OpenPlacement Blog

Managing Post-Acute Risk: Key Strategies for Hospitals

BPCIIn 2013, the first cohorts participating in The Bundled Payments for Care Improvement (BPCI) initiative entered into payment arrangements emphasizing  accountability, both financial and performance-based. These arrangements, championed by the Centers for Medicare & Medicaid Services (CMS), were designed to provide for episodes of care in the aim of reducing costs to Medicare while improving the quality and coordination of patient care.(Bundled, 2016)

While this payment system has typically been restricted to those care providers that have opted in, CMS has initiated a new Medicare Part A and B payment model that is being tested in 67 geographic areas throughout the country. This model, titled the Comprehensive Care for Joint Replacement Model (CJR), is unique in that in those 67 areas, almost all hospitals are required to participate. Hospitals in these 67 areas are acting as test subjects and, if the trial is successful, this model could possibly foreshadow the future of what is to come for hospitals across the nation. (Comprehensive, 2015).

According to, "[a]lthough the CJR Model is distinct from the Bundled Payments for Care Improvement initiative, both initiatives are part of the innovative framework established by the Affordable Care Act to move our health care system toward one that rewards providers based on the quality, not quantity, of care they deliver to patients." Hospitals are encouraged to provide quality care in acute and post-acute settings regardless of whether they treat the patient in a post-acute setting, and while the number of hospitals affected by this is relatively small, big changes are to come. By 2016, CMS's goal is to tie 30 percent of Medicare payments to quality and value through alternative payment models and by 2018, that figure will jump to 50 percent. (CMS, 2015)

In both the CJR Model as well as Model 2 of the BPCI, the episode of care begins when a patient is admitted to the hospital and ends after 90 days post-discharge regardless of where the patient ends their care. (Comprehensive, 2016). The hospital is thus responsible for not only the care provided by their establishment but is also responsible for the care a patient receives from a post-acute care (PAC) provider within 90 days of discharge. This requirement thus incentivizes the hospital to implement strategies for better transitions to the highest quality PAC facilities managing post-acute risk to produce better patient outcomes and lower costs to the hospital. (Bundled, 2016)

Patient Assessment As a Tool to Mitigate Risk

One way that hospitals can mitigate risk is by using a comprehensive patient assessment system to identify those patients that are most at risk of readmission and poor outcomes. Dr. Joan DaVanzo, in her presentation to the National Association of Accountable Care Organizations (NAACOS), stratifies patients into 5 risk categories. These categories progress in severity of ailment from Healthy to Stable to At Risk to Multiple Chronic Illnesses to Advanced/Chronic Illness. By assessing and classifying patients in this manner, providers "can identify those in population who need extra attention to manage chronic illness and/or avoid readmissions and to track progress over time" (DaVanzo, 2014). Thus, patient assessments and classifications become a valuable tool in determining which patients need extra care and attention when assisting them with choosing a PAC organization. This extra time and attention to the most at-risk individuals can help ensure better transitions and mean enacting preemptive interventions before the patient requires readmission.

The Importance of Data Management and Utilizing New Tools

While patient assessment and classification can help mitigate risk by identifying those patients most likely to need quality, intensive post-acute care, without a system of management, this information becomes at best, redundant and, at worst, useless. Sharing data across providers can help reduce redundancies and allows for easier communication between hospitals and PAC providers. In the past, some states have allowed physicians seven days to send discharge summaries to post-acute facilities. The effective use of data management systems, such as the electronic health record can mean the patient leaves the hospitals with their discharge papers allowing the post-acute facility to better tailor their care faster and more efficiently (Hegwer, 2013). Just as in the case of patient assessment, better data management means easier communication which results in better outcomes.

There are a couple of tools that can be utilized by hospitals to assist with data management. Transition agencies specialize in bridging the gap between hospitals and PAC facilities. These agencies can be especially helpful in ensuring that the patient gets placed in the right PAC facility with the highest quality available while fulfilling Medicare's required Patient's Right to Choose mandate. The agencies allow patients to work together with discharge planners and case managers to view aggregated data and governmental ratings on PAC providers in their geographic areas. This ensures that the patient gets what they want most, usually a facility closest to family and their home, while hospitals get what they want most, lowered costs and better outcomes.

Another useful tool for data management is the creation of positions specifically designed to follow patients from acute to post-acute care. These care coordinators usually visit with the patient and family upon discharge from the hospital, helping to facilitate the needs of the patient as well as coordinating their care plan. The care coordinator will then meet again with the patient and their family within 24-48 hours upon admission to a PAC facility to ensure that their care plan is being followed (Hegwer, 2013). Having a dedicated position overseeing the transition of patients cuts down on miscommunication not only between hospitals and PAC facilities but also between staff members who may be overseeing the care of multiple patients at one time.

Additional Strategies to Mitigate Risk

Some hospitals, in an effort to better coordinate care and ensure that the patient receives top tier care in a post-acute setting contract their own PAC facilities. By keeping patients under the hospital's umbrella of care, providers know where their patients are going after their hospital stay and can ensure that they receive appropriate and quality care. However, providers utilizing this strategy have to be cautious not to violate CMS's "Patient's Right to Choose" directive. Another potential challenge that comes along with owning PACs is the issue of acquisition which requires buy-in by acute care CEOs and executives. The top executives must  provide oversight and avoid  "see[ing] post‐acute care as a vehicle for bed and volume management, [instead of] an essential part of the care continuum needed to effectively manage an episode of care." (MedStar Health, 2011)

Another, potentially politically difficult, strategy to reduce risk is to introduce global budgeting. This strategy requires an understanding by hospital leadership that there will be some entities that will consistently lose money while others will consistently make money. By instituting a global budget, competition between facilities is reduced while allowing well-performing entities to cover other entities' financial losses for the good of everyone. "Acute and post‐acute providers alike have separate budgets driven by volume and revenue. The current payment environment offers few incentives for financial collaboration across multiple settings in a more service‐ line, patient‐centered system of care.   Instead, there is an overwhelming mandate for subsidiaries to meet budget targets." When everyone in the care continuum operates within a global budget, there is more incentive to streamline care instead of competing. (MedStar Health, 2011)

In the upcoming years, as CMS continues to place more and more restrictions on hospitals and pushes tying Medicare payments to quality and value through alternative payment models , it will become vitally important to utilize new tools and strategies to mitigate financial risk. Those hospitals that preempt mandates and institute changes now will be ahead of the curve. With patient safety and quality of care on the line coupled with the need to control costs, hospitals are in a tough situation to find a happy medium.  By utilizing patient assessment, data management, owned/contracted facilities, and global budgets hospitals can streamline transitions from acute to post-acute care mitigating the risk of re-admittance and the penalties that come along with it. In the years to come, smoother, more efficient transitions for patients mean better care outcomes for patients and better financial outcomes for hospitals.

Bundled Payments for Care Improvement (BPCI) Initiative: General Information. (2016, April 29). Retrieved June 13, 2016, from

CMS announces additional participants in pilot project to improve care and reduce costs for Medicare. (2015, August 13). Retrieved June 13, 2016, from

Comprehensive Care for Joint Replacement (CJR) Model. (2015, November 16). Retrieved June 12, 2016, from

Comprehensive Care for Joint Replacement Model. (2016, May 06). Retrieved June 12, 2016, from

DaVanzo, D. J. (2014). Managing Post‐Acute Care and Risk Assessment. Washington D.C.: Dobson DaVanzo & Associates, LLC.

Hegwer, L. R. (2013). Bridging Acute and Post-Acute Care. HFMA Learning Solutions, Inc.

MedStar Health. (2011). Delivery of Post-Acute Care Services Among Leading Health Sytems. Nashional Rehabilitation Hospital and MedStar Health.