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Debate over Rehab for Medicare patients

Published on Aug 25, 2014 at 8:06 am in Accounting Malpractice.

Medicare FundingA debate is brewing on Capitol Hill over the treatment of Medicare patients who need rehab after a hospital stay. Typically, these patients can be treated at several types of facilities – but the government is taking an interest because the costs vary greatly.

If a patient leaves the hospital needing rehabilitation, it can typically be administered from a variety of facilities, depending on the injury. They include:

  • specialized rehab hospitals,
  • a skilled nursing facility,
  • outpatient therapists, or
  • in home health care aides.

The current debate is over the fact that the cost for rehab hospitals are much higher than the costs for treatment at skilled nursing facilities. This issue re-surfaced in June, after a report was released from MedPAC – the Medicare Payment Advisory Commission.

Roll Call, the privately-owned Congressional news site, called attention to the disparities noted in the MedPAC June report to Congress:

Currently, Medicare pays more for the care at rehab hospitals than it does at nursing facilities. However, the Medicare Payment Advisory Commission, the panel known as MedPAC that gives lawmakers guidance on Medicare policies, said in a report this year that at least for some conditions, the higher payments may not always be justified.

The debate now is over a push to so-called “site-neutral” Medicare payments, where Medicare could decide to pay the two types of facilities – rehab hospitals and skilled nursing facilities — the same for the same treatment, regardless of what they’re charging.

Orthopedic conditions provide one illustration of the disparity. The MedPAC study found that patients with hip fractures or major joint replacements had similar traits and outcomes whether they were admitted to inpatient rehab hospitals or skilled nursing home, although Medicare pays more for rehab hospitals than the nursing facilities.

Not surprisingly, Congress is being heavily lobbied by representatives from both rehab hospitals and nursing facilities. Rehab hospitals defended their higher rates, although the study they used was funded by their own industry. Nursing facilities, on the other hand, are asking for the justification in paying them less than rehab hospitals if the care is similar.

The nursing home industry acknowledged some serious cases that would be better treated at rehab hospitals. But they pointed out that more studies will probably show that for many conditions, nursing homes can provide similar outcomes.

The MedPAC report stated: “[The commission] recognizes that the services in the two settings differ; however, we question whether the program should pay for these differences when the patients admitted and the outcomes they achieve are similar.”