How Skilled Nursing Facilities Can Navigate New Value-Based Purchasing Rules

Dr. Ahzam Afzal, Co-Founder and CEO, Puzzle Healthcare

Post-acute care facilities for years have been preparing for the impact that value-based purchasing (VBP) programs would have.

The Affordable Care Act of 2010 (ACA) and the Medicare Access and CHIP Reauthorization Act of 2015 put providers on notice that quality of care measures, like reducing hospital readmissions and improving patient outcomes, would take precedence over fee-for-service models.

In 2024, the stakes have gotten much higher for post-acute care facilities. Understanding these changes and potential measures to reduce readmissions is crucial for post-acute care providers.

The ACA’s Hospital Readmissions Reduction Program penalizes hospitals with higher-than-expected readmission rates for certain conditions. It also encourages hospitals to enhance communication, care coordination, and patient engagement in discharge plans to prevent avoidable readmissions.

Hospitals that have a higher rate of Medicare patients readmitted within 30 days of discharge than the government deems appropriate will have their Medicare payments reduced. 

Starting in fiscal year 2024, the VBP model extended to skilled nursing facilities. 

The potential penalties can have a severe impact on an SNF’s financial health, underscoring the importance of SNFs in implementing effective readmission strategies.

Understanding the impact of readmissions

When looking at the scale of challenges of readmissions in the overall healthcare system, it’s understandable why the potential VBP-associated penalties are so severe.

More than $52.4 billion is spent annually to care for patients who were readmitted to a hospital within 30 days. The diagnoses with the highest number of 30-day hospital readmissions include septicemia, heart failure, diabetes complications, and chronic obstructive pulmonary disease (COPD). Many of these readmissions though could be avoided through more effective preventative care and closer monitoring of at-risk patients in post-acute care settings.

Additionally, patients from more socially vulnerable backgrounds and lower economic status are readmitted to hospitals at higher rates. When significant numbers of patients are readmitted to the hospital, it contributes to backlogs of patients waiting for a bed in an SNF. Solving the challenges around readmissions will significantly reduce the stresses on the overall system.

Understanding the root causes of readmissions

The best way to mitigate high rates of readmission is to first understand the root causes of why patients are readmitted. Every SNF faces unique challenges, but here are common reasons:

Complexities of care plans: Patients who are chronically ill with COPD, heart disease or other chronic conditions have the most complex discharge care plans. A patient with COPD, for example, may not only need COPD-specific treatments such as medication, bronchodilators, and supplemental oxygen, but also may need health coaching and specific nutritional programs. Keeping the patient healthy requires continuous communication, engagement, and active remote patient monitoring (RPM).SNF understaffing: SNFs are grappling with ongoing staffing shortages and turnover which have persisted post-COVID. With fewer staff, high-acuity patients are more at-risk of falls, developing bed sores, and of becoming more ill because medications are missed or staff aren’t able to provide effective care interventions to reduce setbacks.Lack of care coordination and post-discharge tracking: Once a patient is discharged from a hospital to a SNF, there may only be a single social worker responsible for following up with patients post-SNF discharge to ensure care needs are being met and medication plans are being adhered to. There is often no centralized communication system between discharged patients back to hospitals and SNFs which leads to gaps in care.

Effective SNF readmission prevention strategies

More effectively treating at-risk patients and preventing them from being readmitted requires that SNFs take a more holistic approach to care, tailored to each patient’s specific health needs. Here are some recommendations:

Better understand each patient’s risk factors and barriers to therapy. SNFs need to take multiple factors into consideration when treating each patient. Those patients who are economically disadvantaged or are part of an ethnic minority may have lower health literacy and are less likely to adhere to medication or preventative care plans. Assigning risk factors to patients can help SNFs better allocate clinical staff in a way that addresses patients with more intensive care needs.Implement on-site physiatry services. Physiatrists can play a vital role in elevating the standard of care in post-acute settings and preemptively addressing risks to prevent a patient’s condition from worsening. Physiatrists specialize in designing comprehensive plans that help patients manage pain, which are one of the leading causes of readmissions. They can implement effective techniques such as trigger point injections to manage pain at the source, and individualized therapy protocols to help reduce patient setbacks. Physiatrists can also identify social determinants that may lead to a patient being readmitted.Increase patient and family engagement. SNF staff should regularly educate families and patients about their conditions, the importance of adhering to medication and treatments, and ways to self-manage their care as much as possible. Keeping patients and families involved reduces the risk of complications and readmissions.SNFs should ensure they can conduct regular, detailed assessments tailored to each patient’s specific health conditions to monitor their recovery process at home, coupled with remote patient monitoring technologies to track vital signs in real-time. Partnering with post-discharge follow-up groups or investing in services or tech solutions that address this need may be the best option for SNFs. This approach allows for proactive interventions based on observed health trends and patient-reported symptoms, significantly reducing the risk of readmissions by addressing potential health exacerbations promptly.

For now, 30-day all-cause readmissions is the primary performance measure in which SNFs are being evaluated under the VBP program and which Medicare payments will be based. But other quality of care metrics, such as healthcare-acquired infection hospitalizations, falls and successful discharge to the community, will soon be a factor in the VBP program. Those SNFs that make holistic changes to the way they assess patients’ risk and deliver care will be best positioned to get their readmission rates down, improve patients’ health outcomes, and succeed in this new era of value-based purchasing.

About Dr. Afzal

Dr. Afzal is a visionary in healthcare innovation, dedicating more than a decade to advancing value-based care models. As the co-founder and CEO of Puzzle Healthcare, he leads a nationally recognized company that specializes in post-acute care coordination and reducing hospital readmissions. Under his leadership, Puzzle Healthcare has garnered praise from several of the nation’s top healthcare systems and ACOs for its exceptional patient outcomes, improved care delivery, and effective reduction in readmission rates.