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Site-Neutral Reimbursement Levels the Playing Field for Skilled Nursing Facilities

CareOne CEO Daniel E. Straus weighs in on MedPac’s recent site-neutral reimbursement recommendation.

Nursing homes have changed dramatically over the past 33 years since the Diagnosis Related Group (DRG) system was developed to determine Medicare payments for health care services in hospital settings. Nursing homes have become much more than just long-term care facilities. They have evolved into the most cost effective venues for the delivery of 24/7 care in an institutional setting. Yet, Medicare reimburses Inpatient Rehabilitation Facilities (IRFs) 42% more than Skilled Nursing Facilities (SNFs) for the same care provided to the same patients.

The recent unanimous vote by the Medicare Payment Advisory Commission (MedPac) recommending site-neutral reimbursement for a minimal subset of post-acute rehabilitation services, is a small but important step towards recognizing SNFs as a vital part of the post-acute healthcare delivery system. The clinical capabilities of nursing homes have increased exponentially, diminishing the differential in care between SNFs and IRFs. Yet, for the most part, both the medical community and the general public still believe that SNFs and IRFs provide different services, when in reality the services are the same. MedPac’s decision proves that there is absolutely no difference between the care provided at SNFs and IRFs.

While the decision is certainly a welcome step, it should be taken even further by implementing site-neutral reimbursement across the board for all services and cases should be reimbursed based on the needs of the patient.

Should the MedPac recommendation of site-neutral reimbursement be enacted, nursing homes could up their game, compete more effectively and deliver even better care. While this initiative certainly benefits both MedPac and SNFs, it also benefits patients who can continue to receive the highest quality of care in a homelike environment.

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