New Medicare Rules Seek to Address Chronic Re-hospitalization of Nursing Home Patients

Starting later this year, the federal government will begin penalizing nursing homes accepting tax dollars for hospitalizations that regulators believe are preventable and end up costing the patient and health care system in the long run. The new rules are the other half of policies instituted by the Center for Medicare and Medicaid Studies (CMS) aimed at reducing patient readmissions by either rewarding or penalizing hospitals and now nursing homes based on their rates of Medicare rehospitalization rates.


According to the U.S. Department of Health and Human Services, one in four long term nursing home patients are hospitalized each year and these hospitalization rates are rising. One in five Medicare nursing home patients “boomerang” back into the hospital within 30-days of being released. The Department of Health and Human Services believes many of these hospitalizations are preventable and are costly to Medicare and, to a lesser extent, Medicaid.


Nursing home residents are especially vulnerable to the risks that accompany repeat hospitalizations and transfers, including medication errors and hospital-acquired infections. This revolving door of patients returning to hospitals soon after discharge often occurs because of a lack of communication between treating physicians at hospitals and healthcare providers at the nursing homes once patient return.


The Department further believes that these repeat hospitalizations also impose a high personal cost on nursing home residents, potentially causing causing disruption, risk of complications and infections, and likelihood of reduced functioning on return to the nursing home. Preventing these potentially avoidable hospitalizations of nursing home residents is thus an important quality-improvement initiative from both the standpoint of the residents and their families, and also may yield cost reductions.


Too achieve these goals, the new CMS rules will take aim at the financial incentives nursing homes and hospitals have to continue to engage in these practices. When nursing homes send a Medicaid resident to a hospital, he or she usually returns with up to 100-days covered by Medicare, which pays more. On top of all that, in some states, Medicaid pays a “bed-hold” fee when a patient is hospitalized which incentivizes the hospital to send back the patient and for the nursing home to accept the resident back even if he or she may not be ready to return.


Hopefully, the new rule changes will yield positive results for nursing home residents and the healthcare system as a whole. From 2011 to 2016, the readmission rate in hospitals dropped to 10.8 percent in 2016 from 12.4 percent once CMS began penalizing hospitals for readmitting patients with CMS benefits.

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