CMS boosting skilled-nursing payments to reduce hospital admissions

Mar 28, 2016 | Hospital Finance Efficiency

The Centers for Medicare and Medicaid have made efforts in the past to reduce hospital admission rates as a means to alleviate health care costs. Now, it's implementing a payment policy that would put more money toward skilled-nursing facilities, hoping to improve care and minimize unnecessary hospitalizations, especially with its upcoming bundled payment model. Set to begin in fall 2016, the initiative will involve approximately 250 long-term care facilities.

"This initiative has the potential to improve the care for the most frail, most vulnerable Medicare-Medicaid enrollees (who are) long-stay residents of nursing facilities," Tim Engelhardt, director of the Medicare-Medicaid Coordination office, said in a statement. "Smarter spending can improve the quality of on-site care in nursing facilities, and the assessment and management of conditions that too often now lead to unnecessary and costly hospitalizations."

The payment policy would affect individuals enrolled in Medicare, Medicaid or both. The additional compensation for participating facilities will go toward better treatment for common medical conditions that are often responsible for the unnecessary and costly hospitalizations, as described by Engelhardt.

The six specifically targeted by CMS include pneumonia, dehydration, asthma, congestive heart failure, urinary tract infections and skin ulcers. According to one CMS publication about unnecessary hospital admissions, these conditions are responsible for 80 percent of these hospitalizations.

One concern is that this new initiative would hurt hospitals that were selected to participate in the CMS' Comprehensive Care for Joint Replacement payment model. That model will require hospitals in 67 regions across the country to accept bundled payments for all services related to hip and knee replacements within 90 days, including initial hospital admission. Hospitals are also expected to cut costs and absorb any losses.

However, according to CMS, the new skilled-nursing facility model shouldn't make that bundled payment program any more challenging for hospitals. In the end, the goal is for CMS to make these treatments more affordable for patients and continue lowering health care costs.

For more solutions concerning your financial efficiency, contact Professional Medical Services today.