AHCA: Reduce Hospital Readmissions, Not Medicare Funding, for SNFs

The nursing home industry is working to prevent further Medicare reimbursement reductions, this time in the form of cuts to bad debt payments, by proposing an alternative: a plan to reduce hospital readmissions from skilled nursing facilities.

On Wednesday, Feb. 1, the American Health Care Association (AHCA) will pitch its plan to a House-Senate conference committee to show that it’s a “viable alternative to just cutting bad debt,” says Greg Crist, vice president of public affairs at AHCA.

Back in December, the U.S. House of Representatives passed legislation that included reducing Medicare bad debt reimbursements for skilled nursing centers to just 55%, down from 70%; this would result in a $2-3 billion cut in Medicare payments in the 10-year budget window.


“Our argument is, instead of just a straight cut [for bad debt reimbursements], how about considering a proposal that has a lot of merit to it, and generates savings in a meaningful way?” Crist asked.

He said the trade association is “pushing hard” to try to reduce readmissions from skilled nursing centers, in lieu of any cuts on the Medicare side.

Their proposal includes developing guidelines on what would constitute an appropriate readmission rate, adjusted for risk and the makeup of the patient mix in terms of acuity and condition. Nursing facilities would be expected to meet these guidelines, and AHCA would expect to see rehospitalizations drop.


“If a facility failed to meet those restrictions and mandates, it would forgo its market basket update (i.e., cost-of-living adjustment),” Crist explained. That could amount to a couple hundred million dollars, he continued, which would go into a funding/savings pool.

Facilities that met the thresholds in a “stellar” way, on the other hand, would have access to that savings pool, which would be split with the Department of Health and Human Services.

And according to calculations, this proposal could save $2 billion in the next ten years, says Crist, “which happens to be what the cut for bad debt would cost.”

Going into the conference committee, the healthcare association is hopeful.

“We had some initial positive feedback. We heard that the staffs of the [House Committee on Ways & Means] were calling CMS to verify, ‘Does this make sense from a policy perspective?’ It’s encouraging,” said Crist.

However, it’s hard to say what will happen, as the proposal is a new measure and hasn’t yet been introduced as a bill.

“We’re touching the right bases, it’s just a question of a well-argued case and timing,” he said.

Written by Alyssa Gerace

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