The Role of Quality Measures in Long-Term Care Reimbursement

Barb Notardonato-Cole

Principal

After attending the OHCA Winter Conference last week and listening to Medicaid Director John McCarthy speak, I was again struck by how important quality measures are going to be for future reimbursement dollars.  Deputy McCarthy’s presentation discussed the “Balancing Incentive Program”, a plan whose goal is to create a unified system for long-term care access and to link payments to person-centered outcomes.  He also touched on “Payment Innovation” initiatives being explored by the Governor’s Office of Health Transformation.  The Office of Health Transformation website lists the goal of Payment Innovations as “to design and implement new health care delivery systems to reward the value of services, not the volume”.   In other words—payment based on quality.

Quality is a great buzzword, and everyone wants to provide it, but sometimes it can be really tricky to measure.  I have many long-term care clients who do a great job of delivering quality.  What they don’t do, however, is a great job of tracking it.  It’s a balancing act.  Do you use resources to provide the care or to document the care?  With skilled nursing facility staffing already being squeezed by cuts in Medicaid and Medicare reimbursement, it can be difficult to allocate those resources to do the necessary documentation.

Quality can be very subjective; yet we are increasingly being called on to quantify it.  Sometimes the quantitative measures don’t reflect the true story.  For example, Hospital A may have much higher mortality rates than Hospital B.  However, Hospital A likely takes patients with much higher acuity, or specializes in a newer experimental treatment for those patients who are more critically ill. On the surface, mortality rates may seem like a good statistic to analyze because it is so easy to obtain.  But it is rarely a good indicator of hospital quality.  This is the downside of “quantifying quality”.

It is becoming clear (even without a crystal ball), that health care dollars are going to be tied to quality and divided up among larger groups of providers.  Skilled nursing facilities may find themselves splitting episodic payments with home and community-based providers, hospitals, and others, and their share will be based on quality and outcomes.  Facilities will need to focus efforts on properly measuring and reporting quality statistics. It has to become a priority.  I also believe that technology will continue to play a big role in this.  To the extent that measuring quality can be automated, it will alleviate some of the tug of war between using resources to provide the care versus documenting the care.

Payment models for long-term care are evolving.   The facilities that become the most successful may not be the ones providing the best quality, but they will be the ones that do the best at documenting it. Facilities that thrive and grow in the future will be good at both.