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s healthcare providers, we can be overwhelmed with regulatory updates, modifications, and entirely new systems. Sometimes we wait until the regulations are finalized before preparing for the changes. The problem with this approach is that we often do not have enough time to incorporate the necessary system requirements into our facility culture to effectively implement new regulations. Department of Health and Human Services (HHS) Secretary Michael Leavitt has outlined his commitment to Pay for Performance (P4P) in all healthcare settings. Value-based purchasing for healthcare services in the nursing home setting will be tested in pilot programs in four or five states starting in 2008, and the Centers for Medicare & Medicaid Services (CMS) wants 50 nursing homes to participate in the pilot project.
       P4P is about how the cost of care meets positive outcomes. It is the use of payment methods and other incentives to obtain patient-focused, high-quality care at the most reasonable cost. CMS believes that states are interested in ways to improve quality of care to beneficiaries in flexible programs that control costs and provide value for dollars spent by directing payment toward care that will improve the health status of citizens within the state. P4P is one method.
       For the pilot project, incentive payments will be made to the facilities that meet certain criteria (see Table 1)

Table 1

based on quality measures. Budget neutrality or cost effectiveness (ie, savings) is a requirement for the P4P initiative. Funding for the project will come from reduced avoidable hospitalizations. The data for the quality measures comes from the Minimum Data Set (MDS), including section W (immunizations); payroll records substantiating staffing; survey; Quality Improvement Organization (QIO) input; and the determination of avoidable hospitalizations. The specific MDS quality measure questions that are calculated include: activities in daily living (ADL) decline, pain, physical restraints, urinary tract infections (UTIs), pressure sores, worsening of depression or anxiety, being bedfast, indwelling catheter use, low risk for incontinence, mobility decline (eg, locomotion, self performance), delirium and pain in post-acute residents, and weight loss.

Avoidable Hospitalizations

       The most controversial aspect of the project is the issue of avoidable hospitalizations. CMS is focusing on preventative care. There are data to substantiate that appropriate preventative care in the physician office setting as well as clear and complete emergency room discharge instructions can reduce hospitalizations. Long-term care providers fear that emphasis on avoidable hospitalizations could result in “bad-outcome gaming” (ie, keeping a resident in the long-term care setting who should go to the hospital because incentive payments would increase). Providers also worry about the legal and outcome implications for the resident who requests to go to the hospital.
       The premise for tracking avoidable hospitalizations is that if we provide a higher quality of care, certain types of hospitalizations will be reduced. The measures initially used in determining avoidable hospitalizations will include the following ambulatory care conditions: UTIs, respiratory infections, and congestive heart failure. CMS wants the focus to be on the number of patients who were hospitalized with these conditions rather than the cost of their care. Theoretically, patients with these conditions can be treated just as well in a less acute setting. It is recommended that there be a risk adjustment to account for differences in the patient’s baseline health status. There may be a need to calculate short- and long-stay residents separately.

Other Types of Performance Measures

       Other types of performance measures being considered include process measures, resident satisfaction, and quality-of-life measures. New measures may be added in the second year as new data become available. The post-acute payment reform demonstration project could also affect nursing homes and is part of the value-based purchasing concepts. This demonstration will start in April 2008. Diagnoses or diagnostic conditions specified by Secretary Leavitt would require a comprehensive assessment at hospital discharge to help determine appropriate post-acute care (PAC) placement. The PAC placement will be based upon a patient’s needs and clinical characteristics. Data on fixed and variable costs for each individual and on care outcomes would be gathered. A standardized assessment instrument would be implemented to measure functional status and other factors during treatment and at discharge across PAC settings. Since nursing homes are a predominant PAC provider, administrative and clinical management personnel should follow the project and review the demonstration data.
       CMS is piloting a Part B therapy service P4P program. Physical therapy and occupational therapy services will be tested using risk-adjusted payment scenarios. The purpose is to design risk-adjusted cut points for effectiveness of treatments and the number of treatments provided. This program could affect residents receiving Part B therapy services.
       CMS is exploring state interest in implementing parallel P4P demonstration projects for Medicaid services. Providers are concerned that the outcomes from a Medicaid project might affect access to care and, thus, quality of care. Survey tasks are focusing on performance issues in all long-term care facilities. Now is the time to understand and use the tools that will drive P4P in long-term care. A proactive approach will improve quality and ensure appropriate reimbursement. We need to get systems in place to assure that we are addressing specific quality issues.
       To follow are 11 ways to begin to prepare for P4P and value-based purchasing of long-term care services.
       1. Put policies and procedures in place to ensure that we are conforming to federal regulations regarding immunizations. Accurately record this information onto the MDS (Section W).
       2. Embrace methods to enhance consumer satisfaction. Designate the best staff with excellent communication and listening skills to handle resident and family issues. Invest time in building resident and family relationships to ensure open dialogue regarding which services are offered at your facility and what constitutes a reasonable and necessary hospitalization.
       3. Find ways to build consumer confidence in your clinical staff. Educate the registered nurse (RN) and licensed practical nurse staff regarding professional communication with residents and families.
       4. Review your Aspen (the federal complaint tracking system) reports, Online Survey Certification and Reporting (OSCAR) reports (which now include payroll data), complaints (internal and reported to state), complaint and incident review and resolution processes, and incident tracking and resolutions.
       5. Work on staff retention. Be creative in examining issues that enhance the longevity of staff.
       6. Listen to consumer perceptions of quality (ie, food, types of activities, friendly staff, and direct care providers).
       7. Review your facility’s infection control monitoring and education of staff members with regard to infection transmission and hand washing. Look at improving systems. Wound infections, UTIs, and other facility-acquired infections may translate to avoidable hospitalizations.
       8. Emphasize and educate all provider staff regarding pressure ulcers. Have a highly competent wound specialist on staff (with one back-up) who knows the latest and best treatments. Have standing orders so that wound treatment can begin immediately. Have the medical director and primary physicians sign off on the wound treatment protocols. If your facility is small, the wound specialist position does not have to be a full-time equivalent; this person can have a combined position with other duties. However, it is important to select someone who is passionate about wound care and competent in assessment.
       9. Improve you programs for the cognitively impaired residents. Consider vocation boxes and more music, color, and touch for the severely impaired.
       10. Enhance education and maintain updated competency levels for professional staff. RNs must be able to deliver post-acute skilled nursing services.
       11. Improve documentation. Consider having a documentation guru designated on each shift. If an incident occurs or a rehospitalization in considered, have this person assist in professional appropriate documentation. Documentation of the clinical reasons for rehospitalization is vital. Educate and reeducate nursing staff on accurate, professional documentation that embraces critical thinking.

Conclusion

       Value-based, quality-based, performance-based healthcare service purchasing is here. The impact of these concepts in the long-term care setting is beginning to be seen in the way surveys are conducted. Providers will need to consider quality and cost when delivering care.