Unintended Consequences of Measures to Reduce Readmissions and Reform Payment—Threats to Vulnerable Older Adults by Mary D. Naylor, Ellen T. Kurtzman, David C. Grabowski, Charlene Harrington, Mark B. McClellan & Susan C. Reinhard

Long Term Services and Supports (LTSS) »Defined as assistance with ADLs or IADLs »Growing population of frail, older people require LTSS  million community-based residents, half of whom are older adults  1.8 million nursing home residents, most of whom are older adults »Recipients of LTSS experience frequent changes in health and multiple transitions »Represent disproportionate share of spending—15% of Medicare beneficiaries have both chronic illnesses and LTSS needs but account for 30% of spending »Much of this spending and associated care may be avoidable (e.g., repeat hospitalizations for uncontrolled conditions)

Impact of Transitions on Older Adults Receiving LTSS 3 Poor health outcomes—accelerated cognitive and physical functional decline Higher rates of iatrogenic events such as hospital- acquired conditions, medical errors Unmet needs, lower patient satisfaction, higher caregiver burden Excessive and often avoidable use of costly health services such as emergency department (ED) visits and hospitalizations

Evidence of Effective Transitional Care »21 RCTs of 587 diverse “hospital to home” innovations targeting chronically ill older adults »9 of 21 had positive impact on at least one measure of rehospitalization plus other health outcomes »Multicomponent interventions that address gaps in care, promote effective hand-offs/root causes of poor outcomes »Reliance on in-person home visits, patient self- management, connecting acute and primary care »Nurses as “hubs”—clinical managers or leaders »Interventions averaged 9+ weeks Naylor, Aiken, Kurtzman, Olds, & Hirschman. Health Affairs. 2011; 30(4):

Yet Few Effective LTSS Transitions, Why? »Under current fragmented payment and delivery system, little incentive to invest in better transitional care models »Opportunity for reform

ACA Reforms »New ACA policies and programs illustrate opportunities to enhance transitional care among Medicare population »Potential for older adult population receiving LTSS to benefit  Hospital Readmissions Reduction Program (Section 3025)  National Pilot Program on Payment Bundling (Section 3023)  Community-Based Care Transitions Program (Section 3026)

ACA’s Impact on Transitions Among Older Adults Receiving LTSS 7

8 »Beginning October 2012, hospitals with excessive, severity- adjusted rehospitalization rates (30 day) will be financially penalized »Initially limited to three target conditions—pneumonia, HF, and AMI—with expansion to other conditions in 2015 »Within 2 years of law’s enactment, quality improvement support will be provided to hospitals through Patient Safety Organizations (PSOs) »Should motivate behaviors that reduce preventable rehospitalizations and improve outcomes for all beneficiaries, including frail elders receiving LTSS Hospital Readmissions Reduction Program

9 »Common reasons for hospitalization among older adults receiving LTSS do not fully synch with those targeted by the law »Restriction of PSO quality improvement opportunities to hospitals »Coordination between acute care and LTSS providers not guaranteed »Preventing rehospitalizations is known to be costly »Penalty cap could incentivize providers to bear the penalty rather than assume costs for prevention »Use of coding to avoid measurement of some rehospitalizations (e.g., observation stays) Hospital Readmissions Reductions— Barriers

10 »Five year pilot program established by January 2013 to evaluate an episode-based, integrated care delivery and payment program »Structured around an acute care hospitalization »Longest “episode” covered—three days before hospital admission and through 30 or 90 days post-hospital discharge »Bundled payment pays for inpatient, physician, outpatient, and postacute care »Should reduce costs and improve quality—incentives will exist to deliver care in the lowest-cost setting, maximize operating margins, and avoid expensive postacute stays and preventable rehospitalizations National Pilot Program on Payment Bundling

11 »Pilot excludes LTSS as part of the “bundle” »Little incentive exists to coordinate care before or beyond the episode »Fails to create the type of integration among acute, postacute, and primary care and community- and institutionally based LTSS »Hospitals likely to limit referral networks which may incentivize nursing homes to specialize in postacute care rather than LTSS »May incentivize withholding or denying care and shifting costs to the postbundle period Hospital Readmissions Reductions— Barriers

12 » $500 million available to community-based organizations (CBOs) + one or more hospitals with high readmission rates to provide transitional care services » Implementation of evidence-based care transition services (e.g., timely post-discharge follow up, self-management support, comprehensive medication review and management) » Target high risk Medicare beneficiaries—those who have been diagnosed with multiple chronic conditions or possess other factors, such as cognitive impairment, depression, or a history of multiple readmissions, that others place them at risk Community-Based Care Transitions (CCTP)

13 » Hospitals as “hub” of care transitions—some frail older adults receiving LTSS are likely to be “missed” if they are not hospitalized and/or live outside geographic region » Patients may lack the required physical, mental, functional disabilities or other determinants for eligibility » Medicare-only benefit without any specific mandate to align, integrate, or coordinate with Medicaid or private insurers Community-Based Care Transitions— Barriers

Policy Recommendations 14

15 Going Beyond the Affordable Care Act »Anticipate unintended consequences  Identify negative effects through warning signs  Longitudinally monitor consequences  Enhance existing performance measures and available data »Advance payment policies that integrate care  Reform needs to incorporate LTSS  Shorter-term, immediate pathways that build on existing programs (e.g., extend readmissions penalties to LTSS) »Promote needed delivery system reforms  Support for providers in their implementation of these provisions

16 Reforming the System »Bring together acute, post-acute and long term care communities to implement health care reforms that improve health and lower costs, particularly for patients with complex needs, including new support for:  Providers  Consumers  Payers  Purchasers »Examples: Aligned provider payment and benefit design reforms for Accountable Care Organizations, Medical Homes, Episode Payments »LTQA can facilitate educational and other reform initiatives that advance developing comprehensive reforms

17 Conclusions Selected provisions of the Affordable Care Act inadequately address the unique needs of older adults receiving LTSS and may introduce unintended consequences Policy action is needed to address these potential emerging risks

18 To Become Involved Contact Doug Pace Executive Director LTQA