St. Augustine Manor.

"We've cut the annual nursing budget by about $400,000"

For a textbook case of sound PPS management, it would be hard to do better than St. Augustine Manor, a Cleveland-based not-for-profit, 248-bed skilled nursing facility under the auspices of Catholic Charities.

"We started planning last April with a series of meetings of about 35 people, and then broke up into five working subgroups," says president and CEO Pat Gareau. "When people were given the chance to problem-solve, they were creative, open, and really tried to help." And when the overhaul was complete, little, if anything, was the same.

First stop: rehab. "Our specialty unit is CARF and joint Commission accredited, but we're finding lower-cost ways to meet the CARF requirements," says Gareau. "We've cut back a bit, for instance, on physiatrist hours. And where we used to have separate directors for speech pathology, PT, and OT, we now have one director of rehab services to coordinate all of them," he adds. "Especially with PT and speech being together in the payment system, there's never been more of a need to consolidate." The therapists also have new tools to help them track the $1,500 caps and hours of service provided.

The 12-bed ventilator unit is being phased out. "We can't afford to employ respiratory therapists under the new system," Gareau notes. "If you have low volume, you can't afford those high costs."

The 16-bed AIDS unit is Medicaid-certified; AIDS patients who are covered under Medicare remain in the general SNF population. "We still have dedicated AIDS nurses, but now not all of them are RNs," says Gareau. "Also, with the emergence of protease inhibitors, treatment of the disease is less reliant on IV than it used to be, so that helps with costs. And we do our own pharmacy, which has turned out to be a blessing.

"In the past, more than half our nurses were RNs, but we've converted many positions to LPNs where it was clinically feasible," he adds. "We've cut the annual nursing budget by about $400,000 on a staff of about 250."

But the crucial pre-screening staff has been expanded. "We've hired an RN case manager for admissions, who we hope can predict to some extent where potential admissions are going to fall in terms of care, and then follow them through the clinical pathways and make whatever adjustments are needed along the way," says Gareau. "We think that will give us a better overall handle on case mix." Often the rehab clinicians will also participate in the pre-screening process.

St. Augustine has one medical director solely for Medicare, and his role has grown under PPS. "He helps to run interference with the physicians," says Gareau. "I think they have a pretty good handle on the new system, but it's up to us to keep them focused."

In the end, even the office equipment didn't emerge from the transition to PPS unscathed. "We've tried to cut non-salary, non-clinical expenses by at least 5 percent," Gareau reports. "We've even assigned codes to the copiers because there seemed to be excessive non-office use."

But when it comes to guidelines that seem a bit stingy on patient care, Gareau is not willing to get with the program. "We've looked carefully at what the PPS time studies say you need to get to a certain case mix score, but to us they're not reasonable or realistic in terms of good clinical care," he says. "We try to be at least 10 percent above what they say, if not more. We're constantly revisiting care issues to make sure they are not compromised.

"We're pretty much where we want to be now, in terms of necessary cuts," he adds. "Now we're just sort of fine-tuning to see if our revenue projections pan out the way we thought they would. But we didn't want to go overboard either. There's still a lot of uncertainty out there."