Facility Leakage and the Delicate Matter of Patient Choice
How to offer patients neutral choice in order to stay compliant
By Elaine Christie, Author
EXECUTIVE SUMMARY
Hospitals and health systems looking for ways to grow are turning to understanding outflow in the post-acute setting.
• Case managers must consider patients’ right to freedom of choice and consider possible violations of antitrust laws.
• Discharge planners and case managers are required to present lists to patients, use a neutral tone, and not say anything that may persuade patients to choose particular agencies.
• Case managers must never lose sight of the fact that patients are in the driver’s seat when it comes to choosing other providers.
Case managers are arguably one of the main drivers along two critical paths in hospitals and health systems: giving patients access to exceptional care and ensuring that hospitals are reimbursed for that care.
As things grow larger — with hospital systems that now own nursing homes, home care, and hospice — leadership is looking at post-acute discharge metrics to see which patients are staying within their health systems, which patients choose other providers, and what can be done to slow leakage — a loss of patient volume — to competing healthcare systems.
Because of the population health incentives inherent in value-based care, a lot of the financial benefit and revenue growth that used to be powered in inpatient settings is no longer there, explains James Case, advisory director in the healthcare and life sciences practice at KPMG Healthcare Solutions.
“Hospitals and health systems are looking for ways to grow, even if they can no longer grow in the inpatient setting — which is why they turn to understanding leakage in post-acute settings,” he says. “I think the case managers want to understand where the best care is for their patients, and they likely care less about whether it’s a healthcare-controlled entity. The case managers simply want to do what’s best.”
Better metrics can help case management departments learn why their own post-acute provider may be the best option, says Case.
“The opportunity is very unique to each health system. Some don’t have a problem with leakage because they’re in an isolated area and patients have fewer discharge issues,” he says. He adds that a complex set of drivers can lead to leakage in the post-acute setting. Understanding these drivers can not only benefit the health system financially, but improve the patient’s experience of care as well.
As an example, he shares a recent experience from a health system that wanted to gain a greater understanding of patients’ post-discharge experiences.
“Due to the circumstances they had, they didn’t have a good understanding of where patients were going post-discharge. There was no standardized process to document where patients went for skilled nursing or home health,” he says.
A big part of that problem was due to case managers using a free-form text field in the electronic medical record that they could vary, contradict, or omit — sometimes resulting in five different ways to describe the same facility, if any facility was described at all. That was a problem because hospital leadership wanted to understand where post-acute patients were going — and how much money the hospital was losing.
“In this particular case, the hospital was losing millions of dollars per year just on net patient revenue — patients they were losing that they could have kept in their network,” says Case. Accountability for quality and the need to improve patient engagement can have major consequences for providers, since patients have freedom to choose where they receive care.
Patient Choice Trumps Economics
While a complicated issue, the reality is that slowing leakage can’t happen overnight, nor should it, according to Elizabeth Hogue, Esq., a healthcare attorney based in Washington, DC. Case managers must consider possible violations of antitrust laws related to patients’ right to freedom of choice, as well as other valid reasons that patients choose other facilities for post-acute care, she says.
Some valid reasons could be due to geographic preference or billing/insurance matters. In the first scenario, a patient who lives a few miles from a nursing home is unlikely to choose the one 40 miles away just because it’s part of the hospital’s network. In the second scenario, the patient would like to stay in network, but the nursing home doesn’t have a contract with the patient’s insurance company.
Further, if a patient is going to a skilled nursing facility, he or she must be given a list of facilities in their geographic area, according to Toni Cesta, PhD, RN, FAAN, partner and consultant at Case Management Concepts.
“Particularly if you’re in a rural area or in a Medicare Advantage Plan, these choice lists have to be modified and it can be cumbersome,” says Cesta. “But you must offer choices within your system and not steer patients, which would be illegal. You have to be very careful in how you make recommendations to the patient.”
Patients Are in the Driver’s Seat
While patients are likely to adopt their discharge planner’s suggestions, it’s critical for case managers to never lose sight of the fact that patients are in the driver’s seat, according to Hogue.
“We’re walking a fine line. It may be that some of the things hospitals are doing are illegal in terms of steering patients to their own facilities. Case managers need to be really, really careful,” she says.
She adds that honoring patients’ right to freedom of choice continues to be a source of great concern for non-hospital-based agencies.
Hogue describes a recent lawsuit filed by a home healthcare company in Indiana against a hospital and its parent company. The home healthcare company claims that the hospital attempted to monopolize home health referrals to the hospital’s home health affiliate.
When home health services are necessary, says Hogue, Medicare regulations require the hospital to provide patients with a list of home health agencies that are Medicare certified, available, and that serve the geographic area in which patients reside. Although all of this was included on the list presented to patients, the lawsuit claims that the hospital made it more difficult to choose a home health company other than the hospital affiliate.
Hogue reiterates that patients have the right to freedom of choice of providers, and case managers have the following legal and ethical obligations:
• All patients have a common law right, based on court decisions, to control the care provided to them, including who renders it. Patient choices must be honored, regardless of payor source or type of care.
• Medicare and Medicaid statutes guarantee Medicare beneficiaries and Medicaid recipients the right to freedom of choice. Patient choices must be honored if they voluntarily express a preference for a home health agency.
• The Balanced Budget Act (BBA) of 1997 requires hospitals to develop a list of home health agencies that are Medicare-certified, provide services in geographic areas where patients reside, and ask to be on the list. If hospitals place the names of agencies in which they have a discloseable financial interest on the list, hospitals must disclose the relationship. This list must be presented to all patients who may benefit from home health services so they can choose the home health agency they prefer.
• Hospital Conditions of Participation (COPs) for discharge planning include the basic requirements of the BBA. Based on an interpretive guideline published by CMS, hospitals may also be required to present lists of hospices to patients. Hospitals are subject to possible loss of CMS reimbursement if they do not meet the COPs.
Hospitals are clearly required to present lists of home health agencies and skilled nursing facilities (SNFs) to patients. The Centers for Medicare & Medicaid Services (CMS) also requires hospitals to present lists of hospices to patients. When sharing these lists with patients, case managers must use a neutral tone and not say anything that may persuade patients to choose particular agencies, cautions Hogue.
“Discharge planners and case managers are required to present lists to patients without prejudicing the case,” she says.
Cesta notes that because CMS does not require listing facilities in any particular order, it could start with a facility’s own providers first, and then list providers with the quality star rating of each provider.
Things Not to Say
Hogue notes that discharge planners and case managers must never attempt to coerce patients or change a patient’s clearly stated choice. She says the following statements are examples of what case managers should not say to patients when they present lists of providers:
• “Choose the hospital’s provider so that we can get orders faster and you can go home sooner.”
• “The hospital’s provider can offer continuity of care, which other providers can’t.”
• “Why do you want to choose that hospice? They are no good.”
• “They’re terrible. Just go with our provider.”
Wrapping Up
When it comes to patient choice, remember that the patient’s choice may differ from yours, explains Brian Pisarsky, RN, MHA, ACM, a director at KPMG Healthcare Solutions.
He shares a few additional ways case managers can stay compliant with an eye toward giving patients valuable, quality care:
• First, a newer concept in some organizations is short videos to give patients an overview of a facility (e.g., scenes from the front door of the facility, all the way down the hall and to a patient’s new room). “They can show the patient and also give the family an idea of where the patient is headed next,” he says.
• Second, the case management leadership should run reports on patient referral patterns, as well as audit patient choice. “Study how many patients were discharged, where patients are going, and verify that no one on the case management team is steering patients to a particular facility,” he says.
• Third, stay updated and connected. For instance, Pisarsky recommends networking with new nursing homes in the community. One idea is to have a case management team meet with a representative from the new nursing home, or even go visit the facility.
“It’s not marketing, but rather, for the case managers to understand what this nursing home and facility have to offer. When a patient or family asks, the case manager can speak confidently about the services available at the facility,” he says.
Hospitals and health systems looking for ways to grow are turning to understanding outflow in the post-acute setting.
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