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Hospital Preferred Provider Agreements: Expert Advice For Home Care

As Elizabeth Houge, our esteemed colleague and well-known health care attorney explains in this article, hospital Preferred Provider Agreements continue to be misunderstood. But, many hospitals refer patients on a regular basis to post-acute providers. These include home health agencies, private duty home care agencies, hospices, and home medical equipment (HME) companies. Relationships with post-acute providers assist hospitals to control costs and avoid penalties, an essential component of financial viability. Consequently, positive relationships with post-acute providers are increasingly important to the success of hospitals.

Preferred Provider Agreements

Hospital Use of Preferred Provider Agreements

Hospitals may wish to use Preferred Provider Agreements in order to enhance their relationships with post-acute providers. That is, hospitals may agree to make referrals exclusively or on a preferential basis to specified post-acute providers in order to help ensure quality of care. Hospitals may be eager to sign Preferred Provider Agreements for a number of reasons.

Hospitals may decide, for example, to limit the number of post-acute providers to which they are willing to refer on the basis that dealing with many post-acute providers may compromise their ability to implement appropriate plans of care effectively. From the point of view of hospitals, referrals to a number of post-acute providers may complicate communications, which may have the potential to compromise implementation of appropriate discharge plans.

Preferred Provider Agreements may obligate hospitals to refer patients to specified post-acute providers. These agreements should not, however, include a specific number of patients that hospitals are expected or required to refer. In fact, they should explicitly indicate that hospitals make no promises about the number or types of patients who will be referred.

Preferred Provider Agreements and Patient Choice

Preferred Provider Agreements must also take into account requirements related to patients’ right to freedom of choice of providers. Both the Balanced Budget Act of 1997 and Conditions of Participation (COP’s) for hospitals, among other sources, guarantee patients the right to freedom of choice.

Many patients, however, do not yet know enough about post-acute services and providers to be able to make choices. When attending physicians indicate that they prefer certain post-acute providers and patients do not wish to choose other providers instead, physicians’ preferences/orders must be honored. Unless patients or physicians choose post-acute providers, it is permissible for discharge planners/case managers to make suggestions. Then patients may wish to choose post-acute providers with which hospitals have preferred provider relationships.

Hospitals are not required to survey post-acute providers in their geographic area to find every entity that provides care of a quality that is satisfactory to them. Consequently, when patients cannot choose and their attending physicians have not indicated preferences for particular post-acute providers, discharge planners/case managers may wish to encourage patients to choose preferred providers.

CMS Stand on Preferred Provider Agreements

Hospitals certainly cannot restrict patient choice. In the final rule on the Comprehensive Care for Joint Replacement (CJR) Payment Model for Acute Care Hospitals; published in the Federal Register on November 24, 2015; however, the Centers for Medicare and Medicaid Services (CMS) stated at follows:

Hospitals, if desired, may recommend ‘preferred providers,’ that is, high quality PAC (post-acute) providers/suppliers with whom they have relationships (either financial and/or clinical) for the purpose of improving quality, efficiency, or continuity of care.

Based upon this language, it seems clear that Preferred Provider Agreements are acceptable so long as the requirements described above are met.


For more information about this or other legal issues in homecare, contact Elizabeth as outlined below.

Elizabeth E. Hogue, Esq.

Office: (877) 871-4062

Twitter: @HogueHomecare

©2016 Elizabeth E. Hogue, Esq.  All rights reserved.

No portion of this material may be reproduced in any form without the advance written permission of the author.


The Inevitable Demise Of The Certified Home Health Agency

For those of you who read the Ankota blog, you know that we’re very excited about the future of the home care industry.  That hasn’t changed one bit, but the industry as we know it today will change dramatically over the coming years. The certified home health agency as we know it today, won’t be a thing for much longer.

Here’s what’s going to happen instead.

The Home Care Payer Will Shift from Medicare to the Hospital

  • This is starting already. Here are two examples.  With the ACO (Accountable Care Organization) model, a health system (combining payer and provider) receives a fixed dollar amount for each patient and they become the payer for all of that patient’s care including post-acute care. In the bundled payment model, which went into effect for knee and hip replacements in almost 800 hospitals on 4/1/2016, the hospital receives a fixed fee for the treatment and recovery (and are also financially responsible if there’s a readmission)

More Hospital Discharges Will Go to the Home

home health agency

  • In 2015 roughly 40% of joint replacement discharges went to skilled nursing facilities (SNFs). With Medicare paying the bills, the hospital would determine whether the patient seemed ready to go home after the surgery.  If not, the hospital sends them to a SNF or other facility.  Now that they’re paying out of their own pocket, more and more patients are going home.  This is good for home care because they’ll get more referrals, but read on…

Successful Care at Home Will Require More that Healthcare

  •  A certified home health agency provides nursing, medication oversight and physical, as well as occupational and speech therapy.  These are all important but cost between $80 and $125 per visit.  Since many of the patients would have previously been sent to a nursing home, the medical services won’t be sufficient to meet all patient needs. Winning agencies will provide the aforementioned skilled care services.  Plus offer non-medical care (at $20 per hour), call center support at $5/call, and automated check-ins (such as friendly “robocalls” at 75 cents per call).

Value-Based Purchasing is Coming to Your Home Health Agency

  •  To make matters worse, the value-based purchasing program is moving to home health.  We offer a free eBook on the Home Health Value Based Purchasing program. In short, Medicare will rate each agency and the best-scoring agencies will eventually be paid 17% more than the lowest scoring agencies.  This program will drive a significant number of home health agencies out of business.

How to Win

Despite the ominous and inevitable changes described above, this story has a very happy ending. But only for the agencies that embrace the future and start preparing for it now.  The key will be to optimize around the new models (ACOs and Bundles) even though today they only represent a minority of the cases.

Will Your Home Health Agency be Blockbuster or Netflix?

In a recent conference presentation, Bob Fazzi from the firm Fazzi Associates, made an analogy between Blockbuster Video and the present state of the home care industry.  As we all know, Blockbuster was a highly successful company. We all had memberships and rented our videos, and now it’s gone.  But we still rent videos.  For a while we got them in the mail from Netflix.  Now for the most part we stream our rental movies and look for original programming in shows like “House of Cards” and “Orange is the New Black.”

The point here is that Netflix saw the inevitable changes in the way that consumers would want to rent videos.  Then they changed their model numerous times to continuously adapt.  Home care agency owners have the historic opportunity to do the same.  Those that don’t act, will perish.  Those that do act will transform themselves into a new kind of organization. They optimize a combination of automation, call centers, non medical care and skilled care in a way that keeps patients/clients at home and minimizes cost.

How Can Ankota Help?

Ankota can help in numerous ways.  If you’re a home health agency delivering nursing, PT, OT and Speech Therapy, we can give you tools.  These tools manage aides and call center personnel and the scheduling capability to optimize across disciplines.  We also offer our Foresight Care service.  Using automated phone calls, you check in with patients so that you can get early warning signs of preventable hospitalizations.  Download, Ankota’s newest e-book,Winning with the Home Health Value-Based Purchasing Program that offers further insight on the discussion. Please contact us if you would like to learn more.

Today’s guest post is by Ken Accardi, who is sometimes referred to as the “Home Care Software Geek.”  Ken founded Ankota LLC to improve the efficiency and coordination of care outside of the hospital.  Ankota provides software to improve the delivery of care, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care.

This article first appeared as “The Inevitable Demise of the Certified Home Health Agency” on June 23, 2016 via the Ankota blog.

Will New Models Reduce Health Care Costs For The Sickest?

Today’s guest post is by Ken Accardi, who is sometimes referred to as the “Home Care Software Geek.”  Ken founded Ankota LLC to improve the efficiency and coordination of care outside of the hospital. Enjoy his always valuable insights!

My wife Tracy has been a health care technology executive on the medical device side for a long time.  She’s presently in charge of technology for Hologic, a leader in breast cancer detection.  At one point Tracy went to a leadership conference in Asia, and met with the Minister of Health of Taiwan. (honestly I might have the country wrong, but I’m pretty sure it’s right)

At the time, this minister put a program in place where the most expensive patients in the country would receive a personal visit from a member of the minister’s office. That team member would make a plan to reduce their health care costs.  In some cases they found that some expensive patients were frequently visiting the nursing room because of loneliness.  They solved the problem by having people call the patient each day and talk to care costs

Pilot Program to Reduce Health Care Costs?

A recent Wall Street Journal article reminded me of this story.  It described a new pilot program authorized by congress where a very high risk patients are authorized for “extreme home care.”  The article profiled Luberta who had a stroke, was paralyzed on one side, had emphysema, diabetes, was on oxygen and had a torn rotator cuff.  The program provides in home care, nursing and physician care in the home.

If the providers are successful in reducing health care costs by 5% over two years, they receive a bonus.  The article goes on to explain that by providing this high level of care with the primary goal of eliminating hospitalizations, that the savings are significant.

Unfortunately, the main message of the article was that the pilot program was capped at 10,000 patients and is no longer funded.

Why is This Important?

Given that the program is no longer funded, you might be thinking that it was a waste of your time to read about it.  Here’s why it’s relevant.  There’s an emerging model of care called Accountable Care Organizations (ACOs).  These organizations are paid a fixed fee for each patient in their census to cover healthcare costs.  There’s a very likely chance that these organizations would love to partner with providers who can provide healthcare at home and avoid hospitalizations.

ACOs and Bundled Payments are Changing Health Care Costs Rules

In addition to the ACO model described above, there is also a new model of reimbursement called “bundled payments.” The convener (generally a hospital) is given a fee to cover an entire acute episode (such as a knee replacement and all of the associated post-acute care).  The good news about this is that the hospitals will be more likely to discharge to home than to the skilled nursing.  The bad news is that the patients will be sicker. They need a combination of healthcare (like med management, wound care and PT) and home care (assistance with activities of daily living).  This will cause the historically strong lines between home health and home care to blur.  Agencies of the future will provide both types of care. And perhaps more and different kinds of care such as telehealth and call centers.

The Conundrum of Reimbursements vs. Health Care Costs Management

As we move from fee-for-service to value-based-care, demands to provide great outcomes with lower health care costs will increase.  In the WSJ example above, the patient received 6 hours a day of non-medical care. The article says that this is more care than they would receive in a nursing home.  When a hospital or ACO is paying the bill, they are likely to want to pay for fewer hours. The way to afford this is to look for other ways to deliver care such as call centers and automation (such as Ankota’s Foresight Care).  Click on Foresight Care to learn more.

Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care.

This article first appeared as “A New Home Care Model for the Sickest Patients” on June 13, 2016 via the Ankota blog.


Bundled Payments are NOW! Time for Home Care to Act!

Today’s guest post is by Ken Accardi. Ken, who is sometimes referred to as the “Home Care Software Geek,” founded Ankota LLC to improve the efficiency and coordination of care outside of the hospital. Enjoy his post and feel free to comment below.

We’ve done several very popular articles about bundled payments.  If you’d like to get caught up, please read this article How Will Bundled Payments Effect Home Care?” and this articleWhat’s A Bundled Payment? Will It Influence Home Care?”  The difference between those articles and today’s offering are that the prior articles were written in future tense.  This one is talking about NOW.

Bundled Payments for Join Replacements went into effect 4/1/16

The Wall Street Journal published an article on April 1st entitled Hospitals Brace for new Medicare Payment Rules.  The article mostly focuses on payment reform at a high level with the joint replacement bundle as an example.  Note that the joint replacement bundle is now in effect for 800 US hospitals. This picture (below) from the article is a great representation of what’s going on.


How Do I Interpret These Bundled Payments?

Here’s how to understand it.  Until very recently, hospitals billed for knee and hip replacements and then discharged patients mostly to skilled nursing facilities (SNFs) and home healthcare agencies (HHAs). The SNF or HHA would then bill Medicare separately for their services.  If there was a readmission, the hospital would bill Medicare for the readmission (but might pay a penalty of around $250).bundled payments

With the bundle, the hospital gets a fixed fee of around $28,000 and needs to pay for everything.  So, referring to the diagram above, if they send the patient to a SNF they’ll lose money and if the send the patient to home health they’re likely to be profitable.  You might be thinking that since you’re home health, you’re all set and in fact you’re likely to get even more referrals. But wait, if the hospital discharges a patient who used to go to a nursing home to home health, it’s very likely that the patient is going to need help with meals, toileting, and more. Sending a nurse for 30 minutes a week and a PT for 2 hours a week won’t get it done.  Plus, the hospital doesn’t need to pay the OASIS rate, they’re going to shop for the best provider at the lowest cost, and since they’re losing money on SNF discharges, they’re going to be looking to make it up on their discharges to home.

This Post-Acute Care Picture Paints 1,000 Words

The diagram below, courtesy of Dr. Josh Luke, sums it up.  The hospital (meaning a readmission) is the last resort because the hospital won’t be reimbursed for the readmission and will likely lose $8,000.  SNFs are the second to last resort because they’re a guaranteed loss for the hospital.  Home Health is viable but CMS is trying to reduce the number of home health agencies (read our ebook on Home Health Value Based Payments).


 What Do Bundled Payments Mean for Home Care?

Seeing the glass half-full, this represents a great opportunity for non-medical home care providers to participate in the reimbursed continuum of care.  Our expectation at Ankota is that the historical divide between home health and non-medical home care will break down and that organizations will merge.  The real leaders will also use call centers to drive patient adherence and behavior change and will use automation like our product Foresight Care to get early warnings to prevent hospitalizations.

Here’s Your Homework:

If you read this article and smiled because this is the direction your agency is moving in, then I applaud you.  For the rest of you, here’s what to do:

One of Ankota’s recent whitepapers, entitled “Selling Care Transition Services to Hospitals” is available for download and we think you’ll find it useful.

Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care.

This article first appeared as “Bundled Payments are NOW – Time for Home Care to Act” on May 26, 2016 via the Ankota blog.

A New Dream For The Home Health Care Plan

For years I have dreamed of a day when home health nurses and therapists would be in charge of their own services. Doctors would be a part of the team but not the “directors” of the care plan. To me, it has never made sense that a physician who knows little about home health services is required to sign off on all orders.

I agree physicians or nurse practitioners must confirm the working diagnosis and the medications. But in home health the professional clinician completes the assessment, defines problems in terms of their discipline and establishes the care plan, not the physician. A physician directing the home health plan of care makes as much sense as asking a plumber to sign off on and be in charge of the electrician, the sheet rocker, and the roofer when building a house. Physicians have repeatedly objected to this requirement and now with the addition of face to face documentation, their objections are even more plan

Current Care Plan Paradigm

So how did we get here? When and why is there a paradigm that the physician directs the care plan for other providers? Therapists have individual practices not requiring physician oversight, but not nurses. The origins of physician control over nursing practice started in the early part of the last century. It was determined that the independent practice of nurses was the single biggest threat to the financial future of physicians. As a result, the American Medical Association succeed in getting congress to pass legislation requiring nurses to work under the direction of a physician. Unfortunately for nurses, doctors, consumers and payers, this has not always been the best practice.

Many physicians signing the care plan developed by clinicians tell us the plans make little sense to them. They sign what is required so patients can get the care they need. Is it any wonder the plans make no sense to them? They aren’t medical plans of care, but nursing and therapy plans written in the language of each discipline. Is it time for a change? My idea is for physicians to continue to sign the medical components – the diagnosis, medications, and required diagnostic tests – while disciplines write specific plans which are signed by individual disciplines.

Think of the money spent trying to support this false paradigm! Think of all the hours spent by home health staff gathering a physician signature on the 485 and verbal orders. Think of the patients denied services because physician didn’t want to be deal with the paperwork burden required for home health services.

Future Care Plan Paradigm

So what could the future look like?  I dream of a home health future where physicians are part of the team and work with other disciplines to achieve desired patient identified goals. Each discipline is responsible for their part of the care plan and nursing is responsible for coordinating the overall plan. Long ago, Medicare recognized home health nurses as the patient coordinator or case manager negating a change in current practice.

The physician confirms the working diagnosis and medications electronically and each discipline signs and dates their plans. Compliance with the home health conditions of participation would continue to be the home health clinician’s responsibility. In my new world, the requirement that the physician certify home bound status will go away.

Homebound Rules Need to Change 

If the intent of physicians certifying homebound status was to prevent fraud, it has not been successful. The clinician in the home doing the assessment is the best person to determine homebound status. However there is second serious issue with the homebound rule. It interferes with the ability to provide the care needed to return clients to full capacity and independence.

Much of home health’s role is assisting patients to make lifestyle changes, stabilize their condition and prevent further exacerbations which may lead to more expensive care. To achieve these goals, particularly for those with chronic diseases and co-morbidities, time is needed beyond a 60 day episode. But, because of the homebound requirement, the patient is just beginning their needed changes when they are discharged. Evidence and experience proves it takes as long as 6 months to successfully integrate a lifestyle change. We are finally seeing a glimmer of hope as CMS begins to recognize that those with chronic diseases need longer periods of care and support beyond the current homebound phase.

Also, the 485 must be revised to reflect these new changes. Numerous physicians have complained for years that the 485 makes no sense and provides little useful information. Physicians are asking for patient progress information, response to provided services and any identified medical issues that need their attention. These are not unreasonable requests and as team members are our responsibility to provide. However, this will require a paradigm shift for home health clinicians.

A New Care Plan Dream

I believe returning to an individualized plan of care structured in care plan format is the goal to strive for. Not only will this help the team plan better, but will help those new to home health better understand the care planning process. The current system does not support critical thinking skills and the entire process has become an exercise in checking off boxes.

The system is starting to change from rules of enforcement to becoming outcome focused. This change must emphasize the importance of patients achieving desired goals and outcomes as well as care cost reductions. I believe with these changes, costs will decrease and outcomes improve as well as physician, clinician and patient satisfaction.

It’s time to dream a new dream! These are just a few ideas I see the home health industry needing to achieve true patient centered care. This will allow each team member to fully use their skill set to assist patients in goal achievement. What are your dreams for the future of home health?  Contact Ginny Kenyon at Kenyon HomeCare Consulting to discuss or leave a comment below. Together we make a difference!

Can This Health Reform Video Project Home Care’s Role Forward?

The department of Health and Human Services (HHS) ( released a whiteboard explainer video that talks about where health reform is going next. Please watch the video and then we’ll talk about  home care’s role in the way forward:

Breaking Health Reform Down For Home Care

Like most healthcare videos, the focus is on hospitals, doctors and expensive lab exams that are ordered more than once. Despite neglecting healthcare at home, the three key principles in the video are good and make sense.  The points are as follows:

  • Paying for Quality Instead of Quantity: The new home care payment models are “value-based.” In particular, a significant and growing share of home care reimbursement will come from bundled payments (such as a single fee for a joint replacement and associated recovery) and accountable care organizations (where the organization gets a fixed fee per member and profit comes from lowering the cost of care per patient while improving outcomes).  Additionally the Home Health Value-Based Purchasing program has been rolled out in 9 states.
  • Coordinating Care: In a home health episode, nurses and therapists make short visits to check vitals, med adherence, expected progress and red flags.  A more holistic view of care also focuses on activities of daily living, and behavior change.  Forward thinking agencies are delivering a care with a combination of skilled workers, aides, call centers and technology.  Substituting aide visits, call center check-ins and automated monitoring for nurse and therapist visits can often improve outcomes while reducing cost.
  • Unlocking Health Data: In addition to coordinating care, there is tremendous value in sharing data.  Most home health visits focus on the specific condition that brought the patient to the hospital, whereas home case visits focus on activities of daily living and health claims data usually focuses on primary diagnosis.  Holistic care looks at all of a patient’s health conditions and leverages the combination of professional, paraprofessional and technology interventions to each do their part in monitoring and providing treatment.

What’s the Health Reform Action Plan for Your Agency?

Let’s face it, we never have enough time to focus on strategy in our agencies. But in this case, the strategy is laid out: Quality, Coordination, and Using Data.  So what are we doing to achieve that strategy.  If you have success stories, send them to us at  We’ll give you all the credit and share them. health reform

Some of the recommendations, such as transforming your organization from a single discipline like home health or home care to a holistic approach combining professional, non-professional, call-center and technology resources, are not easy.  You need to embrace the future and decide whether to get there inside your agency or with partnerships.  Similarly some of the technologies, like telehealth, are expensive and difficult to deploy to the elderly.  We can help

Health Reform Baby Steps

Ankota, through our partnership with Triple Aim Technologies is offering an effective and affordable remote monitoring technology that addresses all of the patient’s health concerns and costs roughly 50 cents a day. You can learn more by downloading our free e-Book entitled Winning with the Home Health Value-Based Purchasing Program that you might also enjoy and find value in.

Ankota was co-founded by Ken Accardi and provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care. 

This article was posted by Ken Accardi and first appeared as “HHS 3-minute Video Projects Health Reform Next Steps” on May 10, 2016 via the Ankota blog.


A Physician’s View On Preventable Readmissions

A recent New York Times article, entitled Most Dangerous Time at the Hospital? It Might Be When You Leave gives a doctor’s perspective on the causes for readmissions.  I’d encourage you to read the full article, but here are some high points.

They first walk us through the case of a patient who came to the hospital with blood in their stool.  The doctors recognized the patient as having low blood pressure, so they stopped his Lasix (a diuretic he took for congestive heart failure) and proceeded to perform an endoscopy where they were able to find and clip the source of the bleeding.  So far so good.  They sent the patient home with instructions to see primary care so that the Lasix could be restarted and the dose reviewed.  The patient didn’t see primary care and ended up being readmitted for congestive heart failure.readmissions

The Committee for Medicare and Medicaid Services (CMS) has estimated it’s annual cost for preventable readmissions to be approximately $17 B (out of a total cost of $26 B).  In other words, CMS believes that 2/3rds of readmissions can be prevented.

A Physician’s View Of Preventable Readmissions

Dr. Eric Coleman has been a pioneer at preventing readmissions.  His evidence based methodology, the Care Transitions Intervention, is based around four pillars of transitional care, as follows:

  • Managing Medications,
  • Use of a Personal Health Record that engages the patient in understanding and documenting their care and sharing that knowledge with all care providers,
  • Making sure that there’s a follow-up appointment with primary care, and
  • Understanding and managing red flags.

Note: The Care Transitions Intervention® and all of its materials are the property of the Care Transitions Program®. All content on this website is © to Eric A. Coleman, MD, MPH.

Had the Coleman method been followed, the patient in the NYT article would notDr_Eric_Coleman_Care_Transitions.png likely have been readmitted.  Let’s review:

  • Medication Management: FAIL – should have gotten back onto Lasix
  • Personal Health Record: FAIL – clearly not in place
  • Primary Care Visit – FAIL – it was prescribed but not attended
  • Red Flags: FAIL – patient should have recognized increased congestion as a red flag

The doctor who inspired the article, had numerous other valuable observations, as follows:

  • Doctors prepare daily plans for all admitted patients.  The plans are often developed by a resident, reviewed with a more senior resident and approved by the attending physician.  For discharge, however, no such rigorous plan is put in place.
  • Often discharges are rushed because either the patient feels better and wants to leave or a bed becomes available in a post acute facility and they rush to take advantage of it.
  • In the hospital, vital signs are constantly monitored, whereas at home they are not
  • Sometimes a patient’s urgency to be discharged, or the hospital’s desire to clear the bed result in a premature discharge
  • There’s a practice whereby hospitals should notify the patient’s primary care physician about the patient’s hospitalization, but often it’s not done.
  • 30 percent of patients are discharged with orders for more tests, but a third of these never happen
  • As many as 40% of patients are discharged with open orders for required lab tests but often the physicians are unaware of these and they are inadvertently cancelled when the patient is discharged
  • There are numerous effective techniques for avoiding preventable readmissions, including the Coleman method, automated follow-up phone calls, pharmacist led interventions and more.

Why Does Preventing Readmissions Matter?

CMS is driving a major shift in the way that home care agencies are compensated.  They are aggressively moving away from the fee-for-service episodes of care and moving instead to bundled payments, value-based payments, and more.  All of these new payment methodologies favor post acute care with a strong track record for preventing avoidable readmissions.

How Home Care Wins In The Bundled Payment Era 

In a recent webinar, Ken Accardi explained how to be a successful post acute care provider in the era of bundled payments.  Hospitals will look for organizations with the best outcomes at the lowest cost.  Successful organizations think differently about how to organize and staff their offerings using a combination of professional care, paraprofessional care and technology. The winners will be highly profitable and win a disproportional share of referrals.

Ankota was co-founded by Ken Accardi and provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care. 

This article was posted by Ken Accardi and first appeared as “Preventable Readmissions – A Doctor’s View” on Apr 3, 2016 via the Ankota blog.

Was The Hospital Readmissions Reduction Program Successful?

As you likely know, one of the provisions in the Affordable Care Act (ACA) was the Hospital Readmissions Reduction readmissions reductionProgram.  This program applied financial penalties to hospitals whose readmission rates exceeded national average for benchmark hospitals.  The result is that from 2007 to 2015, readmission rates for the condition rates targeted by the program declined from 21.5% to 17.8%. Skeptics argued that the reduction came from a policy change in hospitals whereby instead of readmitting patients with targeted conditions, they would keep them in an observation center instead.  The New England Journal of Medicine (NEJM) studied this and concluded otherwise.

The New England Journal of Medicine Validates Readmissions Reduction

After studying data from 3,387 hospitals, NEJM validated that the results are valid and that readmission rates did in fact drop.  They observed that the decline was faster just after the passage of the act, but that the rate has continued to decline. Below is a graph, courtesy of NEJM, showing the results for both targeted and non-targeted conditions.


Was The Hospital Readmissions Reduction Program Successful?

If I was asked whether the readmissions reduction program was successful, I’d answer “not yet.”  As you know, we’re pretty optimistic here at the Ankota blog and we see home care playing a huge and critical role in health care reform.  So a “not yet” rating from us is pretty harsh.  Here’s why we give that rating:

  1. Most importantly, the readmissions reduction programs that we’ve observed and reported on have generally seen a 50% or better improvement. Thus the 12% drop so far is not all that impressive
  2. The big scary penalty that rose year over year between 2013 and 2015 didn’t amount to much.  In the end, the penalty turned out to average $250, whereas the reimbursement for the readmission average north of $6,000
  3. Many hospitals have not taken it seriously (70% have accepted penalties rather than solving the problem), nor has home health care who have seen the rates they can charge for readmission avoidance as not attractive compared to their standard OASIS rates.

Ultimately, Readmissions Reduction Is Still Critical, Here’s Why

The Committee for Medicare and Medicaid Services (CMS) is changing their tactics and making it so that readmissions need to be reduced more significantly. One of the primary ways is via bundled payments.  We’ve reported on bundled payments here and here, but in a nutshell they give the hospital a fixed fee for the procedure and recovery, so if a readmission occurs the hospital has to pay for it.

The Most Affordable Readmission Avoidance Solution

Ankota offers a technology solution called Foresight Care that enables significant reductions in readmission rates and costs 50 cents per day.  In a nutshell, Foresight Care is an automated service that calls patients, asks them questions based on their case mix that would indicate if they’re trending towards a readmission and alerts you.  You can sell this service to hospitals with a nice margin and still make it very attractive to them.

Ankota was co-founded by Ken Accardi and provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care. 

This article was posted by Ken Accardi and first appeared as “Was the Hospital Readmissions Reduction Program Successful? NEJM says Yes” on March 9, 2016 via the Ankota blog.

Are You Aware Of & Prepared For CMS Home Health Rulings, Proposals?

Home health organizations take note! Two new CMS home health rulings and one proposal have recently been issued by The Centers for Medicare & Medicaid Services (CMS). Many home health organizations will be directly impacted by these decisions. And those not immediately affected should keep their ears perked for any whisper of change coming out of CMS. You never know which new rule will end up “rocking your homecare boat.”

CMS Home Health

Recent CMS Home Health Rulings/Proposal

The three new CMS home health developments recently released are as follows:

1. Coordinated Post-Acute Knee/Hip Replacement Care to Be Incentivized

In November of 2015, CMS made final a long-proposed program meant to incentivize post-acute care for those patients getting knee or hip replacements. Implementation begins in 67 hospitals and wraps all related care within 90 days of hospital discharge as “part of the same episode.” In effect, this encourages coordinated efforts between hospitals and home health organizations. There are limits, however. Cost of care cannot exceed a predetermined threshold without incurring “reconciliation fees” to the hospital. Still, within the threshold, everything is covered.

2. Patient Survey Star Ratings Will Affect Home Health Providers

CMS began to implement their new home health Patient Survey Star Rating system in January of 2016. This program is aimed at giving patients a voice in judging home health agencies’ overall performance. What’s more, the program ties your agency’s star rating to financial incentives from Medicare. While presently only active in 9 states, this Home Health Value program is likely to expand, so all home health providers should begin looking for ways to improve client care and “score” higher star ratings.

Some home health groups have expressed concern that the star ratings, which will first be published in July, will be misinterpreted by those viewing them online. The ratings are on a bell curve meaning a 3 rating equals the current industry average “at the moment” but does not indicate an pre-set standard of care. Thus, healthcare providers will need to educate potential clients on the meaning of the star ratings.

3. Proposed CMS Home Health Pre-authorization Requirement

In February of 2016, CMS announced a new proposal that would require home health agencies to get pre-authorization before they can see patients. If finalized, the Medicare Probable Fraud Measurement Pilot Program would be launched in five of the most fraud-prone states: Massachusetts, Michigan, Illinois, Florida, and Texas. These states had higher than 50% “improper payment” rates in 2014, This catch-all term includes more than just fraud and places these states in a negative statistical category.

The general idea of this proposal is to more minutely scrutinize claims before paying them when such claims are deemed, for various reasons, to have a high risk of fraud. The National Association for Home Care & Hospice (NAHC) believes if finalized, this proposal will needlessly increase administrative costs and unfairly harm many home health providers. Similar programs already exist, such as the pre-authorization required before CMS will pay out on power mobility devices (power scooters or wheelchairs).

Kenyon Consultants And CMS Home Health Changes

These three most recent, and any future, rulings or proposals from CMS can potentially affect your home health organization. It is crucial to be both aware of and prepared for their implementation. Kenyon Homecare Consulting, provides expert, knowledgeable consultants available to help you keep up to date on all the latest CMS home health changes. Contact us today to discuss how we can help!

What’s A Bundled Payment? Will It Influence Home Care?

“If I were in charge of a bundled payment, I’d look for the lowest cost partner with the best chance of avoiding a readmission…”

I was reading a website’s FAQ recently and thought to myself how helpful FAQ’s can be at getting to the core of my questions and answers regarding a complicated topic.

With that in mind, here is something similar to an FAQ, a series of questions and some suggested answers regarding the topic of bundled payments and how they may play a part in home care.

bundled payment

What’s a Bundled Payment?

Great Question!  Bundled payments are a new way that certain procedures will be reimbursed.  Ultimately, CMS (the Medicare and Medicaid people) will make one fixed-price payment for a procedure (like a knee replacement) that covers the whole procedure and associated recovery.  This differs from the historical fee-for-service model of reimbursement where, for example, the knee surgery would have one payment, the post-acute recovery in a nursing home or with home care would have a second payment, and a readmission would have a third payment.  (Read more about bundled payments).

Who Will Divvy Up the Bundled Payment?

Following up on the knee replacement example, the surgeon and the hospital are the big players and they’ll get the bundled payment and decide how to divvy it up.

Won’t They Want to Keep Most of the Money for Themselves?

Of course they will!

Today My Home Health Agency Gets Up to $3,000 for nursing and PT. Is That at Risk?

Yes, very much so!

Who Will They choose?

Another great question!  I opened this blog by saying that if I were in charge of bundled payments, I’d look for the lowest cost partner with the best chance of avoiding a readmission…

This is just logical…  I definitely won’t want a readmission because it will come out of my pocket, so I’ll do everything in my power to avoid a readmission at the lowest price possible.

Imagine that you are personally paying out of pocket for the post-acute care for people with knee replacements.  What would you do?  Let’s say that you had a very healthy young patient not on blood thinners who took personal responsibility for their recovery?  Perhaps you’d send them home with no post-acute care except for a YouTube video of exercises that they should do and you’d have an automated phone call check in with them every 5 days to make sure nothing’s going wrong.  Then you’d have them visit your NP a couple of times to make sure they’re on track.

Hmmm…  My Home Health Agency Might be Cut Out of the Loop!  Any advice?

Yes – I’m glad you asked…  What if you set targets for the number of visits per episode (like 6 instead of 15), personally approved any episodes with more visits and gave the nurse in charge a bonus if they do it with fewer visits?  Then, since you’re doing fewer visits, what if you added automated phone calls (available for a quarter per call) to check in on them and let the nurse case manager if they’re off track.  Then I’d keep detailed records of my costs, visits and success rate and I’d use this to market my services.

How Can I Learn More?

A few resources that can help you are as follows:

Ankota was co-founded by Ken Accardi and provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota’s primary focus is on Care Transitions for Readmission avoidance and on management of Private Duty non-medical home care. 

This article first appeared as “What’s a Bundled Payment and How Does It Effect My Home Care Agency?” on the Jan. 22, 2016 Ankota blog.