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Frequent Transfer of Elders and Dependant Adults From Skilled Nursing Facilities Could Cause Them to Incur Stiffer penalties

Skilled nursing facilities whose patients are too frequently admitted to the hospital would face stiff new penalties according to the deficit reduction plan proposed by President Obama on Sept. 20, 2011. These admissions are often caused by Bed Sores, Pressure Sores also known as Decubitus Ulcers, falls, infections, or poor medication management.

Overall, as part of a broad deficit reduction plan, Obama would cut more than $300 billion from projected Medicare and Medicaid spending. Some would come from cuts in general payments to nursing homes, home health agencies, other providers, and drug companies. Some would result in higher out-of-pocket costs for seniors themselves. But one little-noticed provision is aimed squarely at facilities with high hospital admission rates.

An estimated 40 percent of nursing facility residents are admitted to the hospital in a typical year, and one-quarter of these may be preventable, according to the Kaiser Family Foundation. A congressional review panel estimates that about 14 percent of patients discharged directly from hospitals to skilled nursing facilities are sent back to the hospital for conditions that could have been avoided.

I’ve seen hospital emergency rooms filled with very frail seniors on Friday afternoons. Why? Because nursing homes know they won’t have enough weekend staff to care for their sickest residents, so they simply send them back to the hospital. The new rules could stop those practices.

And the penalty for violations would be steep: Nursing facilities would lose up to 3 percent of their Medicare payment. For institutions whose margins are often razor-thin, three percent could be the difference between success and failure.

Because this is a Medicare penalty, it would only apply to those patients who are receiving rehabilitation or recovering from a hospital stay. It would not apply to long-stay residents receiving Medicaid. However, these changes could easily be expanded to Medicaid as well.

This readmission rule is similar to one soon to be imposed on hospitals under the 2010 health law. And while those hospital penalties have not yet kicked in, they have already fundamentally changed the way those institutions think about their patients. Today, because Medicare pays for admissions no matter what the cause, the current system perversely encourages round trips to the hospital, especially in poor performing facilities with lots of empty beds. After all, a readmitted patient generates revenue. The hospital readmission rule radically changes those incentives.

If Congress approves Obama’s idea, nursing homes also may have to rethink the way they do business. They’ll have to more carefully care for patients even as other provisions of the health law encourage them to treat more complicated cases. To make the challenge even more difficult for nursing homes, Obama has also proposed reducing overall payments for post-hospital nursing home care by $32 billion over 10 years.

Skilled nursing facilities are also feeling pressure from hospitals themselves to reduce readmissions. Now, by hammering nursing homes directly, Obama would only reinforce the message.

– from Steven Peck, Senior Attorney at Peck Law Group

The Peck Law Group

About the Author

Attorney Adam Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.


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