How Home Health Can Win in Joint Replacement Bundles

The forthcoming bundled payment model for joint replacements presents a significant opportunity for home health agencies, if they formulate and begin executing smart strategies now.

“Be proactive,” advised David VanderGest, senior manager at McBee Associates, a managerial and financial consulting firm focused on health care.

Some hospitals are currently in wait-and-see mode with regard to the Comprehensive Care for Joint Replacement (CJR) initiative, VanderGest said at last week’s Homecare Homebase User’s Conference in Dallas. This is because, even though the mandatory program started in 67 geographic regions as of April 1, there is a “grace period” through the end of 2016, meaning data will be collected but Medicare reimbursements will not yet be tied to results.

Hospitals may eventually regret being passive right now, and home health agencies should not be lulled into complacency as well, VanderGest proposed. Rather, now is the time for HHAs to be getting their ducks in a row and taking the initial steps to position themselves for long-term success in the program.

The basic idea of CJR is that hospitals are responsible for controlling costs from the time of a joint replacement surgery through 90 days of follow-up care; if they fail to control costs, they will owe Medicare money, but if they do a good job of controlling costs while maintaining quality, they will receive incentive payments. They can share these with their post-acute partners, including home health.

These four steps in particular should be considered by forward-thinking agencies, said VanderGest and his colleague, McBee Senior Manager Maria Warren.

1. Identify referral sources: Step one is the basic but essential task of examining referral current referral sources to identify CJR exposure, said Warren.

Agencies need to get a sense of how much potentially is at stake in terms of getting into a CJR collaborator agreement with their referring hospitals, because it is not a given that all agencies will be included. In their effort to better control cost and quality, hospitals are likely to take hard looks at where they are sending their joint replacement patients, and narrowing their networks to only those HHAs that they are confident can help them hit their goals.

So, to be successful in the future, agencies need to identify both potential upside and risks.

“Start running those reports, determining which referrals are coming from CJR hospitals, trying to identify … how to continue to target them and maximize our revenue,” Warren advised. “But what if they don’t choose you? What does that mean from a referral source stream and a revenue stream? How else are we going to be looking to maximize?”

2. Pitch hospitals: Once they’ve developed their hit list of CJR hospitals, home health agencies need to reach out with a pitch for inclusion in a CJR collaborator relationship.

This is essentially a “marketing strategy,” and it will be informed by key financials, operating, and quality measures, Warren said.

“When we go into that meeting … [hospitals] want to know this stuff up front,” she said. “They want to see this information and they want to know how are you going to continue to provide this and work with us?”

3. Assemble a team, develop pathways. CJR not only a new framework for reimbursement but demands adaptation in terms of staffing and operations. Whether it’s reviewing contracts with hospitals or managing the care for patients in the program, home health agencies will need to have the right people doing the right things.

“The important thing internally is to determine who your key stakeholders are, who’s going to be part of your ‘bundles team,’” said Warren.

Some suggestions she shared: a facilitator for bundled care development and operations, case managers, schedule/intake leaders, IT representatives, and financial and revenue cycle workers to track the claims.

That importance of tracking numbers internally to compare against those from the Centers for Medicare & Medicaid Services (CMS) also was emphasized by VanderGest.

“Have someone who understands the data, to make sure CMS is accurate,” he said.

Of course, the clinical care that the joint replacement patients receive will be crucial, as will the ability of the home health team to coordinate and communicate with physicians and other providers in other settings. So, agencies will need to think about and create appropriate clinical protocols and pathways, Warren said.

4. Implement needed technology. Whether it’s tracking quality measures or communicating with the care team, home health agencies can only succeed in a bundled payment world with the right tech tools in place.

“Technology is all-important,” Warren said.

Agencies may want to begin by identifying internal technology capabilities to support the cost- and quality-related data needs for CJR, in order to pinpoint gaps and potential IT solutions, she suggested.

Providers also need to keep tabs of solutions in development, given that technology companies are actively creating new products and capabilities to address some of the pressing needs that are arising out of a bundled payment environment. One of these is the need for standardized, secure communication among different types of providers throughout the 90-day care episode.

“Devices to text doctors is how we’ll manage bundles in the future,” predicted Warren, noting that this already is on the way.

Implementing the newest technology requires an investment, of course, as do many of these other steps. But the returns should come not only in the form of referrals and revenue related to CJR but other bundled payment programs as well, given that joint replacement appears to be only the tip of the iceberg for this type of program. Care for cancer, COPD and other conditions very well might be moving toward bundled payment models in the near future, and there was talk at the conference that congestive heart failure would be the next to arrive.

However CMS handles it, bundled payment is the wave of the future, VanderGest stressed.

“We have to prepare for the expanded rollout,” he said.

Written by Tim Mullaney

Photo Credit: “Medical/Surgical Operative Photography” by Phalinn Ooi, CC BY 2.0