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Nursing home hospitalizations often driven by payer status
Date:10/3/2011

r nursing home care for elderly individuals who meet the program's assets and income requirements. Eligibility varies from state to state but generally requires that the value of a person's income and assets be below a percentage of the federal poverty guidelines. While Medicaid and private insurance pay for nursing home-related care, costs associated with hospitalization are covered by Medicare the federal health insurance program for the elderly.

Because Medicaid often reimburses nursing homes at a rate lower than private pay insurance and often below the cost necessary to provide the onsite intensive care nursing homes have a strong financial incentive to send sick Medicaid patients to the hospital where the cost will be absorbed by Medicare and the hospital. This decision is further complicated in states with "bed-hold" policies which continue to pay the nursing home for Medicaid residents while they are hospitalized. In New York State to qualify for these payments nursing homes need to meet an occupancy threshold. Nursing homes are not eligible to receive bed-hold payment for patients with private insurance or those paying out-of-pocket.

Bed-hold policies were created to help preserve continuity of care for patients by ensuring that there would be a bed in the same nursing home waiting for them when they returned from the hospital. While well-meaning, these policies have created further incentive to send residents to the hospital for care and, because these costs are born by Medicare and not Medicaid, states have little financial incentive to change these policies. States with bed-hold policies include, among others California, Ohio, and, until very recently, New York.

As it is often more expensive to care for an individual in a hospital setting, these decisions ultimately drive higher federal health care spending. These expenditures can be even more pronounced when the patient could have been adequately cared for in t
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Contact: Mark Michaud
mark_michaud@urmc.rochester.edu
585-273-4790
University of Rochester Medical Center
Source:Eurekalert

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