Direct Admissions to Skilled Nursing Facilities—Are You Ready?
The focus shift in health care delivery from volume to value is getting payers to think more efficiently and effectively regarding site of care. Because one of the most expensive sites of care is the hospital, care has been moving from the hospital setting to the skilled nursing facility (SNF). The cost of most hospital stays exceeds $2000 per day, while SNF stays are typically less than a quarter of that.1
Because hospitals are paid under the diagnostic related group method, where the hospital receives a set lump sum regardless of the length of stay, decreasing hospital lengths of stay has been a priority for years. Hospitals make money through shorter lengths of stay, but, with hospitals taking on risk to lower the total cost of care, they are also looking to reduce hospital admissions as a whole. In order to achieve this, SNFs may begin to accommodate direct admissions at their facilities. In most cases, when it is determined that a patient needs to be admitted to an SNF, they are sent to the emergency department (ED) and then admitted to the hospital. Only after they have been evaluated, are they sent to an SNF. This process can be stressful, costly, and time consuming. Direct admission to the SNF could remedy these issues.
Benefits of Using SNFs for Direct Admissions
There are both clinical and financial benefits to utilizing SNFs for direct admissions. Beyond the obvious financial benefits, there are also clinical reasons, as it is commonplace for older adults to experience iatrogenic events when hospitalized. In one paper on the subject, it was found that at least one-third of all patients had some ill effect during hospitalization that was not related to the progression of any pathologic process, and 9% of patients had a major untoward event.2 Thus, decreasing hospital admissions has both significant clinical and financial benefits that are critical in a value-based care system.
While hospitals are working toward fewer admissions, alternatively, SNFs benefit from increased admissions and occupancy. Through a “home first strategy,” hospitals now perform procedures, such as joint replacement, as outpatient procedures where the patient can go directly home after, but these have previously been done as an inpatient admission with a subsequent SNF rehabilitation stay. Hospitals looking to decrease the total cost of care want to send patients home, when possible, instead of to an SNF. But, with direct admissions, SNFs would be able to increase their occupancy rate.
History of the 3-Day Hospital Requirement
Medicare fee for service (FFS) has limited care organizations’ ability to restrict the use of resources. Unlike managed care organizations that require prior authorization for many services, Medicare FFS does not. Instead, providers can simply provide the service, and Medicare will pay for the services. If Medicare suspects fraud, they may do a review to recapture funds, but this approach is fairly infrequent. In the case of SNF subacute services, Medicare set up a system where a threshold had to be met to gain access to these services to limit overuse. As such, a Medicare beneficiary needs to be in a hospital for 3 days before being eligible for SNF subacute services under Medicare Part A.
Time spent in observation or in the ED prior to (or in lieu of) an inpatient admission to the hospital does not count toward the 3-day qualifying inpatient hospital stay, as a person who appears at a hospital’s ED seeking examination or treatment or is placed on observation has not been admitted to the hospital as an inpatient; instead, the person receives outpatient services. In terms of the SNF qualifying hospital stay requirement, inpatient status commences with the calendar day of hospital admission.
Specifically, the rules here state that the 3 consecutive calendar day stay requirement can be met by stays totaling 3 consecutive days in one or more hospitals. In determining whether the requirement has been met, the day of admission, but not the day of discharge, is counted as a hospital inpatient day.3 This requirement is meant to ensure, for Medicare, that the patient is critical enough to require SNF services and not be overused by inappropriate patients.
While managed care organizations, both Medicare and commercial, have always had the ability to waive the SNF 3-day requirement, Medicare FFS for accountable care organizations (ACOs) is now able to be granted a waiver for this requirement. For approved ACOs and their SNFs, a waiver for the 3-day rule is available in relation to an inpatient hospital, acute-care hospital, or critical access hospital with swing-beds prior to admission to a SNF. In other words, this benefit enhancement allows for beneficiary admission to approved preferred provider SNFs, either directly or with an inpatient hospital stay of fewer than 3 days.
The waiver is available if: (1) the beneficiary does not reside in a nursing home or SNF for long-term custodial care at the time of the decision to admit to a SNF; and (2) the beneficiary meets all other Centers for Medicare & Medicaid Services (CMS) criteria for SNF admission:
- is medically stable;
- has confirmed diagnoses (eg, does not have conditions that require further testing for proper diagnosis);
- does not require inpatient hospital evaluation or treatment; and
- has an identified skilled nursing or rehabilitation need that cannot be provided on an outpatient basis or through home health services.
Preferred provider SNFs must also have, at the time of provider list submission, an overall rating of 3 or more stars for the past 7 of 12 months under the CMS Five-Star Nursing Home Quality Rating System. This is yet another reason that the star rating is so critical for SNFs. Star ratings are reviewed at the time of the preferred provider list submission. Once the SNF has been approved for inclusion on the list for a given performance year, it is not removed during the performance year if the star rating declines.
Beyond Medicare ACOs that are now able to promote direct admissions, direct admissions can also come through managed care plans as well as through those recently discharged from the hospital that still qualify for SNF admissions. There are also other relationships that utilize direct admissions such as hospice and private payers both in need of respite care.
The Process of Direct Admission
Facilities should start by achieving a 3-star rating and developing an admission process from rapid assessment; then they should focus on initial and ongoing treatment—as well as assessment of those treatments in a timely manner—this requires careful planning.
Perhaps the easiest direct admission to SNFs are those coming from an ED, since a rapid comprehensive assessment can be completed as well as the initial treatment. In fact, our facilities, Forest and Chestnut Hill Healthcare Center in Newark and Passaic New Jersey, have developed programs where patients are sent for Rapid Assessment + Initial Treatment, a process which we affectionately refer to as RAbbIT. RAbbIT requires working with the ED ahead of time to establish a process where patients can be seen in the ED and be rapidly assessed with initial treatment started for continuation within the SNF. The reason this requires preparation is that EDs like to admit to the hospital patients who could just be sent to the SNF, so without setting the foundation for this process, EDs would just admit these patients, which is the opposite of reducing hospital admissions. Besides the ED, these services can also be accomplished through the ever-expanding urgent care centers. Together, EDs and urgent care can be used as the starting point for admission directly to the SNF.
For those not coming through these channels, the SNF must be prepared to have a primary care provider (PCP) make an assessment and establish the treatment plan upon admission. This availability of an admitting provider through either virtual provider access or having a dedicated advanced practice nurse at the facility is critical to managing direct admission. Increased PCP availability in an SNF can come through the establishment of a PCP community office within the SNF.
Once the admission orders are complete, another barrier to efficient direct admissions is access to medications. SNFs are dealing with this through use of onsite instant dispensing machines for medications. This comes with benefits and challenges as pointed out by the Institute of Healthcare Improvement, because when medications are stored on patient care units, it may be easy to select the wrong medication or dose.4 Staff members may also forget to record what they select or administer. Dispensing machines often have mechanisms to help prevent these errors, for example, the machine can require that a patient identification number be entered before a medication will be dispensed. Many dispensing machines can also interface with hospital computer systems to integrate their data with information from order entry systems and medication administration records. Dispensing machines can also issue alerts and ask whether an adverse drug event has occurred whenever the machine dispenses a common reversal agent or antidote.
Conclusion
Direct admissions will be coming from managed care organizations, hospice, private respite, and, most recently, Medicare FFS ACOs, but only to those SNFs that are prepared to handle this process—a process significantly different than the traditional admission, which is a transition from the hospital. Those SNFs appropriately equipped to handle direct admissions will benefit from improved clinical and financial outcomes.
References
1. Rappleye E. Average cost per inpatient day across 50 states. Becker’s Hospital Review. https://www.beckershospitalreview.com/finance/average-cost-per-inpatient-day-across-50-states.html. Published May 19, 2015. Accessed November 20, 2018.
2. Steel K, Gertman PM, Crescenzi C, Anderson J. Iatrogenic illness on a general medical service at a university hospital. BMJ Qual Saf Health Care. 2004;13(1):76-80.
3. Centers for Medicare & Medicaid Services (CMS). Medicare Benefit Policy Manual, Chapter 8 – Coverage of extended Care (SNF) services under hospital insurance. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c08.pdf. Revised March 16, 2018. Accessed November 19, 2018.
4. Institute for Healthcare Improvement (IHI). Changes, use medication dispensing machines. ihi.org website. https://www.ihi.org/resources/Pages/Changes/UseMedicationDispensingMachines.aspx. Accessed November 19, 2018.
