Home Health Surpassed SNF Use in 2020 Among Medicare Beneficiaries

Home health agencies surpassed skilled nursing facilities as the most sought after post-acute care setting – SNF care went from most common to second-most used among Medicare beneficiaries, crossing paths with home health in February 2020 as the pandemic ramped up.

By March 2020, the number of hospital discharges referred to SNFs dropped to 16.6% from 18.7% in 2019; in the fall of 2020, that percentage declined even further to 14.9%.

That’s according to data released by the Medicare Payment Advisory Commission (MedPAC). The organization published its 2022 data book on health care spending and the Medicare program on Tuesday.


MedPAC serves as a non-partisan agency of the federal legislative branch, providing analyses and advice on Medicare payment policy to Congress.

Medicare Fee-for-Service (FFS) spending among nursing homes increased in 2020 due to a new case-mix system, the three-day stay waiver, higher case-mix indexes, longer stays and temporary suspension of the sequester which would have otherwise lowered payment rates, according to MedPAC data.

Of the 13,884 facilities incorporated in the data, freestanding SNFs and for-profit operators made up the majority of Medicare-covered stays and Medicare (FFS) payments, an increase from 2019 to 2020.


Freestanding facilities made up 97% of Medicare-covered stays and FFS payments – margins for such facilities remained high in 2020 with an aggregate Medicare margin of 16.5%.

If MedPAC had included additional federal relief funds providers received during the pandemic, that aggregate margin would have bumped up to 19.2%.

“Aggregate Medicare margins (excluding the federal relief funds) varied widely across freestanding SNFs,” MedPAC authors noted. “One-quarter of SNFs had Medicare margins that were 28.7% or higher; one-quarter had margins that were 4% or lower. On average, rural facilities had higher Medicare margins than urban facilities, and for-profit SNFs had considerably higher Medicare margins than nonprofit SNFs, reflecting their larger size and lower cost growth.”

For-profits accounted for 74% of stays and 78% of FFS payments in 2020.

Overall nursing home admissions continued to decline in 2020 as enrollment expanded in Medicare Advantage (MA) and participation increased for alternative payment models like accountable care organizations (ACOs), according to MedPAC.

“Between 2019 and 2020, covered SNF admissions per 1,000 FFS beneficiaries decreased 7.9%,” data authors said. “The decline is consistent with a decline in FFS per capita inpatient hospital stays that were three days or longer and therefore qualified for Medicare coverage of SNF care … it also reflects a decline in SNF use during the coronavirus public health emergency.”

While MedPAC did report SNF quality measures for 2020, they did so with a huge caveat – data reflects conditions unique to the public health emergency (PHE) that “confound” measurements and assessments for 2020.

Increased mortality due to Covid-19 and capacity constraints in hospitals likely affected quality outcomes, data authors said. Covid as a new diagnosis was not included in any of the current data models and doesn’t accurately reflect acuity and patient mix.

“Therefore, we report the changes we have observed in the quality measures but do not draw conclusions about whether quality improved, worsened, or stayed the same in 2020,” data authors said in the report.

Nursing homes saw a 13.8% drop in successful discharge to the community between 2019 and 2020; hospitalizations increased 3.6% for all SNFs, another quality measure included in MedPAC data.

The overall number of post-acute care providers decreased slightly in 2021, MedPAC found, with long-term care hospitals seeing the highest drop from 2017 to 2021 at 4.3%. The total number of SNFs decreased less than 1% per year between 2017 and 2021.

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