Looking for a way out of the Medicare morass?
Hospital can help you make managed care leap
Hospital-affiliated home health providers trying to increase managed care business face a tough road, but with their affiliated hospital's backing, they may have more strength than initially appears. Leveraging the hospital's contracting power while reducing costs and revamping agency operations may be a winning combination, experts tell Hospital Home Health.
· Get contracts.
To step out of the shrinking Medicare box, hospital-affiliated agencies should obtain managed care contracts as quickly as possible. If your agency now has few contracts, doing so may seem daunting, but it will be much easier with your hospital's support, sources say.
Capitalizing on its hospital connection, Elk Grove Village, IL-based Alexian Brothers Home Health went from a new predominantly Medicare agency four years ago to one with over 40 managed care contracts and only 40% Medicare business, says Kathleen Gunderson, director.
Although "most hospital negotiations don't include home care, [you should] ideally rope into the hospital's contract because you can get higher rates," Gunderson explains. For example, a hospital's ancillary or outpatient services contract may call for a 30% discount from usual and customary charges. A hospital-affiliated agency with a $120 per visit standard charge will fare better under such an arrangement than with a separate home care agreement that may be a flat per visit rate, often ranging from $50 to $60, she explains.
Collaborate with hospital
It helps to collaborate and design service packages with the hospital contract officer, says Kathy Lucas, executive director of Fairview Home Care and Hospice, an affiliate of the Fairview Health System based in Minneapolis. "We have many different initiatives with many different plans," she adds.
Proposals that present home care as part of the hospital system may have more merit with managed care than home care only bids. The best proposal approach depends on the market, according to Lucas.
You may "start with an already capitated population [for the hospital] and propose shaving [inpatient] days." With some plans, specific population carve-outs such as Medicare-risk plans, or maternal/child programs may open the door, while blanket proposals for the entire population may work with other companies, she adds.
· Maximize system integration.
Tightly linking with your affiliated hospital will not only help obtain contracts, but also meet managed care expectations afterward, sources report. Developing a comprehensive system that seamlessly moves patients from the hospital to the community is critical, says Lucas. "It must look and be seamless," she emphasizes.
Clinical pathways help substantiate the hospital-home care link, says Gunderson. "Payers want to know what to expect and what outcomes [will result from] treatments," she adds.
· Know your costs.
"You have to get a real fix on costs to know how low you can go [on contracts]," says Gunderson. "If you only break-even [or lose] on a contract or certain patients, it better be a loss leader for the hospital, so that systemwide it makes better sense to cut losses [through home care]," she adds.
Such an approach reflects a "state-of-the-art system and works well if [the home care entity] is being incented [to take losses for the system]," says Jack Rahaim, a health care consultant based in Boston. "Unfortunately, most hospitals don't take such an enlightened view of the financials" and they hold each entity individually responsible for profit and loss without considering their system contribution, he adds.
· Reduce costs.
After determining costs, agencies should quickly move to wring all possible efficiencies from their operations, sources say. "Look at everything. Leave no stone unturned," advises Lucas. "Billing and medical records are areas where people tend to throw bodies at problems," she continues.
"Look at the layers and levels of clinical management and ask whether you can eliminate any. Can you share support functions such as compliance, quality [improvement, and education, with other agencies or parts of the hospital? You can start by not filling positions and ease into it by learning to do with less. It's easier if you don't have to layoff staff," Lucas says.
Although both average just over 20 visits per patient, Alexian Brothers and Fairview are now looking for ways to reduce utilization and increase productivity. Both are evaluating staffing levels and pay formulas. "Start where your organization is [in terms of productivity]," Lucas advises. "Begin by enforcing the standards that you have so that you get past where it's an emotionally sapping issue and people just accept and understand what has to be done."
If your agency needs to increase productivity, bring field staff into the process from the beginning, Lucas recommends. "They're the best people to know how [it can be accomplished], and you'll have much less resistance." She recently convened a field staff task force to determine how the agency can increase productivity by one visit per day. "If you devote resources, you can fast track changes," she adds.
· Restructure operations.
More efficient operations come not only from reducing costs, but also from re-deploying staff and restructuring operations, sources say. Alexian Brothers added clinical case managers while reducing clerical positions. The changes resulted in overall salary savings and allowed the agency to forestall some managed care denials with better coordination and communication, according to Gunderson.
Lucas recommends that agencies with high utilization establish a care management function to help ratchet down the number of visits per patient. "You should identify someone in the staff who understands good care can be accomplished with fewer visits, maybe someone [from] a market with lower utilization."
When reviewing organizational efficiency, "come at it from a systems view. Look at it as a business process. Don't just solve individual problems. You will just chase problems around the system," Rahaim advises. Agencies may need to expand their process review beyond home care to get at the root cause of bottlenecks and develop long-term solutions, he adds.
Fairview is now undergoing such a process with its case management function. Fairview Home Health has liaison care coordinators who help transition patients home. But the system is now evaluating where those positions should reside and how they function. are looking at how to make our patients' experience better and how to facilitate transition to the most efficient place which is not necessarily home care," Lucas reports.
Use your secret weapon
Sometimes managed care confounds agencies' efficiency efforts, particularly with billing functions. Contract-by-contract special accommodations slow productivity and encourage errors, Lucas says. "Get a top-notch information system if you can afford to do it. Otherwise you'll be stuck in the nightmare of the paper shuffle."
· Communicate contract status.
As you work on increasing managed care business, it helps to communicate the status of all contracts both within home care and the hospital. Gunderson developed a grid indicating the status, parameters (for signed agreements), and services offered for all proposed home care contracts. She periodically updated the spreadsheet and shared it with hospital discharge planners and the home care intake staff.
· Sell the agency internally and externally.
Getting a contract is only the first hurdle in increasing managed care business. With each new agreement, Alexian Brothers Home Health worked with both its affiliated hospital discharge planners and insurance company case managers, Gunderson says. Educate both parties about your agency's capabilities, and emphasize the smooth hospital-to-home connection to insurance case managers, she advises.
· Routinely meet with managed care representatives.
To facilitate smooth sailing once awarded a contract, meet at least quarterly with managed care representatives and address any quality, care, billing, or process issues, Lucas advises. "It works well [especially] in the beginning. It shows your interest in making things go well, and it helps address things before [the managed care company] gets mad at you [over a problem]," she adds.
· Leverage your hospital relationship.
Both Gunderson and Lucas encourage agencies to leverage their hospital affiliation to both obtain contracts and increase managed care business. "The regionals tout their wide service area, but you also have the big guys behind you. Use the hospital's power to get contracts," says Gunderson.
Lucas agrees. "You have a major advantage because of your hospital affiliation. Use it as a strong reason as to why hospitalized patients would get better care if they went with your home care program. Get out there! Talk about what you can do! Get a trial!"
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content