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Cutting Medicare 3-night rule could avoid risks, lower costs

Friday September 20, 2013
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Elimination of a Medicare rule that mandates a three-night hospital stay as a precondition for skilled nursing rehabilitation coverage could reduce unnecessary hospitalizations and improve patient care without increasing costs to the patient or the federal government, according to a published article.

“Rather than rely on the three-night stay to identify appropriate patients for skilled nursing and rehabilitative services, the Centers for Medicare and Medicaid Services could implement specific functional criteria … such as acute decline in mobility, impairment of activities of daily living or presence of delirium, and use the savings from reduced hospitalizations to provide appropriate payments for home-based or nursing home-based treatments,” Lewis Lipsitz, MD, chief of gerontology at Beth Israel Deaconess Medical Center and director of the Institute for Aging Research and a professor at Harvard Medical School, Boston, wrote in a JAMA Viewpoint published Sept. 16 online.

Lipsitz suggests the change could be paired with a shared-savings model such as the move to quality contracts and accountable care organizations that, when used with efficient case management and quality controls, can provide appropriate saving incentives.

The three-night stay rule was established in 1965, when it took about three days for a Medicare patient to be admitted and evaluated, have a care plan developed and be discharged. The process now takes only a day or two. Through the years, waivers of the rule were allowed. Studies suggested the waiver had little effect on the quality of patient care and small financial savings could be achieved.

However, a study of 431 Pennsylvania nursing homes after passage of the short-lived Medicare Catastrophic Coverage Act of 1988 — which waived the rule — found a 243% increase in Medicare spending, likely caused by an increase in volume of skilled nursing facility care.

“Without the three-night stay requirement, nursing homes may have triggered the SNF benefit for changes in condition that were previously managed with customary nursing home services,” Lipsitz wrote.

The three-night stay rule was reinstated after the law’s 1989 repeal, but it has been the subject of ongoing debate. Former CMS Administrator Donald Berwick, MD, MPH, recently said the rule should be eliminated as a way to clarify confusion about the classification of inpatient versus observation patients.

According to Lipsitz, the rule might provide incentives to hospitalize patients unnecessarily. In the article, he cites hypothetical cases in which a patient who needs rehabilitation after a fall at home is admitted to a hospital to be eligible for skilled nursing care, or where a patient is transferred from a nursing home to a hospital to relieve an overburdened LPN. Both cases result in a significantly higher cost.

“Although there is little empirical evidence that elimination of the three-night stay rule will improve patient care without increasing Medicare costs, there is justifiable concern that this rule contributes to suboptimal care and increased costs attributable to avoidable hospitalizations,” Lipsitz wrote.

Lipsitz also argues the national push to reduce excessive hospital use while providing necessary care in other, less expensive environments should be consistent with eliminating the three-night stay requirement and providing improved care for older patients, either at home or in a nursing home.

Article: http://jama.jamanetwork.com/article.aspx?articleid=1738447


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