The New – and Improved – Role of Post-Acute Care and Aging Services Providers under the Affordable Care Act

Guest Blog By: Carrie Nixon, Esq., CEO -- Times are changing for those who care for our aging population --- and that’s not necessarily a bad thing. The dramatic shift from a fee-for-service model to value-based reimbursement, brought about by passage of the Affordable Care Act, creates new leverage for post-acute, long-term care, and aging services providers that most in the field never would have anticipated.

The source of this newfound leverage lies in the underpinnings of the ACA, the so-called “Triple Aim” -- better quality care for individual patients, improved health of patient populations, and reductions in the overall cost of care. Providers of post-acute and long-term care can play an important role in achieving the Triple Aim because they are well situated to provide high quality care for patients in lower cost settings. Those providers who are able to demonstrate their ability to move the needle on costs and quality are valuable partners within the healthcare ecosystem, which now includes acute care hospitals intent on reducing avoidable re-admissions, along with providers and payers participating in value-based reimbursement models such as Accountable Care Organizations (“ACOs”).

When I spoke to an audience of long-term care executives back in 2012 about their role in this new era of healthcare reform, I was met mostly with blank stares. Post-acute care providers are used to being low-man-on-the-totem-pole in the healthcare industry, and here was someone telling them that this wasn’t going to be the case much longer! Their reaction wasn’t surprising, since the rest of the industry had not yet fully recognized how the landscape was changing.

Today, the story is different. You can’t attend one of the innumerable conferences on ACOs and other value-based payment models without finding a session highlighting the importance of post-acute care. The Center for Medicare and Medicaid Services is getting in the game as well; the new Final Rule on Medicare ACOs waives the “Three-Day Rule” (requiring admission in an acute care setting for three days prior to admitting to a Skilled Nursing Facility) for some ACOs. CMS is also promoting Bundled Payment Initiatives and imposing steep penalties on hospitals with unnecessary re-admissions. ACOs, health systems, and payers want – and need – to partner with post-acute providers who can help them achieve the Triple Aim. (Note: This is where that newfound leverage comes in!)

Not all players in the post-acute/long-term care space will fare equally well in this new regime, however. Only those who can demonstrate their value by pointing to data showing improved outcomes and high quality care stand to benefit. Those who say they provide great care but can’t support their claim with the data to back it up will lose their leverage with hospitals, ACOs, and payers, eventually finding themselves left behind.

So, what can post-acute care and aging services providers do to position themselves for success in the new era of healthcare? A few things to consider:

  1. Data, data, data! Without it, you can’t create a good business case for yourself as a valuable partner in the healthcare ecosystem. Identify the data you need to collect, analyze, and (in some cases) report, then get the right systems in place for doing so. Be sure you’ve done your due diligence on potential vendors to avoid spending money on a system that doesn’t have the appropriate compliance mechanisms in place or just isn’t the right fit for your needs.

  2. Join or create a Post-Acute Care Network. In doing so, consider the whole spectrum of services for the aging. Identify good partners in home care, assisted living, skilled nursing, and hospice care. Choose your partners wisely, and formalize network relationships with agreements that set forth clear expectations. Consider including those providers of aging services that are not directly tied to caregiving; for example, meals-on-wheels and transportation providers. Then, be prepared to demonstrate that your network is THE best partners for health systems/ACOs/payers in the area.

  3. Participate in a value-based delivery model. Once you are comfortable with your ability to deliver and demonstrate value, consider becoming a Medicare or commercial ACO participant. Again, it’s important to choose your partners wisely. Your ability to achieve cost savings and earn bonuses will depend in part on the other provider participants in the value-based arrangement. If one participant (e.g., a hospital) isn’t pulling its weight on quality and costs, the rest of the group will be negatively impacted. But with all participants rowing in the same direction, you are more likely to see savings bonuses added to your own bottom line.

Our healthcare system is in the midst of an enormous sea change, and the tides are favorable for those aging services providers who embrace the shift to value-based delivery models.