Bradley Flansbaum, DO, MPH

In recognizing the importance of Hospital Medicine (HM) and its practitioners, the Centers for Medicare and Medicaid Services (CMS) awarded the field a specialty designation in 2016. The code is self-selected by hospitalists and used by the CMS for programmatic and claims processing purposes. The HM code (“C6”), submitted to the CMS by the provider or their designee through the Provider Enrollment Chain and Ownership System (PECOS), in turn links to the National Provider Identification provider data.

The Society of Hospital Medicine^® sought the designation given the growth of hospitalists practicing nationally, their impact on the practice of medicine in the inpatient setting,¹ and their secondary effects on global care.² In fact, early efforts by the CMS to transition physician payments to the value-based payment used specialty designations to create benchmarks in cost metrics, heightening the importance for hospitalists to be able to assess their performance. The need to identify any shifts in resource utilization and workforce mix in the broader context of health reforms necessitated action. Essentially, to understand the “why’s” of hospital medicine, the field required an accounting of the “who’s” and “where’s.”

The CMS granted the C6 designation in 2016, and it went live in April 2017. Despite the code’s brief two-year tenure, calls for its creation long predated its existence. As such, the new modifier requires an initial look to help steer the role of HM in any future CMS and managed care organization (MCO) quality, payment, or practice improvement activities.

We analyzed publicly available 2017 Medicare Part B utilization data³ to explore the rates of Evaluation & Management (E&M) codes used across specialties, using the C6 designation to identify hospitalists.

To try to estimate the percentage of hospitalists who were likely billing under the C6 designation, we then compared the rates of C6 billing to expected rates of hospitalist E&M billing based on an analysis of hospitalist prevalence in the 2012 Medicare physician payment data. Prior work to identify hospitalists before the implementation of the C6 designation relied on thresholds of inpatient codes for various inpatient E&M services.^4,5 We used our previously published approach of a threshold of 60% of inpatient E&M hospital services to differentiate hospitalists from their parent specialties.⁶ We also calculated the expected rates of E&M billing for other select specialty services by applying the 2012 E&M coding trends to the 2017 data.

Table 1 shows the distribution of inpatient E&M codes billed by hospitalists using the C6 identification, as well as the use of those codes by other specialists. Hospitalists identified by the C6 designation billed only 2%-5% of inpatient and 6% of observation codes. As an example, in 2017, discharge CPT codes 99238 and 99239 were used 7,872,323 times. However, C6-identified hospitalists accounted for only 441,420 of these codes.

Table 2 compares the observed billing rates by specialty using the C6 designation to identify hospitalists with what would be the expected rates with the 2012 threshold-based specialty billing designation applied to the 2017 data. This comparison demonstrates that hospitalist billing based on the C6 modifier use is approximately one-tenth of what would have been their expected volume of E&M services.

We examined the patterns of hospitalist billing using the C6 hospital medicine specialty modifier, comparing billing patterns with what we would expect hospitalist activity to be if we had used a threshold-based approach. The difference between the C6 and the threshold-based approaches to assessing hospitalist activity suggests that as few as 10% of hospitalists have adopted the C6 code.

Why is the adoption of the C6 modifier so low? Although administrative data do not allow us to identify the reasons why providers chose to disregard the C6 designation, we can speculate on causes. There are, to date, low direct risks and recognized benefits with using the code. We hypothesize that several factors could be impeding whether providers use the modifier to bring about potential gains. The first may be knowledge-related; ie, hospitalists might not be familiar with the specialty code or unaware of the importance of accurately capturing hospitalist practice patterns. They may also wrongly assume that their practices are aware of the revision or have submitted the appropriate paperwork. Similarly, practice personnel may lack knowledge regarding the code or the importance of its use. The second factor may be logistical; ie, administrative barriers such as difficulty accessing the Provider Enrollment, Chain and Ownership System (PECOS) and out-of-date paper registration forms impede fast uptake. The final reason might be related to professionals whose tenures as hospitalists will be brief, and their unease of carrying an identifier into their next non-HM position prompts hesitation. Providers may have a misperception that using the C6 code may somehow impact or limit their future scope of practice, when, in fact, they may change their Medicare specialty designation at any time.

Changes in reimbursement models, including the Bundled Payments for Care Improvement Advanced (BPCI-A) and other value-based initiatives, heighten the need for a more accurate identification of the specialty. Classifying individual providers and groups to make valid performance comparisons is relevant for the same reasons. The CMS continues to advance cost and efficiency measures in its publicly accessible physiciancompare.gov website.⁷ Without an improved ability to identify services provided by hospitalists—by both CMS and commercial entities—the potential benefits delivered by hospitalists in terms of improved care quality, safety, or efficiency could go undetected by payers and policymakers. Moreover, C6 may be used in other ways by the CMS throughout its payment systems and programmatic efforts that use specialty to differentiate between Medicare providers.⁸ Finally, the C6 is an identifier for the Medicare fee-for-service system; state programs and MCOs may not identify hospitalists in the same manner, or at all. Therefore, it may make it more difficult for those groups and HM researchers to study the trends in care delivery changes. The specialty needs to engage with these other payers to assist in revising their information systems to better account for how hospitalists care for their insured populations.

Although we would expect a natural increase in C6 adoption over time, optimally meeting stakeholders’ data needs requires more rapid uptake. Our analysis is limited by our assumption that specialty patterns of code use remain similar from 2012 to 2017. Regardless, the magnitude of the difference between the estimate of hospitalists using the C6 versus billing thresholds strongly suggests underuse of the C6 designation. The CMS and MCOs have an increasing need for valid and representative data, and C6 can be used to assess “HM-adjusted” resource utilization, relative value units (RVUs), and performance evaluations. Therefore, hospitalists may see more incentives to use the C6 specialty code in a manner consistent with other recognized subspecialties. 

Disclaimer

The research reported here was supported by the Department of Veterans Affairs, Veterans Health Administration, and the Health Services Research and Development Service. The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the Department of Veterans Affairs.

In recognizing the importance of Hospital Medicine (HM) and its practitioners, the Centers for Medicare and Medicaid Services (CMS) awarded the field a specialty designation in 2016. The code is self-selected by hospitalists and used by the CMS for programmatic and claims processing purposes. The HM code (“C6”), submitted to the CMS by the provider or their designee through the Provider Enrollment Chain and Ownership System (PECOS), in turn links to the National Provider Identification provider data.

The Society of Hospital Medicine^® sought the designation given the growth of hospitalists practicing nationally, their impact on the practice of medicine in the inpatient setting,¹ and their secondary effects on global care.² In fact, early efforts by the CMS to transition physician payments to the value-based payment used specialty designations to create benchmarks in cost metrics, heightening the importance for hospitalists to be able to assess their performance. The need to identify any shifts in resource utilization and workforce mix in the broader context of health reforms necessitated action. Essentially, to understand the “why’s” of hospital medicine, the field required an accounting of the “who’s” and “where’s.”

The CMS granted the C6 designation in 2016, and it went live in April 2017. Despite the code’s brief two-year tenure, calls for its creation long predated its existence. As such, the new modifier requires an initial look to help steer the role of HM in any future CMS and managed care organization (MCO) quality, payment, or practice improvement activities.

We analyzed publicly available 2017 Medicare Part B utilization data³ to explore the rates of Evaluation & Management (E&M) codes used across specialties, using the C6 designation to identify hospitalists.

To try to estimate the percentage of hospitalists who were likely billing under the C6 designation, we then compared the rates of C6 billing to expected rates of hospitalist E&M billing based on an analysis of hospitalist prevalence in the 2012 Medicare physician payment data. Prior work to identify hospitalists before the implementation of the C6 designation relied on thresholds of inpatient codes for various inpatient E&M services.^4,5 We used our previously published approach of a threshold of 60% of inpatient E&M hospital services to differentiate hospitalists from their parent specialties.⁶ We also calculated the expected rates of E&M billing for other select specialty services by applying the 2012 E&M coding trends to the 2017 data.

Table 1 shows the distribution of inpatient E&M codes billed by hospitalists using the C6 identification, as well as the use of those codes by other specialists. Hospitalists identified by the C6 designation billed only 2%-5% of inpatient and 6% of observation codes. As an example, in 2017, discharge CPT codes 99238 and 99239 were used 7,872,323 times. However, C6-identified hospitalists accounted for only 441,420 of these codes.

Table 2 compares the observed billing rates by specialty using the C6 designation to identify hospitalists with what would be the expected rates with the 2012 threshold-based specialty billing designation applied to the 2017 data. This comparison demonstrates that hospitalist billing based on the C6 modifier use is approximately one-tenth of what would have been their expected volume of E&M services.

We examined the patterns of hospitalist billing using the C6 hospital medicine specialty modifier, comparing billing patterns with what we would expect hospitalist activity to be if we had used a threshold-based approach. The difference between the C6 and the threshold-based approaches to assessing hospitalist activity suggests that as few as 10% of hospitalists have adopted the C6 code.

Why is the adoption of the C6 modifier so low? Although administrative data do not allow us to identify the reasons why providers chose to disregard the C6 designation, we can speculate on causes. There are, to date, low direct risks and recognized benefits with using the code. We hypothesize that several factors could be impeding whether providers use the modifier to bring about potential gains. The first may be knowledge-related; ie, hospitalists might not be familiar with the specialty code or unaware of the importance of accurately capturing hospitalist practice patterns. They may also wrongly assume that their practices are aware of the revision or have submitted the appropriate paperwork. Similarly, practice personnel may lack knowledge regarding the code or the importance of its use. The second factor may be logistical; ie, administrative barriers such as difficulty accessing the Provider Enrollment, Chain and Ownership System (PECOS) and out-of-date paper registration forms impede fast uptake. The final reason might be related to professionals whose tenures as hospitalists will be brief, and their unease of carrying an identifier into their next non-HM position prompts hesitation. Providers may have a misperception that using the C6 code may somehow impact or limit their future scope of practice, when, in fact, they may change their Medicare specialty designation at any time.

Changes in reimbursement models, including the Bundled Payments for Care Improvement Advanced (BPCI-A) and other value-based initiatives, heighten the need for a more accurate identification of the specialty. Classifying individual providers and groups to make valid performance comparisons is relevant for the same reasons. The CMS continues to advance cost and efficiency measures in its publicly accessible physiciancompare.gov website.⁷ Without an improved ability to identify services provided by hospitalists—by both CMS and commercial entities—the potential benefits delivered by hospitalists in terms of improved care quality, safety, or efficiency could go undetected by payers and policymakers. Moreover, C6 may be used in other ways by the CMS throughout its payment systems and programmatic efforts that use specialty to differentiate between Medicare providers.⁸ Finally, the C6 is an identifier for the Medicare fee-for-service system; state programs and MCOs may not identify hospitalists in the same manner, or at all. Therefore, it may make it more difficult for those groups and HM researchers to study the trends in care delivery changes. The specialty needs to engage with these other payers to assist in revising their information systems to better account for how hospitalists care for their insured populations.

Although we would expect a natural increase in C6 adoption over time, optimally meeting stakeholders’ data needs requires more rapid uptake. Our analysis is limited by our assumption that specialty patterns of code use remain similar from 2012 to 2017. Regardless, the magnitude of the difference between the estimate of hospitalists using the C6 versus billing thresholds strongly suggests underuse of the C6 designation. The CMS and MCOs have an increasing need for valid and representative data, and C6 can be used to assess “HM-adjusted” resource utilization, relative value units (RVUs), and performance evaluations. Therefore, hospitalists may see more incentives to use the C6 specialty code in a manner consistent with other recognized subspecialties. 

Disclaimer

The research reported here was supported by the Department of Veterans Affairs, Veterans Health Administration, and the Health Services Research and Development Service. The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the Department of Veterans Affairs.

In recognizing the importance of Hospital Medicine (HM) and its practitioners, the Centers for Medicare and Medicaid Services (CMS) awarded the field a specialty designation in 2016. The code is self-selected by hospitalists and used by the CMS for programmatic and claims processing purposes. The HM code (“C6”), submitted to the CMS by the provider or their designee through the Provider Enrollment Chain and Ownership System (PECOS), in turn links to the National Provider Identification provider data.

The Society of Hospital Medicine^® sought the designation given the growth of hospitalists practicing nationally, their impact on the practice of medicine in the inpatient setting,¹ and their secondary effects on global care.² In fact, early efforts by the CMS to transition physician payments to the value-based payment used specialty designations to create benchmarks in cost metrics, heightening the importance for hospitalists to be able to assess their performance. The need to identify any shifts in resource utilization and workforce mix in the broader context of health reforms necessitated action. Essentially, to understand the “why’s” of hospital medicine, the field required an accounting of the “who’s” and “where’s.”

The CMS granted the C6 designation in 2016, and it went live in April 2017. Despite the code’s brief two-year tenure, calls for its creation long predated its existence. As such, the new modifier requires an initial look to help steer the role of HM in any future CMS and managed care organization (MCO) quality, payment, or practice improvement activities.

We analyzed publicly available 2017 Medicare Part B utilization data³ to explore the rates of Evaluation & Management (E&M) codes used across specialties, using the C6 designation to identify hospitalists.

To try to estimate the percentage of hospitalists who were likely billing under the C6 designation, we then compared the rates of C6 billing to expected rates of hospitalist E&M billing based on an analysis of hospitalist prevalence in the 2012 Medicare physician payment data. Prior work to identify hospitalists before the implementation of the C6 designation relied on thresholds of inpatient codes for various inpatient E&M services.^4,5 We used our previously published approach of a threshold of 60% of inpatient E&M hospital services to differentiate hospitalists from their parent specialties.⁶ We also calculated the expected rates of E&M billing for other select specialty services by applying the 2012 E&M coding trends to the 2017 data.

Table 1 shows the distribution of inpatient E&M codes billed by hospitalists using the C6 identification, as well as the use of those codes by other specialists. Hospitalists identified by the C6 designation billed only 2%-5% of inpatient and 6% of observation codes. As an example, in 2017, discharge CPT codes 99238 and 99239 were used 7,872,323 times. However, C6-identified hospitalists accounted for only 441,420 of these codes.

Table 2 compares the observed billing rates by specialty using the C6 designation to identify hospitalists with what would be the expected rates with the 2012 threshold-based specialty billing designation applied to the 2017 data. This comparison demonstrates that hospitalist billing based on the C6 modifier use is approximately one-tenth of what would have been their expected volume of E&M services.

We examined the patterns of hospitalist billing using the C6 hospital medicine specialty modifier, comparing billing patterns with what we would expect hospitalist activity to be if we had used a threshold-based approach. The difference between the C6 and the threshold-based approaches to assessing hospitalist activity suggests that as few as 10% of hospitalists have adopted the C6 code.

Why is the adoption of the C6 modifier so low? Although administrative data do not allow us to identify the reasons why providers chose to disregard the C6 designation, we can speculate on causes. There are, to date, low direct risks and recognized benefits with using the code. We hypothesize that several factors could be impeding whether providers use the modifier to bring about potential gains. The first may be knowledge-related; ie, hospitalists might not be familiar with the specialty code or unaware of the importance of accurately capturing hospitalist practice patterns. They may also wrongly assume that their practices are aware of the revision or have submitted the appropriate paperwork. Similarly, practice personnel may lack knowledge regarding the code or the importance of its use. The second factor may be logistical; ie, administrative barriers such as difficulty accessing the Provider Enrollment, Chain and Ownership System (PECOS) and out-of-date paper registration forms impede fast uptake. The final reason might be related to professionals whose tenures as hospitalists will be brief, and their unease of carrying an identifier into their next non-HM position prompts hesitation. Providers may have a misperception that using the C6 code may somehow impact or limit their future scope of practice, when, in fact, they may change their Medicare specialty designation at any time.

Changes in reimbursement models, including the Bundled Payments for Care Improvement Advanced (BPCI-A) and other value-based initiatives, heighten the need for a more accurate identification of the specialty. Classifying individual providers and groups to make valid performance comparisons is relevant for the same reasons. The CMS continues to advance cost and efficiency measures in its publicly accessible physiciancompare.gov website.⁷ Without an improved ability to identify services provided by hospitalists—by both CMS and commercial entities—the potential benefits delivered by hospitalists in terms of improved care quality, safety, or efficiency could go undetected by payers and policymakers. Moreover, C6 may be used in other ways by the CMS throughout its payment systems and programmatic efforts that use specialty to differentiate between Medicare providers.⁸ Finally, the C6 is an identifier for the Medicare fee-for-service system; state programs and MCOs may not identify hospitalists in the same manner, or at all. Therefore, it may make it more difficult for those groups and HM researchers to study the trends in care delivery changes. The specialty needs to engage with these other payers to assist in revising their information systems to better account for how hospitalists care for their insured populations.

Although we would expect a natural increase in C6 adoption over time, optimally meeting stakeholders’ data needs requires more rapid uptake. Our analysis is limited by our assumption that specialty patterns of code use remain similar from 2012 to 2017. Regardless, the magnitude of the difference between the estimate of hospitalists using the C6 versus billing thresholds strongly suggests underuse of the C6 designation. The CMS and MCOs have an increasing need for valid and representative data, and C6 can be used to assess “HM-adjusted” resource utilization, relative value units (RVUs), and performance evaluations. Therefore, hospitalists may see more incentives to use the C6 specialty code in a manner consistent with other recognized subspecialties. 

Disclaimer

The research reported here was supported by the Department of Veterans Affairs, Veterans Health Administration, and the Health Services Research and Development Service. The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the Department of Veterans Affairs.

In 2015, the Centers for Medicare and Medicaid Services (CMS) tied 42% of Medicare payments to a value-based model of care.¹ Many of these models are designed to expand the scope of hospitals’ accountability to include care provided to patients postdischarge (eg, readmission penalties, bundled payments, accountable care organizations). With such a significant change in organizational incentives, one would expect to see activity as it relates to hospital-skilled nursing facility (SNF) integration, potentially including shared risk among providers.^2,3

Hospitals can choose from several different strategies when contemplating SNF integration, such as vertical integration with SNFs, which would involve acquiring and owning SNFs. However, despite the high level of incentive alignment and financial integration achieved through SNF acquisition, this strategy has not been widely adopted. Perhaps this is because hospitals can often attain a shorter length of stay and lower readmission rates without taking on the additional risk of owning a facility, except under particular market conditions.⁴ Hospitals can alternatively pursue virtual integration by developing preferred provider networks through contractual relationships or other formal processes, attempting to direct patients to SNF providers that have met predefined criteria, as described by Conway and colleagues in this issue of the Journal of Hospital Medicine^®.⁵ While hospitals have adopted this form of integration more widely than vertical integration, only those with additional financial motivations, such as those employing bundled payments, engaged in accountable care organizations (ACOs) or forward-thinking organizations preparing for looming global models of payment, have implemented such action. Finally, hospitals can focus on relational coordination through informal person-to-person communication and transition management. Given the high number of patients discharged to SNFs, the strategies above are not mutually exclusive, and enhanced relational coordination is most likely going to occur regardless of the type of—and perhaps even without—organizational-level integration.

For those hospitals choosing not to pursue integration with SNFs, there are several reasons to maintain the status quo. First, hospitals have different interpretations of provider choice (“beneficiary freedom to choose”), whereby many do not believe they can provide information to patients outside of facility names and addresses. As such, they will refrain from developing a SNF network due to their interpretation of hazy federal rules.⁶ Second, it is possible that the incremental benefit of establishing a network is viewed by many hospitals as not worth the cost, measured by the time and effort required and the potential risk of not adhering to choice requirements. This could be especially true for hospitals without additional financial motivations, such as participation in an ACO or bundled payment program.

As the landscape continues to evolve, more successful systems will embrace a more concordant partnership with local and regional SNF providers, and several market factors will support the trend. First, the Medicare Payment Advisory Commission (MedPAC) is discussing the idea of choice in the context of postacute discharge, potentially leading to hospitals relaxing their strict interpretations of choice and the level of information provided to patients.⁷ Second, the evidence supports better patient outcomes when hospitals develop SNF networks.^8,9 Finally, continued penetration of value-based payment models combined with CMS decisions regarding choice will continue to provide the additional motivation hospitals may need to change the cost-benefit calculation in favor of developing a network.

IMPLICATIONS FOR HOSPITALISTS

Traditionally, primary care physicians followed their patients through the acute- and postacute care continuum, but a variety of changes led to the growth of hospital medicine as fewer primary care physicians saw patients in the hospital.^10,11 This shift has challenged efforts to ensure continuity of care across settings, especially since most hospitalists have ceded control of postdischarge placement to case managers and therapists. Further, there has been little incentive to connect hospitalists to any other component or provider along the range of care, and compensation models rarely, if at all, consider any accountability for patient outcomes outside the hospital. Several factors can change this reality for hospitalists.

First, as more providers adopt team-based care approaches and as alternative payment models expand the scope of accountability, hospitalists will become an even more central component of the risk evaluation process for hospitalized patients as it relates to their discharge profile. This could mean that hospitalists are more involved in the postdischarge follow-up of patients sent home, to make sure patients adhere to discharge instructions. Alternatively, hospitalists may need to increase the level of physician-to-physician communication with SNF medical directors for patients discharged to SNF. This, in turn, could result in an increasing number of hospitalist groups recruiting SNFists to join their group or potentially assigning existing hospitalists or physician assistants to round on patients in the SNF. The 2018 Society of Hospital Medicine report showed an increase in activity among hospital medicine groups performing services in postacute-care facilities outside the hospital from 13% in 2016 to 25% in 2018.¹² Similarly, a 2017 study in JAMA Internal Medicine reported a 48.2% increase in the number of physicians classified as SNFists from 2007 to 2014.¹³

Second, hospitalists will be more involved in the discharge planning process through internal interdisciplinary team communications. Whereas case managers and therapists owned the discharge planning process historically, new teams will include hospitalists, case managers, physical therapists, and pharmacists. System leaders will task them with identifying the appropriate discharge destination (eg, SNF, home health), finalizing the medication reconciliation, scheduling follow-up appointments, and completing a warm handoff.

Finally, as the field matures and hospitalists learn more about postacute-care connections, they will continue to be held more accountable for patient outcomes postdischarge. Many hospitalists have already connected to community providers through checklists and use evidence-based discharge programs like ProjectRed or Project BOOST.^14,15 Organizations will need a similar strategy for SNFs, developing process measures, with the input of hospitalists, around those noteworthy areas that hospitalists can control. This will require greater alignment among constituents around overall organizational goals and, more importantly, entail the hospitalist to be attuned to overall patient goals beyond the care provided in the hospital setting.

As payment and care models continue to evolve, the status quo cannot be sustained. We anticipate that hospitalists will become more integrated into the patient discharge process, especially as it relates to discharge to SNFs before patients reconnect to their community physicians. Hospital systems will accelerate integration through the development of preferred SNF networks, and hospitalists stand to play a critical role in the success of these arrangements by enriching the benefits they create through these outward relationships.

For organizations engaged in embedded networks, they can realize gains via incentive alignment, trust, information transfer, mutual support, and coordination through virtual integration, without requiring vertical ownership.^3,16Thus, the opportunity exists for hospitalists to be critical drivers of network success, serving as intermediaries from which information, collaboration, and shared problem-solving flow between hospitals, SNFs, patients, and the entire care team. Opportunities to rebuild our system are long past; however, like all changing sectors in healthcare, the disaggregate acute and postacute settings must move in lockstep. Hospitals and postacute care facilities must find ways to alter their thinking to eradicate the obstructive and injurious invisible wall.

Disclosures

The authors have nothing to disclose.

In 2015, the Centers for Medicare and Medicaid Services (CMS) tied 42% of Medicare payments to a value-based model of care.¹ Many of these models are designed to expand the scope of hospitals’ accountability to include care provided to patients postdischarge (eg, readmission penalties, bundled payments, accountable care organizations). With such a significant change in organizational incentives, one would expect to see activity as it relates to hospital-skilled nursing facility (SNF) integration, potentially including shared risk among providers.^2,3

Hospitals can choose from several different strategies when contemplating SNF integration, such as vertical integration with SNFs, which would involve acquiring and owning SNFs. However, despite the high level of incentive alignment and financial integration achieved through SNF acquisition, this strategy has not been widely adopted. Perhaps this is because hospitals can often attain a shorter length of stay and lower readmission rates without taking on the additional risk of owning a facility, except under particular market conditions.⁴ Hospitals can alternatively pursue virtual integration by developing preferred provider networks through contractual relationships or other formal processes, attempting to direct patients to SNF providers that have met predefined criteria, as described by Conway and colleagues in this issue of the Journal of Hospital Medicine^®.⁵ While hospitals have adopted this form of integration more widely than vertical integration, only those with additional financial motivations, such as those employing bundled payments, engaged in accountable care organizations (ACOs) or forward-thinking organizations preparing for looming global models of payment, have implemented such action. Finally, hospitals can focus on relational coordination through informal person-to-person communication and transition management. Given the high number of patients discharged to SNFs, the strategies above are not mutually exclusive, and enhanced relational coordination is most likely going to occur regardless of the type of—and perhaps even without—organizational-level integration.

For those hospitals choosing not to pursue integration with SNFs, there are several reasons to maintain the status quo. First, hospitals have different interpretations of provider choice (“beneficiary freedom to choose”), whereby many do not believe they can provide information to patients outside of facility names and addresses. As such, they will refrain from developing a SNF network due to their interpretation of hazy federal rules.⁶ Second, it is possible that the incremental benefit of establishing a network is viewed by many hospitals as not worth the cost, measured by the time and effort required and the potential risk of not adhering to choice requirements. This could be especially true for hospitals without additional financial motivations, such as participation in an ACO or bundled payment program.

As the landscape continues to evolve, more successful systems will embrace a more concordant partnership with local and regional SNF providers, and several market factors will support the trend. First, the Medicare Payment Advisory Commission (MedPAC) is discussing the idea of choice in the context of postacute discharge, potentially leading to hospitals relaxing their strict interpretations of choice and the level of information provided to patients.⁷ Second, the evidence supports better patient outcomes when hospitals develop SNF networks.^8,9 Finally, continued penetration of value-based payment models combined with CMS decisions regarding choice will continue to provide the additional motivation hospitals may need to change the cost-benefit calculation in favor of developing a network.

IMPLICATIONS FOR HOSPITALISTS

Traditionally, primary care physicians followed their patients through the acute- and postacute care continuum, but a variety of changes led to the growth of hospital medicine as fewer primary care physicians saw patients in the hospital.^10,11 This shift has challenged efforts to ensure continuity of care across settings, especially since most hospitalists have ceded control of postdischarge placement to case managers and therapists. Further, there has been little incentive to connect hospitalists to any other component or provider along the range of care, and compensation models rarely, if at all, consider any accountability for patient outcomes outside the hospital. Several factors can change this reality for hospitalists.

First, as more providers adopt team-based care approaches and as alternative payment models expand the scope of accountability, hospitalists will become an even more central component of the risk evaluation process for hospitalized patients as it relates to their discharge profile. This could mean that hospitalists are more involved in the postdischarge follow-up of patients sent home, to make sure patients adhere to discharge instructions. Alternatively, hospitalists may need to increase the level of physician-to-physician communication with SNF medical directors for patients discharged to SNF. This, in turn, could result in an increasing number of hospitalist groups recruiting SNFists to join their group or potentially assigning existing hospitalists or physician assistants to round on patients in the SNF. The 2018 Society of Hospital Medicine report showed an increase in activity among hospital medicine groups performing services in postacute-care facilities outside the hospital from 13% in 2016 to 25% in 2018.¹² Similarly, a 2017 study in JAMA Internal Medicine reported a 48.2% increase in the number of physicians classified as SNFists from 2007 to 2014.¹³

Second, hospitalists will be more involved in the discharge planning process through internal interdisciplinary team communications. Whereas case managers and therapists owned the discharge planning process historically, new teams will include hospitalists, case managers, physical therapists, and pharmacists. System leaders will task them with identifying the appropriate discharge destination (eg, SNF, home health), finalizing the medication reconciliation, scheduling follow-up appointments, and completing a warm handoff.

Finally, as the field matures and hospitalists learn more about postacute-care connections, they will continue to be held more accountable for patient outcomes postdischarge. Many hospitalists have already connected to community providers through checklists and use evidence-based discharge programs like ProjectRed or Project BOOST.^14,15 Organizations will need a similar strategy for SNFs, developing process measures, with the input of hospitalists, around those noteworthy areas that hospitalists can control. This will require greater alignment among constituents around overall organizational goals and, more importantly, entail the hospitalist to be attuned to overall patient goals beyond the care provided in the hospital setting.

As payment and care models continue to evolve, the status quo cannot be sustained. We anticipate that hospitalists will become more integrated into the patient discharge process, especially as it relates to discharge to SNFs before patients reconnect to their community physicians. Hospital systems will accelerate integration through the development of preferred SNF networks, and hospitalists stand to play a critical role in the success of these arrangements by enriching the benefits they create through these outward relationships.

For organizations engaged in embedded networks, they can realize gains via incentive alignment, trust, information transfer, mutual support, and coordination through virtual integration, without requiring vertical ownership.^3,16Thus, the opportunity exists for hospitalists to be critical drivers of network success, serving as intermediaries from which information, collaboration, and shared problem-solving flow between hospitals, SNFs, patients, and the entire care team. Opportunities to rebuild our system are long past; however, like all changing sectors in healthcare, the disaggregate acute and postacute settings must move in lockstep. Hospitals and postacute care facilities must find ways to alter their thinking to eradicate the obstructive and injurious invisible wall.

Disclosures

The authors have nothing to disclose.

In 2015, the Centers for Medicare and Medicaid Services (CMS) tied 42% of Medicare payments to a value-based model of care.¹ Many of these models are designed to expand the scope of hospitals’ accountability to include care provided to patients postdischarge (eg, readmission penalties, bundled payments, accountable care organizations). With such a significant change in organizational incentives, one would expect to see activity as it relates to hospital-skilled nursing facility (SNF) integration, potentially including shared risk among providers.^2,3

Hospitals can choose from several different strategies when contemplating SNF integration, such as vertical integration with SNFs, which would involve acquiring and owning SNFs. However, despite the high level of incentive alignment and financial integration achieved through SNF acquisition, this strategy has not been widely adopted. Perhaps this is because hospitals can often attain a shorter length of stay and lower readmission rates without taking on the additional risk of owning a facility, except under particular market conditions.⁴ Hospitals can alternatively pursue virtual integration by developing preferred provider networks through contractual relationships or other formal processes, attempting to direct patients to SNF providers that have met predefined criteria, as described by Conway and colleagues in this issue of the Journal of Hospital Medicine^®.⁵ While hospitals have adopted this form of integration more widely than vertical integration, only those with additional financial motivations, such as those employing bundled payments, engaged in accountable care organizations (ACOs) or forward-thinking organizations preparing for looming global models of payment, have implemented such action. Finally, hospitals can focus on relational coordination through informal person-to-person communication and transition management. Given the high number of patients discharged to SNFs, the strategies above are not mutually exclusive, and enhanced relational coordination is most likely going to occur regardless of the type of—and perhaps even without—organizational-level integration.

For those hospitals choosing not to pursue integration with SNFs, there are several reasons to maintain the status quo. First, hospitals have different interpretations of provider choice (“beneficiary freedom to choose”), whereby many do not believe they can provide information to patients outside of facility names and addresses. As such, they will refrain from developing a SNF network due to their interpretation of hazy federal rules.⁶ Second, it is possible that the incremental benefit of establishing a network is viewed by many hospitals as not worth the cost, measured by the time and effort required and the potential risk of not adhering to choice requirements. This could be especially true for hospitals without additional financial motivations, such as participation in an ACO or bundled payment program.

As the landscape continues to evolve, more successful systems will embrace a more concordant partnership with local and regional SNF providers, and several market factors will support the trend. First, the Medicare Payment Advisory Commission (MedPAC) is discussing the idea of choice in the context of postacute discharge, potentially leading to hospitals relaxing their strict interpretations of choice and the level of information provided to patients.⁷ Second, the evidence supports better patient outcomes when hospitals develop SNF networks.^8,9 Finally, continued penetration of value-based payment models combined with CMS decisions regarding choice will continue to provide the additional motivation hospitals may need to change the cost-benefit calculation in favor of developing a network.

IMPLICATIONS FOR HOSPITALISTS

Traditionally, primary care physicians followed their patients through the acute- and postacute care continuum, but a variety of changes led to the growth of hospital medicine as fewer primary care physicians saw patients in the hospital.^10,11 This shift has challenged efforts to ensure continuity of care across settings, especially since most hospitalists have ceded control of postdischarge placement to case managers and therapists. Further, there has been little incentive to connect hospitalists to any other component or provider along the range of care, and compensation models rarely, if at all, consider any accountability for patient outcomes outside the hospital. Several factors can change this reality for hospitalists.

First, as more providers adopt team-based care approaches and as alternative payment models expand the scope of accountability, hospitalists will become an even more central component of the risk evaluation process for hospitalized patients as it relates to their discharge profile. This could mean that hospitalists are more involved in the postdischarge follow-up of patients sent home, to make sure patients adhere to discharge instructions. Alternatively, hospitalists may need to increase the level of physician-to-physician communication with SNF medical directors for patients discharged to SNF. This, in turn, could result in an increasing number of hospitalist groups recruiting SNFists to join their group or potentially assigning existing hospitalists or physician assistants to round on patients in the SNF. The 2018 Society of Hospital Medicine report showed an increase in activity among hospital medicine groups performing services in postacute-care facilities outside the hospital from 13% in 2016 to 25% in 2018.¹² Similarly, a 2017 study in JAMA Internal Medicine reported a 48.2% increase in the number of physicians classified as SNFists from 2007 to 2014.¹³

Second, hospitalists will be more involved in the discharge planning process through internal interdisciplinary team communications. Whereas case managers and therapists owned the discharge planning process historically, new teams will include hospitalists, case managers, physical therapists, and pharmacists. System leaders will task them with identifying the appropriate discharge destination (eg, SNF, home health), finalizing the medication reconciliation, scheduling follow-up appointments, and completing a warm handoff.

Finally, as the field matures and hospitalists learn more about postacute-care connections, they will continue to be held more accountable for patient outcomes postdischarge. Many hospitalists have already connected to community providers through checklists and use evidence-based discharge programs like ProjectRed or Project BOOST.^14,15 Organizations will need a similar strategy for SNFs, developing process measures, with the input of hospitalists, around those noteworthy areas that hospitalists can control. This will require greater alignment among constituents around overall organizational goals and, more importantly, entail the hospitalist to be attuned to overall patient goals beyond the care provided in the hospital setting.

As payment and care models continue to evolve, the status quo cannot be sustained. We anticipate that hospitalists will become more integrated into the patient discharge process, especially as it relates to discharge to SNFs before patients reconnect to their community physicians. Hospital systems will accelerate integration through the development of preferred SNF networks, and hospitalists stand to play a critical role in the success of these arrangements by enriching the benefits they create through these outward relationships.

For organizations engaged in embedded networks, they can realize gains via incentive alignment, trust, information transfer, mutual support, and coordination through virtual integration, without requiring vertical ownership.^3,16Thus, the opportunity exists for hospitalists to be critical drivers of network success, serving as intermediaries from which information, collaboration, and shared problem-solving flow between hospitals, SNFs, patients, and the entire care team. Opportunities to rebuild our system are long past; however, like all changing sectors in healthcare, the disaggregate acute and postacute settings must move in lockstep. Hospitals and postacute care facilities must find ways to alter their thinking to eradicate the obstructive and injurious invisible wall.

Disclosures

The authors have nothing to disclose.

You Have Lowered Length of Stay. Congratulations: You’re Fired.

For several decades, providers working within hospitals have had incentives to reduce stay durations and keep patient flow tip-top. Diagnosis Related Group (DRG)–based and capitated payments expedited that shift.

Accompanying the change, physicians became more aware of the potential repercussions of sicker and quicker discharges. They began to monitor their care and, as best as possible, use what measures they could as a proxy for quality (readmissions and hospital-acquired conditions). Providers balanced the harms of a continued stay with the benefits of added days, not to mention the need for cost savings.

Read the full post at hospitalleader.org.
 

Also on The Hospital Leader …

• Why 7 On/7 Off Doesn’t Meet the Needs of Long-Stay Hospital Patients by Lauren Doctoroff, MD, FHM
• Is It Time for Health Policy M&Ms? by Chris Moriates, MD
• George Carlin Predicts Hospital Planning Strategy by Jordan Messler, MD, SFHM
• Many Paths to a Richer Job by Leslie Flores, MHA, MPH, SFHM
• A New Face for Online Modules by Chris Moriates, MD

You Have Lowered Length of Stay. Congratulations: You’re Fired.

For several decades, providers working within hospitals have had incentives to reduce stay durations and keep patient flow tip-top. Diagnosis Related Group (DRG)–based and capitated payments expedited that shift.

Accompanying the change, physicians became more aware of the potential repercussions of sicker and quicker discharges. They began to monitor their care and, as best as possible, use what measures they could as a proxy for quality (readmissions and hospital-acquired conditions). Providers balanced the harms of a continued stay with the benefits of added days, not to mention the need for cost savings.

Read the full post at hospitalleader.org.
 

Also on The Hospital Leader …

• Why 7 On/7 Off Doesn’t Meet the Needs of Long-Stay Hospital Patients by Lauren Doctoroff, MD, FHM
• Is It Time for Health Policy M&Ms? by Chris Moriates, MD
• George Carlin Predicts Hospital Planning Strategy by Jordan Messler, MD, SFHM
• Many Paths to a Richer Job by Leslie Flores, MHA, MPH, SFHM
• A New Face for Online Modules by Chris Moriates, MD

You Have Lowered Length of Stay. Congratulations: You’re Fired.

For several decades, providers working within hospitals have had incentives to reduce stay durations and keep patient flow tip-top. Diagnosis Related Group (DRG)–based and capitated payments expedited that shift.

Accompanying the change, physicians became more aware of the potential repercussions of sicker and quicker discharges. They began to monitor their care and, as best as possible, use what measures they could as a proxy for quality (readmissions and hospital-acquired conditions). Providers balanced the harms of a continued stay with the benefits of added days, not to mention the need for cost savings.

Read the full post at hospitalleader.org.
 

Also on The Hospital Leader …

• Why 7 On/7 Off Doesn’t Meet the Needs of Long-Stay Hospital Patients by Lauren Doctoroff, MD, FHM
• Is It Time for Health Policy M&Ms? by Chris Moriates, MD
• George Carlin Predicts Hospital Planning Strategy by Jordan Messler, MD, SFHM
• Many Paths to a Richer Job by Leslie Flores, MHA, MPH, SFHM
• A New Face for Online Modules by Chris Moriates, MD

It was a propitious step to hear from Jeff Weise, MD, SFHM, current president of SHM, speaking in favor of increased transparency for our organization (see “To Err is Human,” October 2010, p. 42).

Encouragingly, when SHM has misstepped, we have corrected our transgressions. We have adopted rigorous conflict-of-interest policies, and we now disclose affiliations rapidly as a consequence—both for our board and for ranking members.

However, I do not believe, as Jeff states, we are the leaders in this domain. SHM still accepts large sums of money from industry, the exact amounts of which remain undisclosed on our website. Additionally, we underwrite our national meetings with corporate contributions, while other organizations have moved forward and shunned this process.¹ Corporate sponsorship via branded logos are prominent on our website.

Granted, we are far from alone in this endeavor. Nevertheless, even with full disclosure, the appearance of purity is far from assured, as an outstanding essay commenting on AAFP’s acceptance of monies from Coca-Cola conveys.²

Calls to reform professional medical society practices are increasing, and the new healthcare legislation will begin to mandate recording, and then reporting, of physician-industry affiliations.³

Whether our organization will continue to “lead” on this front is unknown, and a question we must ask is, “Are our members prepared to pay full freight and pony up the costs of running our society in lieu of outside dollars?” I hope at some point the answer is “Yes.”

I for one would welcome full SHM disclosure, front and center, at our next national meeting. Similar to consumer-directed healthcare plan (CDHP) uptake lagging in the presence of opaque transaction costs at hospitals, we cannot change unless as members we know exactly what percentage of our activity others remunerate.

The “others,” as you can guess, are not physicians.

Bradley Flansbaum, DO, MPH, SFHM,

director, hospitalist services,

Lenox Hill Hospital, New York

References

1. The American Psychiatric Association phases out industry-supported symposia. American Psychiatric Association website. Available at: http://psych.org/MainMenu/Newsroom/NewsReleases/2009NewsReleases/APAPhasesOutISS.aspx. Accessed Sept. 21, 2010.
2. Brody H. Professional medical organizations and commercial conflicts of interest: ethical issues. Ann Fam Med. 2010;8(4):354-358.
3. Rothman DJ, McDonald WJ, Berkowitz CD, et al. Professional medical associations and their relationships with industry: a proposal for controlling conflict of interest. JAMA. 2009;301(13):1367-1372.

It was a propitious step to hear from Jeff Weise, MD, SFHM, current president of SHM, speaking in favor of increased transparency for our organization (see “To Err is Human,” October 2010, p. 42).

Encouragingly, when SHM has misstepped, we have corrected our transgressions. We have adopted rigorous conflict-of-interest policies, and we now disclose affiliations rapidly as a consequence—both for our board and for ranking members.

However, I do not believe, as Jeff states, we are the leaders in this domain. SHM still accepts large sums of money from industry, the exact amounts of which remain undisclosed on our website. Additionally, we underwrite our national meetings with corporate contributions, while other organizations have moved forward and shunned this process.¹ Corporate sponsorship via branded logos are prominent on our website.

Granted, we are far from alone in this endeavor. Nevertheless, even with full disclosure, the appearance of purity is far from assured, as an outstanding essay commenting on AAFP’s acceptance of monies from Coca-Cola conveys.²

Calls to reform professional medical society practices are increasing, and the new healthcare legislation will begin to mandate recording, and then reporting, of physician-industry affiliations.³

Whether our organization will continue to “lead” on this front is unknown, and a question we must ask is, “Are our members prepared to pay full freight and pony up the costs of running our society in lieu of outside dollars?” I hope at some point the answer is “Yes.”

I for one would welcome full SHM disclosure, front and center, at our next national meeting. Similar to consumer-directed healthcare plan (CDHP) uptake lagging in the presence of opaque transaction costs at hospitals, we cannot change unless as members we know exactly what percentage of our activity others remunerate.

The “others,” as you can guess, are not physicians.

Bradley Flansbaum, DO, MPH, SFHM,

director, hospitalist services,

Lenox Hill Hospital, New York

References

1. The American Psychiatric Association phases out industry-supported symposia. American Psychiatric Association website. Available at: http://psych.org/MainMenu/Newsroom/NewsReleases/2009NewsReleases/APAPhasesOutISS.aspx. Accessed Sept. 21, 2010.
2. Brody H. Professional medical organizations and commercial conflicts of interest: ethical issues. Ann Fam Med. 2010;8(4):354-358.
3. Rothman DJ, McDonald WJ, Berkowitz CD, et al. Professional medical associations and their relationships with industry: a proposal for controlling conflict of interest. JAMA. 2009;301(13):1367-1372.

It was a propitious step to hear from Jeff Weise, MD, SFHM, current president of SHM, speaking in favor of increased transparency for our organization (see “To Err is Human,” October 2010, p. 42).

Encouragingly, when SHM has misstepped, we have corrected our transgressions. We have adopted rigorous conflict-of-interest policies, and we now disclose affiliations rapidly as a consequence—both for our board and for ranking members.

However, I do not believe, as Jeff states, we are the leaders in this domain. SHM still accepts large sums of money from industry, the exact amounts of which remain undisclosed on our website. Additionally, we underwrite our national meetings with corporate contributions, while other organizations have moved forward and shunned this process.¹ Corporate sponsorship via branded logos are prominent on our website.

Granted, we are far from alone in this endeavor. Nevertheless, even with full disclosure, the appearance of purity is far from assured, as an outstanding essay commenting on AAFP’s acceptance of monies from Coca-Cola conveys.²

Calls to reform professional medical society practices are increasing, and the new healthcare legislation will begin to mandate recording, and then reporting, of physician-industry affiliations.³

Whether our organization will continue to “lead” on this front is unknown, and a question we must ask is, “Are our members prepared to pay full freight and pony up the costs of running our society in lieu of outside dollars?” I hope at some point the answer is “Yes.”

I for one would welcome full SHM disclosure, front and center, at our next national meeting. Similar to consumer-directed healthcare plan (CDHP) uptake lagging in the presence of opaque transaction costs at hospitals, we cannot change unless as members we know exactly what percentage of our activity others remunerate.

The “others,” as you can guess, are not physicians.

Bradley Flansbaum, DO, MPH, SFHM,

director, hospitalist services,

Lenox Hill Hospital, New York

References

1. The American Psychiatric Association phases out industry-supported symposia. American Psychiatric Association website. Available at: http://psych.org/MainMenu/Newsroom/NewsReleases/2009NewsReleases/APAPhasesOutISS.aspx. Accessed Sept. 21, 2010.
2. Brody H. Professional medical organizations and commercial conflicts of interest: ethical issues. Ann Fam Med. 2010;8(4):354-358.
3. Rothman DJ, McDonald WJ, Berkowitz CD, et al. Professional medical associations and their relationships with industry: a proposal for controlling conflict of interest. JAMA. 2009;301(13):1367-1372.