Adult day services could be subacute’s pinch hitter

Subacute, adult day care alliance creates perfect niche

Ensuring a facility’s survival in light of proposed changes to Medicare reimbursement could leave many subacute providers scrambling to find a pinch hitter to provide care economically.

An unlikely player, however, is not the home health agency up the street, but the adult day service center around the corner. Forming an alliance with an adult day service, say providers in existing agreements, is a win-win situation for both parties. Patients benefit from interacting socially with peers in a non-clinical environment. Caregivers benefit from the knowledge that patients are supervised by a registered nurse in the event complications should arise.

Adult day services provide care to people with mild to moderate dementia, chronic medical problems, strokes, and orthopedic rehabilitation. And care provided in adult day services is not limited to the elderly, either. Specialized programs are being developed for patients with multiple sclerosis and AIDS, for example.

The industry, which dealt with the perception of being a baby-sitting service for adults, is experiencing substantial growth. Compared with 1975 when 15 centers existed nationwide, the industry now has more than 3,000 centers nationally, according to the Washington, DC-based National Adult Day Services Association. (To see how the industry has grown, see the growth chart, above.)

"We see ourselves as an outpatient subacute setting. All the hands-on care provided in the inpatient setting is available in the adult day care, the only difference is there are no beds," explains Ken Oliver, president, chairman, and chief executive officer of Birmingham, AL-based Active Services Corporation (ASC).

ASC opened its first adult day care center in June 1996 in Birmingham. The company now operates eight day care centers in four states: Alabama, Florida, Kentucky, and South Carolina. Each center provides a full range of medical services and is affiliated with a nearby provider. "We have agreements with skilled nursing facilities, outpatient rehab facilities, and subacute facilities," adds Oliver.

Patients who participate in adult day services have reached a point in the subacute setting where "it’s economically disadvantageous for them to treat the patient. They can transfer the daily care to us at that point," says Oliver. Patients remain at the subacute facility overnight, but "we provide transportation, any necessary health care during the day, two snacks, a meal, and structured social interaction and return the patient at night," he adds. Adult day care definitely has its advantages over home health, and that appeals to managed care Medicare providers, notes Oliver. "The last data from HCFA [Health Care Financing Administration] estimated the average one-hour home health visit in the high $90 range. If that same patient was enrolled in adult day care, it would cost about $50 for 10 hours of supervised socialization and care," says Oliver.

Currently, patients enrolled in managed care plans are more likely to benefit from a subacute-adult day service agreement. That’s because Medicare does not reimburse for adult day services. ASC, for example, has Medicare managed care contracts for services provided in Alabama and Florida.

"The transition is occurring. Managed care is creating the ideal environment for this type of agreement," says Oliver. Some Medicaid programs, however, operate under community-based waiver programs that allow reimbursement for adult day services, he adds.

Managed care’s efforts at fostering post-acute agreements between subacute and related providers will only help in creating a viable prospective payment system, says Oliver.

"If the prospective payment system is done properly, it could definitely improve care delivery. Any entity, whether it be a subacute provider, inpatient rehab provider, or outpatient provider, could serve as the case manager, but a clinical group comprised from all entities should determine where the patient should be," Oliver says. "The clinicians would decide on X days for inpatient rehab, X days for subacute care, and X days for adult day services."