Learning to operate under the value-based payment model

For nursing homes, learning to operate under a new payment model is challenging after existing in the fee-for-service sphere for so long. But the introduction of new value-based programs requires nursing homes to adapt and embrace payment changes.

Understanding the basics of the value-based model is the first step to success. Here are three key points nursing homes should recognize about value-based payments:

  1. The value model rewards performance. That could mean delivering on quality measures or making improvements over time. Either way, providers must meet certain standards for care and cost to be rewarded.
  2. The value-based care model is data-centered. Measuring and reporting performance outcomes is part of the assessment process that determines whether or not nursing homes earn incentives. This means management needs to be focused on measurement and data.
  3. Collaboration is an important success factor under value. Since patient health outcomes are part of what drives reimbursement, nursing homes need to collaborate with other providers—like acute care, primary care physicians, home health and even pharmacies—to understand how to achieve the best outcomes for the individuals under their care. Value-based care needs to be coordinated care.

Learn how to adapt

Quality of care, patient outcomes, and efficiency are the primary factors that will determine reimbursement from this point forward. To prepare for this, nursing homes need to begin adopting new processes, training staff on new procedures and implementing other adjustments. These things take time, so rather than wait, it makes sense to get started now and be flexible as new guidelines are developed. The following suggestions point to areas where skilled nursing homes should focus initially.

Push for greater use of electronic medical records

EMRs can improve outcomes for residents and help long-term care facilities meet value-based care goals. But walk into a nursing home and you are more likely to find paper charts than electronic medical records. Nursing homes tend to be low-tech environments because they lack the funding to put EMR technology in place. However, facilities that can prioritize EMR adoption will have an advantage.

A pressing topic surrounding EMRs right now is interoperability. Healthcare providers know that they need to communicate with external providers in their community and coordinate patient care. But right now there are several barriers that make data sharing difficult. Luckily, interoperability breakthroughs are on the way, and new requirements will soon force EMR systems to be interoperable. This is another reason why those nursing homes that have not adopted EMRs (or are not using their system to capacity) need to work now for greater use of electronic medical records.

Be entrepreneurial

Another way nursing homes can adapt to shifts in payments is to become more entrepreneurial. If you look at the healthcare organizations that have best aligned themselves with the value model, you’ll see that they have a few things in common. For starters, their leaders have adopted entrepreneurial management structures that focus on maximizing innovation. This isn’t surprising—it takes an innovative environment to achieve change and progress. 

Nursing home leaders need to push their organizations to embrace new processes and technology, make quality improvements, and work more cooperatively. They can do this by encouraging innovative thinking, flexibility and creative problem solving. This is particularly important when it comes to things like hospital readmissions and other areas the Centers for Medicare & Medicaid Services (CMS) has targeted for Medicare skilled nursing facility payment rates.

Strengthen ties to external providers

Nursing home residents often have complex medical histories. Overall, people that enter nursing homes today are in poorer health than those admitted in the past. Managing the health of individuals has become more challenging, so there is more reason to call on outside providers and work together as a team to achieve the best possible health outcomes. Therefore, nursing homes should make it a mission to build strong relationships with providers across the care continuum.

Nursing homes that want to improve care coordination with other providers can:

  • Bring external providers into care planning meetings
  • Work with hospitals to develop solid working relationships
  • Reach out to pharmacies to get better information and insight regarding medication
  • Work closely with primary care doctors to ensure patients receive necessary routine and follow-up services

Embrace change

Here is a final point for nursing homes (especially management): the standards that measure the success of your organization today—financial or otherwise—will not be the same in two years. Change is happening swiftly.

The Centers for Medicare and Medicaid Services (CMS) plans to roll out the Skilled Nursing Facility Value-Based Purchasing Program (SNFVBP) in 2019. CMS has said that the SNFVBP will pay participating nursing homes for services based on the quality of care, not just quantity of the services they provide in a given performance period.

There is time to prepare before Medicare’s SNFVBP program is launched. Nursing homes need to recognize that change is inevitable, and they need to begin making adjustments now. Doing so will help organizations operate more successfully as value-based payment programs advance in the future.

Richard A. Royer, MBA, has served as the chief executive officer of Primaris since 2001. He has extensive administrative healthcare experience and is actively involved in several statewide healthcare initiatives. In 2006 he was appointed by the Missouri governor to the Missouri Healthcare Information Technology Task Force and chaired the resources workgroup. He also serves on the board of directors as treasurer for the Excellence in Missouri Foundation. In his over 35 years of medical business experience he has held positions as chief executive officer at Cuyahoga Falls, Ohio, General Hospital; executive director of Columbia Regional Hospital in Missouri; and founder and president of Avalon Enterprises, a medical financial consulting firm. He can be reached at 573-817-8300.


Topics: Articles , Executive Leadership , Medicare/Medicaid , Technology & IT