekly, Monthly things that get scored.  There should be accountability, celebrations, etc.  You come up with it.  I want to see it up on the wall next week.

The Kitchen's Scoreboard. Fires me up!
The Kitchen’s Scoreboard. Fires me up!  She did way better than I could’ve.  And, she owns it because she created it.

In addition to the scoreboard we changed the menu completely and added a few hours to the department each day to allow the cooks to give a little bit more attention and time to their meals.

The dietary department now knew that they were being measured (for the first time) on objective key factors for satisfaction.  They knew their supervisor was stressed about the patient satisfaction.  They knew their jobs may be affected if they don’t score well too.

But, they had no idea that I cared.

And, the rest of the facility (particularly the department heads) didn’t know that I really cared about this and that the dietary manager was taking this so seriously.

So, I decided to go all food critic on them.  I channeled my inner Chef Ramsey.  I began to ask for test trays for lunch and dinner.  I created my own version of a scoreboard that ended up meaning a lot to them.  Why?  Because they see that I actually cared.  Silence can mean a lot of things to your staff.  But, it rarely means what you really intend.  We all fill in the void/the silence with our own fears/worries.

After a meal, I would send an email to the entire department head team with my Chef Ramsey Food Critic review.  My dietary manager braces herself when she sees an email from me about the meal and shares the usually-good news with her staff right away.  I’ve noticed a massive change in the morale and level of engagement of the dietary department — for the better.

Here are some of my reviews …

Laura (and team),

I just wanted to let you know that dinner was great tonight! The ham was moist (it’s really easy to make dry ham) and the taste was really good. Rice done perfectly. Spinach … well, cooked spinach is cooked spinach. The biscuit was tasty too. Presentation was appealing, as you can see. When I went down there to ask for a test tray tonight, I also noticed their scoreboard up in their break room. I LOVE it. Getting food to be loved by so many different palates is a serious challenge. Our scores are sometimes really high. Sometimes really low. We still have a ways to go, but in talking with Laura, I’m confident that we’re headed in the right direction.

Dave

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Team,

Ok … I won’t do this anymore for the whole team (yeah right) but here’s my food critic column for tonight’s dinner at the Sloan’s Lake restaurant.

Tonight’s food presentation was really good again! The chicken … the taste was good but it was dry and chewy. I thought about our patients maybe having a hard time cutting/chewing (don’t know if there’s a way to tenderize the chicken but that would probably help a lot. The mashed potatoes and gravy were really good and masked the dryness of the chicken well. The corn was pretty good and the roll was perfection. The desert was also good. On the sugary/sweet side, but good.

Before and after photos included.

The kitchen is on a roll!

Dave

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Laura/Team,

Lunch was very good today.  Thought you should know.  The meal: cod.  The fear: dry and overcooked or undercooked.  The result: perfectly cooked.  Moist.  Layers of fish fell away from each other easily.  Flavor?  Good.  I had to add salt to the whole plate, but would’ve been satisfied without doing so.  I add salt to just about everything.  Fish could’ve used a little more seasoning since the cod probably wasn’t caught yesterday in Alaska.  Nevertheless, very enjoyable.  I loved the cous cous and peas and carrots too.  The portion of fish could’ve been larger but I’m full after eating everything on my plate.  The dessert … some sort of cream puff cake.  Ummm, Yum.  I had to stop after two bites because I have a wife that I go home to, but it was surprisingly good.  As you can see the appearance was also very nice.  Hats off to Scott today.

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What if I didn’t do this?  The whole food critic thing?  What would the dietary staff think mattered to me as the Executive Director?

I don’t know.  But, I’m pretty sure they wouldn’t think that I cared much for their food or much about their work.

PS: August’s patient satisfaction scores hit 8!  The entire staff applauded the kitchen staff at our all staff meeting for their progress this week.  I just got the chills.  You?