Constrained Innovation in Managing Care for High-Risk Seniors in Medicare + Choice Risk Plans. 1. Skilled Nursing Facility and Rehabilitation Hospital Services


All the case study organizations made extensive use of skilled nursing facilities. They used them to substitute for hospital-based care for those patients who no longer required intensive services. In fact, three of the four organizations admitted patients directly to skilled nursing facilities, in contrast to the standard Medicare program, which requires a minimum three-day prior hospitalization as a condition for receiving skilled nursing facility benefits. Only Aspen did not waive this requirement, which is stipulated in their contract with the Medica health plan.19 Conditions that lend themselves to a direct admission to a skilled nursing facility include new stroke, wound infection, pneumonia, falls, urinary tract infection, dehydration, nutritional deficiencies, and need for intravenous antibiotics.

To ensure adequate treatment of people admitted to skilled nursing facilities, the organizations imposed special requirements on the facilities in their networks. These requirements go beyond those imposed by Medicare. For example, Keystone East requires that the facility be accredited as a subacute unit by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), be able to administer antibiotics intravenously, and have heart-monitoring capacity. For all the nursing homes with which Kaiser Colorado contracts, the health plan examines performance on state surveys and requires that the home be accredited by JCAHO as a subacute unit or that it demonstrate that it meets the requirements. It also examines enrollee satisfaction surveys in deciding whether to renew a contract. Aspen requires that skilled-care facilities in its network be able to admit patients 24 hours a day (including weekends) and that they offer rehabilitation services at least six days a week. Aspen also imposes staffing requirements: skilled nursing facilities must have their clinical functions provided by permanent staff rather than outsourced, and they must be staffed primarily with registered nurses rather than licensed practical nurses.

Aspen and Kaiser Colorado went beyond these special requirements to limit their network of skilled nursing facilities. Aspen used only four skilled facilities, while Kaiser Colorado used just five. In contrast, HMO Oregon and Keystone East contracted with any facility that met their standards. At Kaiser Colorado, we were told that cost was not a significant factor in selecting its limited network of facilities. Instead, Kaiser Colorado looked for nursing facilities that wanted to establish a long-term partnership in which Kaiser Colorado would participate in the facility’s continuous quality improvement process. Aspen and Kaiser Colorado also felt that limiting their network of facilities gave them more leverage with the facilities with regard to the shaping of care. It also enabled these two organizations to use a small dedicated medical staff to care for patients in nursing facilities. For example, Kaiser Colorado used only five physicians (4.5 FTEs) and a nurse practitioner to monitor care for its members in skilled-care facilities, custodial nursing homes, and rehabilitation hospitals. Each of these Kaiser Colorado physicians typically follows 35 skilled-level and 150 custodial- level patients. The physician, physical therapist, nurse, and social worker hold weekly meetings to review the status of patients. Some 35 patients might be reviewed during an hour-and-a-half meeting.

For Aspen and Kaiser Colorado, the concentration of subacute care in a few facilities and reliance on a small number of physicians dedicated to nursing home patients permits a high level of patient care (including daily rounds) that would not be reimbursed conventionally through traditional fee-for-service Medicare Part B payments. The daily visits also enable physicians to monitor patients who receive long-term custodial care at the facilities that provide the skilled nursing care. Finally, the frequent contact between facilities and physicians fosters a working relationship that can enhance flexibility in care delivery. For example, the facility directors with whom we talked noted that their staff have considerable discretion regarding length of stay. They can use this flexibility to provide a slightly extended stay if that will facilitate teaching a family how to help care for a family member who is being discharged. Aspen physicians promote the use of nursing homes as a substitute for some hospital care by talking to patients before their hospital stay and explaining that a nursing home stay will be part of their overall plan of treatment.

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