How to Survive as a Post-Acute Care Provider Without a Health Network

Sound strategies can allow un-affiliated operators to still thrive

By Darrin Hull and Erin Shvetzoff Hennessey, Health Dimensions Group

Are you a post-acute care (PAC) provider operating in a market where you are not a part of your local hospital or health system’s formal network? The future is not as bleak as you may think.

As an independent PAC owner or operator attending trade organization meetings or education sessions in the last several years, you have likely heard that the sky is falling. Many suggest that if you do not formally partner with a hospital or health system, the future of your business is dire.

Partnering and integrating with hospitals and health systems is a solid strategic direction, even if you are not a partner. That said, there are many ways to ensure the success of your PAC business while continuing to operate as an independent provider, meeting revenue goals and providing high-quality care.

Why Are You Not in the Network?  

There are a number of reasons why a formal partnership with a hospital or health system is not possible, including: 

• The local hospital or health system owns or has ownership interest in PAC providers and has developed their own post-acute network; therefore, they are not looking to align with partners with whom they do not retain ownership or operational interest.

• PAC providers were not selected during the hospital or health system’s formal partnership development. In some cases, they could not meet the health system’s network selection criteria or accept the system’s terms for participation.

• The provider is disadvantaged due to geographical location, creating barriers for partnership oversight. 

• The provider has organizational limitations on the types of alignments possible — including government or religious ownership and/or operations. 

Through execution of the strategies below, PAC providers can survive and even thrive outside of formal networks.

Provide Collaborative, Quality, Value-Based Care

Even if you are not a formal partner of the local hospital or health system, you are likely caring for their patients. They have an interest in the care and wellness of the population you both serve once patients are discharged from the acute care setting.

Do not view care provision as an autonomous activity. Use opportunities to collaborate on care through medical specialist involvement, information sharing and proactive communication to the hospital or health system. A provider’s ability to effectively communicate around its clinical and quality outcomes will position the PAC provider favorably in the eyes of medical providers at the health systems, allowing for referrals and recommendations outside of preferred networks.

Even though communication with hospital and health system caregivers does not typically involve senior-level executives, the reputation of good care and confidence will usually make its way to the hospital’s leadership.

It is often advantageous for providers to share in collaborative approaches in care delivery whereby the hospital and PAC providers share in physician, nurse practitioner and other medical provider services to the patients. This type of collaboration promotes improved continuity of care.

Starting in 2016, hospitals in 67 metropolitan statistical area (MSAs) will receive bundled payments for hip and knee joint replacements for Medicare beneficiaries through the Comprehensive Care for Joint Replacement Model (CJR). Being able to articulate the value and quality of your care to hospitals in these markets will be crucial. This data should include both clinical and financial outcomes.

In addition, in 2017, skilled nursing providers with CMS 5-Star Quality rating of three or more stars will be able to admit CJR patients on Medicare Part A stays without a three-day qualifying stay.

As hospitals and health systems look to shorten hospital stays and discharge patients to quality, value-driven organizations, a three-star-or-higher rating will be the standard. If your facility is rated three stars or above, you are far more likely to be included in future network development, or be referred outside of the network.

Become a Valued Customer

Your local health system is most likely operating a complex and diverse business and offers many of the services and products that your organization must purchase or use to operate. These include:

• Medical directors

• Rounding physicians, nurse practitioners, and physician assistants

• Laboratory and phlebotomy services

• Oxygen and durable medical equipment

• Home health and hospice

It is important to quantify the positive financial impact that you have as a customer and partner to hospital or health systems. Internally tracking these expenses and referrals and requesting historical data from the hospital or health system is key to using this data in conversations with the hospital or health system. Keep in mind, it is common that a significant percentage of revenue derived from services to your residents is being billed and collected by the hospital or health system directly through third-party payors.

When interacting with a hospital or health system, don’t be shy in reminding them of the positive financial impact that these revenue sources have on the hospital or health system. As a customer able to articulate the value of the relationship, you may find hospital or health system leadership a bit more accessible than previously thought.

Utilizing the hospital’s or health system’s home health services as a service provider also creates a number of ways to collaborate around patient throughput and leakage avoidance—both extremely important areas for any hospital.

Find Your Specialty

Even robust post-acute networks sometimes lack the type of specialized care that hospitals and health systems need for the timely discharge of certain patients.

By developing advanced competencies in specialty care, such as wound care, geriatric psychiatric support or chronic illness management, you set yourself apart from PAC providers whose programming may focus on more common competencies such as orthopedics or cardiac care.

While you must maintain your proficiency in those areas as well, having a specialty that is unique will position you as a location of choice for the hospital and health system medical providers, even outside of the network.

Hospitals want to discharge their patients to PAC providers they know can care for those patients without the high re-hospitalization rates sometimes associated with certain diagnoses. PAC providers that can provide specialized care that is not available in a formal network will receive referrals from the hospitals.

Take the lead in researching the type of specialty care your referring hospitals or health systems may need by evaluating the hospital’s length-of-stay metrics by diagnosis. Readily available through third parties that compile such statistics, this information is invaluable in positioning you to help alleviate one or more significant pain points for any hospital.

Where statistics show a diagnosis results in a higher-than-peer-group length of stay, you may have discovered an area of specialization and programming underserved by the market.

There Is Always a Need

Even in markets with well-developed post-acute networks, there are times when a certain type of specialty PAC is needed. There are also times that, due to higher-than-normal hospital occupancy rates or during events such as community illness outbreaks, most beds in network communities are full.

Stay on the radar of care managers and discharge planners in the community and be readily available when they need you. To stay ahead of the competition, conducting business with your organization must be an easy, barrier-free process. Always look for ways to streamline intake and make those admission decisions as quickly as possible.

Don’t forget the various managed care payors in your market. Be proactive. Don’t wait to negotiate a one-time agreement with a payor at the time of admission.

Use commonly available government databases to explore who all the payors are in your county and initiate conversations with contracting agents within these organizations. Leverage the same positive outcomes data you share with hospitals to become a preferred provider in payor networks. If you are one of a few providers accepting certain payments, you will receive referrals outside of formal hospital PAC networks.

Stay Focused and Engaged

Even if you were not included in a formal network, stay engaged in the conversation and changing landscape.

The market, your business and the needs of the community will always change and evolve. Stay focused on improving your outcomes, quantifying your value and sharing your value proposition with hospitals and health systems and all others who will listen. Your ability to demonstrate the value you bring to any relationship always improves your ability to find and secure new opportunities for success.

Patient Choice

Last, but certainly not least, with the exception of some payment models or insurance coverage restrictions, patients have a say in where they receive post-acute care.

By becoming a provider of choice in the community, you will see repeat stays, more referrals and increased census.

If being in a formal network with your local hospital or health system is not possible at this time, focus on patient care and the strategies above and you will not just survive, you will thrive.

Darrin Hull is vice president of senior care solutions and Erin Svetzoff Hennessey is vice president of business solutions, both at Health Dimensions Group, a consulting service for healthcare providers including seniors housing.