Alliance: Penalize Nursing Homes with High Rehospitalization Rates

Avoidable rehospitalizations are one of the most significant issues in acute and post-acute care, and because a substantial number of Medicare beneficiaries are readmitted to hospitals after having been discharged, at high costs to Medicare, the Alliance for Quality Nursing Home Care has detailed an interim initiative to reduce hospitalizations from skilled nursing facilities (SNFs)—or else face penalties—based on the proposal advanced by the Obama Administration.

One out of five Medicare beneficiaries discharged from the hospital is readmitted within 30 days, costing Medicare more than $17 billion a year. Approximately 40% of Medicare beneficiaries are discharged to post-acute care settings such as SNFs or Inpatient Rehabilitation Facilities, said Alan Rosenbloom, president of the Alliance, a significant amount as gaps in care coordination between acute and post-acute settings are often named as reasons for rehospitalization.

“Improvement in care coordination across settings is becoming even more essential to providing quality care because the ongoing decline in hospital length of stay that began in the 1990s continues to result in the discharge of sicker patients to SNFs,” Rosenbloom said.


The readmissions reduction program in the Affordable Care Act (ACA) only focuses on hospitals in terms of reducing readmission rates, but Rosenbloom said it’s also necessary to consider the role of hospital and post-acute care coordination.

“We believe a fully effective rehospitalization program must cross care settings and align incentives across providers,” he continued. “Until such a program is developed, the Alliance supports establishing an interim initiative to reduce Medicare rehospitalizations from SNFs based on the Administration’s proposal.”

The proposal he mentions begins in 2015, and targets individual SNFs with above-average rehospitalization rates, which will have their reimbursement rates cut by up to 3%. The Administration proposal is very similar in approach to the hospital readmission reduction program in the ACA, said the Alliance.


The group will support the proposal, but modify it to require the Center for Medicare and Medicaid Services to consult with independent academics and other stakeholders regarding the manner in which the definition of rehospitalization and/or readmission would “account for geographic variations in readmission patterns, and risk-adjust for patient mix and in so doing account for the substantial differences in patient characteristics and readmission patterns between Medicare post-acute patients in SNFs and long-stay nursing home patients.”

There’s plenty of time to develop such a SNF-specific metric without jeopardizing the savings to be generated within the relevant budget window, said Rosenbloom, because the SNF initiative wouldn’t begin until 2015.

Written by Alyssa Gerace