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Finding a Soft Cushion for a Hard Economy
Home » News » Finding a Soft Cushion for a Hard Economy |
Healthcare delivery in an uncertain economy is something like sitting on a hard chair. There’s just not much cushion if you make a wrong move. That’s why long-term care providers who offer therapy increasingly are looking for ways to keep therapy costs flexible, maintain a competitive edge, and share financial risk.
In the five years since the Medicare Prospective Payment System (PPS) changed the face of healthcare reimbursement, the business of providing therapy has evolved. “When PPS first went into effect, facilities felt they needed to take control of rehabilitation, so many of them took therapy in-house,” says Cindy Susienka, president of Aegis Therapies, which offers rehab services to more than 1,000 facilities in 36 states. “But since PPS, facilities are beginning to see the value of variable costs versus fixed cost. They also realize they don’t have the expertise to manage the therapy program. Many are beginning to outsource therapy again. In the last quarter alone, we’ve noticed a large increase in the number of facilities coming to us that previously provided therapy in-house.”
Ensuring expertise is one of the reasons John Knox Village, a continuing care retirement community in Lee’s Summit, Missouri, decided to outsource therapy. When the facility was approved to increase its number of SNF Medicare beds from 44 to 107, Administrator Lynn Carroll took a hard look at her in-house therapy program. Although John Knox had a lot of resources on campus, Carroll saw an opportunity to expand therapy services.
“We have an excellent reputation in the Kansas City area for rehab,” she says. “But we wanted to offer more alternatives for medically complex residents. When rehab becomes a significant add-on or becomes complicated operationally, referring to outside expertise can save time and generate more appropriate reimbursement.”
While expertise can be taken to mean the delivery of knowledgeable and efficient treatment, it goes further than that. A good contract therapy company, according to Mark Besch, vice president of clinical services for Aegis, reaches beyond the status of vendor to the facility. “The therapy company brings a commitment to the facility in terms of clinical expertise and outcomes,” he says. “It can provide the facility with more options in terms of continuing education, the knowledge necessary to meet the special needs of residents, and the sharing of risk by partnering in the responsibility for surveys.”
The therapy company also acts as a resource for therapists. “Therapists in an in-house model are pretty much on their own,” says Besch. “If they have questions on treatment technique or equipment, or want to consult with others about a problem, where do they go?”
Moreover, because of the size and geographic reach of a therapy company, it can easily benchmark outcomes against those of other facilities, track diagnoses and length of stay for specific diagnoses, and utilize outcomes information to enhance the public’s perception of the facility’s program.
Finding Flexibility
Recruiting and maintaining staff may be one of the biggest headaches for a facility, not to mention a significant cost center. Because PPS reimbursement is tied so tightly to the minutes of therapy a patient receives, using only those therapists who are necessary to the patient load makes financial sense. Facilities that must keep therapists on staff (and possibly idle) during fluctuating census take a hit in the pocketbook. “The importance of variable costs is that you are only paying for the services utilized and the services that you’re going to get reimbursed for,” explains Darryl Bueker, partner in BKD, LLP, a financial and reimbursement consulting firm in southern Missouri.
“Most of our clients negotiate their therapy contract for Part A Medicare services so they pay on a per-minute basis,” says Bueker. “In Part B, they negotiate a percentage of the fee-schedule amount for each type of service.” That means that as therapy expenses go up, Medicare Part A and Part B billings go up. If Part A and Part B volume drops, the amount owed to the therapy company declines as well. “By outsourcing, you avoid the risk of having all these people on staff and not being able to keep them productive,” he adds.
Promoting Productivity
These days, the infrastructure required to deliver efficiency and to make therapy profitable and competitive is a full-time undertaking, often difficult for a single facility. Think, for example, of the resources needed to develop the proprietary systems and software to simplify procedures and the management of therapy minutes in order to streamline service and capture more accurate reimbursement.
Or consider the time and cost of ongoing staff education. “In an in-house model, the facility itself is responsible for ensuring that the rehab staff remains current in recent professional developments,” says Besch. “The facility must have a mechanism for therapists to learn all of the compliance and regulatory issues, including upcoming legislation, changes in procedures, changes in codes, CMS interpretations, etc.” Outsourcing shifts that burden to the therapy company. Aegis, for example, offers a stipend for therapists to attend continuing education classes and actually pays for education days. And an Aegis compliance officer handles all compliance issues at the facility.
Expanding the Market
Establishing a specialty niche can place a facility in the forefront of its market. Susienka explains, for example, Aegis’ program “Freedom through Functionality,” a partnership with Nautilus that emphasizes muscular strength and fitness development: “We use Nautilus equipment that’s been augmented for the senior population. The results are astonishing. People who thought they would never walk again end up not only walking, but are able to go home.” She cites an added benefit for the facility: “Former residents often return to the facility to continue the program from a wellness standpoint.”
What to Look For in a Therapy Company
If you decide to contract, what should you look for? At John Knox, Carroll says she looked at several factors, including the number of therapy contracts and facilities the company oversees, the sophistication of its systems, its knowledge of PPS, and its detailed approach to developing and tracking quality outcomes.
Susienka suggests first looking for a “high level of clinical expertise.” Then she says to consider the following:
1. Consistent quality staff and the ability to move therapists in and out of a facility as necessary
2. Specialty areas of service that might enhance the facility’s therapy program
3. A commitment to the facility to work as a partner, not just a vendor, so therapists are invested in and responsible for patient outcomes
4. Partnering in responsibility for survey outcomes and addressing any survey risk areas
5. Dedicated computer software that catches errors and makes documentation accurate and faster
6. Commitment to continuing education, training, and ongoing monitoring of staff, including keeping therapists up to date on new techniques and treatments
7. A dedicated therapy compliance officer who is familiar with current regulations, changes in codes, and CMS interpretations
8. A mechanism to deal with denials
9. User-friendly outcomes measurement, quality indicators, and the ability to benchmark against a large group of facilities
10. A strong lobbying voice in Washington
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