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Referral, liability implications of hospital readmissions from SNFs

April 20, 2012
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Within the vast healthcare reform legislation, among the many new measures was the Hospital Readmission Reduction Program (the “HRRP”), which is set to become effective in fiscal year 2013 (assuming of course that it is not thrown out as part of any Supreme Court dissection). Using a carrot-and-stick approach, the HRRP will incentivize hospitals to reduce the number of hospital readmissions for acute myocardial infarction, heart failure and pneumonia.

A tainted readmission occurs when a patient is readmitted to the discharging hospital or admitted to another hospital within 30 days of discharge. Those hospitals that are unable to reduce readmissions below set baseline levels will see their reimbursement cut for all Medicare inpatient payments by escalating percentages—1 percent in 2013, 2 percent in 2014, and 3 percent in 2015 and beyond.

But what does this have to do with nursing homes?


Although the HRRP does not directly implicate nursing homes, the Centers for Medicare & Medicaid Services (CMS) certainly sees the connection between hospital readmissions and SNFs. Indeed, CMS estimates that approximately 45 percent of hospital admissions for Medicare and Medicaid enrollees from nursing facilities can be avoided, accounting for approximately $2.6 billion in Medicare expenditures.

In response, CMS announced on March 15, 2012, the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents. This initiative will fund organizations that partner with nursing facilities to provide enhanced on-site services and supports to residents. CMS has committed up to $128 million to support a portfolio of these evidence-based interventions. Eligible organizations can include physician practices, care management organizations and other public and not-for-profit entities. 

From a business and liability context, the HRRP may create tension between hospitals and nursing homes and could impact referral patterns. Because nursing homes are one of the chief recipients of hospital discharges, they depend on the hospitals for referrals. Under the HRRP, hospitals will potentially lose money on readmissions. Therefore, hospitals may not appreciate frequent readmissions from nursing home providers.

In addition, if hospitals are concerned about readmissions, they may be less likely to discharge patients as early. Delayed hospital discharges mean potentially fewer acute patients and fewer days for the resident in the nursing home. But these are primarily revenue and business issues, so what are the legal issues for the nursing homes?

As a nursing home lawyer, I have defended several cases in which families alleged that a resident was not timely transferred out for hospital evaluation. We counter that, except in emergencies, it is the attending physician who must provide a transfer order for the hospital visit.


Jason Bring

Jason E. Bring, Esq., is a member of the Healthcare Group of...