Preparing for the Next Wave of Payment Reform

Brian Garner, Medline Industries

Brian Garner

Brian Garner, Medline Industries

The wait is over. The time is now.

While the rehab landscape prepares for more reforms, administrators should already have their facility and staff in line and operators need to be thinking about the future and how to deal with payment reform. Otherwise, they’ll be left behind and will ultimately lose out financially. The focus has to shift to functional rehab as employees are no longer working on a fee-for-service (FFS) model. Facilities are dealing with higher acuities and sicker patients, but being asked to provide better outcomes, and by the way, working for less money.

Due to the new quality measures from the Centers for Medicare & Medicaid Services (CMS), there’s now a greater burden on a staff as they’re being asked to do more with less to meet the Five Star quality rating. So how does a facility improve these quality outcomes with the same type of patient population while controlling their costs?

The Challenges
First off, it’s a consumer-driven market right now for Skilled Nursing Facilities (SNFs).

One challenge is we’re still in the midst of payment reform for nursing homes, especially when it comes to therapy services. With Section GG, introduced last year, nursing care centers are figuring out how to maneuver through the new functional assessments. There’s no real metric to get these patients to where they need to be and how to utilize limited resources to complete the expanding requirements. The plan for patient improvement starts with administrators and their interdisciplinary teams who must be smart and efficient when it comes to productivity and staff. That can all be achieved, especially with the proper equipment.

Also, part of the added stress is the processing of the new Activities of Daily Living (ADLs), looking at the functional mobility of patients. The federal government is tracking one of the stages of development, late-loss ADLs, and how that facility’s therapy team is impacting patient progress. More than a third of the Medicare population receives help with at least one important ADL.

Tie those challenges to the current mindset that there is still time to modify their approach. Some facilities don’t feel the immediate financial implications, which are causing some to hold off on their preparations for the pay-by-outcomes model. In this current health care climate, no one wins by waiting.

Keeping Rehab a Profit Center
With the state of nursing care centers today, administrators pay close attention to their therapy departments as it’s often considered the last profit center. With the new quality measures, there are concerns there will be less profit from the therapy department, moving away from a fee-for-service environment where the more you do, the more you get paid. The problem isn’t just the model, but it’s how the patient population fits into this new formula.

The numbers are staggering. The U.S. Department of Health and Human Services expects the number of people 65 and up to grow from 14 percent of the population to more than 21 percent by 2040. The patients aren’t just getting older. They’re sicker. The number of patients with diabetes continues to climb and the National Health Council is projecting 157 million Americans will have some form of chronic illness in just three years. Imagine this added and ballooning burden on therapists who must work one-on-one with a patient to achieve the same positive results, but in less time whereas before the facility was billing for that time, no rush and no consequences.

Therapists know the struggle, one in particular. About 20 years ago, Avi Nativ saw the challenge in helping his patients take a more active role to regain and maintain their mobility. He realized working with the patients one-on-one with the equipment he was utilizing wasn’t always safe for him or the patient. He struggled in achieving the outcomes he hoped for, and with his doctoral research in motor control and emphasis on brain plasticity, Nativ knew patients of all ages and conditions could regain strength and functional abilities. He created tools that enabled patients to practice functional strategies to regain mobility and prevent falls, by outlining three ideas essential to functional outcomes in the elderly: patient-enabled movement, functional activity and repetition.

Thoughtful Purchasing
Even with these new thoughts on tools, some skilled nursing care providers are panicking. Just last year, a customer received a negative survey that led to a serious downgrade and they became a Two Star facility. This operator, like many others in the same predicament, reached out to its vendor partner. In their quest to correct the deficiency-riddled survey results, they wanted to buy anything and everything for their therapy department.

This was not the solution. Their purchases appeared to have it all, costing $45,000 to almost $60,000 for each piece of new equipment, but the equipment was geared more toward high-performance athletes. The fancier products still required more than one therapist to get the patient into the equipment, a strain on staffing resources.

The expensive, fancy, futuristic products the facility thought it needed are now sitting in a corner, collecting dust.

Less Time to Treat Patients
Robert Tripicchio, PT, D.Sc., president of Community Physical Therapy, shared his facilities’ focus to meet the three tenants of healthcare reform: healthier populations, improved outcomes and decreased delivery costs.

“Regardless of what the product is called, we are transitioning from a FFS basis to one of cost containment and value,” said Trippichio. “Value can be expressed by the equation of outcomes over cost. The providers that will be successful are the ones who get better patient outcomes in a shorter period of time.”

Trippichio understands the transition is underway. Payment reform is no longer a discussion point in our nation’s capital. It’s a reality. Some of the changes have started, but do not go down this new path of payments alone. With the proper staff and equipment, facilities can still increase their reimbursement rates. Your therapy supplier should already be working with you to provide the wealth of knowledge they have to meet the demands in this new era.

Brian Garner is the Director of Sales, Rehab Division, for Medline Industries. He can be reached at

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