Jul 092014

by Anne H. Montgomery and Joanne Lynn, MD, MA, MS

Congress is gearing up to put a legislative glide path in place that is intended to culminate in major reform of Medicare’s post-acute care (PAC) payment system. Following several months of soliciting and reviewing comments on a discussion draft, the “Improve Medicare Post-Acute Care Transformation Act” (H.R. 4994/S. 2553) was introduced on June 26. Sponsored by Sens. Ron Wyden (D-OR) and Orrin Hatch (R-UT), together with Reps. Dave Camp (R-MI) and Sander Levin (D-MI), the IMPACT proposal (https://www.congress.gov/bill/113th-congress/senate-bill/2553) is believed to have good odds of being enacted during the 113th congressional session.

One of IMPACT’s primary goals is to establish a system of uniform assessment in the PAC sector (or perhaps more accurately the “after- hospital” sector) along with improved quality measurement. This information, which would be transmitted to CMS and available for analysis and research, would be used to help redesign payments across skilled nursing facilities, inpatient rehabilitation facilities, long-term care hospitals and home health agencies, with recommendations due from CMS and the Medicare Payment Advisory Commission by 2022.

“Without comparable information across PAC settings, policymakers and providers cannot determine whether patients treated and the care provided in different settings is, in fact, the same or whether one PAC setting is more appropriate,” a summary of the bill notes.

“Absent this information, it is difficult to move forward with PAC payment reforms.”

This is true enough: Clinicians and thoughtful experts knowledgeable about the care of older adults have advocated a uniform assessment for several decades, and having a high-quality, standardized tool in hand would enable better prognostication and decision support.

But there are other factors that could heavily influence the way that PAC reform played out. One is the “Bundling and Coordinating Post-Acute care Act of 2014” (BACPAC) bill (https://www.congress.gov/bill/113th-congress/house-bill/4673) introduced on May 19 by Rep. McKinley (R-WV) and Tom Price (R-GA). As proposed, the policy would give control of PAC services to a PAC coordinator – which could be a hospital, health insurance issuer, third-party benefit manager or PAC provider; no government entities or locally-managed coalition efforts are envisioned. PAC coordinators would be given full authority to authorize, deny and coordinate all PAC services for 90 days post-discharge. These services are defined as post-hospital extended care services, home health services, inpatient services provided in a rehabilitation facility, inpatient hospital services provided by a long-term care hospital, durable medical equipment, outpatient prescription drugs and biologicals, and skilled nursing facility services. Physician services and hospice are not included. Standardized assessment is called for, but there is no mention of the information being transmitted to CMS.

Starting in January 2016, PAC coordinators receiving a single payment from the HHS Secretary for PAC services would manage PAC services within a designated “PAC area” (no standardized geographic definition of these areas is provided), and would reimburse “PAC providers” (providers or suppliers furnishing PAC services) at current rates.

After January 2019, PAC coordinators would be empowered to negotiate rates and savings targets with PAC providers. Under the terms of these negotiated agreements, PAC coordinators would keep up to 70% of any savings realized, with 10% or more to PAC providers, 10% or more to the PAC physician, and 10% or more to the discharging hospital. Although unlikely to be enacted in this Congress, BACPAC will probably be reintroduced in the 114th session. And while it may be financially attractive for certain providers, beneficiaries would not see financial gains, and the benefits from better “navigation” of services are not well established. Nonetheless, unless careful attention is paid to the implications of the bill, it is even possible that some of the proposed reforms could be implemented administratively.

But the most interesting issue is where PAC dollars that are saved will go before any of the proposed legislative reforms culminate in a rebased PAC financing system. In the IMPACT bill, financing reforms are more than seven years away. This provides a window of opportunity for capturing large savings in this sector, now that research and private companies has established that substantial efficencies in the PAC sector are feasible.

This raises two related questions: Are there models already in use that are capturing PAC savings, and if so, where are the savings going? The answers are “yes” and “to private investors.” More specifically, evidence-based proprietary protocols are now being used by some risk-bearing contractors and managed care plans to significantly reduce PAC expenditures (http://healthaffairs.org/blog/author/jlynn/). Under these arrangements, savings from taxpayer-financed PAC services are not being reinvested in further improvements, but rather are being funneled via contractual agreements directly into private pockets.

Business as usual, you say? Classic American capitalism? Certainly. But for policymakers and other guardians of the public purse and the public welfare, the merits of this approach may best be examined in a larger framework: the future of the U.S. health and long-term care systems after 2020, when the largest generation of older adults in U.S. history will rapidly drive up demand for a mix of services that are aimed at controlling chronic conditions and mitigating the impact of functional disability. Since evidence suggests that about 45% of the roughly 23% of total Medicare dollars that are spent on PAC services can be harvested
(http://healthforum.brandeis.edu/meetings/materials/2014-18 march/naviHealth.Scully.pdf), this represents an important opportunity to have a robust policy discussion about whether PAC savings — or a portion of them – could be set aside to re-engineer the health, PAC and post-PAC (i.e., long-term care) systems into better-organized integrated care systems.

The sheer size of the possible PAC savings that are available to possibly be captured over the next seven to 10 years – roughly 10% of all Medicare spending – makes this a particularly important case to debate thoroughly – rather than merely standing by and letting the money quietly disappear.

The reality is that today, we are still billions of dollars away from having the necessary infrastructure to grow our modestly-sized coordinated care and shared savings models into the stable integrated care system that will be needed for tomorrow’s large cohort of older adults. For American health care to have become so chaotic and poorly designed that private companies can design ways to pull about 10% of Medicare spending out of services and mostly into profits points out just how poorly we have built our care system for complex chronic conditions.

Some private gain using public dollars may be necessary to catalyze reforms of the PAC sector. However, the size of the looming potential loss for the Medicare Trust Fund is stunningly large, especially when the services provided are primarily decision support and navigation. If, instead, the strategy can be shifted to reinvesting a hefty portion of realized savings in care systems that are deliberately designed to deliver consistent and reliable supports for frail elders and their families, while also reducing their overall health care costs, our future will look very different.

One such comprehensive and community-focused system, the MediCaring model, has been developed by Altarum’s Center for Elder Care and Advanced Illness [now Program to Improve Eldercare]. Others may emerge from the dual eligibles demonstration and ongoing research efforts, while smaller-scale plans such as PACE may devise successful expansion strategies. These models spring from efforts to serve the target population, rather than opportunistically attending only to the happenstance period after hospitalization.

Making these and other high-quality comprehensive models larger and economically viable and sustainable – capable of both driving down unnecessary utilization while improving outcomes — will take ingenuity and innovation, significantly more efficient deployment of services and workforce, and greater flexibility in how existing financial resources are used. Given the likelihood that Congress will not want to make substantial resources for further reforms available in the form of new programs and large grants, this is an important time to think carefully about how greater efficiencies in the PAC sector can both be reliably achieved and how any resulting savings can be best leveraged to build the care system we need to handle the demands of the “age boom.”


key words: Joanne Lynn, IMPACT, BACPAC, MediCaring model, congress

May 282014

While diligently trying to improve care for frail elders, often by filling gaps in the care system, even our most innovative programs tend to work within the constraints that created those gaps in the first place. Dr. Joanne Lynn, Director of the Center for Elder Care and Advanced Illness (CECAI), has been visiting and often coaching many innovative programs as they work to do a better job for their community’s frail elders.

Dr. Lynn reports being inspired and sometimes awed by the deep personal and professional commitments of their program staff. Yet she finds more and more evidence that genuine reforms to create sustainable and reliable arrangements for the services that frail elders need will require breaking out of our increasingly archaic habits. Even the most innovative leaders and programs continue to accept historic barriers and red tape that stymie enduring improvements.

Rules Changes as Game Changers

Think about what you accept in your own work or what you feel that you are forced to accept because of rules and regulations that, in your experience, have simply always been there. Remember, the Centers for Medicare & Medicaid Services Innovation Center can waive most regulations, and even an act of Congress can be undone by later laws. So why do we keep working with the assumptions that home care means being homebound, that skilled nursing facility use means only rehabilitation, and that hospice care requires refusing what the Medicare statute called “curative” treatment? Think about other important changes that we have made in the health care system. Would labor and delivery have changed if we had persisted in thinking that women should be unconscious during delivery? Would hospice have emerged if we had adhered to the belief that randomized controlled trials aiming for small improvements in survival time were all that mattered to cancer patients? Not likely.

Not Just a Body Shop

Yet even our forward-thinking programs continue to categorize people by disease or prognosis. A prominent efficiency contractor (a business working under contract with managed care, bundled payment, or accountable care organizations to reduce expenditures, especially in the post-hospital period) said that its work in the 90 days after hospitalization did not extend to long-term care. Really? A frail elder who needs long-term care is likely to need that care during the first 90 days after hospitalization and planning for the time beyond that. People needing long-term supports need a service delivery system that works with a comprehensive care plan for a good life, not just for a few months of rehabilitation services.

A modern folk song by David Mallet has the wonderful line, “We are made of dreams and bones.” Indeed, each unique individual comes to old age not only with a medical history but, often more importantly, with a lifetime of connections to others, personal and family histories and aspirations, and an array of resources.

Our bodies are not like cars, which can go to the repair shop just for tires. Perhaps a person can sometimes see a doctor for preventive maintenance or repairs to just one body part. But once someone is living with serious illnesses or disabilities, the central challenge is how to live well with those conditions and their treatments. Still, whole sectors of the health care industry continue to operate like repair shops, addressing one treatment, diagnosis, or setting and therefore regularly falling short in providing good care for frail elders.

Comprehensive Care for Frail Elders

Imagine a service delivery system that really worked for frail elders. A key member of a multidisciplinary team would know each person well and understand the particulars of each situation, including strengths, fears, and priorities. The frail elderly person, his or her family, and the care team would develop and agree to a plan of services that optimally helps attain important and achievable goals.

At the same time, an organization representing the community would be continually working toward making available an optimal array of services. Making such an arrangement a reality will require developing new rules and procedures that enable the community to improve service supply and quality. We will have to learn how to evolve from the currently dysfunctional structure, a legacy developed for a different time and a different population with a different set of challenges.

MediCaring Communities

CECAI is now working with several communities whose visionary leaders are moving toward our comprehensive MediCaring® model, learning how to work within current limitations without accepting them. MediCaring offers a strategy that spans settings and time, through to the end of life (and even beyond to support the bereaved). This model goes beyond our traditional focus on medical services by including important services such as housing, nutrition, transportation, social connections, and caregiver support. One idea behind MediCaring is to balance the resources available for medical services with those needed for social supports within each community.

We know that many other communities and organizations are working to similar ends, and we would enjoy hearing more about just what you are doing. Share some compelling stories of how you are using the flexibility of Center for Medicare & Medicaid Innovation waivers or the adaptability granted by capitation or local funding to make a difference for frail elders now! Write us, comment, or share on social media. We are eager to learn from you.

Want to learn more?

The MediCaring reforms:

Building reliable and sustainable comprehensive care for frail elderly people:

Health Affairs blog on efficiency contractors by Dr. Joanne Lynn:

Jan 232013

By Dr. Joanne Lynn

The latest issue of JAMA features our paper describing   an exciting and successful initiative from the Centers for Medicare and Medicaid Services (CMS) and fourteen of its quality improvement organizations (QIOs).  Grounded in quality improvement methodology—plan-do-study-act–this unusual project offers many insights for those aiming to reduce avoidable readmissions.  And its raises a number of important question about how we measure progress in reducing readmissions. (For more on that topic, see our earlier MediCaring blog, https://medicaring.org/2013/01/07/readmissions-count-should-cms-revise-its-calculations/ )

A Medicare patient’s ability to receive successful treatment during care transitions from one setting to another has a crucial effect on the overall cost and efficiency of the Medicare system. Errors in information transfer, care planning or community support can cause hospitalizations, rehospitalizations and unnecessary costs to the Medicare program.

This project involved a three-year, community-based effort to improve the care transition process for fee-for-service Medicare beneficiaries. Participating QIOs facilitated cooperation among providers, health care facilities, and social services programs, such as Area Agencies on Aging. They centered their efforts around each community’s unique needs.   QIOs worked with communities to understand their own particular causes of readmissions, and to implement appropriate, evidence-based models to address them.  Communities analyzed results of the intervention along the way, and changed course to stick with interventions most likely to work.

The results, when compared to 50 comparison communities, showed significant reductions in hospitalizations and rehospitalizations, both by an almost 6% average, saving Medicare $3 million in hospitalization costs per average community per year.

This correlation has already led to new national efforts such as Partnership for Patients and the Community-based Care Transitions Program. In addition, in the 10th Scope of Work, all 53 QIOs are leading community projects nationwide (so far, in more than 400 communities).

This paper may be the first time one of America’s leading medical journals has published a report based on QI methods. Doing so represents a profound change in the openness of American medicine to learn not only what works for a patient, but works for the delivery system, too.

key words: quality improvement, care transitions, CMS, CFMC, Joanne Lynn, readmissions, community coalitions, JAMA

Dec 182012

For years, physicians and insurers have applied the so-called “improvement standard” for care rendered to Medicare beneficiaires, insisting that if the patient was not improving, he or she was ineligible for benefits. Taking on what she calls that “intractable myth”, Judith Stein, Executive Director of the Center for Medicare Advocacy, led a team that filed a class-action suit, whose plaintiffs included 5 individuals and 6 organizations. For years, Stein said, the Center had responded to individual requests for help appealing such decisions, but had been unsuccessful in its efforts to negotiate the issue with represenatives from the Centers for Medicare and Medicaid Services (CMS). The group concluded that the only way to achieve “systemic change” was to take the issue to court. On October 16, 2012, a settlement in principle was reached. According to the Center’s Litigation Director, Gil Deford, the government claimed that there was no such thing as the improvement standard and, had there been, it would not have been enforced.

The settlement is designed to ensure that denials based on the improvement standard will end. Beneficiaries can receive skilled, covered services, even if they have “plateaued” or if the services are for “maintenance only.”

To make this information more widely known and understood, CMS will revise its Medicare Beneficiary Policy Manual for skilled nursing, home health, and outpatient therapies. The current version is ambiguous, says Deford. Attorneys for the plaintiffs will review CMS’ proposed revisions, and a final version will be released. Deford estimates that this process will take about six months. CMS will then launch an educational campaign that will include updates on its website, national phone calls with stakeholders, open door forums, and materials and training.

In the meantime, any claims dating from 1-18-11 that have been denied because of the improvement standard can request a review of that denial. The Center for Medicare Advocacy has developed self-help packets that can be downloaded from its website at http://www.medicareadvocacy.org/. Margaret Murhphy, associate director of the Center, told participants in a webinar last week that if claims are denied because of the improvement standard, they should, “appeal, appeal, appeal!” There are strict time limits in which appeals must be made–but the appeals process is launched with just a phone call.  The Center is trying to spread the word: Jimmo can help people now. And it applies to anyone who needs skilled care.


key words:  Jimmo, improvement standard, Medicare beneficiaries, Center for Medicare Advocacy

Jul 082011

Despite widespread interest in the $500 million budget allotted for Community-Based Care Transitions Program (CCTP) under the Affordable Care Act, many stakeholders are confused about the exact nature of the program. What does it aim to do? Who is eligible to apply for the funds?

Aim: CCTP aims to improve the reliability and effectiveness of care transitions as evidenced by reducing hospital readmissions. CCTP participants are paid to improve services targeted fee-for-service Medicare beneficiaries, the population requiring the most frequent care transitions. The backbone of the program in most places will be cooperation of service providers in a geographic community, since the participation and engagement of many stakeholders who share in the care of the area’s patients appears to be essential for sustained excellence.

Eligibility: To be eligible for funding, every applicant must have a minimum of one Community-Based Organization (CBO) and one hospital. While a hospital on CMS’s list of high readmission hospitals by state can lead a proposal, the payment will still go to the CBO, making lead authorship rather trivial. Priority will be given to eligible entities participating in programs run by the Administration on Aging (AoA), or that serve the medically underserved, small communities, or rural areas.

Financing: Foremost, this is not a grant! Payment is based on a blended rate proposed in the response to the solicitation, paid “per eligible discharge” and heavily based on the type of intervention. The blended rate can reflect different costs for different categories of patients and can include such elements as ongoing supervision, monitoring, administrative costs, and so on. Most important, however, it does not include initial training: Sites must have some previous experience with care transitions, so they must have paid for initial training. CMS payment also cannot directly support travel expenses for attending the required meetings in Baltimore (the cost of this must come from some other source).

Applicants are required to use the worksheet provided by CMS. No payments will be made more than once in 6 months for each beneficiary. In other words, CMS will not pay for re-treatment of patients for whom first efforts to prevent rehospitalization failed. Keep in mind that, although the program will run for 5 years, the initial award is only for 2 years, with possibility of renewal annually thereafter.

Intervention: CCTP interventions must target Medicare beneficiaries who are at high-risk for readmissions, based on criteria provided by HHS, or for substandard care post-hospitalization. Interventions cannot duplicate already required services. You must be willing to participate in collaborative learning and redesign (including data collection). Finally, and not surprisingly, your intervention must save money overall, and show savings within two years.

CMS’s measures so far include:

Outcome measures

  1. 30-d Risk-adjusted all-cause readmission rate (currently under development)
  2. 30-d unadjusted all cause readmission rate
  3. 30-d risk-adjusted AMI, HF, and Pneu readmissions

Process measures

  1. PCP follow-up within 7 days of hospital discharge
  2. PCP follow-up within 30 days of hospital discharge

“HCAHP items” – (note – includes more than HCAHPS)

  1. HCAHPS on medication info
  2. HCAHPS on discharge info
  3. Care Transitions Measure (3 – item)
  4. Patient Activation Measure (13-item, see:    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1361231/table/tbl1/)

Note: There are some areas where the solicitation is unclear or internally inconsistent.

Key words: hospital readmission, care transitions, 3026 funding, evidence-based intervenitons, patient activation measure, budget worksheet, financing, medicare beneficiaries, payment rate, CMS

May 172011

Many improvement teams have real problems with measuring their progress – some never get around to measuring, and some never do anything else!  This presentation was set for the communities funded under the Beacon initiatives that are working to bring information exchange to care transitions, but you’ll find the pointers applicable to any intervention that your community might try.

You can download a PowerPoint presentation by clicking the following link:

caretransitionsmeasuresprimer (PowerPoint presentation)

Keywords: Beacon communities, care transitions, reasonable skeptic test, ten units of energy test, sure audience test, rehospitalization, best practices, Medicare, good care plans, near misses, targeting, nursing home residents, mentally ill, delirious, frail elderly, homeless, ESRD,  “revolving door” patients, case reviews, Care Transitions Measure, avoidable readmission, HCAHPS, discharge planning, denominator problems, numerator problems