Long-Term Care Payment Initiative To Lower Medicare, Medicaid Spending

CMS announced that it will test a new payment model for long-term care (LTC) facilities and practitioners with the goal of reducing avoidable inpatient hospitalizations. The new model is part of the next phase of CMS’s Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents.

Under the new model, physicians will receive payments for engaging in multidisciplinary care planning activities and for providing additional treatment for common medical conditions that often lead to avoidable hospitalizations. Currently, physicians are paid more for a comprehensive assessment at a hospital than at a skilled nursing facility. The new model will equalize these payments in order to encourage LTC providers to improve their ability to manage acute changes in a resident’s condition, mitigating the need for hospitalization.

CMS hopes that the new initiative will also reduce Medicare and Medicaid spending. In 2005, approximately 45% of hospital admissions among LTC facility residents enrolled in both Medicare and Medicaid programs could have been avoided, according to CMS. These avoidable admissions accounted for $2.6 billion in Medicare expenditures.

“This Initiative has the potential to improve the care for the most frail, most vulnerable Medicare-Medicaid enrollees—long-stay residents of nursing facilities,” said Tim Engelhardt, director, Medicare-Medicaid Coordination Office. “Smarter spending can improve the quality of on-site care in nursing facilities and the assessment and management of conditions that too often now lead to unnecessary and costly hospitalizations.”

The Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents is a counterpart to larger efforts aimed at improving the quality of care provided in LTC facilities, such as updating the conditions of participation for nursing homes; making five-star rating system improvements for consumers; and implementing the Skilled Nursing Facility Quality Reporting program, which ties skilled-nursing facility payments to the reporting of quality measures.—FRMC Editor

References

CMS launches new effort to improve care for nursing facility residents [press release]. Centers for Medicare & Medicaid Services. Baltimore, MD; March 24, 2016.