Strategically Positioning Skilled Nursing Facilities for Success Under the Affordable Care Act
Beginning October 1, 2014, the Centers for Medicare and Medicaid Services (CMS) began to penalize acute care hospitals for readmitting patients diagnosed with Chronic Obstructive Pulmonary Disease (COPD) within 30 days of discharge. This was the result of the national Hospital Readmissions Reduction Program, established by the Affordable Care Act of 2010, which reduces payments to hospitals for excessive readmissions. The progressive percent reduction penalties for fiscal year (FY) 2013-2015 are provided below:
- FY 2013 – 1% for all CMS reimbursements to a particular hospital with excess readmits
- FY 2014 – 2% “
- FY 2015 – 3% “
Any readmission is penalized if it occurs within 30 days, regardless of whether the patient was readmitted with a different diagnosis than the original, or if the patient readmits to a different hospital; however, the hospital reporting the initial diagnosis is still the one liable for the reimbursement penalty.
CMS penalty fees for FY 2013-2014 applied to the diagnoses of acute myocardial infarction, heart failure, and pneumonia. In 2013 alone, penalties totaled $2.2 million. In FY 2015, CMS added three more conditions to the readmission penalty list: arthroplasties of the total hip and total knee and COPD. These diagnoses will only compound the reductions in reimbursement hospitals will receive if they do not manage these conditions well moving forward.
COPD is one of the most difficult diseases to manage within this list of diagnoses. In 2012 over 1 million patients were admitted to acute care hospitals for an exacerbation of COPD; in general, readmissions occur within 20% to 23% of cases. The direct costs of COPD in the US has been estimated at $32 billion in 2011; worldwide COPD is estimated to become the third leading cause of death by 2020.
Since COPD is a leading admitting diagnosis to acute care facilities, this new penalty has the potential to severely impact the financial health of already-struggling hospitals. It would be fair to conclude that hospitals will eventually only discharge their COPD and pneumonia patients to those post-acute care facilities that have excellent track records of respiratory disease management. Thus, long-term care and skilled nursing facilities should implement respiratory therapist-driven care paths to successfully manage patients suffering from COPD and pneumonia.
There are several clear advantages to using care paths according to the American College of Chest Physicians:
- Therapy can be adjusted more frequently in response to changes in the patient’s condition;
- Physicians are consulted for major clinical changes but not minor ones so nuisance calls can be avoided;
- Consistency of treatment is maintained and non-pulmonary physicians have the ability to use up-to-date methods of therapy by simply requesting that a protocol be instituted; and
- Respiratory therapists (RTs) are actively involved in achieving the goal of good patient outcomes instead of performing rigid tasks.
Respiratory-driven care paths are designed to maintain consistency with the medical staff’s respiratory care plans; ensure that therapy is timely, appropriate, and driven by the patient’s most recent condition; ensure cost-effective strategies are implemented when appropriate; and most importantly, ensure that providers are notified of any clinical conditions that are outside the scope of the protocol.
Respiratory therapy care paths should be the responsibility of licensed clinicians who have achieved strict levels of advanced education, training, and experience in respiratory assessment and treatment modalities. RTs are licensed clinical professionals who possess these skills in abundance. RTs are obligated to complete either a two-year associate’s degree or a four-year baccalaureate degree in respiratory therapy assessment and technology. Upon graduation, RTs are qualified to undergo three national examinations, which upon passing leads to the Registered Respiratory Therapist (RRT) credential. The RRT credential demonstrates that the holding RT has the relevant critical thinking skills necessary to assess and make the correct decisions when treating patients with respiratory-related conditions.
By having RTs coordinate these care paths, long-term care and skilled nursing facilities will be best situated in maintaining lower readmission hospital rates versus national averages. The U.S average for 30 day re-hospitalization rates are 17.3% for pneumonia and 20.7% for COPD (medicare.gov/hospitalcompare/data/30daymeasure.html). Kingston Healthcare Company based in Toledo, Ohio has three skilled and long-term nursing facilities in Ohio and Indiana that employee RTs. In one such facility where they have RTs in-house 7 days/week, 12-16 hours/day, Kingston reported the following combined RTH rates for COPD & pneumonia in FY 2016:
- 1st Quarter: 13.3%
- 2nd Quarter:3.7%
- 3rd Quarter: 7.69%
- 4th Quarter: 12.5%
The approximate costs associated with employing RCPs in the skilled environment in the Midwest are as follows:
- Human resource costs: $124,300 annually for 2 full-time respiratory therapists and $279,054 for 4.49 full-time therapists
- Supply costs: $42,000 annually per facility
- Capitol one-time, start-up cost: $26,000
Regardless of initial, start-up expenses, the benefits outweigh the associated costs over the long-run. It is in the best interest of patients who suffer from acute and chronic lung disease that they first seek facilities that employee RTs to assess and treat respiratory-related conditions, and that CMS adopt a reimbursement model that will allow skilled nursing facilities to incorporate RTs and complex respiratory assessment and therapy into their resident care models.