Reforming medicare payments to skilled nursing facilities to cut incentives for unneeded care and avoiding high-cost patients

Health Affairs

Volumn 31, Issue 6, 2012, Pages 1303-1313

  Carter, Carol ^a   Garrett, A Bowen ^b,c   Wissoker, Douglas ^b  

^a Medicare Payment Advisory Commission   (United States)

^b URBAN INSTITUTE   (United States)

^c MCKINSEY AND COMPANY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; HEALTH CARE COST; HEALTH CARE FACILITY; HUMAN; MEDICARE; PATIENT CARE; PROSPECTIVE PAYMENT; REHABILITATION CARE; REIMBURSEMENT;

HUMANS; MEDICARE; REHABILITATION NURSING; REIMBURSEMENT MECHANISMS; REIMBURSEMENT, INCENTIVE; SKILLED NURSING FACILITIES; UNITED STATES;

EID: 84862857333     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2009.1090     Document Type: Article

References (22)

1. Office of the Actuary. 2012 annual report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. Baltimore (MD): Centers for Medicare and Medicaid Services; 2011.
2. Medicare Payment Advisory Commission. Promoting greater efficiency in Medicare [Internet]. Washington (DC): MedPAC; 2007 Jun [cited 2012 May 9]. Available from: http://www.medpac.gov/documents/jun07_entirereport.pdf
3. Centers for Medicare and Medicaid Services. Medicare program; prospective payment system and consolidated billing for skilled nursing facilities; disclosures of ownership and additional disclosable parties information; final rule. Fed Regist. 2011;76(152):48486-562.
4. Cotterill PG, Thomas FG. Prospective payment for Medicare inpatient psychiatric care: assessing the alternatives. Health Care Financ Rev. 2004;26(1):85-101.
5. Fries BE, Lapane K, Moore T, Mor V, Pizer S, White A, et al. Variation in prescribed medication and other non-therapy ancillary costs in skilled nursing facilities: potential RUG-III refinements. Cambridge (MA): Abt Associates; 2000.
6. White C, Pizer SD, White AJ. Assessing the RUG-III resident classification system for skilled nursing facilities. Health Care Financ Rev. 2002;24(2):7-15.
7. A spell of illness begins when a beneficiary has not been in a hospital or skilled nursing facility for sixty consecutive days. Because a threeday hospital stay is required for Medicare coverage of skilled nursing facility services, a hospitalization triggers a spell of illness.
8. Fries BE, Schneider DP, Foley WJ, Gavazzi M, Burke R, Cornelius E. Refining a case-mix measure for nursing homes: Resource Utilization Groups (RUG-III). Med Care. 1994;32(7):668-85.
9. Centers for Medicare and Medicaid Services. Time Study (STRIVE) [Internet]. Baltimore (MD): CMS; [last modified 2012 Mar 19; cited 2012 May 9]. Available from: http://www.cms.gov/Medicare/Medicarefee-for-service-payment/SNFPPS/TimeStudy.html
10. Centers for Medicare and Medicaid Services. Medicare program; prospective payment system and consolidated billing for skilled nursing facilities; disclosures of ownership and additional disclosable parties information; proposed rule. Fed Regist. 2011;76(88):26364-429.
11. In 2010 and 2011 CMS made the following changes to therapy payments: Skilled nursing facilities are required to conduct new patient assessments, which are used to establish payments, when the amount of therapy changes or stops; and payments are lower when therapy is furnished to two or more patients at the same time. In addition, by changing the therapy and nursing adjusters associated with each casemix group, payments were lowered for therapy and raised for nursing.
12. Researchers at the Urban Institute examining the policies in place until October 2010 found that as therapy costs increased, therapy payments increased even more, which would encourage the provision of therapy. Garrett B, Wissoker D. Modeling alternative designs for a revised PPS for skilled nursing facilities. Washington (DC): Urban Institute; 2008.
13. Office of Inspector General. Questionable billing by skilled nursing facilities [Internet]. Washington (DC): Department of Health and Human Services; 2010 Dec [cited 2012 Apr 26]. (Pub. No. OEI-02-09-00202). Available from: http://oig.hhs.gov/oei/reports/oei-02-09-00202.pdf
14. Keeler EB, Carter GM, Trude S. Insurance aspects of DRG outlier payments. Santa Monica (CA): RAND; 1988.
15. We focused the outlier policy we propose on ancillary costs to direct payments to services likely to reflect patient care needs
16. To access the Appendix, click on the Appendix link in the box to the right of the article online
17. Centers for Medicare and Medicaid Services. Medicare Program; prospective payment system and consolidated billing for skilled nursing facilities for FY 2010; minimum data set, version 3.0 for skilled nursing facilities and Medicaid nursing facilities; proposed rule. Fed Regist. 2009;74(90):22208-316.
18. Centers for Medicare and Medicaid Services. Medicare program; prospective payment system for inpatient psychiatric facilities; proposed rule. Fed Regist. 2003; 68(229):66920-78.
19. In the Technical Appendix (see Note 16) we suggest reasons why the update to the system led to reductions in the correlation between nontherapy ancillary costs and payments
20. Even at facilities with the most days classified into nonrehabilitation case-mix groups (the top decile), such days make up less than a third of all days
21. Medicare Payment Advisory Commission. Report to the Congress: Medicare payment policy. Washington (DC): MedPAC; 2012.
22. Centers for Medicare and Medicaid Services. FY 2012 SNF PPS monitoring activities [Internet]. Baltimore (MD): CMS; [cited 2012 May 9]. Available from: http://media.mcknights.com/documents/32/snf_monitoring_fy_2012_first_q_7995.pdf