Senior care providers will play a vital role in reducing Medicare costs through coordinated care initiatives, say two healthcare lawyers, and partnerships will be crucial for survival. 

“Going it alone will no longer be a viable long-term strategy,” said John Durso, JD, partner at law firm Ungaretti & Harris, at a Life Services Network session last Thursday. “If you’re not part of an Accountable Care Organization (ACO), your patient base is probably going to shrivel up, at least on the Medicare side.”

Right now is an ‘exciting’ time to be involved in post acute care organization as there’s increased focus on the relationships between hospitals and other organizations in the care continuum and the synergies that can be created, said Jonathan Brouks, an associate at Ungaretti & Harris’ Healthcare Group. 

“Now, [the hospital industry] is starting to think more longitudinally, figuring out, ‘How can we continue to care for these patients after they leave our walls?'” Brouks says. 

Penalties for hospitals with 30-day readmissions above a certain threshold for heart attack, heart failure, and pneumonia patients will go up to 3% of total Medicare reimbursements by fiscal year 2015 under the Affordable Care Act. For some acute care providers that could translate to a “very large” amount, Durso says.

The push to partner with post-acute providers is becoming more urgent, and skilled nursing facilities are competing to be chosen for ACO participation. Senior care providers with home care service lines will boost their attractiveness to hospitals.

Providers want to be able to tell prospective partner hospitals that they’re able to manage an entire population, including home care, hospice, or care coordination, Durso says.

“If you think about it, where do residents want to stay? For many cases, the biggest competitor is the home,” he says. If a skilled nursing provider has its own home care service, “That’s most likely where [hospitals] are going to go,” he says. “That’s another reason why home care is really, really important.”

Another way for providers to improve their ACO profile is to hire or partner with highly-trained medical staffs.

“SNFist physicians would be a great partner,” Brouks says.

Durso advised providers to train staff—including doctors—to focus on avoiding emergency room visits and hospital readmissions. 

During a previous managed care trend in the 1990s, some hospital providers began acquiring nursing homes, Durso said, but quickly realized that the specialized model is very different from hospitals, complete with its own operating challenges.

These days, he says, hospitals don’t want to buy nursing homes—they want to contract with them and plug them into a coordinated care contract.

“You are a lower-cost healthcare environment [and] that’s a positive. The whole idea is, [place patients in] the lowest cost healthcare environment, and you should be able to prove that to hospitals,” he told listeners during the session. “[Skilled nursing providers] are an important part of the ACO, whether they realize that right now or not—and I think they will.” 

Written by Alyssa Gerace