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 New Legislation Would Reward SNFs For Reducing Readmissions, Reaching Rate Benchmarks

​House and Senate leaders unveiled legislation overnight that encompassed both a one-year sustainable growth rate patch as well as new nursing home legislation that would reward homes for either cutting their readmissions rates or having low rates to begin with.

The proposal, which would launch in four years, with an estimated savings of $2 billion over 10 years, would also give proportionally fewer federal dollars to those nursing centers with the worst readmissions rate, but it would reward homes for either improving their readmissions rates or “attaining” low rates.

The bill was announced today as one way to help cover the cost of the so-called “doc fix.”

The rewards would come from having federal regulators “withhold” up to 2 percent of all nursing centers’ pay at the beginning of fiscal year 2019 (Oct. 1, 2018). Most of the 2 percent withholding dollars would be tagged for rewarding high-performing providers; a relatively small portion would count as savings to the Medicare program.

House Republicans have long argued for such “value-based purchasing” schemes in health care, and the topic was given its own heading in an open letter to post-acute care “stakeholders” by leaders of the Ways & Means and Senate Finance committees last summer.

Initial drafts of the bill would have required federal regulators to come up with a risk-adjusted benchmark rate for 30-day readmissions.

The legislation, which includes several elements of the American Health Care Association's (AHCA's) own readmission reduction proposal, was welcome news for long term and post-acute care advocates.

"We are excited to work with Congress in supporting a policy alternative beyond mere cuts to the profession," said AHCA Senior Vice President of Public Affairs Greg Crist. "Our members are ready to step up and be part of a solution that reduces readmissions, saves funding for Medicare, and produces positive changes on behalf of beneficiaries."  

Medicare spent $62 billion on post-acute care in 2011, and more than half of that went to skilled nursing centers. Of the 5.6 million who used Medicare to help pay for their rehab, 1.7 million went through skilled nursing centers.

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