The United States House of Representatives recently proposed new legislation aimed at curbing Medicare costs. The legislation proposes to decrease skilled nursing facilities’ Medicare rate updates, introduce new post-acute payment systems, and institute readmissions penalties for skilled nursing facilities.
It is estimated that the Medicare Hospital Insurance Trust Fund will be bankrupt by 2026, and that the Supplemental Medical Insurance Trust Fund will increasingly strain the federal budget as Medicare spending is expected to grow from 3.6% in 2012 to 6.5% of GDP in 2087. With this in mind, the House Ways and Means Committee has introduced legislation aimed at reducing Medicare costs. Based upon proposals made by the Medicare Payment Advisory Commission, the proposals include creating bundling payments for a post-acute episode of care and creating site-neutral payments between inpatient rehabilitation facilities and skilled nursing facilities for some procedures.
One proposal is to require public disclosure for all Medicare payments via an online database with the belief that subjecting providers to such public scrutiny may deter some wasteful practices and overbilling.
Another target of the legislation is skilled nursing facility readmission policies. The Medicare Payment Advisory Commission indicates that nearly 14 percent of individuals on Medicare discharged from a hospital to a skilled nursing facility are readmitted to the hospital for conditions that could potentially have been avoided. In an attempt to curb these incidences and lower costs, the proposed legislation would establish a skilled nursing facility readmissions program similar to that already in place for hospitals with the aim of holding nursing homes accountable for hospital readmissions. Reimbursement penalties would be instituted against skilled nursing facilities if they exceed a threshold for admissions to a hospital for certain conditions within a particular timeframe. According to the U.S. Department of Health and Human Services (HHS) 2014 budget proposal, such a policy could save $2.2 billion over ten years.
The Committee is accepting comments on the draft legislation through August 30.