Learners will understand and be able to apply foundational financial concepts in healthcare at any level across the healthcare continuum and in any area of administration.
Learners will understand and be able to apply foundational financial concepts in healthcare at any level across the healthcare continuum and in any area of administration.
After completing this continuing education course, the participant will be able to meet the following objectives:
Some individuals, even in the healthcare industry, may not understand what Medicare is or how it works. Medicare delivers a guaranteed level of coverage to people who might not otherwise be able to afford it. Before Medicare, almost 1 in 2 older Americans had no health insurance, and their choices often included wiping out their savings, taking money from their children, seeking welfare, or doing without care. When Medicare began in 1965, nearly 1 in 3 seniors lived in poverty. Older people were more likely to be poorer than any other age group. However, in its first ten years, Medicare helped cut aging-related poverty rates in half and help insulate beneficiaries from rising health care costs. People enrolled in the program may still pay thousands of dollars a year for health care, but their access to health care is vastly better than before the program existed.1
Medicare’s administrative overhead remains low compared with private insurance, and its spending per individual has risen more slowly than private insurance. The expenditure per individual climbed 1.4 percent each year between 2010 and 2015, less than half the 3 percent growth rate in private health insurance. Overall, total Medicare spending grew less than 5 percent a year, a significant decline from its 9 percent annual rate in the prior decade.1
Medicare is one of the largest sources of public health insurance in the United States (US), serving the elderly, the disabled, and those with end-stage renal disease (ESRD). Managed by the Centers for Medicare and Medicaid Services (CMS), another division within the Department of Health and Human Services (DHHS), Medicare offers coverage for hospital care, post-discharge nursing care, hospice care, outpatient services, and prescription drugs.1-4
Medicaid, the third-largest source of health insurance in the country, provides coverage for low-income adults, children, the elderly, and individuals with disabilities. This program is also the largest provider of long-term care to older Americans and individuals with disabilities. The program has seen significant expansion under the Affordable Care Act of 2014 (ACA) and, similar to Medicare, is the focus of reducing repeat hospital admission rates.1-4, 6 For the purpose of this course, we will focus on the impact on Medicare. However, many of the issues in the elderly are valid in the young and infirmed as well, when it comes to access to healthcare financing.
In 1997, the US government created the Children’s Health Insurance Program (CHIP) to provide insurance to children in uninsured families. The program expanded coverage to children in families that have modest incomes but do not qualify for Medicaid. 1-4, 6
Medicare affects more than delivery. It drives many of the financial standards for the way healthcare is delivered, even for younger adults and children. The payment systems for Medicare are heavily woven into the fabric of all other forms of healthcare financing because it is government-based. Access to healthcare financing is a significant factor driving the access patients have to the services they need. To understand the entire picture, we first have to look at how healthcare, in general, is funded in America.
The details regarding healthcare financing in America is explored in the CEUFast© Course Foundational Concepts in Healthcare5. Here are some key points from that section.
The complexity of financing is one of the primary characteristics of medical care delivery in the US. Here, both public and private funding play substantial roles. In the American public sector, the government has created a multitude of tax-financed programs; each program serves a defined category of citizens provided they meet the established qualifications. Insurance overlap is also relatively common. For example, a significant number of Medicare beneficiaries either qualify for Medicaid or have purchased private supplementary insurance to pay for expenses not covered by Medicare. In the private sector, financing for health insurance is shared between the employer and the employee; the employer provides the bulk of financing. Self-employed people purchase health insurance in the open market.1-4, 6
Insurance, in general, is based on a few fundamental principles1-4:
Insurance requires some cost-sharing so that the insured assumes at least part of the risk. The purpose of cost-sharing is to reduce the misuse of insurance benefits. The rationale for cost-sharing is to control the utilization of healthcare services. Because insurance creates a moral hazard by insulating the insured from the cost of healthcare, making the insured pay part of the cost promotes more responsible behavior in healthcare utilization.1-4, 6
The modern health insurance industry is pluralistic; that is, private insurance includes many different types of health plan providers. Managed Care seeks to achieve efficiency by integrating the essential functions of healthcare delivery, and it employs mechanisms to control (manage) utilization and cost of medical services. Managed care is the dominant healthcare delivery system in the United States today. It covers most Americans in both private and public health insurance programs through contracts with a managed care organization (MCO), such as a healthcare maintenance organization (HMO) or a preferred provider organization (PPO). The MCO, in turn, contracts with selected healthcare providers—physicians, hospitals, and others—to deliver healthcare services to its enrollees.1-4, 6
Traditionally, Medicare and Medicaid established per diem (daily) rates for reimbursing hospitals, nursing homes, and other inpatient facilities. The per diem rates were based on the actual costs the providers had incurred during the previous year, referred to as retrospective reimbursement. Home health was also reimbursed based on cost.1-4, 6
Because the retrospective method was based on charges that were directly related to the length of stay, services rendered, and the cost of providing the services, providers had no incentive to control costs.1-4, 6
With this method, services were rendered indiscriminately because healthcare institutions could increase their profits by increasing costs. Because of the perverse financial incentives inherent in retrospective cost-based reimbursement, it has been primarily replaced by prospective methods of reimbursement. In contrast to retrospective reimbursement, the prospective reimbursement uses specific pre-established criteria to determine in advance the amount of reimbursement. Medicare has been using the prospective payment system to reimburse inpatient hospital acute care services under Medicare Part A since 1983.1-4, 6
Medicare is a health insurance program for individuals over the age of 65. It is also available for some individuals with specific disabilities and those of all ages for ESRD. Medicare has different parts that help cover specific services. Medicare Part A helps cover inpatient care in hospitals, including critical access hospitals and skilled nursing facilities (SNFs). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits. Most people do not pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working.1-4, 6
On the other hand, Medicare Part B helps cover medically appropriate physician’s services and outpatient care. It also covers some other medical services that Part A does not cover, such as some of the services of physical and occupational therapists and some home health care. It also covers health care to prevent illness or detect it at an early stage, when treatment is most likely to work best. Most people pay a monthly premium for Part B. Medicare Part D prescription drug coverage and is available to everyone with Medicare. To get Medicare prescription drug coverage, people must join a plan approved by Medicare that offers Medicare drug coverage. Most people pay a monthly premium for Part D.
The table below has been recreated from an annual report released by CMS,7 demonstrating the number of Medicare beneficiaries and the overall cost in billions for each type of service site across the Continuum of Care. The Continuum of Care will be discussed further later in this course. Below we see that Both Part A & B cost more than $180 billion and serving nearly 35 million Americans each year. Those amounts are then parsed further according to each setting: Inpatient hospital, SNF, home health agency (HHA), hospice, physician's offices, outpatient, and medical equipment (such as oxygen tanks).
| Program Payments|
|Total Part A and/or B||34.8||$377.0|
Table 1. Medicare Persons Served and Payments by Type of Service CY 2017. Table recreated from CMS Fast Facts, November 2019.7
Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government. Medicaid and the Children’s Health Insurance Program (CHIP) provide critical health coverage for millions of people. Through these programs, CMS supports access to care in many ways. Most importantly, people gain access to health care services that may not be affordable without Medicaid or CHIP. Additionally, some programs and benefits include special protections—such as provider network and payment methods—that help ensure services are accessible.8
Preventive care and other services help people stay healthy and avoid more costly care. CMS offers materials, toolkits, and other resources for states to facilitate Medicaid and CHIP beneficiaries learn about these services and how to access them. CMS also supports many efforts to measure access, share the results, and promote progress. Participants learn more through guidance, reports, and initiatives. States establish and administer their own Medicaid programs and determine the type, amount, duration, and scope of services within broad federal guidelines. Federal law requires states to provide certain mandatory benefits and allows states the choice of covering other optional benefits. The compulsory benefit includes services including inpatient and outpatient hospital services, physician services, laboratory and x-ray services, and home health services, among others. Optional benefits include prescription drugs, case management, physical therapy, and occupational therapy.8
States have the option to charge premiums and to establish out of pocket spending (cost-sharing) requirements for Medicaid enrollees. Out of pocket costs may include copayments, coinsurance, deductibles, and other similar charges. Maximum out of pocket cost is limited, but states can impose higher fees for targeted groups of somewhat higher-income people. Certain vulnerable groups, such as children and pregnant women, are exempt from most out of pocket costs and copayments and coinsurance cannot be charged for certain services.8
Medicaid rules give states the ability to use out of pocket charges to promote the most cost-effective use of prescription drugs. States may establish different copayments for generic versus brand-name drugs or drugs included on a preferred drug list. For people with incomes above 150% federal poverty level (FPL), copayments for non-preferred medications may be as high as 20 percent of the cost of the drug. For people with income at or below 150% FPL, copayments are limited to nominal amounts. States must specify which drugs are considered either "preferred" or "non-preferred." States also have the option to establish different copayments for mail-order drugs and drugs sold in a pharmacy.8
States have the option to impose higher copayments when people visit a hospital emergency department for non-emergency services. This copayment is limited to non-emergency services, as emergency services are exempted from all out of pocket charges. For people with incomes above 150% federal poverty level, such copayments may be established up to the state's cost for the service, but certain conditions must be met.8
ACA created the opportunity for states to expand Medicaid to cover nearly all low-income Americans under age 65. Eligibility for children was extended to at least 133% of the federal poverty level in every state (most states cover children to higher income levels), and states were given the option to extend eligibility to adults with income at or below 133% of the federal poverty level. Most states have chosen to expand coverage to adults, and those that have not yet expanded may decide to do so at any time.8
There are conditions where individuals require both Medicare and Medicaid. To illustrate this, we will explore one Medicare only example, one Medicaid only example, and then a final fictional example of a patient situation requiring both forms of government-based healthcare.
A 74-year-old female with a diagnosis of Amnestic Mild Cognitive Impairment:
Mild Cognitive Impairment (MCI) will be also be examined further in subsequent sections of this course, but to get us going, here is an overview: Amnestic MCI (aMCI). aMCI is considered a prodromal phase between healthy aging and Alzheimer's disease (AD) because upwards of 80% of all aMCI patients progress to AD status within an average of 6 years. Biomarkers of AD pathology are found in aMCI patients and predict 95% MCI to AD conversions. Adults with aMCI have reduced cerebral glucose metabolism in the posterior cingulate, precuneus, parietotemporal, and frontal cortices, have reduced memory performance, and exhibit signs of amyloid plaque accumulation. The subcategories of aMCI are Single Domain aMCI and Multiple Domain aMCI, respectively. A portion of patients with Single Domain aMCI will convert to a status of AD within a short number of years. Patients with Multiple Domain aMCI are highly likely to switch to a status of AD or vascular dementia within a short number of years.9
The mild nature of MCI fundamentally suggests that this individual does not require skilled care. Therefore, they do not need a residence in an SNF. This individual will have some functional deficits in their activities of daily living, such as maintaining their finances, driving their car, or cooking dinner. However, they can remain mostly active.
For this reason, many MCI patients can reside in Assisted Living Facilities (ALF), Independent Living Facilities (ILF), or at home with a home health agency (HHA) providing some services. If they are living in an ALF or ILF, they would likely utilize more of their Medicare Part B services. If they use an HHA, they would probably use their Medicare Part A services. These details will continue to be examined as we go further. In an ALF or ILF, this patient could get access to physical therapy or speech therapy, depending on what their residences provide. It is more likely that these services will be found in the ALF rather than the ILF. ILFs are meant to be "independent," and residents in those facilities often can operate a vehicle if the need should arise. If the patient utilizes an HHA, it is not likely that they would get much access to speech therapy to treat their cognitive issues. Rehabilitation departments are not as frequently associated with HHAs as they are with ALFs or SNFs.
A 19-year-old male recovering from a motorcycle accident with Traumatic Brain Injury:
Here, we have a fictional case study of a young adult male who was in a severe motorcycle accident. This young man suffered significant spinal and traumatic brain injuries. Before the accident, he worked as a contractor. This means he did not qualify for any form of disability insurance through an employer. Therefore, he went on Social Security and Medicaid in order to live and receive healthcare. This type of patient would need significant medical, allied health, and rehabilitative treatments for six or more consecutive months. If this male can reside at home, perhaps a private duty nurse or an HHA would be available.
A 43-year-old female with child-onset Diabetes Mellitus & other co-morbidities:
A possible patient scenario where an individual would require both Medicare and Medicaid could include a female patient with child-onset diabetes mellitus. This patient, now in her 40s, has had issues with consistently maintaining employment due to her bouts with neuropathy, retinopathy, and chronic kidney disease (CKD). Once the diabetic ulcers, neuropathy, and retinopathy came to a point where she could not carry employment anymore, she became eligible for Social Security and Medicaid benefits. At 43 years old, she was diagnosed with ESRD. With this diagnosis, she became eligible for Medicare as well as Medicaid. She can utilize the Medicare benefits for her qualifying medical conditions, and possibly utilize Medicaid if her skin ulcers and neuropathy reach the point where she needs skilled nursing care. At that point, she would be admitted to a SNF.
For patients such as this one who has a qualifying disability, Medicaid can be utilized for SNF related expenses as well. Medicare Part A could be utilized for inpatient related medical care. This patient would require services spanning the physician, nursing, psychiatric, neurological, physical, occupational, and respiratory therapy departments. This form of flexibility in financing healthcare-related services provides a path for complicated conditions, such as this one, to be treated in America.
During the past two decades, the Medicare coverage choices available to dually eligible individuals have increased significantly, especially with the introduction of the Medicare Part C/Medicare Advantage MA program. Under the Balanced Budget Act of 1997 (BBA), health plan options were expanded to allow private commercial insurers to offer an alternative to traditional Fee-for-Service Medicare in the form of specific types of health care plans. Today, these expanded options are collectively known as the “MA program” and include HMOs, provider-sponsored organizations, PPOs, and private Fee-for-Service plans.
Fee-for-service and more of these concepts are explained in another course called Business Management for the Healthcare Professional (CEUFast ©2019).12
SNFs that provide services (e.g., nursing, physical therapy (PT), occupational therapy (OT) and speech-language pathology (SLP) services) to Medicare beneficiaries are paid under a prospective payment system through Part A of the Medicare benefit. If a patient requires services based on their clinical characteristics, Medicare requires SNFs to provide them regardless of whether the services are covered under Part A or Part B of the program. SNF prospective payment system policies are reviewed and updated annually and are valid for the federal fiscal year.11,13-15
Implemented in 1992 by Medicare, the resource-based relative value scale (RBRVS) reimburses physicians according to a corresponding value assigned to each physician service. Relative values are based on the time, skill, and intensity it takes to provide a service, and the actual reimbursement is derived using a complex formula. Each year, Medicare publishes the Medicare Fee Schedule, which gives the reimbursement amount for each of the services and procedures identified by a current procedural terminology (CPT) code. The reimbursement amounts are adjusted for the geographic area in which the practice is located. Reimbursement Under Managed Care Three distinct approaches are used by MCOs. PPOs use a variation of the fee-for-service method, in which the PPO establishes fee schedules based on discounts negotiated with providers participating in its network. HMOs sometimes have physicians on their staff who are paid a salary.11,13-15
Remember, with the prospective reimbursement method, specific pre-established criteria to determine in advance the amount of reimbursement. Four main prospective reimbursement methods currently in use are based on diagnosis-related groups (DRGs), ambulatory payment classifications (APCs), resource utilization groups (RUGs), and home health resource groups (HHRGs).11,13-15
The DRG method is used to pay for hospital inpatient services. The predetermined rate is set according to DRGs. Instead of a per diem rate, the reimbursement method based on DRGs prospectively sets a bundled price according to the principal diagnosis at the time of admission. The hospital receives the predetermined fixed rate for that particular DRG classification. The primary factor governing the amount of reimbursement is the primary (or main) clinical diagnosis, but additional factors can create differences in reimbursement for the same DRG. In 2007, Medicare Severity DRGs were implemented. MS-DRGs include patient severity to reflect the use of hospital resources better.11,13-15
The DRG-based prospective reimbursement has forced hospitals to control their costs. This reimbursement method has also forced hospitals to minimize the length of inpatient stay in order to keep the cost of services below the fixed reimbursement amount. This is one of the essential points in this course. Limiting the length of inpatient stay may be contributing to the repeat hospital admissions. Many of those preventable conditions and issues could be addressed through the reformations of the system. CMS and others have been moving towards these conclusions since 2011 when much of the data related to repeat hospital admissions was released.7,16
Reimbursing costs through the DRG-based prospective method is a double edge sword. It can cut costs. However, if the total cost of services is less than the DRG-based reimbursement amount, a hospital gets to keep the difference as profit. Conversely, a hospital loses money when its costs exceed the prospective reimbursement rate. In an effort to avoid losing money, some hospitals were discharging patients before they are ready to be released. In the past, the patient could come back to the hospital sometime later, and before the prospective payment system changes, each new stay incurred more costs that the hospital got to collect from the patient.7,11,13-16 Reducing repeat hospital admissions through accurate, medically necessary, and comprehensive care has the potential to improve patient outcomes as well as reduce overall Medicare and patient cost burden.
Another method for keeping costs below the reimbursed rate is that hospitals may not offer additional specialty or allied health services that could significantly improve the patients’ outcomes. For example, respiratory therapy may be found in any hospital due to the use of artificial oxygen and mechanical ventilation in these facilities. Additionally, physical therapy may be found in the acute and inpatient hospital settings because ambulation to and from a bathroom or a patient’s fall risk is vital to establishing a patient’s current capacity. However, some hospitals may not hire speech therapists or occupational therapists. They may employ only a few registered nurses (RN) or licensed practical nurses (LPN) and rely heavily on certified nursing assistants (CNA) or technicians for many patient-related activities.
Fundamentally, in the past, there was no incentive to comprehensively treat a patient because they could return later on in the next few weeks and receive more services. Under the prospective reimbursement method, that kind of care is discouraged because it drives the repeated hospital admissions problem. Hospital Days of Stay and Costs for a Given DRG Hospitals now have disincentives to discharge patients too quickly. The ACA requires a reduction in payments to hospitals that incur excessive Medicare readmissions within 30 days of discharge. Readmission can be to the same or another hospital and is related to the medical condition for which the patient was previously hospitalized.7,11,13-16
The prospective payment method based on APCs, implemented in 2000, is associated with Medicare’s Outpatient Prospective Payment System for services provided by hospital outpatient departments. The APC divides all outpatient services into more than 300 procedural groups. Reimbursement rates are associated with each APC group. The prices are also adjusted for geographic variations in wages. APC reimbursement includes services such as anesthesia, certain drugs, supplies, and recovery room charges in a package price established by Medicare. In January 2008, Medicare implemented the outpatient prospective payment system to pay for facility services—such as nursing, recovery care, anesthetics, drugs, and other supplies—in freestanding (i.e., nonhospital) ambulatory surgery centers. The most common procedures performed in these centers are cataract removal and lens replacement, upper gastrointestinal endoscopy, and colonoscopy. Physician services are reimbursed separately under the physician fee schedule based on RBRVS.1-5, 7, 11,13-16
Medicare pays SNFs based on RUGs, but the method differs from how DRG-based payments are used for hospitals. Whereas a fixed amount of reimbursement is associated with each DRG, RUG categories are used for determining an SNF's overall severity of health conditions requiring medical and nursing intervention. The aggregate of clinical severity in a facility is referred to as its case mix. It is determined by first evaluating each patient’s medical and nursing care needs.1-5, 7, 11,13-16
Based on this evaluation, each patient is classified into one of 66 RUGs (according to RUG-IV classifications). The case-mix composite of an institution is then used to determine a fixed per diem amount, an all-inclusive bundled rate, associated with that case mix. The higher the case-mix score, the higher the reimbursement. Adjustments to the prospective payment rates are made for differences in wages prevailing in various geographic areas and for facility location in urban as opposed to rural areas. HHRGs Implemented in October 2000, the prospective payment system for home health care pays a fixed, predetermined rate for each 60-day episode of care, regardless of the specific services delivered.1-5, 7, 11,13-16
Thus, all services provided by a home health agency are bundled under one payment made on a per-patient basis. An assessment instrument called the Outcomes and Assessment Information Set (OASIS) is used to rate each patient’s functional status and clinical severity level. The assessment measures translate into points; the points are totaled to determine the patient’s HHRG. Payment is based on the patient’s specific HHRG category. The HHRG classification uses 153 distinct groups in which patients can be classified according to clinical severity, functional status, and the need for rehabilitation therapies.13-16
As we reflect on how financing healthcare drives healthcare delivery, we see that bundling the costs of care is vital to keeping prices low for the patients. Currently, America is attempting many different ways to bundle care in order to keep costs down, in order to ensure that as many Americans can access those healthcare services as possible. The types of bundles we have covered so far include:
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 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:
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.
Allied health professionals received specialized training, and their clinical interventions complement the work of physicians and nurses. An allied health professional is someone who has received a certificate, associate's, bachelor's, or master's degree; doctoral-level preparation; or post-baccalaureate training in a science-related to healthcare and has responsibility for the delivery of health or related services. Some key allied health professionals are graduates of programs accredited by their respective professional bodies. For example, such programs train PTs, whose role is to provide care for patients with movement dysfunction. OTs help people of all ages improve their ability to perform tasks in their daily living and work environments. OTs help rehabilitate individuals who have conditions that are mentally, physically, developmentally, or emotionally disabling. OT interventions help people live independently or become more productive in their workplace. SLPs treat patients with speech and language problems, whereas audiologists treat patients with hearing difficulties.1-5, 7, 11,13-16
OTs, PTs, SLPs recommend the frequency and length of sessions that they anticipate a patient will need. This is part of the MDS information about the patient's needs that are combined to determine the patient's RUG level. For PTs and SLPs, there are some rules from the RAI Manual, Chapter 3, Section 0 that one needs to follow15:
In general, there are some considerations for PTs and SLPs performing evaluations in SNFs for Medicare Part A beneficiaries. These include:
It is vital that you always stay up to date on all current rules associated with your license and scope of practice. Additionally, there are a few Medicare considerations to take into account.
SNFs are subject to consolidated billing. This means that the SNF must provide and bill for all Part A and Part B services provided to the patient. Consolidated billing is a mechanism established by CMS to prevent double billing for services. For example, if the SNF does not have an SLP on staff, they must contract with an SLP to provide the necessary services. In this scenario, the agency would bill Medicare for the SLP’s services and pay the SLP a negotiated rate. CMS does not dictate the amount a contract employee is paid.1-5, 7, 11,13-16
Additionally, in 2014, Congress passed the IMPACT Act20 in an effort to better understand the differences in payments and outcomes among four post-acute care settings: SNFs, inpatient rehabilitation facilities, HHA, and long-term care hospitals. The IMPACT Act requires the standardization of data across these four post-acute care settings. Currently, each environment has its own distinct assessment tool (SNFs use the MDS). These separate assessment tools do not collect or track data in a consistent manner, making it difficult to evaluate the distinctions between the settings. However, CMS has already begun—and will continue—to change the assessment tools in order to comply with the mandates of the IMPACT Act. The Act also requires reports examining the possibility of implementing a unified prospective payment system across all four settings.20
The term advanced practice nurse (APN) is a generic name for nurses who have education and clinical experience beyond that required of an RN. Four areas of specialization for APNs exist: clinical nurse specialists (CNSs), certified registered nurse anesthetists (CRNAs), nurse practitioners (NPs), and certified nurse-midwives (CNMs). The term nonphysician practitioner (NPP)—also called nonphysician clinician and midlevel provider—refers to clinical professionals who practice in many of the areas in which physicians also practice, but who do not have a medical degree or a doctor of osteopathy degree. NPPs typically include physician assistants (PAs), NPs, and CNMs. NPs work predominantly in primary care, whereas PAs are evenly divided between primary care and specialty care. PAs are licensed to perform medical procedures only under the supervision of a physician. PAs assist physicians in the delivery of care to patients; the supervising physician may be either onsite or offsite. Hence, they are an essential adjunct to the practice of primary care physicians. Another area where they provide service is in SNFs. NPs have statutory prescribing authority in almost all states. Studies have confirmed the efficacy of NPPs, as many studies have demonstrated that they can provide both high-quality and cost-effective medical care.1-5, 7, 11,13-16
The nursing department and all NPPs serve a vital role across the Continuum of Care. For example, nurses at various stages in their careers can have a vibrant future in acute care. Jobs can include Administration as a Vice-President, Regional Manager, Director, Management & Supervisory Role and Staff in Ambulatory care and Outpatient Services, Cardiovascular Services, Pharmacy, and Quality/Risk Management in their respective buildings. Director, Management/Supervisory, and Staff nursing jobs are available in Case Management, Critical Care, Emergency Services, Laboratory Services, Surgical Services, Telemetry/Medical-Surgical Nursing, and Women's/Children's Services. Director positions are available for nurses in the dietary/nutrition departments as well as the Rehab Department, working closely with PT, OT, SLP.1-5, 7, 11, 13-16, 19
A vital PT, OT, and nursing collaboration that could help treat patients in a more comprehensive manner is through referrals to the acute, outpatient, or acute care SLP. SLPs in acute care provides evaluation and treatment of swallowing disorders and speech and language problems resulting from strokes, head injury, respiratory issues, and other medical complications. SLPs are usually expected to be competent in dysphagia management, including conducting and interpreting videofluoroscopic examinations. Patients typically are seen soon after admission, particularly for swallowing issues, and require daily individual treatment. While some patients are able to tolerate more extended sessions, some may only be seen for brief periods of time or more than once per day for short periods, as tolerated. Weekend SLP services for new admissions or seriously involved patients are often provided.1-5, 7, 11, 13-16, 19
In general, the age range of acute care patients is22:
The Top 5 primary medical diagnoses of acute care patients are22:
Typically, the Top 5 Functional Communication Measures scored by SLPs working in acute care hospitals are:
NPPs, PTs, and OTs have a greater role in acute care than the other interdisciplinary healthcare staff. SLPs and respiratory therapists are commonly available in acute care, but maybe less so in rural communities. Respiratory therapists can be found in intensive care units, emergency departments, neonatal units, and general units of most hospitals.22
Many medical specialists may be involved in a patient's care, and referrals may come from any of these physicians. Some facilities will have established "critical pathways" based on admitting diagnoses that may facilitate the referral process. For example, a critical pathway for an individual admitted with a stroke may include an SLP consult within the first 24 hours for a swallowing evaluation. In this case, the consult is automatically entered into the system upon initiation of the pathway. SLPs collaborate with many professionals within the hospital system, including physicians, nurses, other rehabilitation providers, dietitians, social workers, and case managers. The role of the SLP may be more consultative in nature in this setting than in any other, and the focus is more on patient management than direct treatment. The case manager (often a Nurse or NPP) is a vital part of the patient care team, and the SLP may have frequent discussions with the case manager as discharge plans are developed.21
PT and OT use a complex decision-making process in order to assess and evaluate patients in the acute care setting. They must employ a continual dynamic assessment consisting of communication to gain information, collection, and analysis of medical information, application of specialized therapy knowledge and communication to provide information to the patient and their loved ones. Acute care is one in which patients are medically unstable and need treatment.
PTs can use their knowledge about22:
PTs monitor and quickly interpret, then respond to various types of data to ensure safety for their patients. They may use specialized medical knowledge to consider how the movement might compromise medical stability or how medical conditions or medications might affect patients' physiological responses to movement or compound safety issues. Similar to SLPs in this setting, PTs interacted with physicians, nurses, case managers, and others on more than a daily basis.22
Post-acute care is a growing and essential health and social service, accounting for more $2.7 trillion spent on personal health care, and, of that, almost 15% of total Medicare spending. There are nearly 5,000 member hospitals, health systems, and other health organizations, which include 3,300 post-acute care providers, including free-standing post-acute hospitals and post-acute units. Post-acute care settings include LTC hospitals, inpatient rehabilitation facilities, SNFs, and HHA.23 Many of the job opportunities seen in acute care are prevalent in post-acute care. However, in post-acute care, there will be a higher demand for PT, OT, and SLP-related services. Based on what we've learned so far, we can expect in Post-acute care for there to be DRGs, RUG levels, APCs, and HHRGs for Medicare Part A/B & HHA qualifying services and ambulatory care.
Rehabilitation hospitals, also referred to as inpatient rehabilitation hospitals, are devoted to the rehabilitation of patients with various neurological, musculoskeletal, orthopedic, and other medical conditions following stabilization of their acute medical issues. The industry is primarily made up of independent hospitals that operate these facilities within acute care hospitals. There are also inpatient rehabilitation hospitals that offer this service in a hospital-like setting but separate from critical care facilities. Most inpatient rehabilitation facilities are located within hospitals.1-3
Rehabilitation hospitals were created to meet a perceived need for facilities that were less costly on a per diem basis than general hospitals, but which provided a higher level of professional therapies such as PT, OT, and SLP than can be obtained in an SNF. Rehabilitation hospitals are designed to meet the requirements imposed upon them by the Medicare administration and to bill at the rates allowed by Medicare for such a facility. Medicare allows a lifetime total of 100 days' stay in a rehabilitation hospital per person. A rehabilitation hospital can only be accessed following a visit as an inpatient in a general hospital, which has lasted for a certain number of days. The general hospital will evaluate the patient to determine if the patient will benefit from rehabilitation services. An affirmative determination will be made if the patient is deemed to require a certain level of therapy. If a positive determination is made, a report concerning the patient's needs will be sent to the rehabilitation hospital, which has the discretion to admit or not admit the patient. If the patient is transferred to the rehabilitation hospital, his/her medical records, and a recommended treatment plan will be transmitted with the patient. The treatment plan will include daily therapies except on weekends.1-3
Overall, across the Continuum of Care, OTs address the need for rehabilitation following an injury or impairment. When planning treatment, occupational therapists address the physical, cognitive, psychosocial, and environmental needs involved in adult populations across a variety of settings.
OT/OTA services in adult rehabilitation may take a variety of forms1-3:
ALFs and ILFs have largely the same types of departments that are found in Rehab Hospitals or SNFs; however, round the clock monitoring is not required. ALF/ILFs may require the use of more personal care assistants, CNAs, orderlies, and personal attendants that are found in other settings. In addition to the skilled help they receive from trained CNAs, senior residents appreciate all the activities available in assisted living facilities. An activities director makes sure residents have plenty to do to enjoy their stay. Off-site trips to museums, theaters, and shopping are everyday activities for residents. Sometimes they arrange bingo games, yoga, exercise groups, karaoke and movie events as well as visits from volunteers to provide entertainment for residents. The activity director works in the office with other personnel, such as the director or administrator, intake staff, and marketing professionals.1-3
Reducing readmissions is a national priority for payers, providers, and policymakers seeking to achieve Triple Aim objectives of improved health and enhanced care at a lower cost. Hospital readmissions are frequent, costly, and highly variable across providers and geographic locations. A large body of evidence documents the major inconsistencies with transitioning out of the hospital and into the next setting of care. It can be unsafe, rushed, confusing, and ineffective. These processes can and must be improved to make the health care system safe, effective, and efficient. The method of reorganizing operations and services to reduce readmissions effectively is foundational to health care delivery redesign and accountable care.1-3
Causes of readmissions are multifactorial, and rates vary substantially by the institution. Historically, nearly 20% of all Medicare discharges had a readmission within 30 days. The Medicare Payment Advisory Commission has estimated that 12% of readmissions are potentially avoidable.16, 24, 25
Preventing even 10% of these readmissions could save Medicare $1 billion. Therefore, reducing hospital readmissions has been made a national priority. In 2008, the Medicare Payment Advisory Commission recommended to Congress that CMS begin confidentially reporting readmission rates and resource use to hospitals and physicians.16, 24, 25
Since October 1, 2012, the Hospital Readmissions Reduction Program (HRRP) has required CMS to reduce payments to participating hospitals with excess readmissions. The penalty is a percentage of total Medicare payments to the hospital; the maximum penalty was set at 1% for 2013, 2% for 2014, and 3% for 2015. The penalties assessed to hospitals are savings for the CMS. According to the ACA, the savings are added to the Medicare Hospital Insurance Trust Fund, with the goals of protecting guaranteed benefits and providing new benefits and services for all Medicare beneficiaries, in addition to lowering the cost of Part B premiums.16, 24, 25
The conditions initially included in the HRRP were acute myocardial infarction, heart failure, and pneumonia, which expanded in 2015 to include acute exacerbation of chronic obstructive pulmonary disease and elective total hip arthroplasty and total knee arthroplasty. Conditions are identified from primary discharge diagnosis, not the DRG assigned to the hospitalization. Additionally, hospitals must have at least 25 initial hospitalizations for a diagnosis to be measured. Public, and possibly financial, accountability is thereafter extending to hospital-wide readmission rates. The HRRP continues to refine its policies, including prior changes in the methodology to calculate the hospital readmission adjustment factor and to account for planned readmissions.16, 24, 25
The HRRP is a Medicare value-based purchasing program that reduces payments to hospitals with excess readmissions. The program supports the national goal of improving healthcare for Americans by linking payment to the quality of hospital care. Section 3025 of the Affordable Care Act required the Secretary of the Department of Health and Human Services to establish the HRRP. The HRRP links the payment of services to the quality of hospital care. It gives hospitals an incentive to improve communication and care coordination, so patients and caregivers are more involved in post-discharge planning. They’ve included measures of conditions and procedures that make a big difference in the lives of large numbers of people with Medicare. The HRRP, along with the Hospital Value-Based Purchasing and the Hospital-Acquired Condition Reduction Programs, is a significant part of how we add quality measurement, transparency, and improvement to value-based payment in the inpatient care setting. Research shows that hospital readmission rates are different across the nation. This affords an opportunity to improve the quality of care and save taxpayer dollars by giving providers incentives to reduce excess readmissions.16, 24, 25
Applicable hospitals under HRRP are defined in section 1886(d)(1)(B) of the Social Security Act. Maryland hospitals are included under the program in readmission measure calculations, but they’re waived from payment reductions because they participate in the Maryland All-Payer Model. You can find more information about Maryland hospitals in section 1886(q)(5)(C) of the Social Security Act. They use the excess readmission ratio (ERR) to assess hospital performance. The ERR measures a hospital’s relative performance and is the ratio of predicted-to-expected readmissions. They calculate an ERR for each condition and procedure included in the program.
CMS has indicated that the following six conditions/diagnoses are significantly correlated with a repeat hospital admission16, 24, 25:
If we take a look back at many of the diagnostic profiles expected to reside in an SNF (from the previous section above!), we know that COPD and hip issues account for more than 158,000 Medicare qualifying admissions in any given year. Reducing repeat hospital admissions rates for Medicare beneficiaries by providing higher quality and more comprehensive care could save hundreds of millions of dollars per year to Medicare and patients.
Remember that to count as a readmission, the new admission must have occurred within the most recent 30 days of the previous discharge. To qualify, patients can be readmitted to the same hospital or another applicable acute care hospital for any reason. Readmissions to any appropriate critical care hospital are counted, no matter what the principal diagnosis was. The measures don’t include some planned readmissions. 16, 24, 25
For FY 2020, CMS calculates the payment adjustment factor and component results for each hospital based on their performance during the three-year performance period of July 1, 2015, through June 30, 2018. Payment reductions are applied to all Medicare Fee-for-Service base operating DRG payments between October 1, 2019, through September 30, 2020. The payment reduction is capped at 3% (i.e., payment adjustment factor of 0.97). CMS sends confidential Hospital-Specific Reports to hospitals annually. CMS gives hospitals 30 days to review their HRRP data, submit questions about the calculation of their results, and request calculation corrections. The Review and Corrections process for HRRP is specific only to discrepancies related to the calculation of the payment adjustment factor and component results. Following the Review and Corrections period, CMS will publicly report hospitals’ HRRP data on Hospital Compare in early 2020.16, 24, 25
The 30-day risk-standardized readmission rate for hospitals based on claims data has been portrayed as a highly reliable and actionable measure of care quality. It has been utilized as the basis for rendering financial penalties for poor outcomes. Hospital 30-day risk-standardized readmission data was reported by CMS beginning in 2010.16, 24, 25
When compared to older people who do not reside in RACFs, residents in RACFs have a higher proportion of presentations to the emergency room department (ED), re-presentations to ED, readmission to hospital, and increased length of stay in both ED and hospitals. Reasons for ED transfer includes falls and fall-related fractures, cardiovascular and respiratory illness, altered mental state, and device-related complications such as indwelling catheters. The consequences of transferring older people living in RACFs to ED and admission to hospital are significant with an increased risk of delirium, and other iatrogenic events such as falls, medication errors, pressure injuries, deconditioning, and death.16, 24, 25
When older residents in RACFs need medical care and treatment, there is a disruption to the continuity of care and a need for management of their care across primary, tertiary, community, and rehabilitation health services. When acutely ill, they may be transferred to an ED with little attention to handover, including limited documentation of their illnesses, current symptoms, or usual presentation. Obtaining a history can be difficult because of cognitive problems. Unfortunately, many older residents seem to move frequently between acute and LTC settings. The management of unwell older people within the RACF has been shown to have similar or better outcomes than older people who are managed in the hospital. When assessing ill older people, the benefit of hospitalization needs to outweigh the risk. The additional risks associated with hospitalization, without substantial potential benefit for the resident’s clinical course or quality of life necessitate consideration of new or alternative models of care.16, 24, 25
Powerful incentives can create much-needed attention and action. However, the vast majority of the incentives, new financing, and technical assistance have focused providers and communities on reducing readmissions for the Medicare Fee-for-Service population (see Foundational Concepts in Healthcare, CEUFast©, 2019 for an explanation of Fee-for-Service). Many of the tools and best practices for reducing readmissions were developed based on insights from the geriatric health service research literature. Thus, it is reasonable that many hospital readmission reduction initiatives target Medicare beneficiaries or conditions on the CMS readmission penalty list only. However, all-payer data analyses show that the adult, non-obstetric Medicaid population has readmission rates as high as—or even higher than—the Medicare fee-for-service population. Hospitals are starting to face pressures to reduce Medicaid readmissions as policymakers and payers focus on the unique needs of newly enrolled and dually eligible Medicaid patients at the State and Federal levels.6
Medicare cut payments to 2,583 hospitals in October of 2019, continuing the ACA’s campaign to financially pressure hospitals into reducing the number of patients who return for a second stay within a month. The severity and broad application of the penalties, which Medicare estimates will cost hospitals $563 million over a year, follows the trend of the previous few years. Of the 3,129 general hospitals evaluated in the HHRP, 83% received a penalty, which will be deducted from each payment for a Medicare patient stay over the fiscal year. Although Medicare began applying the penalties in 2012, disagreements continue about whether they have improved patient safety. On the positive side, they have encouraged hospitals to focus on how their patients recuperate, and some now assist them in procuring medications and follow-up appointments. But the hospital industry and some academics have raised concerns that some hospitals may be avoiding readmitting patients who require additional inpatient care out of fear of the financial repercussions, while others have said the program is not showing significant benefits.16, 24, 25
A few studies have even found an increase in mortality since the penalties took effect, but other studies, including a recent one by the Medicare Payment Advisory Commission (MedPAC), an independent body that helped devise the approach for Congress, identified no such link. The MedPAC staff’s preliminary analysis, made public last month, found that the frequency of Medicare patients being readmitted within 30 days of discharge dropped from 16.7% in 2010 to 15.7% in 2017. However, the analysis said the decrease was more significant once it took into consideration that the average patient was frailer in 2017 than in 2010 and thus more likely to end up back in the hospital, with all other things being equal. In general, readmissions declined between 2010 and 2018, without causing a material increase in mortality.16, 24, 25
An important point to always reiterate Medicare counts the readmission of patients who returned to a hospital within 30 days, even if that hospital is not the one that originally treated them. In those cases, the penalty is applied to the first hospital. The penalties that were imposed in 2019 were based on discharges from July 1, 2015, to June 30, 2018. The average penalty will be a 0.71% decrease in payment for each Medicare patient who leaves the hospital over the next year. Additionally16, 24, 25:
These figures do not include 2,142 hospitals that Medicare exempted from the program this year, either because they had too few cases to judge; were veterans’ hospitals, children’s hospitals, psychiatric hospitals, or were critical-access hospitals, which are the only hospitals within reach of some patients. Also, Maryland hospitals were excluded because Congress lets that state set its own rules on how to distribute Medicare money and handle readmissions. CMS determines its penalties by looking at national averages for each of the conditions, so hospitals that have reduced their readmissions from previous years can still take a hit. The hospital industry argues it may be approaching the limits of how much it can do to prevent readmissions. A repeat stay, hospitals say, is sometimes necessary no matter what precautions are taken.16, 24, 25
Another study evaluated the overall effectiveness of the HRRP program. It found four key findings. First, readmission rates for both targeted and nontargeted conditions began to fall faster in April 2010, after the passage of the Affordable Care Act (ACA), than before. Readmission rates continued to decline from October 2012 through May 2015, albeit at a slower rate. Second, the passage of the ACA was associated with a more substantial decline in readmissions beginning in April 2010 for targeted than for nontargeted conditions. Third, the rate of observation-service use for both types of conditions increased throughout the study periods. Finally, there was no significant association within hospitals between increases in observation-service use and reductions in readmissions during the implementation period.16, 24, 25
At the passage of the ACA, readmission rates for both targeted and nontargeted conditions fell, which could imply that changes in the organization of care in response to the HRRP. However, we still observed a more significant change in rates of readmission for targeted conditions. Although this effect could be in response to the HRRP, the higher baseline readmission rates for targeted conditions could make it easier to reduce readmissions for these conditions than for the nontargeted conditions, which could contribute to the more significant decrease in readmission rates for targeted conditions. Some policymakers and MedPAC have proposed expanding the HRRP to cover all clinical situations. This could create incentives for hospitals to more aggressively reduce readmissions for nontargeted conditions, more accurately highlight the intent of the program, and simplify the program by using a single readmission measure.16, 24, 25
At the passage of the ACA, readmission rates for both targeted and nontargeted conditions fell, which implies that changes in the organization of care in response to the HRRP, along with other factors noted above, may have had an effect beyond the targeted conditions. However, we still observed a more considerable change in rates of readmission for targeted conditions. Although this effect could be in response to the HRRP, the higher baseline readmission rates for targeted conditions made it easier to reduce readmissions for these conditions than for the nontargeted conditions, which probably contributed to the more significant decrease in readmission rates for targeted conditions. Some policymakers and MedPAC have proposed expanding the HRRP to cover all clinical situations. This could create incentives for hospitals to more aggressively reduce readmissions for nontargeted conditions, more accurately highlight the intent of the program, and simplify the program by using a single readmission measure.16, 24, 25
To illustrate the overall impact of Medicare’s payment system on a patient’s care, let’s look at a fictional case study. In this instance, we will, again, imagine a female patient with child-onset diabetes mellitus. Now in her 40s, she had issues with consistently maintaining employment and has been receiving Social Security and Medicaid benefits for several years. At 43 years old, she was diagnosed with ESRD. After the disease progressed, this patient required more skilled levels of care, and she relocated to an SNF.
Upon admission to the SNF, this patient received an assessment that determined her metabolic, endocrine, and epidermal needs required immediate care. The patient had difficulty ambulating a distance that could maintain a sufficient level of exercise for her body. With chronic renal dysfunction, her excretory functions were inconsistent, and in combination with the glucose/insulin imbalance, she had difficulty maintaining electrolyte balance. The Nursing team was led by the physician and NP. The team coordinated care of meals, ambulation, peripheral epidermal ulceration, edema, and respiratory care with the PT, OT, and RT teams. Making appropriate referrals, the interdisciplinary team was able to coordinate the patient’s care to reduce the swelling, improve circulation, restore the patient’s epidermal barrier protection, regulate excretory functions, and re-establish metabolic and endocrine balance. Under the plan of care related to the primary diagnoses associated with admission to the SNF (e.g., diabetes mellitus, chronic kidney disease, and reduced ambulatory capacity), Medicare Part A would cover these qualifying medical services and all the associated equipment.
An example of possible medical equipment associated with treating this set of conditions, this female patient could have significant respiratory dysfunction associated with the loss of ambulation, increased peripheral edema, electrolyte imbalance, and chronic renal dysfunction. This patient likely has gastrointestinal reflux and dysphagia, as these comorbidities are associated with chronic metabolic and renal imbalances (REFS). As such, this patient may have aspiration, aspiration pneumonia, or aspiration pneumonitis in their patient history. They could require the use of artificial oxygen delivery via a mask or nasal cannula. At later stages, they could require the use of mechanical ventilation. These forms of equipment and all the nursing, PT, OT, RT, and SLP services would be covered under Medicare Part A as well.
Maintaining this patient’s mobility, reducing their respiratory dysfunction, and stabilizing their metabolic and renal issues is fundamental to improving this patient’s outcomes. The NP and physician can coordinate the care of this patient’s diagnostic profile from the overall view. They are able to interpret the pathophysiological biomarkers of diabetes mellitus, ESRD, GERD, and dysphagia. This patient began to receive care and continued on this path for several weeks.
Then, the patient took a turn for the worse. The culmination of co-morbidities was beginning to take their toll on the cardiovascular system, particularly when the edema had begun. The patient’s blood pressure was rising insidiously. While still in the mild to moderate range, the patient suffered a Myocardial Infarction and went to the hospital. The patient returned two weeks later, having had video fluoroscopy for her dysphagia, treatments for her respiratory distress, and the patient was stabilized. The patient had been given a tube in her stomach to get nourishment, oxygen via nasal cannula, and a pacemaker had been placed. She had a co-diagnosis of hypertension.
To address the preventable conditions that might deteriorate this patient's conditions further, the physician and interdisciplinary team coordinated the SLP to work with respiratory and gastrointestinal departments to manage the patient’s dysphagia. Dysphagia can increase the return to hospital admission rates and mortality.9 The SLP worked with the nursing team to coordinate delivery of medications to prevent further aspiration risks and delivery of nutrients via a tube placed in the gastrointestinal tract. The nursing team coordinated care with the PT, OT, and RT to manage the patient's decubitus ulcers they were developing due to the body temperature regulation issues, electrolyte imbalance, metabolic, and renal dysfunctions. The hospital administrator and hospital management team had a sufficient supply of technicians and technologists available to provide a level of care to the patients that kept community-acquired infections to a minimum, activity to a safe and productive level as well as an environment of compassion that motivated this patient to work towards an improved outcome.
To manage this patient’s dysphagia, the SLP consulted the physician and NP to discuss bringing in a fiberoptic endoscopic examination of swallowing (FEES) assessment to manage the patient’s gastroesophageal reflux disease (GERD) and dysphagia. The main components of GERD and dysphagia are not coated by barium in a modified barium swallow9; therefore, a FEES is necessary to establish the scope of swallowing issues related to these diagnoses.
Of course, in the end, this patient does have ESRD and chronic diabetes mellitus. In many cases, this patient’s future will include some level of cognitive impairment or possibly AD; diabetes mellitus patients are 4xs more likely to develop AD than the general population.9 It is true that this patient may not return home and establish their daily lives again; however, they can continue to live in dignity and grace for as long as possible. In another course, Business Management for the Healthcare Professional (CEUFast ©2019)12, the importance of delivering quality and compassionate care are discussed, and this example demonstrates how those ideas can also be seen in the skilled nursing setting here.
However, let’s go back and assume this patient did not receive the most comprehensive care. The reason this medium type of language is being used is that underserved healthcare is the larger issue, rather than a lack of care at all. Most often, healthcare practitioners, clinicians, and allied health professionals are doing the absolute best they can, given the resources and time afforded to them. This is well understood. Let us imagine, here, that the situation deteriorates for this patient due to an abundance of factors contributing to an underserved level of care. Some of these factors are not preventable, and some are. In this scenario, the patient is going to deteriorate due to common preventable and associated conditions that are contributing to repeat hospital admissions in this group, overall.
For example, let’s say that this patient was assessed, and a plan of care was established at the SNF as described. The patient was able to do the work necessary to not only maintain their quality of life but show some improvements. Then, at around 100 days, the Medicare reimbursements ran out. This patient did not have any other means to continue with that level of care and had to be discharged home and receive HHA, Medicaid, and Social Security. This patient’s conditions returned, and their access to quality care was reduced. She didn’t have access to the interdisciplinary team and case management team that could make a difference in her condition. The HHA in her area was small and had an RN that would come to assess her condition, daily. While on HHA, she is considered on Medicare Part A. Getting access to therapy services under this condition is difficult, as these are often covered under Medicare Part B. Due to no management of her co-morbidities or primary diagnostic profile, she went back and forth to her hospital and home several times with aspiration, aspiration pneumonia, falls, ulcers, and additional tachycardic events. She was admitted to an SNF once again, with an acute diagnosis of chronic bronchitis and a fall, secondary diagnoses of AD and tertiary diagnoses ESRD, diabetes mellitus, peripheral edema, peripheral neuropathy, retinopathy, dysphagia with aspiration. The new diagnosis of chronic bronchitis and a fall makes this a new case and is not documented as a repeat hospital admission.
The new diagnosis of chronic bronchitis and a fall requires readmission to the SNF and all-new assessments to establish the patient's current condition. Once again, there is a chance to change this patient’s outcome if the interdisciplinary team can work together with outpatient and primary care once this patient is discharged at 100 days. In many instances, this patient can be returned to a functioning level and able to maintain a level of dignity and grace they’ve earned in their lives. However, just as frequently, the revolving door of the hospital to home to SNF to home health to the hospital to SNF to the hospital to the morgue can occur.
Reducing repeat hospital admissions is a major initiative in healthcare. The savvy medical or allied health professional that evaluates how these external forces can shape their career will find themselves ahead of the pack! Having an overall understanding of the workings of the healthcare machine (e.g., Medicare, Medicaid, and Healthcare Financing in America), which provides access to care, could give the savvy medical or allied health professional and advantage. This knowledge can improve patient outcomes, help professionals have a higher job satisfaction as well as propel a career forward through understanding and action.