Healthcare News & Insights

New payment model for nursing care may benefit hospitals

A new Medicare initiative may make it easier for hospitals to avoid unnecessary admissions for patients from long-term care facilities. And it could also make the road ahead smoother for bundled payments. 

ThinkstockPhotos-465315623The Centers for Medicare & Medicaid Services (CMS) just announced that it’ll be updating the payment structure for certain types of care provided to residents of skilled nursing facilities.

As stated in a news release, as part of the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents, CMS will pay skilled nursing facilities to provide more comprehensive care to frail elderly patients who receive Medicare, Medicaid or both (dual-eligibles).

According to an article from Modern Healthcare, skilled nursing facilities will be compensated to evaluate and care for patients with six medical conditions that cause about 80% of avoidable hospital admissions: urinary tract infections, pneumonia, skin ulcers, dehydration, asthma and congestive heart failure.

And they’ll be paid the same rates as hospitals to do so.

Why this can help hospitals

CMS hopes this will help physicians at skilled nursing facilities give these patients more thorough care. This can benefit hospitals who discharge elderly patients to skilled nursing facilities, as the hope is that they’ll be less likely to develop preventable complications that’ll bring them back to the hospital. And it could lower rates of hospital-acquired infections in these patients, which also works in hospitals’ favor.

Additionally, experts say this move is integral to the shift toward alternative, value-based payment models (such as bundled payments).

Improving quality of care in skilled nursing facilities could make it easier for hospitals to treat these patients in other areas, including joint replacement surgery. Reason: Healthier patients have fewer complications post-surgery, so hospitals won’t have to worry about treating other issues during an episode of care that could hurt their bottom lines.

It also shows how much CMS values high-quality care across the entire continuum of care. On its website, the agency said improving the care of residents in long-term care facilities has the potential to lower healthcare costs and improve outcomes.

To test its theory, CMS implemented part one of the initiative at 144 facilities in seven states. The first portion of the project focused more on supplementing the care provided at each facility, adding more staff and services, rather than changing the payment structure.

After two years, each of the seven sites provided better care at lower costs to its residents. The rates of all hospitalizations decreased, including potentially avoidable hospital stays. This phase will continue through the end of this year.

The second phase of the project will not only change the payment structure for care at skilled nursing facilities, it’ll also be expanded to more sites. Nearly 250 facilities in six states will be selected to participate when the program begins in the fall.

We’ll keep you posted on how these changes will affect hospitals.

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