Post-Acute Partners
Companies expanding their services through ventures with ACOs
By Jessica Zigmond, Modern Healthcare, August 25, 2012
Whether it is through contracted services, formal and informational discussions, or joint operating committees, post-acute providers are finding different ways to offer their services to the quickly expanding roster of accountable care organizations.
And while the transition toward integrated care—and a new payment model that rewards for it—has everyone re-thinking how they deliver care, many post-acute providers say their work with ACOs is a natural progression for their businesses.
“There is an increasing recognition that today about 35% to 40% of Medicare beneficiaries who are leaving a hospital need some form of post-acute care,” says William Altman, executive vice president of strategy and integrated care at Louisville, Ky.-based Kindred Healthcare, a large operator of post-acute services, including long-term care, skilled nursing, assisted living, rehabilitation, home care and hospice
“Today, those patients use post-acute care without a great deal of coordination. So those patients are using multiple sites of post-acute care,” he says, adding that this often leads to problems of readmission. “We have found in the last year or so there is a high level of interest from hospitals, health systems and managed-care payers in working with post-acute providers on how to better manage that post-acute episode.”
Kathleen Griffin, national director of post-acute and senior services at consulting firm Health Dimensions Group, says the most important gap for an ACO to manage cost, quality and outcomes on a post-acute basis is at skilled-nursing facilities, the venue where the largest volume of post-acute patients stay. As she explains, the majority of health systems interested in an ACO are forming continuing-care networks.
“I think that the type of relationship is less important than a clinically integrated partnership,” Griffin says. “How you structure the relationship—affiliation agreement, as a full-fledged partner, or contracted arrangement—the most important thing is that you've done the work on both sides to create a seamless, clinically integrated delivery system for the patients.”
There is nothing that precludes a post-acute company from acting as a formal nonhospital partner in an ACO, Griffin says. But often those providers do not have the capabilities to bear the risks that ACOs assume. Meanwhile, the relationships they're building with the ACO partners are mutually beneficial.
“Certainly the ACO—or any hospital at risk for penalties for readmissions or value-based purchasing penalties—benefits by having a smaller group of (skilled-nursing facilities) where they can embed their primary physicians and have ongoing care management for these attributable lives,” Griffin says. What happens at the nursing home, the LTAC, inpatient rehab facility or home health agency—“for the majority of these providers, Medicare is still their best payer,” she says.
At Kindred, the company is in discussions with about 20 ACOs throughout the country, some of which are Pioneer ACOs, Altman says. The CMS has announced 32 Pioneer ACOs, which are models for healthcare organizations that have experience in coordinating care for patients across different settings. The company also has 20 “cluster” markets nationwide where it is building capacity to provide the full range of care, from LTACs and inpatient rehabilitation facilities to home health and hospice services. Last week, Kindred expanded its reach in the home health market when it announced a deal to buy IntegraCare Holdings, a privately owned provider of home health, hospice and community services that operates 47 locations throughout Texas, for about $71 million.
Altman says Kindred will be of higher value to ACOs if the company provides fully integrated services for patients.
That requires three components: providing a full continuum of post-acute services to providers in their areas, effective transition-of-care management services and payment incentives. While some ACOs have their own care-management systems, others look to post-acute providers to offer it. Altman says involving physicians in the care-management process and using information technology to link patient records with the other partners are critical pieces of Kindred's care-transition strategy.
“In the future world, the payment incentives have to be aligned,” Altman says. “Today, Kindred is not a formal part of an ACO in the sense that we are a member of the ACO and we will share in the gain and the risk. In the future, I envision we will be a part of those.”
To move in that direction, Kindred established joint operating committees between hospitals and health systems about three years ago. They are designed to foster better integration between the health system and post-acute providers.
“I think they could absolutely lead to ACOs,” Altman says.
Meanwhile, CareOne, a Fort Lee, N.J.-based post-acute provider with 30 senior-care facilities that offers long-term care, rehabilitative, sub-acute and assisted living services, is applying a similar approach in its collaboration with four Medicare-approved ACOs in New Jersey: Atlantic ACO, a joint venture between Atlantic Health System and Valley Health System; the Hackensack Physician-Hospital Alliance ACO; Optimus Healthcare Partners; and, as of last month, Barnabas Health-ACO North.
“We're a participant in their network,” says Tim Hodges, chief strategy officer at CareOne. “The ACOs are seeking out post-acute providers that have the resources—for example, the IT resources to share data, the clinical resources for clinical program development—that support the overall mission of accountable care.”
While CareOne bears no financial risk-sharing in the arrangement with these ACOs, the provider sees its role as supporting the ACOs in their financial and quality goals. The company relies on its Specialized Management of Avoidable Readmissions and Transitions, or SMART, platform to address the needs of the ACOs, and it also uses the program throughout all of its facilities for quality-improvement purposes.
CareOne developed the program in 2011 and launched it this year. Hodges describes SMART as the organization's operating philosophy or strategy that helps CareOne determine what services it can provide. For ACOs, that usually means services related to care coordination, transitions of care and systems to reduce 30-day admissions.
CareOne also hosts a monthly joint quality council with its ACO partners and other health systems that includes participation of administrators and clinicians to ensure all clinical and program initiatives are making progress.
Sharing in the savings
Post-acute provider Hospice of Michigan has entered the accountable care movement by contracting with the Detroit Medical Center ACO, says Dottie Deremo, president and CEO of the not-for-profit hospice provider.
In April, Hospice of Michigan signed a three-year contract with the Detroit Medical Center ACO to use the hospice provider's product known as @HOMe support, an advanced illness-management service the company developed 10 years ago. As part of the agreement, Hospice of Michigan will provide at-home care services for nearly 200 patients and hopes to add another 200 patients by year's end. The @HOMe resource includes 24/7 telesupport services; home services; emergency room and hospital transition coaches; and outcomes analytics and predictive modeling.
“Our job is to hit quality markers and receive a portion of that shared savings,” Deremo says, adding that she could not provide specific details about the savings because Hospice of Michigan is in negotiations with two more Michigan ACOs and five ACOs outside the state.
Meanwhile, Baptist Health South Florida and oncology practice Advanced Medical Specialties announced in May that the two Miami-based companies would work with Florida Blue, a Blue Cross and Blue Shield company based in Jacksonville, to establish an ACO especially for cancer treatment. And renal-care company DaVita has also shown a strong interest in accountable care. The Denver-based company has urged the CMS to allow these arrangements specifically for renal-care patients.
“Our strategy proceeds from the assumption that the healthcare system is going to be much more value-based in terms of payment as opposed to volume-based,” Kindred's Altman says. “There's going to be continued pressure on all providers. So we think a critical part of value is meeting a patient's needs and participating in care management. We think if we position ourselves to be a continuum-of-care provider, we will be in a very good position to succeed.”
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