Given the state of the healthcare business and human nature, I find myself more and more favoring managed care plans

On May 7, McKnights published an article titled More than half of skilled nursing facility rehab residents classified under Ultra-High, CMS finds. The title was fairly benign but what really caught my eye was a Twitter quote from the body of the article: “Skilled nursing facility therapy billings in the Ultra-High RUG category increased steadily in recent years. . . ” The article then goes on to make the following points:

  • The Ultra-High Rehab Category represented over 50% of the Skilled Nursing Medicare Part A billing days last year.
  • The number of residents classified in the Ultra-High group was 48.6% up from 44.8% the year before.
  • In contrast all other lower payment billing categories remained steady or declined.
  • The Smoking Gun: The amount of therapy being provided is frequently just enough to put the resident in the highest reimbursement categories.

The Big Bleed

On one hand I get that skilled nursing communities operate in a system that looks a bit like high stakes poker, where they feel as if they have to use every single advantage they can find to win. In this case, figuring out how to maximize therapy dollar reimbursements. Yet . . .

  • My single biggest beef is that what is best for the resident takes a back seat to maximizing cash flow to the operator. Don’t get me wrong, I think profit is a good thing, but I don’t think it is the most important thing. It should always be secondary to doing the right thing for the resident.
  • When a resident receives the skilled nursing benefits through a managed care plan their care is heavily case managed and, in most cases, they receive much less therapy than Medicare residents with matching needs. Yet the outcomes for those residents is as good or better as those who receive revenue maximizing therapy.
  • I worry that excessive therapy could be detrimental to frail residents (a study someone ought to undertake). It would seem to unnecessarily emotionally and physically tax these residents.
  • Those dollars that flow through the system and into the pockets of the skilled nursing operators come from a pot of money that comes out of my tax payer pocket or, more realistically, out of the pockets of my children and grandchildren in the form of higher deficits. This is not fair and is not right.
  • On one hand the industry rightly complains about regulations, restrictions and excessive record keeping. Yet, when stuff like this happens the only thing Medicare can do is add more paperwork, more regulations and more restrictions to curb the excesses.

In truth the skilled nursing industry is largely to blame for the oppressive regulatory and reimbursement system. Too many operators worked every angle and took every short cut. The industry did not do a good job of self-enforcement.

This should been seen as a cautionary tale for the assisted living industry.

  • In this particular circumstance skilled nursing operators have put Medicare in a real bind. On one hand they want to, even need to, have a provision to provide and pay for high levels of therapy for a small percentage of residents who could really benefit without having to worry about massive industry wide therapy creep.

Given the state of the healthcare business and human nature, I find myself more and more favoring managed care plans where there are case managers who will take a more rational approach to balancing outcomes and cost, though honestly I believe it would be much better if the industry would do the right thing. Am I overly critical? Steve Moran

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