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What SNFs Need to Know About Reimbursement Penalties

Care teams within skilled nursing facilities (SNFs) know intimately how readmissions affect the patients they care for, with risks including  challenging their already fragile condition while potentially increasing the potential of infection, polypharmacy, and discomfort and stress for the resident and family. These incidents not only can have a profound impact on patients, but due to pending changes taking place under the Affordable Care Act (ACA), readmission rates will also potentially impact Medicare reimbursements to SNFs.

Under The Protecting Access to Medicare Act of 2014 (PAMA), skilled nursing facilities will have Medicare reimbursements linked to their own readmissions rates. The focus of this law will be “potentially preventable” readmissions, which demands that SNFs both understand what qualifies under this definition and then develop a plan for reducing the potential of these types of readmissions occurring.

While this drive to reduce readmissions was initially aimed at hospitals, SNFs now find themselves under the same pressure to provide better post-acute care and identify new services that ensure continuity of high-quality care once the patient has been declared physically ready for discharge. If SNFs do not adequately prepare patients for discharge and subsequently see them readmitted, penalties could cost a given nursing facility up to 2% of Medicare reimbursements.

According to Josh Luke, founder of the National Readmission Preventative Collaborative, SNFs will first receive an “all-cause, all-condition” readmission measure. Then, in October of 2016, SNFs will get a risk-adjusted potentially preventable hospital readmission rate for their facility.

By 2017, PAMA will require each SNF to report their readmission rates on Medicare’s Nursing Home Compare database and the Department of Health and Human Services (HHS) will establish a performance standard, along with levels of achievement, to develop a scoring methodology that helps develop a SNF ranking system. Medicare reimbursement rates for SNFs will be partially based on these performance scores.

Beginning in October 2018, the lowest ranking 40% of SNFs will be reimbursed less than they would otherwise be reimbursed without the program. CMS could withhold up to 2% of their SNF Medicare payments as a fund for incentive payments for high ranking SNFs, with as much as 50 – 70% of the withholdings going to those facilities.

It is the accuracy of the evaluation to the physician that decides whether the patient must be exposed to the risk of transport to the hospital. Telemedicine consultations offer one way to reduce readmissions and foster greater collaboration between hospitals and SNFs by allowing the physician to remotely examine the patient’s condition. In doing so, the physician can use this individual observation to provide a diagnosis and recommend the appropriate level of care – often eliminating the need for disruptive trips to the ER.

Today’s demanding reimbursement policies are challenging healthcare organizations to adopt new care delivery models that improve efficiencies and reduce costs while still maintaining high quality care, and telehealth technology is at the forefront of these advancements.

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