Significant changes in healthcare provision are underway in the US. Mary Chmielowiec and Paola DiNatale outline the extent of these developments and how captives can best prepare for the changing environment.
Long-term care facilities have embarked on a journey of change, lots of change. From healthcare reform to RUG-IV and MDS 3.0, facilities across the US face the most significant and sweeping change in decades. Obscured by the immediate demands of implementing these new systems and programmes, there are at the same time unprecedented opportunities to advance risk management initiatives, improve resident care and drive up the satisfaction level for every stakeholder. On the other hand, these changes also have the potential to expose long-term care facilities to greater litigation risk. As such, from a captive’s perspective, it’s important to understand the changes taking place and how to best leverage these changes for the overall advancement of facility performance and the preservation of capital.
The goal of healthcare reform, known as the patient protection and Affordable Care Act (ppACA), is to control spending while increasing access to affordable care for all Americans. to this end, the overriding theme of reform is efficiency. theoretically, by breaking down the silos of care and building a more comprehensive, integrated, casemanaged and client-centred delivery system, both savings and improved outcomes will be achieved. One mechanism to allow for increased integration is bundled payments. For certain episodes, a patient will be allocated a set amount of funds that would follow the patient from acute to post-acute settings. While the implementation date for this is not immediate, voluntary pilot programmes will begin in January 2011 for implementation in 2013. However, longterm care facilities risk losing out on reimbursement dollars by not positioning themselves properly during the pilot studies.
Of more immediate concern to captives is the section of PPACA entitled ‘nursing Home transparency and improvement Act’. this act requires nursing homes to provide consumers with a substantial amount of new information regarding ownership and operating performance designed to encourage improvements in quality standards. these changes can dramatically alter insurance coverage requirements and increase loss costs. the key provisions of this act and their implementation dates are as follows:
• Revamped staffing data submitted electronically from payroll records and other verifiable sources for the public reporting of hours per resident day of care, with turnover and retention rates (march 2011)
• Improved information available on Nursing Home Compare, including more timely and extensive staffing data; facilities’ survey reports and plans of correction; summaries of complaintsagainst facilities, including number, type, severity and outcome; a standardised complaint form; adjudicated criminal violations by facilities and their employees, including civil monetary penalties levied against the facility, its employees, contractors or other agents (march 2011)
• A requirement for nursing homes to make three years of surveys and complaint investigations available upon request, and post a notice in a prominent location at the facility that this information is available (march 2011)
• Streamlined complaint-handling, including a voluntary standardised form for filing complaints with the survey agency, and protection of residents’ legal representatives and other responsible parties from retaliation when they complain about the quality of care (march 2011)
• Institution of training programmes for dementia care and abuse prevention in nurse aide training programmes (march 2011)
• Public disclosure of nursing home owners, operators, and other entities and individuals that provide management, financing and services to nursing homes (June 2012)
• Establishment of compliance and ethics programmes that are reasonably designed, implemented and enforced to prevent and detect civil/criminal violations, while improving quality assurance (march 2013).
As these provisions are implemented, long-term care facilities will become increasingly transparent not only to residents and family members, but also to plaintiff attorneys. Accordingly, this transparency will breed closer scrutiny and subject facilities to greater risk of litigation. From a captive’s perspective, the simple demand for full disclosure of ownership will hinder the opportunity to hide deep pockets. Add increased accessibility of surveyresults, complaints and prior offences, and it’s easy to see how this act could fuel a fire of litigation that may require a revised analysis of existing coverage levels. As the saying goes, the best defence is a good offence. For long-term care facilities, that offence starts with leveraging new tools to build an impenetrable risk management programme.
Effective October 1, 2010, MDS 3.0 introduces a radical shift in assessment philosophy from an observational approach to a resident-directed approach. Like any major change in systems, the transition period from MDS 2.0 to MDS 3.0 will introduce an element of risk for all facilities. However, for facilities that took the initiative and developed a thorough implementation plan with adequate staff training, the transition to MDS 3.0 will deliver more informative assessments, better-quality care plans, more positive survey results, improved public relations and higher-quality measures. Alternatively, facilities that are unprepared for this change will struggle to reap those same advantages. Even worse, they may inadvertently expose themselves to increased risk.
"MDS 3.0 introduces a radical shift in assessment philosophy from an observational approach to a resident-directed approach."
It is important for every facility to recognise that MDS 3.0, in addition to the many advantages it introduces, also produces new areas of exposure. Accordingly, there should be a plan in place to manage that risk. throughout MDS 3.0, for example, residents are interviewed and expected to respond to very targeted and scriptedquestions about their mental status, mood and preferences of daily routine, pain, long-term goals and overall satisfaction. While resident interviews may not appear risky at first glance, consider the following questions: ‘have you ever thought of hurting yourself?’ or ‘have you ever thought you’d be better off dead?’. Now, consider what happens when a resident answers with a ‘yes’.
Obviously, such questions open up a facility’s responsibility to provide additional services, immediately. In this example, the facility would have a responsibility to report that event to the proper authorities, allocate additional mental health resources and make sure that the plan of care addresses this risk. Not asking these telling questions is not an option with MDS 3.0. Everything is documented and measured according to built-in severity scores. Of equal importance is the fact that this type of staff/resident interaction is entirely new, and proper training must be implemented so that the correct plan of action is taken every time.
The captive’s response
For many facilities, the challenge of these new systems will be in the change itself and the magnitude of these changes. As such, it’s critical for captives to understand underlying risk drivers such as communication between resident/family and staff, counselling on end-of-life issues, immunisations, handling of internal complaints, participation levels in resident surveys and the percentage of residents with advanced directives. These indicators speak volumesabout actual risk within the four walls of any facility. This is an opportunity to come alongside the membership and facilitate risk management initiatives. For example, if one facility has a 90 percent success rate in obtaining advanced directives, enquire as to its methods. Then, share the lessons learned, and provide a mechanism for facilities to share best practices and allow the entire risk pool to benefit. This is an ideal opportunity for captives to stand out from traditional insurance carriers by providing risk management services through an increased awareness of underlying risk drivers.
Invest in the future
In order to maintain loss ratios in the midst of these changes, it is important to invest in risk management practices. Leverage existing tools, such as MDS 3.0, to broaden and deepen your understanding of how each facility operates on a day-to-day basis. Learn to interpret, benchmark, track and trend available data to monitor the effectiveness of risk management programmes.
Mary Chmielowiec is the executive vice president of insurance services at PointRight Inc. She can be contacted at: email@example.com
Paola DiNatale MSN, RN, NHA, RAC-CT, is a national account manager, risk services at PointRight Inc. She can be contacted at: firstname.lastname@example.org