Fiscal Year 2021 is a difficult year for hospital Medicare reimbursement. Medicare “will cut payments to 83% of the 3,080 hospitals evaluated” under the Hospital Readmissions Reduction Program.¹ Reimbursement reductions “from 0.01% to the maximum of 3.0%”² will compound the financial challenges emanating from the COVID pandemic.

 

Research shows on average “patients discharged to home healthcare had a 5.6% higher 30-day readmission rate than similar patients discharged to a skilled nursing facility (SNF).³

• For the patient, there is no mortality or functional outcomes differences between the two groups.⁴

• For Medicare and Medicare Advantage plans, home health care is significantly less expensive; “an average savings of $4,514 in total Medicare payments in the 60 days after the first hospital admission.”⁵

• For hospitals, Michelle Marsh of Forma Advisors, Inc. notes that payors want patients directed to the lowest cost of care option. “For hospitals, the challenge is identifying the patients at discharge where constant 24/7 monitoring prevents complications or where a more intensive treatment protocol will avoid an unnecessary inpatient admission.”

 

A proactive and analytical approach to post-acute care referrals may significantly improve upon hospital readmission rates, and support cost saving related conversations with managed care organizations. For example, using Medicare data, hospitals can redirect home health referrals to levels of care with lower hospital risk adjusted readmission rates. Michael Kubica of Applied Quantitative Sciences, Inc. opines “readmission rate differentials are significant enough to make it worthwhile for hospitals to understand the best options and influence post-acute care choice where they can. Related analysis should include specific comorbidities, severity level psychosocial support and other key factors. Much of the data necessary to perform such an analysis are collected by Medicare.”

 

 

Kubica suggests “hospitals should study the patients discharged to home health care to understand the attributes leading to a successful post-acute care treatment outcome versus a hospital readmission. Data analytics and a predictive model of readmission risk can be a valuable tool to advance a hospital’s Medicare reimbursement position.”

 

Emphasizing the opportunity to reduce hospital readmissions, the data shows:

• Nationally, 17 million Medicare fee-for-service beneficiaries were discharged to post-acute care between 2010 and 2016; 39% were referred to home health and 61% to a SNF.⁷

• Analysis by Bill Sampsel of Health Metrics shows Medicare fee-for-service covered about 786,510 hospital discharges in Florida in 2020 (27.2% of total discharges). Of this total, 153,770 or 19.6% were discharges to a skilled nursing facility. Assuming the national proportion is a good approximation, about 306,740 Medicare discharges were to Florida home health agencies. The number of home health referrals better suited for discharge to a SNF requires study at the hospital level.