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30 Aug 12 Hospital Readmission Reduction Program’s Impact On Assisted Living

Under the Hospital Readmission Reduction Program, Medicare will withhold 1% of a hospital’s reimbursement rate for readmissions that take place within 30 days of a discharge and are deemed to be excessive. The initiative takes effect October 1st and will initially focus on 3 conditions: congestive heart failure, heart attack, and pneumonia.

This may be a game-changer for assisted living and nursing facility providers who will increasingly have to demonstrate their ability to safely prevent hospital readmissions. Those who do will become preferred partners for Medicare discharges and gain a competitive edge in markets where Accountable Care Organizations (ACOs) are active (not Oklahoma). As subcontractors to ACOs, assisted living providers may, for the first time, become part of the Medicare revenue stream.

Assisted living communities are responding to the policy change with tools and methods to better manage conditions associated with hospital readmissions. Strategies include installing an electronic medical records system, enhancing staff levels and clinical capabilities, and making renovations to accommodate new services and levels of care.

Some assisted living providers are remodeling to offer short-stay units and 24-hour nursing services in states with regulations allowing high levels of medical care. They are partnering with therapy and home health care companies to provide more medical components. Health care systems are transforming as more people are served in long-term and post-acute care settings instead of a hospital. This pushing of acuity down the continuum of care is likely to become even more pronounced as the government looks for ways to further reduce costs. Home-based services will likely be more used as an alternative to long-term care.