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Medicare rules may encourage nursing homes to over-treat patients


Even as the healthcare industry puts an increased emphasis on cutting costs, Medicare's payment rules for nursing homes seem to encourage these facilities to provide expensive--and even harmful--excess care, the Wall Street Journal reports.  

Medicare changed its reimbursement system for nursing homes in 1998 to pay providers based on the level of rehabilitative therapy they deliver to patients, from "low" to "ultra high." Providers get the most Medicare money for patients in the ultra-high category, which requires them to receive 720 hours per week of therapy.

Not surprisingly, that payment structure encouraged providers to give more therapy to more patients, according to a WSJ analysis of Medicare data. Case in point: While only 7 percent of patients received ultra-high levels of therapy in 2002, that share jumped to 54 percent by 2013.

While the evidence is clear that physical, occupational and speech therapy works for patients, it's less clear whether more therapy produces better outcomes, Vincent Mor, a Brown University health-services professor and chairman of the independent quality committee at large nursing-home operator HCR ManorCare Inc., told the publication.

Even worse, though, intense therapy regimens may harm fragile patients, notes David Grabowski, a Harvard University professor who studies nursing-home spending. "The system really rewards high-intensity care," he says. "There are patients being treated who aren't appropriate."

The Department of Justice has even joined a whistleblower lawsuit that alleges HCR pressured employees to provide unnecessary therapy and overbilled Medicare. HCR declined comment to the WSJ, but at least one other nursing-home operator says the increase in ultra-high therapy may simply reflect the preferences of a more informed patient population.

For its part, Medicare has taken steps to address the billing concerns, the article notes, and hired a contractor to explore alternative payment systems. In July, the Department of Health and Human Services also made a range of proposals intended to improve the safety and functioning of the country's long-term care hospitals and nursing homes. Still, skilled nursing facilities are set to receive a 1.4 percent increase in payments in 2016.

To learn more:
- read the article

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