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Medicare Cuts Payments To Nursing Homes Whose Patients Keep Ending Up In Hospital

Do you support the move?

by Kaiser Health News | Updated on 12.4.18

The federal government has taken a new step to reduce avoidable hospital readmissions of nursing home patients by lowering a year’s worth of payments to nearly 11,000 nursing homes. It gave bonuses to nearly 4,000 others.

These financial incentives, determined by each home’s readmission rates, significantly expand Medicare’s effort to pay medical providers based on the quality of care instead of just the number or condition of their patients. Until now, Medicare limited these kinds of incentives mostly to hospitals, which have gotten used to facing financial repercussions if too many of their patients are readmitted, suffer infections or other injuries, or die.

“To some nursing homes, it could mean a significant amount of money,” said Thomas Martin, director of post-acute care analytics at CarePort Health, which works for both hospitals and nursing homes. “A lot are operating on very small margins.”

The new Medicare program is altering a year’s worth of payments to 14,959 skilled nursing facilities based on how often their residents ended up back in hospitals within 30 days of leaving. Hospitalizations of nursing home residents, while decreasing in recent years, remain a problem, with nearly 11 percent of patients in 2016 being sent to hospitals for conditions that might have been averted with better medical oversight.

These bonuses and penalties are also intended to discourage nursing homes from discharging patients too quickly — something that is financially tempting as Medicare fully covers only the first 20 days of a stay and generally stops paying anything after 100 days.

Over this fiscal year, which began Oct. 1 and goes through the end of September 2019, the best-performing homes will receive 1.6 percent more for each Medicare patient than they would have otherwise. The worst-performing homes will lose nearly 2 percent of each payment. The others will fall in between. (You can see the scores for individual nursing facilities here.)

For-profit nursing homes, which make up two-thirds of the nation’s facilities, face deeper cuts on average than do nonprofit and government-owned homes, a Kaiser Health News analysis of the data found.

In Arkansas, Louisiana and Mississippi, 85 percent of homes will lose money, the analysis found. More than half in Alaska, Hawaii and Washington state will get bonuses.

Overall, 10,976 nursing homes will be penalized, 3,983 will get bonuses, and the remainder will not experience any change in payment, the KHN analysis found.

(Story continues below.)

Medicare is lowering payments to 12 of the 15 nursing homes run by Otterbein SeniorLife, an Ohio faith-based nonprofit. Pamela Richmond, Otterbein’s chief strategy officer, said most of its readmissions occurred with patients after they went home, not while they were in the facilities. Otterbein anticipates losing $99,000 over the year.

“We’re super disappointed,” Richmond said about the penalties. She said Otterbein is starting to follow up with former patients or the home health agencies that send nurses and aides to their houses to care for them. If there are signs of trouble, Otterbein will try to arrange care or bring patients back to the nursing home if necessary.

“This really puts the emphasis on us to go out and coordinate better care after they leave,” Richmond said.

Congress created the Skilled Nursing Facility Value-Based Purchasing Program incentives in the 2014 Protecting Access to Medicare Act. In assigning bonuses and penalties, Medicare judged each facility’s performances in two ways: how its hospitalization rates in calendar year 2017 compared with other facilities and how much those rates changed from calendar year 2015.

Facilities received scores of 0 to 100 for their performances and 0 to 90 for their improvements, and the higher of the two scores was used to determine their overall score. Facilities were then ranked highest to lowest.

Medicare is not measuring readmission rates of patients who are insured through private Medicare Advantage plans, even though in some regions the majority of Medicare beneficiaries rely on those to afford their care.

Through the incentives, Medicare will redistribute $316 million from poorer-performing to better-performing nursing homes. Medicare expects it will keep another $211 million that it would have otherwise paid to nursing homes if the program did not exist.

The new payments augment other pressures nursing homes face from Medicare and state Medicaid programs to lower readmissions to hospitals.

“Skilled facilities have been working toward this and knew it was coming,” said Nicole Fallon, vice president of health policy and integrated services at LeadingAge, an association of nonprofit providers of aging services.

The American Health Care Association, a trade group of nursing homes, said in a statement that it had supported the program and was gratified to see that more than a quarter of facilities received bonuses.

While most researchers believe that readmissions can be reduced, some consumer advocates fear that nursing homes will be reluctant to admit very infirm residents or to re-hospitalize patients even when they need medical care.

“It may end up causing great pain to residents who actually need to be hospitalized,” said Patricia McGinnis, executive director of California Advocates for Nursing Home Reform, which is based in San Francisco.

Fallon said Medicare eventually may penalize homes that have done all they can to prevent return trips to the hospital. But because of the program’s design by Congress, Medicare still will need to punish large numbers of homes.

“There’s always going to be winners and losers, even if you make good progress,” Fallon said. “At what point have we achieved all we can achieve?”

Meanwhile, Medicare is looking to expand financial incentives to other kinds of providers. Since 2016, it has been testing quality bonuses and penalties for home health agencies in nine states. Richmond, the nursing home executive, applauded that kind of expansion.

‘There’s a whole bunch of people in this chain” of institutions caring for patients at different stages, she said, “and we all need to be working in a common direction.”

KHN data editor Elizabeth Lucas contributed to this report.

KHN’s coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Kaiser Health News

Written by Kaiser Health News

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(29)
  • John
    Voted No
    12/05/2018
    ···

    Universal single payer healthcare, cradle to grave!

    Like (7)
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  • Mack
    Voted Maybe
    12/05/2018
    ···

    Quality of care is a good measure but what protections do the patients have when the for profit nursing homes aren’t getting the same level of income?

    Like (4)
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  • Terry
    Voted Yes
    12/05/2018
    ···

    Nothing makes people (or Medicare paid healthcare facilities) perform better than taking away $$$ for subpar care.

    Like (3)
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  • KansasTamale
    Voted No
    12/05/2018
    ···

    We’re talking older people who have medical problems, for God’s sake. They are going to have to have more medical care than can be provided in a nursing home with only 1 nurse for all the people and s/he is responsible for everything medical. Unless the patients are being sent to the hospital for falls, or evidence of abuse taking money away will absolutely create REPUBLICAN DEATH PANELS because there won’t be anywhere for these patients to go.

    Like (6)
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  • Kathleen
    Voted Yes
    12/05/2018
    ···

    That neglect and mistreatments, lack of adequate nursing staff-contribute to those issues. And it’s in rehabilitating settings also !

    Like (2)
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  • Joel
    Voted Maybe
    last Friday
    ···

    If the nursing homes aren't providing adiquate care and the patients continue to end up hospitalized then something needs to change. May I suggest single payer insurance, not voting to end Obamacare over 70 times or end protection against pre-existing conditions. Hey voters, if you keep voting against your own self interest, you're going to end up without Medicare, Medicare and Social Security. That's what the GOP is all about, saving he rich more money.

    Like (1)
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  • Hillary
    Voted No
    12/05/2018
    ···

    Just like in pre schools and day care centers a virus can sweep through elder care facilities, no matter how clean, with amazing speed. Taking even more money away from nursing facilities is akin to murder. We should honor and care for our elders instead of throwing them into a living compost heap till they finally rot.

    Like (4)
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  • Tooluser1
    Voted No
    12/05/2018
    ···

    Way to motivate neglect and elder abuse. Patients won't "go to the hospital too often", they'll go to the morgue.

    Like (3)
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  • Cindy
    Voted No
    12/05/2018
    ···

    The support of this new initiative proves how little Lawmakers and the American people don’t understand how poorly the government manages Medicare. Value Base Purchase is essentially data entry. If you have a patient that has congestive heart failure and you have staff that beat them as long as they do not readmit them to a hospital your nursing home will get more reimbursements. They use diagnosis metrics to measure “Quality of Care” not how well a patient is cared for like assessing the patient to find they are in a medical emergency like a low blood sugar and the staff do the appropriate action to save their life. The Government has to get out of healthcare for it to get better!

    Like (3)
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  • Christa
    Voted No
    12/05/2018
    ···

    Nursing homes are incredibly problematic for improvement based services. Low quality medical care and debilitated patients means falls, pneumonia, other infections, and people who are Medicare die painfully and early anyway. Eugenics are illegal. Penalize the program for being incompetent

    Like (2)
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  • Abbi
    Voted No
    12/05/2018
    ···

    I don’t think it’s a good idea to cut Medicare for nursing homes who’s patients end up in a hospital a lot, my mother has the good fortune to be well enough not to need residency in a nursing home yet she has had a series of stokes, complications do to medical treatments over the years and some times her own failure to be properly hydrated. I suspect that many patients of nursing homes have the similar issues. It is the price of surviving to an old age. A nursing home must not lose funding simply because its patients have a multitude of ailments that require hospitalization to keep them alive. I know what this move is, I see it clearly, it is an attempt to take money from Medicare to pay for tax cuts to the rich or that stupid wall we do not need.

    Like (1)
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  • Robin
    Voted No
    last Thursday
    ···

    How disgusting. Our seniors should be taken care of instead of cut. Very very very disgusting. How dare you.

    Like (1)
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  • Stephanie
    Voted No
    last Thursday
    ···

    Some Senior can live to their Golden Years, rather to be in the Nursing home.

    Like (1)
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  • David
    Voted No
    12/05/2018
    ···

    Payments to nursing homes by Medicare and Medicaid are already so low most facilities cannot sustain good care and still pay the bills. This speaks volumes about how little we value our elderly, sick, and disabled. Universal Single Payer Healthcare needs to be passed and implemented. I would like Congress to answer 2 questions: 1) Is healthcare a right or a privilege in this country? 2) for what reason do we place so little value as a nation on the care of our elderly, sick, and vulnerable?

    Like (1)
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  • Kirby
    Voted No
    12/05/2018
    ···

    This again is another bad example of the government getting involved in healthcare. So nursing homes are going to be more hesitant about sending patients to the hospital opening the doors to a patient dying or even malpractice lawsuits! Patients should get the care they need not have it decided that they can’t because they are sick. It’s a way to thin the heard of older people. Trust me it is a pain to constantly send people to the hospital from nursing homes and have to readmit those people. We don’t send them unless they need it!

    Like (1)
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  • Randy
    Voted No
    12/05/2018
    ···

    It’s bad enough that the care the elderly receive in these places is lacking as it is. Now you go cutting payments to them will only make it worse!!!

    Like (1)
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  • verymary
    Voted No
    12/05/2018
    ···

    Heartless!

    Like (1)
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  • Zack
    Voted Maybe
    12/05/2018
    ···

    I can see where they are trying to use money to have nursing home facilities focus on the quality of care for the patients and I like that idea. What I don’t like is the possibility of the nursing homes knowing that the patient might need to be hospitalized in the future and not admitting them to there nursing home based on that fact. Now I don’t know if that happens or not, it’s just a concern I could see happening.

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  • ChristianNelson
    Voted Yes
    last Friday
    ···

    YES 100%.

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  • John
    Voted Maybe
    12/05/2018
    ···

    The intention of the initiative is well meaning but we have to be realistic. Patients are "cared" for by individuals. However, the corporations and companies are incapable of "caring". They are motivated by one thing only and that is money. I fear the risk of these corporations neglecting patients in need of care by not readmitting them outweighs the fact that blind faith is being put in them to do the right thing. Many patients will likely be denied the care they need in order to save a buck. Although improving the quality of patient care and treatment is the goal here the end result of that happening is improbable. Intentions don't get results. If we knew for sure that care would improve then sure this would be a wise decision but that unfortunately just isn't the case. As they say, the road to hell is paved with good intentions.

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