ACOs have an economic incentive to manage post-acute care use rates, networks, quality, and costs. Today, this often includes an expanded use of home visits and in-home care. Joe Damore, CEO of Damore Health Advisors (below), offers three steps to scale home-based services and manage total cost of care.

Managing post-acute care providers and patients is critical to the success of most Accountable Care Organizations.

The post-acute network includes more than just skilled nursing facilities. It includes home health care, hospice care, inpatient rehabilitation care, and long-term acute care hospitals. Each of these services can have an impact on the total cost of PAC services, and significantly impact hospital costs, quality of care, and readmission penalties.

As care continues to move home, traditional Medicare-approved services like skilled nursing and home health care are not enough. Meal delivery, transportation, remote monitoring, and pest control are examples of the services needed to deliver care in the home setting.

Medicare Advantage (MA) plans and ACOs have an economic incentive to manage PAC use rates, networks, quality, and costs. Medicare spent about $60 billion on PAC services (not including hospice) in 2016, as reported by MedPAC. Additionally, 22% of SNF admissions were readmitted to hospitals within 30 days.

As care continues to move into the home, traditional Medicare-approved services like skilled nursing and home health care are no longer enough.

The use and cost of PAC services have a significant impact on the financial success and results of quality metrics of an ACO. For example, LTACH use can range from 0.3% to 3% of hospital discharges, according to a report from Kindred Healthcare.

Step 1: Manage PAC Services

The first key to managing PAC services is to refer patients to the most cost-effective and clinically appropriate site of care.

MA plans and ACOs are financially incentivized to provide care in the least expensive location, such as the home or a PAC setting, instead of the hospital.

A 2018 study by Health Affairs demonstrated that Medicare ACOs who routinely used home care had more than a 50% higher shared savings amount than those that did not routinely use home care visits. The primary reasons for home visits were patient assessments, including for non-compliance; needs assessments; and medication reconciliation.

According to a study by Deloitte, MA plans used significantly fewer PAC days of care than fee-for-service (FFS) patients including at Inpatient Rehabilitation Facilities (IRF) and SNFs, despite a 2% higher admission rate to them based on a study of stroke patients, joint replacement patients, and heart failure patients for these same conditions.

Step 2: Manage Preferred Networks

A second key is to select and manage a preferred provider network based on measurable criteria, including total cost of care, patient satisfaction, complications such as infection and decubiti rates, and readmission rates.

Most MA plans and about half of all ACOs have started to develop preferred PAC networks based on performance criteria and geographical and market coverage. Examples of criteria include STAR ratings, quality measures such as falls based on “real time” data, impact on hospital readmission rates and ER visits, and overall outcomes and costs.

Today, the reasons for home visits have expanded to include primary care assessments, managing patients with chronic diseases, managing the acute post-discharge transition, medication reconciliation and management, and support for the frail elderly.

The new CMS Acute Hospital at Home model will allow for further expansion of care in the home as it permits payment to organizations for care that previously was required in the hospital.

Covid-19 created a need and moved telehealth and home care to the forefront with positive results and positive patient satisfaction. New remote patient monitoring (RPM) technology is creating new opportunities for caring for acutely ill patients in the home . These factors will result in additional growth in PAC, especially in the home.

Step 3: Use Technology to Boost Efficiency

Many ACOs are still using Excel spreadsheets to manage PAC networks and care. New technology and electronic tools provide an opportunity to better manage networks and enable real-time data exchanges and care coordination.

There is also an opportunity to use data from the home to refine population health strategies and proactively manage care. New tools allow you to plug into smart devices, integrate with telehealth and remote monitoring technology, and electronically engage patients for monitoring and evaluation. Triggers from predictive modeling, and from patients directly, can help care coordinators “manage by exception” and determine in real-time who may need intervention.

New technology and electronic tools provide an opportunity to better manage networks and enable real-time data exchanges and care coordination.

Scaling Home Services

Better management of PAC services, especially home health care services, offers hope for managing total cost of care, and lets patients receive care in a safer and more comfortable setting than institutional care. Innovative technology will permit the scaling of home services to a much greater degree and will result in more efficient health systems, MA plans, and ACOs. The growth of care in the home appears to be a priority for health systems, ACOs, and health plans.

Joe Damore is CEO of Damore Health Advisors ( A seasoned healthcare executive, Damore has extensive experience assisting organizations in successfully transitioning to value-based care and other payment models. He is a former vice president at Premier Performance Partners, and was CEO at Mission Health System in Asheville, North Carolina, and Sparrow Health System in Lansing, Michigan for two decades.

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