Monday, June 16, 2008

Thoughts on Nursing Home Reimbursement

There is no business case for quality in long term care. There certainly is in the hospital industry, where compliance with evidence based practice practices was shown in a Premier demonstration pilot to save 11K per CABG patient. The reason that nursing homes can't afford quality is the current reimbursement system. Under RUGs, we are financially rewarded for keeping residents sick and maintaining utilization of resources as high as possible. While this is good for the bottom line, it is no good to residents. Perhaps we could look at going back to capitation, a system in which a facility is paid X amount of dollars per month per resident, with the dollar amount being determined by the average cost of care for nursing homes in that region. While this may not be the best system for skilled residents, it is certainly feasible for residents receiving an ICF level of care. Nursing homes would then have an incentive to maintain quality standards, because poor resident outcomes would result in nursing homes having to absorb that cost (ie, there would not be additional payments for in-house acquired pressure ulcers or other preventable complications). Hospitals have a list of no-pay diagnoses, inpatient acquired complications that they are not allowed to bill for. Third party payers should demand the highest quality of care from nursing homes, just as they do from every other provider type.

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