Looking at how healthcare bundles services together based on the combination of diagnostic profiles (e.g., the case-mix), it is crucial to understand what kind of diagnostic patterns you can expect in each type of site across the Continuum of Care. For our purposes, we will see how these feed into paying for Medicare qualifying services.
In general, long term care (LTC) consists of medical and non-medical care that is provided to individuals who have chronic health issues and disabilities that prevent them from doing regular daily tasks. Hence, LTC includes both healthcare and support services for everyday living. It is delivered across a wide variety of venues, including patients' homes, assisted living facilities, and nursing homes. Also, family members and friends provide the majority of LTC services without getting paid for them. Medicare does not cover non-medically necessary LTC services (such as rent or laundry). Thus, costs associated with this form of daily need can impose a significant burden on families. Medicaid covers several different levels of LTC services, but a person must be indigent to qualify for Medicaid. LTC insurance is offered separately by insurance companies, but most people do not purchase these plans because premiums can be unaffordable.1-5, 7, 11,13-16
Overall, only certain medically necessary services are approved for Medicare Part A and Part B. These include15:
- The services must be directly and specifically related to an active written treatment plan that is approved by the physician after any needed consultation with the qualified therapist and is based on an initial evaluation performed by a trained therapist before the start of therapy services in the facility.
- The services must be of a level of complexity and sophistication, or the condition of the resident must be of a nature that requires the judgment, knowledge, and skills of a therapist.
- The services must be provided with the expectation, based on the assessment of the resident's restoration potential made by the physician, that the condition of the patient will improve materially in a reasonable and generally predictable period of time, or the services must be necessary for the establishment of a safe and effective maintenance program.
- The services must be considered accepted standards of medical practice.
- The services must be reasonable and appropriate for the treatment of the resident's condition; this includes the requirement that the amount, frequency, and duration of the services must be reasonable, and they must be furnished by qualified personnel.
The plan of care must identify goals that would benefit the patient (or train caregivers) functionally. The frequency and duration of services must also be justifiable according to the documented severity of the patient's condition, responsiveness to treatment, and demonstrated change in function.15
Part A SNF benefit covers up to 100 days of post-acute care. To qualify for admission to the SNF under the Part A benefit, the patient must have had a prior stay of at least three days in an acute care hospital. The services provided in the SNF must relate directly to the preceding hospitalization or must be necessary to treat a condition that arose after admission to the SNF.1-5, 7, 11,13-16
Additional coverage criteria include:
- transferred to the SNF within 30 days of discharge from the three-day stay
- require the need for skilled care daily, seven days a week, that can only be provided on an inpatient basis1-5, 7, 11,13-16
The full cost of covered services will be paid for by Medicare for days 1 through 20, with the patient paying for nothing. On the 21st day, coinsurance kicks in, and there is a daily coinsurance cost to a SNF stay that could be more than $150. Beyond 100 days, Medicare pays none of the costs, and the responsibility falls entirely on the patient. Qualified SNF services can include a semi-private room, which is a room that they may share with other patients. Meals, skilled nursing care, rehabilitative services (PT, OT, SLP), medical social services, medication, medical supplies and equipment used in the facility, roundtrip ambulance transport to the nearest supplies of medically necessary services that are not available at the SNF and dietary counseling.17
When the patient arrives at the SNF, they receive an assessment within the first eight days. They will establish health goals, and daily assessments and skilled care will occur.17 Assessments, diagnostic tools, interventional, and comprehensive care are necessary for beneficial patient outcomes. While in the SNF, a Medicare patient would be evaluated utilizing the minimum data set (MDS) assessment tool.15
The MDS assessment tool is a comprehensive summary of the patient's mental and physical issues, completed by the fifth day after admission to an SNF. A nurse typically completes it, and triggers are provided for assessment of MDS elements by other professionals. However, other professionals may sometimes score specialty areas. For speech-language pathologists, those areas are cognitive patterns, communication/hearing patterns, and oral/nutritional status. Time spent on MDS assessment does not count toward therapy minutes.15
The MDS places a patient into a diagnostic category, and the SNF receives a lump sum payment based on that category for all of the services the patient requires. The services are billed through the SNF, rather than the individual clinician(s) who rendered the services. Medicare requires the SNF to record assessments done on days 14, 30, 60 and 90 of the covered stay and any other evaluations needed account for any significant changes in condition until the patient is discharged to home, or the 100 days benefit coverage has ended. Assessments commonly evaluate a patient’s current physical and mental condition, their medical history, medications list, activities of daily living, speech and cognition, and physical limitations. A care plan will be established that will provide information on the types of services the patient needs, the types of healthcare professionals that will provide those services, what equipment and supplies are needed as well as if an altered diet is required.17
Below is a table comprised of data from the Medicare and Medicaid Research Review. These are ten typical diagnostic patient profiles that require skilled nursing care at a residential facility. These are the costs and number of Medicare-covered admissions in 2011. They provide us with an overall view of the breadth and scope of Medicare.18
|Disease||# of Covered Admissions||Covered Medicare Charges Per Admission||Covered Medicare Charges Per Day|
|Acute Myocardial Infarction||14,021||$9,492||$390|
|Disorders of Muscle, Ligament and fascia||56,256||$11,699||$375|
|Fracture neck of femur||45,502||$14,596||$387|
|Late effects of cerebrovascular disease||39,650||$14,040||$392|
|Senile and prosenile organic psychotic conditions||14,268||$11,321||$341|
|Other Cerebral degernations||17,114||$10,744||$328|
Table 2. The Number of Medicare Covered Admissions, Covered Medicare Charges Per Admit and Covered Medicare Charges Per Day for 10 Common SNF-related Conditions.18
As you can see, many of the patient profiles you would expect to find in an SNF require skilled nursing care and Medicare coverage for its related services.18
For example, neuropathy, retinopathy, mobility, and epidermal ulcerations are associated with chronic diabetes mellitus. Patients may require skilled nursing care for the management of their diabetes mellitus and related co-morbidities. Acute Myocardial Infarction is associated with acute vascular conditions such as a heart attack. While common, it does not have the most significant number of related SNF admissions. These enormous numbers are related to disorders of the muscular, fascia, and ligaments (such as a knee or hip dislocation), late effects of cerebrovascular disease, and a fracture of the neck of the femur.18
A fracture of the neck of the femur is commonly referred to as a “broken hip.” Nearly 400,000 hip surgeries are performed each year. These can be associated with the broken hip, or the dislocated hip noted above. Senile or pro-senile organic psychotic conditions refer to the prodromal and early stages of dementia. Patients with dementia often required skilled nursing care and may reside in specialized memory units. Parkinson's disease was the only singular age-related neurodegeneration associated with skilled-nursing care, presumably due to the fall, fractures, and aspiration pneumonia-related risks.19
If a Medicare beneficiary does not qualify for a Part A stay, their services may be paid under the Part B benefit through the Medicare Fee Schedule. For example, if the patient requires post-acute care in excess of 100 days, the services provided after this period might be covered under Part B. 1-5, 7, 11,13-16
Outpatient services do not require an overnight inpatient stay in an institution of health care delivery, such as a hospital or LTC facility.1-5, 7, 11,13-16 The entire gamut of healthcare-related diagnoses can be found in outpatient care. Use your imagination! What you can think of, there is probably a clinic for it somewhere!
Many hospitals have emergency departments and other outpatient service centers, such as outpatient surgery, rehabilitation, and specialized clinics. Outpatient services are also referred to as ambulatory care. Strictly speaking, ambulatory care constitutes diagnostic and therapeutic services and treatments provided to the “walking” (ambulatory) patient. Hence, in a restricted sense, the term “ambulatory care” refers to care rendered to patients who come to physicians’ offices, hospital outpatient departments, and health centers to receive care. This term is also used synonymously with “community medicine” because the geographic location of ambulatory services is intended to serve the surrounding community, providing convenience and easy accessibility to health care services for the members of that community.1-5, 7, 11,13-16
Patients may be bounced back and forth from their home to the hospital, to a short stay in an SNF, then back to their HHA. Then, sometime later, their status deteriorates again, but this time, they are being bounced from their home/HHA to the hospital, an SNF, and now an ALF. Perhaps they don’t receive the most comprehensive assessments and care (for any number of reasons including but not limited to medical error), and they return to the hospital several times before they finally end up in an SNF. While at the SNF, they continue to deteriorate. They go back and forth to the hospital again and again, until one day, they don’t return to the SNF at all.
Up until changes went into effect in October of 2019, a SNF receives a per diem rate and receives additional reimbursement based on the number of therapy minutes and/or nursing services provided to a patient. This payment system incentivized some providers or agencies to provide medically unnecessary care. As such, it is critical that the services provided are clearly documented and are reasonable, necessary, and individualized to the needs of each patient.