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Medicare to Improve Nursing Homes with Financial Incentives

One of the major problems with nursing homes is being that many patients end up back in the facility after only 30 days or less of being discharged. Kaiser Health News reported that Medicare is making a move to change this, by penalizing nursing homes that have high readmission rates, and giving bonuses to those with low rates of readmission.

Paying based on quality not quantity

This move is part of Medicare’s plan to pay providers based on how well they treat patients, not just how many patients they treat.

Medicare has been doing this for hospitals, but is now making a move to act on nursing homes and skilled nursing facilities. Medicare also wants to discourage nursing homes from letting patients go to early, and risking further illness and readmission.

The Kaiser Health News analysis shows that 85 percent of nursing homes in Arkansas, Louisiana, and Mississippi will be penalized, while more than 50 percent in Alaska, Hawaii, and Washington will receive bonuses.

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Cons of the new measure

Some negative aspects of these measures include that:

  • Medicare is not taking into account readmission rates for those insured under Medicare Advantage plans.
  • Some fear that nursing homes will not want to admit very ill or inform patients for fear of readmissions.
  • Medicare may have to penalize homes that have made every effort to reduce readmissions.

Overall, Medicare will redistribute $316 million from ill-performing to better-performing homes, and keep $211 million that would have been paid to nursing homes. Medicare is testing giving bonuses and penalties to home health agencies as well.

Using financial incentives, Medicare hopes to improve outcomes and performance across the board. See this Kaiser Health News page to check up on nursing homes near you and see whether they got a bonus or a penalty.

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