The End of the GIP Building Era

In the early years of my work as a hospice consultant, I spent a great deal of time conducting hospice facility feasibility studies. Many of my clients were freestanding non-profits, i.e., hospices that were not part of a hospital system or larger entity. The common wisdom at that time was that while hospice inpatient facilities were unlikely to break even on the basis of their operating revenue, they nevertheless fulfilled a need for patients and families. In addition, they were seen as visible symbols of service to the community and reliable magnets for fund raising.

One of the biggest questions in these projects was always how big to build it. (Rarely was the question whether to build.) I had a number of rules of thumb in helping clients plan these facilities. While typical hospices without a GIP facility might expect to see 1% to 2% of their patient days at the GIP level of care, hospices with facilities routinely exhibited much higher proportions. Utilization as high as 6% was much more typical, and usually the metric I used to estimate the need for beds in new facilities. In fact, even after using that aggressive planning target, one of my clients reported after an expansion project that their occupancy rate was running far ahead of projections.

My, how times have changed.

These days I find myself advising disappointed clients not to build at all. One client had already lined up donated land and was set to launch the capital campaign. However, when shown the size of the probable operating deficit their proposed facility would carry year after year, the board decided to put the project on indefinite hold.

So what happened? I attribute the change directly to the transformed environment for compliance oversight and increased scrutiny of general inpatient level care. The OIG study released in March this year was titled, “Hospices Inappropriately Billed Medicare for $250 Million for General Inpatient Care.” Only in their document, that title is in ALL CAPS. There is no doubt this analysis is guiding their enforcement action. Since June of this year, two hospices have been assessed civil monetary penalties for misuse (read over-use) of GIP level care. I expect there will be more to come. In addition, we’re hearing from hospices across the country that their MACs are aggressively rejecting claims and requiring much more thorough documentation of the appropriateness of each day of GIP level care.

So what do we do about it? We’ve already built the facilities using a different set of assumptions about their use. If we assume that today’s tight scrutiny is here to stay, how do we ensure that our facilities receive their best and highest use while remaining compliant with Medicare regulations?

I’ll be publishing more about this topic over the coming weeks. In the meantime, I urge you to consider attending our upcoming event devoted to this topic. On October 30, prior to the start of The Intensives conference, I’ll be facilitating the NHPCO Edge Thought Leader Forum. Our focus is “Optimizing Freestanding Hospice Facilities: Stemming Losses in an Era of Shrinking GIP Utilization.” We’ll gather leaders in hospice facility management from around the country to share what works, what doesn’t and how they are adjusting to the new reality. For more information, see the event announcement here. 

Sue Lyn Schramm, MA
Director, Consulting Services, NHPCO

See the previous NHPCO Edge Blog article, "Community-based Palliative Care."

Community-Based Palliative Care

By K. Jeanne Dennis, MSW
Associate Consultant, NHPCO Edge 

When the winds of change in health care blew our way many of us in hospice cheered, our time had come! Hospice was the one provider that was hitting the triple aim: better quality of health for a population of patients, better health care and at a lower cost. But are the health care providers and payers in our communities flooding our phone lines and email boxes to partner with us, learn from us, contract with us? In some cases perhaps, but mostly we are hidden in plain site, fighting for a seat at the table (with ACOs, DSRIPs, Medicare Advantage plans, PCMHs, etc.) What happened? Why is the hospice model of care not promoted as the solution to the problem of improving quality of care and saving health care dollars? Consider two reasons: Internal barriers and external competition. 

Internal Barriers: 

• Unprecedented Changes in the core hospice business that require significant operational focus and resource allocation.
•  Funding: with no distinct palliative care benefit, and the options of Medicare B and/or fund raising lacking the promise of a breakeven bottom line, the financial case is too hard to make.
•  Infrastructure: Although a community-based palliative care service is anchored in the hospice model, it requires an investment in recruitment and education of staff, an EMR, policies and procedures, a marketing plan, and more.
•  Strategic Positioning: with some notable exceptions, hospice programs did not have the planning and palliative care program structure ready to go.
•  Value Proposition: participation in the new shared saving and risk sharing opportunities demands data that demonstrates value. Pulling this information is a challenge for many hospice providers.

External Competition: The lack of distinct Medicare Conditions of Participation or a benefit structure opened up the opportunity for palliative care innovation by other providers and by payers. For example:

• Large health care systems are already creating post-acute services designed to manage patients in the community and reduce re-admissions
• Physician groups (often part of a large system) are now expanding home visit and tele-medicine services
• Major health insurance companies are implementing care management programs with the ability to scale beyond the usual boundaries of most hospice programs
• New entrants in the field like Aspire Health, a for profit company founded in 2013, now providing community based palliative care in 11 states and the District of Columbia. Aspire has the advantage of a well-known Board Chair, Bill Frist, MD, former Senate Majority Leader and $21m in venture capitalist funding.

The good news is that it’s not too late to succeed. Community-based palliative care is in our DNA, and the opportunity to shape the future of care for a vulnerable population is now. The innovation in palliative care that’s happening among hospice providers is encouraging and exciting. For hospice leaders this service is emerging as a top strategic priority. Hospices are now taking action aimed at clearing the barriers. Record-breaking attendance at NHPCO’s Palliative Care offerings at the recent MLC is evidence of the energy and interest in adapting the hospice principles, practices and proficiencies to meet the care needs in the community and the mandates of the new value based payment models.

NHPCO is committed to leading these efforts and NHPCO Edge is here to provide support and consultation.

This post was written by K. Jeanne Dennis, NHPCO Edge Associate Consultant. NHPCO Edge is proud to count Jeanne among our expert consultants, as she brings decades of experience in hospice leadership. For more info, see NHPCO Edge online.

See our previous NHPCO Edge blog, "Using Metrics for Marketing." 

Using Metrics for Marketing

If I could offer one key to getting your foot in the door with potential partners and referral sources, it would be, “know your metrics.” Don’t just tell the local health system that you provide great hospice care and your patients love you. Tell them that you can prevent those patients from bouncing back into the hospital or ER. And then prove it.  

You can use your own patients’ histories to make the case. Gather aggregate statistics on your patients’ hospital admissions or ED visits in the period prior to hospice admission. You may cover the 30, 60 or 90 days prior to the hospice admit; then look at their care patterns afterwards. Be sure you know what percentage of your hospice patients are admitted to a hospital while on service and break it out by diagnosis, so you look closely at those diagnoses that we know are highly likely to run the risk of readmission. In particular, check hospital utilization for patients admitted to hospice after hospital admissions for COPD, CHF or stroke. 

One key measure that will pique the interest of ACO referral sources is the overall cost of care for your patients. ACO shared savings targets depend on reducing the total cost of care for the lives assigned to the ACO, regardless of where that care is received. If you can demonstrate a mean Medicare payment per admission that’s lower than your competitors, you might consider sharing that information with the leadership of the ACO with whom you seek preferred status. You may be able to get that comparative data from your state survey of hospices, or from one of the national hospice data analytics firms that gathers Medicare claims. 

Consider external sources of data as well. If your relationship with the local health system permits, you may be able to run a cooperative study, drawing from their inpatient data to find out which diagnoses and which patients are creating avoidable costs to the system. And don’t forget to check the CMS consumer site, Hospital Compare. That site shows rates of readmission for several key diagnoses, and how well each individual hospital is doing at meeting targets for avoidable readmits. 

Be imaginative and try to see through the lens of your referral partners’ needs. If hospice and palliative providers are truly to take a seat at the table, we need be seen as the problem solvers we are.

Sue Lyn Schramm, MA
Director, Consulting Services, NHPCO

See the previous NHPCO Edge Blog article, "The Gentle Art of Teaching Hospital CEOs."

 

The Gentle Art of Teaching Hospital CEOs

One of the challenges for hospice and palliative leaders has always been that their services were seen as a small part of the healthcare continuum. Over and over, I’ve had hospice CEOs and administrators tell me their greatest frustration was getting the time of day from hospital and health system execs.

Lately, however, I’m not hearing that as much. Instead, I hear clients and friends telling me their local system seems interested in post-acute care in a new way. In January of this year, the Society for Healthcare Strategy & Market Development published results from a survey of hospital and health system executives, CEOs and CFOs, mostly. They were asked, “How likely is it that by 2021, the proportion of your hospital or health system’s expenditures devoted to post-acute care capabilities (palliative care, hospice, or skilled nursing) will increase?” Fully 92% of them said it was Likely. 54% of them even said “Very Likely.”

The reason for this new attention to post-acute care is that new payment incentives are strongly encouraging acute care providers to care about what happens after patients are discharged from the hospital more than ever before. This hasn’t always been the case. Jeff Goldsmith, the well-known healthcare futurist, recently wrote about this issue: “Traditionally, the hospital’s responsibility ended abruptly upon discharge. In candor, the discharge process often was not focused on patient outcomes. In many institutions, the main focus was on clearing the bed and making sure the patient had a safe ride home.”

Now however, inattention to what happens immediately after an acute care episode can cost the hospital, health system or ACO money. If the patient comes back as a re-admission or Emergency Department visitor, that’s bad, not only for the patient, but also for the at-risk provider’s bottom line.

Cost avoidance is the name of the game, and post-acute care is finally getting its due as a key component in improving outcomes and reducing costs. Unfortunately, that doesn’t always mean that the hospital CEOs know clearly what they want or need from hospice. Nor does it mean they always have a good understanding of why hospices can make vital partners in a health system’s efforts to reduce costs of care.

Hospice leaders may find themselves in the position of (gently) helping their local hospitals and health systems to understand the new imperatives of managing costs when revenue is at risk. After all, managing patient costs on a fixed payment is something that the hospice industry has been doing since 1983.

This post is a preview from a longer article on working with ACOs and hospitals that will appear in the Summer edition of NHPCO’s Newsline out June 15. 

Sue Lyn Schramm, MA
Director, Consulting Services, NHPCO

New Strategic Opportunities for Hospice

On Tuesday, March 8, Medicare announced a new five-year initiative that has the potential to radically change the way it pays for outpatient drugs. This is just another part of CMS’ ongoing migration of provider incentives from volume to value. These changes are already altering the landscape for hospices and their relationships with professional referral sources, including hospitals, health systems, physicians and ACOs.

Healthcare payment reform is creating a new set of challenges and opportunities for hospitals and health systems. This seminar will help the hospice administrator evaluate opportunities to become an active partner with hospitals, Accountable Care Organizations (ACOs) and other at-risk organizations in your market. In this session, you’ll gain clarity and a sense of direction for your organization’s strategies by learning from the perspective of three speakers: a hospice strategist, a hospice provider, and an ACO physician and owner.

Are you comfortable that you understand all the implications for your hospice?

In April, at the NHPCO Management and Leadership Conference, Sue Lyn Schramm, M.A., Director of NHPCO Edge, will be leading a half-day preconference session on the topic of hospice strategies for working with ACOs. Taking Hospice Skills Upstream: New Ways Hospice Can Partner with Health Systems and ACO’s is being presented on Wednesday, April 20, 9:00am - 12:00pm and online registration is open until March 31, 2016.

Of additional interest, attendees may want to consider combining attendance at this cutting-edge preconference session with the 2^nd Annual Executive Business Summit, Beyond the Benefit: Delivering on the triple aim in healthcare through palliative care, happening April 20 from 5:00 - 6:00pm (separate registration is required.)

Sue Lynn Schramm, MA
NHPCO Director, Consulting Services

See Sue Lyn Schramm's article in Spring 2016 NewsLine on ACOs and Alternative Payment Models.