Skilled Nursing Admissions Dropping in Tandem with Lower Hospital Use

Admissions to skilled nursing facilities have declined in a manner consistent with a drop in inpatient hospital usage, according to the Medicare Payment Advisory Commission’s (MedPAC) most recent data book.

That’s just one of the conclusions from the statistics, released last month by MedPAC — a non-partisan agency that advises Congress on Medicare issues.  For instance, while increases in total fee-for-service spending on post-acute care slowed, partly because of the growth of Medicare Advantage enrollment, Medicare FFS spending on SNFs stayed essentially flat from 2014 to 2016 at about $29.1 billion.

SNF admissions per 1,000 FFS beneficiaries dropped between 2015 and 2016 by 3.6%, while covered days per 1,000 FFS beneficiaries dropped even more steeply in the same time frame, falling by 6.5%.

There’s one finding in the MedPAC data book that can shed some light on that drop, according to Anne Tumlinson, the founder of health care consultancy Anne Tumlinson Innovations.

“A lot of times, SNFs will say: ‘Well, the volume is going to home health!'” Tumlinson, who previously led Medicaid oversight at the Office of Management and Budget (OMB) and founded Avalere Health’s post-acute and long-term care consulting practice, told SNN. “What’s actually happening is overall, inpatient hospitalizations are declining.”

From 2006 to 2016, the number of Medicare inpatient admissions per FFS beneficiary declined almost 22%. Though the percentage of Medicare FFS beneficiaries discharged to SNFs or swing beds from acute-care hospitals rose by 1.4% from 2006 to 2016, Tumlinson stressed that the overall decline of inpatient hospitalizations has hurt skilled nursing margins.

In addition, even though freestanding SNF Medicare margins were high in 2016 at 11.4% overall, that number is misleading, she noted.

“The thing to remember is in addition to it not taking into account Medicaid margins, it doesn’t take into account managed Medicare margins,” Tumlinson explained. “It’s on a declining book of business in two ways. One is that FFS as a percentage of all Medicare beneficiaries is declining, and inpatient hospitalizations are declining.”

Margins for residents covered by Medicare Advantage plans will be narrower for SNFs because MA pays lower rates, she added. For instance, managed Medicare revenue per patient day was $431 according to the most recent set of statistics from the National Investment Center for Seniors Housing & Care (NIC), as compared to $522 for traditional Medicare.

The data book draws from various sources that include MedPAC’s recent reports to Congress and the Medicare Current Beneficiary Survey.

Written by Maggie Flynn

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Maggie Flynn
Business reporter at Aging Media Network
When she's not working, Maggie enjoys running, reading, writing and sports, in no particular order. Favorite things include murder mysteries, Lake Michigan and the Pittsburgh Penguins.

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