The nursing home industry has made a proposal to cut Medicare spending that could impact other providers, reported Kaiser Health News.
The proposal, made to Congress by the American Health Care Association (AHCA), intends to cut the readmission rate from nursing home patients to hospitals. It could lead to $2 billion in Medicare savings from 2014 to 2021.
The proposal would have the U.S. Department of Health & Human Services create a baseline for 30-day hospital readmission rates from nursing homes and determine how much they cost Medicare. HHS would then create a targeted readmission reduction goal. If the goal is not met, market basket updates would be cut to close the gap.
Although hospitals rely on Medicare payments from patients brought in from nursing homes, they will soon be financially penalized for unnecessary readmissions.
The nursing home industry is still hurting from an 11 percent payment reduction that went into effect last October, noted Kaiser. The proposal aims to mitigate any further reductions in reimbursement.