The Affordable Care Act’s mandate for payment reductions for hospitals with high rates of readmissions is heading toward the post-acute industry.

The U.S. Department of Health and Human Services (HHS) 2014 budget proposal includes a Medicare legislative proposal that could save $371 billion over ten years and smack in the middle of that proposal is a recommendation that would impose payment reductions to skilled nursing facilities for preventable hospital readmissions.

Told you so!

HHS references research by the Medicare Payment Advisory Commission that notes that nearly 14 percent of Medicare patients that are discharged from a hospital to a post-acute setting – primarily a skilled nursing facility — are readmitted to the hospital for what they consider avoidable care issues. The budget proposal is recommending that beginning in 2017, payments made to post-acute/skilled nursing facilities be reduced by 3% for facilities that have high rates of preventable hospital readmissions.


But it’s not your fault! Right?

Unfortunately that argument is not going to resonate. Right now, hospitals are tracking patients they discharge, noting where they are being discharged to and whether they are being readmitted back to the hospital. They are literally tracking utilization figures of nursing facilities because they have to report their rehospitalization rates to Medicare.

It is just a matter of time until the hospital is going to report to Medicare the names of the skilled nursing facilities that contribute to high rehospitalization rates, and that is when it’s going to affect you, the nursing facility. Medicare will note your rehospitalization rate and penalize you. Thus the 3% reduction begins.

As a skilled nursing facility you may logically try to explain that the rehospitalizations came as a result of physician’s orders, non-compliant patients, and so on and so forth. It’s not your fault. But the finger pointing will only get you so far. The hospital will start to select facilities that they know can provide quality in-house care to higher acuity patients, therefore preventing rehospitalizations.

Is your staff trained to reduce rehospitalization? Can your staff ensure that the hospital has provided the necessary information regarding the patient’s plan of care prior to admission? Are they trained to care for the diseases and conditions most associated with rehospitalizations? And finally, do they have the skills required to provide the quality care needed to prevent rehospitalization? If you can’t answer yes to these questions, you may be looking at a 3% reduction in your bottom line in addition to a lower census since your hospital partners might just stop referring patients to you.

Check out our Reducing Rehospitalization Series of courses and our Rapid Review Series which will provide your staff the knowledge needed to prevent rehospitalizations so you can say YES to your hospital referral network!