Traditional Medicare Provider Payment—Postacute Care

Background

Postacute care under Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… refers to services provided after inpatient hospitalization or outpatient treatment, such as skilled-nursing care and rehabilitation therapy. Postacute care is commonly provided by home health agencies, skilled-nursing facilities (SNFs), hospital outpatient departments, rehabilitation facilities, and long-term care hospitals.

The Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… benefit for SNF care (for up to 100 days) requires a prior inpatient hospital stay of at least three days. Time spent in the emergency room or under outpatient observation does not count toward the three days. After 20 days of postacute care, Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… beneficiaries incur significant cost-sharing (which can be covered by Medigap plans). Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… pays the full amount for the first 20 days of a covered SNF stay. From the 21st to the 100th day of a SNF stay, beneficiaries pay coinsurance A form of health care cost sharing in which a percentage of covered expenses must be paid by the insured person.  Different from a copayment (copay) which is usually a flat dollar amount.  of $167.50 a day in 2018. Thereafter, they are liable for the full cost.

Beneficiaries who are considered homebound and need part-time skilled-nursing visits or therapy services may receive home health care services. Home health care services do not require a prior hospitalization. Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… covers medically necessary part-time or intermittent home health services, which may include skilled-nursing care, rehabilitation therapy, and home health aide services. However, Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… requires that a beneficiary be homebound—that is, able to leave home only with great difficulty and only for short, occasional absences—and need skilled care, including skilled nursing or physical, occupational, or speech therapy. Home health visits are not subject to deductibles or coinsurance A form of health care cost sharing in which a percentage of covered expenses must be paid by the insured person.  Different from a copayment (copay) which is usually a flat dollar amount.  . Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… requires a face-to-face visit before a doctor can certify that a beneficiary needs home health services. A nurse-practitioner or other health professional may conduct that visit, but only a physician may certify the patient’s eligibility.

Most postacute care providers are paid under a per diem or episode-based prospective payment system (PPS) except in the case of outpatient rehab services, which are paid under a fee schedule for individual services. In 2018, Congress repealed annual payment limits for rehabilitation therapy in outpatient settings. As with other Part B services, Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… now pays 80 percent of the fee schedule amount for rehab therapy services. CMS collects data from patient assessments conducted in the home when receiving home health care, in skilled-nursing facilities, and inpatient rehabilitation facilities, and uses it to monitor quality and assess the adequacy of PPS payments.

Postacute care has several features that raise concerns about the adequacy of coverage. They include cost-sharing, the 100-day cap on SNF services, and the “three day stay” requirement and payment incentives which may reduce access for higher need beneficiaries. Other features include:

  • The SNF coinsurance A form of health care cost sharing in which a percentage of covered expenses must be paid by the insured person.  Different from a copayment (copay) which is usually a flat dollar amount.  amount, which is computed on the basis of the Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… hospital deductible, is much higher than the 20 percent coinsurance A form of health care cost sharing in which a percentage of covered expenses must be paid by the insured person.  Different from a copayment (copay) which is usually a flat dollar amount.  required for most Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… services.
  • Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… does not pay for SNF services after 100 days.
  • The requirement of a prior hospital stay for SNF eligibility means that Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… beneficiaries with skilled-care needs who are not admitted as hospital inpatients will not receive the SNF benefit (e.g., patients who have been receiving home health care or who are discharged from an emergency room after being held for observation for several days). In addition, the requirement creates a perverse and expensive incentive to hospitalize Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… beneficiaries so they can qualify for the SNF benefit.
  • The homebound requirement for Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… coverage of home health services is too restrictive. It leaves many who have serious health conditions but are not technically homebound without needed care.
  • Although there is no statutory limit on the number of home health visits for beneficiaries who pass eligibility tests, Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… ’s coverage of home health care is limited to part-time and intermittent care. The program’s PPS provides an incentive for home health agencies to avoid high-cost users and to limit the number of visits.
  • The ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. includes provisions to slow the growth of Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… spending for postacute care services. It also funds demonstrations to test different payment approaches for postacute services, including a value-based purchasing A strategy in which employers or other purchasers of health care base contracting decisions for health plans and other providers on quality and cost. For example, they may offer financial incentives to providers who earn high quality ratings or reduce cost-sharing charges for consumers… program for SNFs and home health agencies, a national program of bundled payments for acute and postacute care services, and a Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… community-based care transitions program.

 

TRADITIONAL MEDICARE PROVIDER PAYMENT—POSTACUTE CARE: Policy

Impact on quality and access

In this policy: Federal

Congress, CMS, and other federal agencies should closely monitor the impact of Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… payment policies on the quality of—and access to—postacute care, and the appropriateness of care in these settings.

Congress and CMS should assess the effects of bundled payment models tested in demonstrations before adopting a broader application of these models.

The incentives of postacute payment methods must safeguard access to necessary, high-quality covered services for all beneficiaries, without regard to the intensity or duration of care required.

CMS should educate the postacute provider community about beneficiaries’ rights and join with state and federal enforcement officials to take strong action against postacute providers that inappropriately deny, reduce, or restrict services.

Beneficiaries must have the right, and be advised of the right, to appeal decisions such as denials of, cutbacks in, and discontinuation of postacute care.

Health care providers and beneficiaries should be informed that individuals who are eligible for skilled-nursing facilities may also be eligible for home health care.

Quality of care

In this policy: Federal

CMS should take active steps to ensure the quality of postacute care and promote quality improvements where necessary. The agency should place particular priority on:

  • pursuing initiatives to improve the quality of SNF care;
  • using data sets, such as the Outcome and Assessment Information Set (OASIS) and others, to measure and improve home health outcomes;transitioning to a common assessment instrument across all postacute care settings, including skilled-nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals;
  • reestablishing the OASIS reporting requirement for all patients, not just Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… and Medicaid beneficiaries;
  • working with Quality Improvement Organizations to improve quality of care in postacute settings; and
  • improving methods of coordinating care among multiple providers while maintaining or enhancing beneficiaries’ choice of providers and their access to needed care.

Efforts to streamline OASIS must ensure its role in outcome measurement and quality improvement and not dilute it into a tool used only for determining payment amounts.

 

Postacute benefits

In this policy: Federal

Congress should mandate improvements in postacute benefits, safeguard beneficiaries’ access to benefits, and avoid shifting the costs of postacute care to beneficiaries.

The highest priority should be given to reforms that:

  • protect beneficiaries from exposure to high out-of-pocket costs by reducing the Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… SNF coinsurance A form of health care cost sharing in which a percentage of covered expenses must be paid by the insured person.  Different from a copayment (copay) which is usually a flat dollar amount.  obligation;
  • increase the number of Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… -covered SNF days;
  • remove Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… ’s prior-hospitalization requirement for new SNF admissions, and until the requirement is removed, credit time spent under observation status toward the three-day stay requirement;
  • maintain home health benefits free of copayments; and
  • allow Advanced Practice Registered Nurses to certify eligibility for home health services (see also this chapter’s section on Health Care Workforce Continuing Education and Licensing).

Congress should explore approaches to better target Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… home health benefits in ways that would relax the homebound requirement.

Future reform proposals should be informed by careful research on access to and delivery of care, including design options for Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… -covered care management or care coordination for postacute (e.g., home health services, SNF) beneficiaries.