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Doc Fix Could Depend on Post-Acute Care

In 1997, as part of the Balanced Budget Act, the Medicare Sustainable Growth Rate (SGR) was enacted in an attempt to manage Medicare’s spending on physician services. Every year since the SGRs inception, Congress has attempted to avoid implementing its proposed physician reimbursement cuts.

This past March, another “patch” was plastered on the SGR – marking the 17th time Congress has delayed the reimbursement cuts, for a combined cost of $150 billion. But, this fix is a bit different. Congress is actually visiting real solutions and repeal of the SGR. With the latest doc fix issued until March 2015, Congress is on the clock to iron out the terms of a permanent SGR fix.

The biggest issue with repealing the SGR is determining how to pay for it. The Congressional Budget Office estimates that a 10-year fix will cost $121 billion.

The Engelberg Center for Health Care Reform at the Brookings Institution determined a list of potential contributing factors – the largest of which restructures payment for post-acute care. Post-acute care has seen exponential growth over the last several years, making the potential for savings in the industry immeasurable.

Currently, post-acute care payment is determined by the Centers for Medicare & Medicaid Services (CMS). CMS decides when and what it will pay, with the rules varying based on each of the many post-acute settings. Brooking’s recalibration of the industry’s payment would eliminate the CMS’s decision making, and instead delegate decisions to the hospitals and post-acute care facilities.

Brookings’s plan calls for a set payment that hospitals would receive for the post-acute care costs of each patient. Once received, it would then be the hospital’s responsibility to stay within budget and determine – along with the post-acute facility physicians – the proper care required for each specific case.

As it’s currently structured, healthcare services using high-end technology or involving surgery receive higher reimbursement. Meanwhile, long-term care receives drastically lower reimbursement rates. This disconnect inflates the amount of costly services being utilized, simply because patients are not receiving the care they truly need.

Hospitals experience the “revolving door” scenario, where patients come in as quickly as patients move out, and fees are being charged on a service basis, rather than an outcome basis. Former Senator William Frist and Steve Schroeder recommend moving away from this fee-for-service strategy and starting to focus more on the quality and value of services.

Allocating additional resources for preventative care – such as post-acute services – will in turn lower hospital readmission rates and reduce the amount spent on costly hospital services.

General Medicine, The Post-Hospitalist Company provides post-hospitalists that specialize in providing an elevated level of post-acute care. Physicians hold regular, on-site office hours, rather than responding to calls or making scheduled visits, contributing to the many benefits all General Medicine patients receive.

If you’re committed to lowering hospital readmission rates, find out how you can partner with General Medicine, The Post-Hospitalist Company by contacting us today.

Tom Prose