Business proposal for IPR

1. Business proposal for IPR Leslie Burgy, RN St John Macomb Hospital Health care systems management LDR 609 October 28th,2013

2. Executive summary Healthcare is transforming and there will be effects to Inpatient Rehabilitation (IPR) units

3. Executive summary: Current proposed Medicare reductions to IPR: • Reduction of payment updates for IPRs by 1.1 percentage points beginning in 2014 through 2023 • Adjusting the standard for classifying IPR patients that are currently admitted under the designated severity codes from 60% to 75% • Equalized IRP and SNF payments on three conditions: hips, knees and pulmonary conditions • Implementation of bundled payments in 2018 (McCurdy, 2013, para 2).

4. Executive summary: • There has been a steady decrease in IPR admissions over the past five years changing the average daily census (ADC) from 26 to 19. • Proposal: decrease the number of IPR beds from 30 to 24 with an average daily census of 19. • How: By taking a total of 6 beds or 2 rooms off line and make a nursing associate lounge/locker room and storage room.

5. Project description and background information: Rationale: • Changes in CMS regulations and intense work by the SJPHS Readmission Reduction team has decreased the overall admissions to the acute care hospitals. • 85 % of St John Macomb’s IPR admissions come from within the hospital. • The FY’12 IPR occupancy rate was 59% • Decreasing the IPR beds from 30 to 24 and having ADC of 19 would give the unit about a 79% occupancy rate. • Research indicates that occupancy rates over 85% have a negative impact on patient safety and efficiency • Compliance with TJC in keeping egresses clear and safe medication storage • Nursing WES statement consistently talk about the aesthetics of the unit

6. Risks and barriers: Current facts: • ADC= 19.4 • LOS= 10.375 days • Two other IPR units in SJPHS which all provide the same basic services • SEMCOG reports decrease in population in SE Michigan and the population is shifting towards Livingston and Northern Macomb counties

7. Risks and barriers: • Two competitors within a ten mile area: Henry Ford Health System and Beaumont Health System and both have IPR units • 2012 overall market share Beaumont – 19.5 % Henry Ford- 21.4 % SJPHS- 27.8 %

8. Risk and barriers: • SJPHS Acute Care Asset Team looking at many areas which includes Rehabilitation Services • SJPHS not sure how Rehab services will look in the future but they will be looking at the model of care delivery but it will include systemizing rehab services • St John Macomb physicians not on board with regional department concept.

9. Risk and barriers: Considerations of the ACA • Bundled payments • IPR units reimbursement higher than nursing home placement. Facilities perspective: • Nursing staff keeping personal belongings (purses) in the med room • Halls are cluttered with equipment

10. Fundamental Assumptions • Must continue to follow the current CMS guidelines for participation • Must maintain and staff a minimum of 10 beds to meet CMS criteria • Qualifying IPR criteria: 60% of the facilities total patient population must meet at least one of 13 medical conditions • Failure to comply with the 60% criteria will decrease reimbursement of the IPR current prospective payment system to that of a critical access hospital

11. Operations • Continue to operate at the same FY’14 budgets for Rehab Services • Needs: lockers, table and chairs and keyless pad entry. • Nursing FTEs will remain the same:

12. Financials: • FY’14 budget will continue to be utilized Total Operating Expenses for nursing cost center : Actual: $1,907,999 Flexed: $1,921,855

13. Implementation plan • Room 445 – 2 bed room and room 450 – 4 bed ward will be taken off line only • Room 445 will be made into a nursing associate lounge/locker room • Room 450 will be a equipment storage room

14. Implementation plan • Plan could be implemented within a two week time period • Stakeholders in favor of project: nursing associates, therapy associates, EVS and facilities departments • Stakeholders that are currently neutral or against project – Macomb physicians • Compliance with TJC guidelines

15. Evaluation criteria • Subjective information from nursing associates and physicians • Decreased work environment statements regarding the aesthetics of the IPR unit • Standing agenda item on monthly IPR Macomb leadership meetings

16. Exit strategy • If the amount of admissions should have a sustained increase than Room 450, the four bed ward can be converted back to an operable room within 24 hours

17. References: • CMS Manual System, Transmittal 119 Medicare Benefit Policy § 110-2 (January 15th, 2010). • Inpatient rehabilitation facility prospective payment system. (2012). Retrieved from http://www.cms.gov/Outreach-and-Education/Medicare-learning-network-MLN • Jones, R. (2011). Hospital bed occupancy demystified and why hospitals of different size and complexity must run at different average occupancy. British Journal of Healthcare Management, 17(6), 242-248. • McCurdy, D. A. (2013). Obama’s administration’s proposed FY 2014budget includes a $401 billion in health program savings. Retrieved from www.healthindustrywashingtonwatch.com-rehabilitation-facility • SEMCOG. (2012). www.semcog.org • Shay, P. D., & Mick, S. S. (2013, January/February). Post acute care and vertical integration after the patient protection and Affordable Care Act. Journal of Healthcare Management, 58(1), 15-27.