Like Hospitals, Skilled Nursing Facilities Could Face Readmission Penalties

by | May 1, 2013

Skilled nursing facilities could soon share responsibility—and accompanying penalties—with hospitals for avoidable readmissions, as the Department of Health and Human Services (HHS) included the Medicare Payment Advisory Commission’s (MedPAC) recommendation to Congress in its fiscal year 2014 budget proposal.

About 14% of Medicare patients discharged from hospitals to skilled nursing facilities are rehospitalized for conditions that potentially could have been avoided, according to MedPAC analysis.

HHS’s proposal reduces payments by up to 3% for skilled nursing facilities with high rates of care-sensitive, preventable hospital readmissions beginning in 2017 in a bid to promote high quality care and potentially save $2.2 billion over 10 years.

The Affordable Care Act places emphasis on hospitals and their ability to provide quality care while achieving cost savings for Medicare and reducing preventable hospital readmissions, but the skilled nursing industry has “considerable opportunities” to improve the care they provide and arrangements made for post-discharge care, MedPAC said in its Congressional report.

“If facilities faced rehospitalization penalties, they would be more inclined to ensure that patients were physically ready, to see that their families were adequately educated (e.g., about medication management, advance directives, and hospice care), and to partner with high-quality community services to avoid readmission to the hospital,” says the report regarding last year’s recommendation to reduce skilled nursing facility payments for high readmission rates.

For the 2013 report, MedPAC staff worked with a contractor to develop a risk-adjusted measure of rehospitalization during the 30-day window following discharge from a skilled nursing facility.

The method considered patients’ comorbidities, ability to perform activities of daily living, whether the patient and a surgical procedure during a prior hospital stay, and the number of times the physicians’ orders were changed as a reflection of patient instability.

Discharges from skilled nursing facilities, excluding direct hospitalizations and deaths, were to long-term nursing home care 31% of the time, to home health care services 45% of the time, and back to the community with no services, or some other type of care such as hospice, 24% of the time.

The average risk-adjusted rate of rehospitalization after discharge from the skilled nursing facility for five potentially avoidable conditions factored into the method was 10%, MedPAC found, and compared with the rates while the beneficiaries were in the skilled nursing facility, there was more variation across facilities. While about one-fourth of facilities had readmission rates of 7% or lower, another quarter had rates of 12.5% or higher.

“When the separate rehospitalization rates are considered together, they indicate that over 28% of beneficiaries were rehospitalized (for any one of the five conditions) either during or after a SNF stay,” MedPAC writes in the report. “This finding suggests considerable opportunities for SNFs to improve the care they provide and the arrangements they make for beneficiaries after discharge. It also represents considerable program spending for those hospitalizations that could have been avoided.”

Beginning in 2018, the HHS budget also proposes implementing a bundled payment system for post-acute care providers, including skilled nursing facilities, home health providers, and inpatient rehab facilities. Rates would be based on patient characteristics and other factors producing a permanent and total cumulative adjustment of rates, bringing them down 2.85% by 2020 and resulting in an estimated $8.2 billion in savings over 10 years.

From: Senior Housing News