Provider group supports reimbursement cuts for SNFs with frequent re-hospitalizations

Addressing the costs associated with avoidable re-hospitalizations of Medicare beneficiaries, the Alliance for Quality Nursing Home Care Wednesday suggested that SNFs with above-average re-hospitalization rates have their reimbursement cut by up to 3 percent beginning in 2015. The Alliance’s suggestion echoes a similar proposal made by the Obama administration.

The Alliance pointed out that one out of every five Medicare beneficiaries discharged from the hospital is readmitted within 30 days—costing Medicare more than $17 billion annually. The lack of coordination between acute and post-acute care settings is typically cited as a contributing factor to unnecessary re-hospitalizations.

“Improvement in care coordination across settings is becoming even more essential to providing quality care because the ongoing decline in hospital length of stay that began in the 1990s continues to result in the discharge of sicker patients to SNFs,” Alliance President Alan G. Rosenbloom said.

The impetus for the Obama administration’s proposal on SNF reductions came from the readmission reduction program within the Affordable Care Act that only includes hospitals. The Alliance supports this as an interim solution, but says a long-term re-hospitalization program “must cross care settings and align incentives across providers.”

In its statement, the Alliance said it will support the 3 percent reimbursement cut only if the Centers for Medicare & Medicaid Services account for the geographic variations in readmission patterns, and risk-adjust for patient mix “and in doing so account for the substantial differences in patient characteristics and readmission patterns between Medicare post-acute patients in SNFs and long-stay nursing home patients.”

Rosenbloom said given that the SNF re-hospitalization initiative would not begin until 2015, “there is ample time to develop such a SNF-specific metric without jeopardizing the savings to be generated within the relevant budget window.”