CMS taking aim at post-acute care costs

The Medicare program wants to clamp down on costs associated with nursing homes, home healthcare and other services provided after an enrollee is discharged from the hospital, Kaiser Health News reported.

Post-acute spending has grown at a 5 percent annual clip in 34 of the most populous markets for hospitals in the U.S, according to KHN. And regional cost disparities abound: Medicare patients in Louisiana cost the program $8,800 each for home healthcare services, compared to $3,800 in New Jersey. In fact, Louisiana, Texas, Mississippi and Oklahoma spend more than a quarter of their Medicare expenditures on post-acute care services, according to the article.

The Centers for Medicare & Medicaid Services often compounds the problem by paying differing rates for patients receiving similar care, KHN reports. Care for patients recovering from a stroke is paid at a higher rate than those recovering from other illnesses.

As a result, the article said that nearly three-quarters of the wide variations in Medicare spending nationwide can be traced back to post-acute care payments.

Hospitals can play a fiduciary role by being selective in the services patients receive after discharge, but few do not. "They have not had to think remotely about costs or quality or anything except where's a bed available," said Anne Tumlinson, a consultant with Avalere Health told KHN. "Often doctors have very little to do with the discharge decision. Largely it has to do with the supply of providers and type of providers in the area."

The American Hospital Association has voiced objections to direct payment cuts to long-term care hospitals, skilled nursing facilities and other entitites that handle post-acute care on an inpatient basis, FierceHealthcare previously reported.

As a result, CMS is resorting to bundled payments to post-acute care providers in order to rein in costs. CMS has received 335 proposals for bundled payments that involve a combination of hospitals and post-acute providers, or such providers and other firms, which agree to a set sum for patient care instead of separate payments. One such company, NaviHealth, was founded by former CMS Administrator Tom Scully. It has proposed bundled payment projects with hospitals in four states, according to KHN.

To learn more:
- read the Kaiser Health News article

Related Articles:
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CMS launches bundled payment program
Half of LTC hospitals fail to report co-location, risk overpayment
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