MEDICARE: New Rules Make Nursing Home Admission Harder
Two-thirds of hospital discharge planners are encountering more difficulty in placing high-cost Medicare patients in nursing homes since changes in federal reimbursements took effect last year, according to a recently finished report by the General Accounting Office (GAO). The report reveals that lower reimbursement rates and the new "prospective payment system" have prompted many nursing homes to "see certain patients as profit centers, while others are potential money losers -- and they base their admission decisions accordingly." Nursing home officials "are reluctant to admit patients requiring certain high-cost services" and thus are scrutinizing patients before admitting them, the GAO report notes. Despite the access difficulties, however, the report concludes that Medicare patients are receiving the care they need. GAO officials determined that the recent bankruptcies of two major nursing home operators -- Vencor Inc., and Sun Healthcare Group Inc. -- cannot be blamed entirely on the Medicare changes. While both companies were hurt by reimbursement reforms, their "financial difficulties are the result of several factors" the report concludes. The GAO attributes the majority of the companies' losses to "one-time transactions," including cost restructuring and the "writing down of assets." Sun officials called the analysis "overly simplistic," arguing that "the notion that the chaos currently facing the industry is a result of mismanagement of an entire industry and is unrelated to the implementation of the (Medicare system) is a notion we find difficult to accept" (Adams, Wall Street Journal, 12/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.