Report confirms nursing homes cherry-pick patients
Study shows SNFs being more selective
While the federal government’s two-year-old cost-saving reimbursement plan for Medicare patients admitted to skilled nursing facilities (SNFs) has caused irritation for some hospitals, it has led many SNFs to become more selective in the patients they choose to accept, a new government study confirms.
"I have noticed that since the law changed, it is more difficult at times to place patients in skilled nursing facilities," says Carmencita Hart, RN, BSN, coordinator of case management at Northside Hospital in Atlanta. "The common excuse is that [they] cannot meet that patient’s needs or have no space available."
Hart said there are days when her hospital spends valuable time contacting facilities throughout the state in order to make a placement, and the problem intensified after the July 1998 implementation of the Prospective Payment System (PPS).
In an effort to control spending growth, Congress directed the Health Care Financing Administration in the Balanced Budget Act of 1997 to develop the PPS for skilled nursing facility services provided to Medicare beneficiaries. The PPS pays fixed, predetermined rates for each day of care — a major change from the former system of cost-based reimbursement, according to a report released in December 1999 by the General Accounting Office (GAO).
Previously, under the cost-based system of payment, facilities benefited from furnishing more ancillary services to Medicare patients, without regard for their services’ price or necessity, according to the GAO. As a result, the number of Medicare beneficiaries using SNF care and the number of services furnished to each patient have surged, making the Medicare SNF benefit one of the fastest-growing components of Medicare spending. Medicare spent $13.6 billion on the SNF benefit by the end of 1998.
Selecting the least expensive patient
The PPS attempts to create incentives for providers to control their daily costs and deliver care more efficiently. Facilities that can care for beneficiaries for less than the case-mix-adjusted per diem payment can retain the difference as profit. Those with higher costs than the per diem payments suffer a loss.
A nationwide survey of 153 hospital discharge planners conducted last year by the GAO suggests that SNF behavior is changing with regard to admission practices. Swing-bed facilities and hospitals with an affiliated SNF were not included in the survey.
According to the report, since the reimbursement system changed, SNFs have become more cautious in accepting patients, favoring some over others. But the study says this practice has not affected Medicare beneficiaries’ ability to receive care.
Nearly two-thirds of survey respondents reported a recent increase in difficulty placing Medicare beneficiaries needing certain types of treatment, including some costly non-therapy ancillary services, while 43% of respondents said facilities prefer to admit patients needing short-term rehabilitation treatment.
Hart, a GAO survey respondent, agrees with her peers that SNFs are now more likely to pick and choose. "Their favorite patient is a hip replacement patient because they know he will be going home with his wife in 20 days," she said.
Because the survey indicates that patients needing short-term rehabilitation are preferred by nursing homes, concern has been raised that payment for those patients may be too high. Medicare does not pay for long-term care.
Also, the survey confirmed that patients with some conditions (including orthopedic and stroke patients) and those requiring physical, rehabilitative, speech, and occupational therapies are easier to place. And 46% of nursing home administrators reported that under PPS they were more likely to admit patients requiring special rehabilitation services, such as physical, occupational, or speech therapy, according to the GAO report.
Patients requiring services such as expensive drug treatment, infusion therapy, chemotherapy, parental nutrition, or dialysis are more difficult to place.
Hart confirmed that by saying dialysis patients, particularly those who do not have families and who need transportation, are especially difficult to place.
What happens to difficult-to-place patients?
Hart says expensive patients eventually find care, but it might take a few extra days. If the patient’s hospital medical expenses have been exhausted, "we eat it," she says. The GAO’s translation of such occurrences is "to the extent that additional days in the hospital replace some SNF days, longer hospital stays generally reduce Medicare spending for the entire episode of illness." And although some patients stay in the hospital longer, others are transported to postacute care providers.
But the GAO reports that Medicare patients are continuing to get quality care because the hospitals are providing the skilled care.
"I couldn’t guess how much money we lose," says Kathy Rickard, RN, MBA, associate director of clinical resource management and social work at the University of Pennsylvania Health System in Philadelphia. "I’d say it’s a lot. Particularly if it is an extremely complex patient, we end up doing the skilled care."
Commonly, she says, a SNF’s response to admitting a complex patient will be, "we don’t have a bed, but he’s No. 12 in line.’ But by the time the bed comes opens, it’s too late."
Vann Camp, executive director of Orlando, FL-based Adventist Care Centers, says changes to Medicare reimbursements have had no impact on his company’s operating policies. Adventist operates 21 skilled nursing facilities across the country with a 92% occupancy rate and 2,234 beds.
"The only resident we would not accept would be one whose needs we could not meet," says Camp. "We will take anyone who is referred to us who we are capable of managing. For example, if we didn’t have an Alzheimer’s facility, it wouldn’t make sense for us to accept an Alzheimer’s patient."
It is considered discrimination when a Medicare-certified facility fails to accept a patient it can accommodate. But it could be difficult for a hospital to prove a skilled nursing facility doesn’t have space or cannot accommodate the needs of the patient. "The SNF can say that it cannot meet a patient’s needs, but it cannot discriminate against a Medicare patient," says Laura Dummit, the GAO’s associate director of health financing and public health issues.
Most patients in nursing homes have their care paid for through the Medicaid program. Medicare-covered SNF days account for about 9% of total nursing home days. Before implementation of the PPS, Medicare revenues accounted for about 10% of nursing home revenues on average.
In-depth research on the patient
Another change brought on by the federal government’s attempt to better manage Medicare is SNFs’ increasing desire to learn more about patients before opening their doors.
Discharge planners say most SNFs have started assessing the patient’s condition more closely before they will accept the patient, requesting medical records, reviewing drug administration charts, and even sending staff to the hospital for in-person assessments.
Rickard says this is particularly true of SNFs that provide different levels of care. "They may send someone over to make sure they can provide the proper level of care."
But the GAO report says sometimes this behavior further delays transition to the SNF.
For more information, contact:
Kathy Rickard, RN, MBA, associate director of clinical resource management and social work, University of Pennsylvania Health System, Philadelphia. Telephone: (215) 662-2375.
Vann Camp, executive director, Adventist Care Centers, Orlando. Telephone: (407) 975-3000.
Laura Dummit, associate director, health financing and public health issues, Washington, DC. Telephone: (202) 512-7119.
Carmencita Hart, RN, BSN, coordinator of case management, Northside Hospital, Atlanta. Telephone: (404) 851-8000.
To view the full General Accounting Office report on skilled nursing facilities, visit the GAO’s Web site at www.gao.gov.
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