Is subacute care a legitimate level of care worthy of its own category of Medicare reimbursement? Or is it a smoke-and-mirrors marketing strategy used primarily to boost providers' profits?
The Prospective Payment Assessment Commission says it's still not sure. But members of the congressional advisory panel know recognizing subacute care won't save Medicare any money.
That, in essence, was ProPAC's conclusion last month after meeting to decide whether it will recommend that Medicare add a new payment level for subacute care. Commission members are scheduled to further review the subject before releasing ProPAC's annual report to Congress next March with its recommendations.
Subacute care is the highly touted yet still unproven level of patient care designed for patients who aren't sick enough to remain in hospital intensive-care units, yet are too sick to be discharged or transferred to nursing facilities.
Because it's being considered as a viable part of many healthcare reform proposals, providers are pressuring the government to consider adding a new level of Medicare reimbursement for subacute care.
However, after some lively discussion, the commission concluded it didn't have enough information about subacute care to issue any recommendations on the subject.
"The commission felt that it wasn't appropriate at this point to step forward and make any specific recommendations regarding subacute care," said ProPAC senior policy analyst Sharon Arnold.
MODERN HEALTHCARE obtained transcripts from ProPAC's Sept. 13 meeting. During the meeting, commission members had difficulty agreeing on a specific definition of subacute care, the types of services that fall under sub-acute care, and, most importantly, whether subacute care is actually beneficial for patients.
For example, some members of the commission expressed bewilderment as to why subacute care was even being considered.
"What I am hearing is, `Let's think about deriving a new set of reimbursements for something which we can't even define,'*" said ProPAC commission member Judith Lave.
Ms. Lave, who is a professor of health economics at the University of Pittsburgh, raised questions about subacute care's overall effectiveness and publicly dismissed the growing number of subacute-care trade associations as "a purely political strategy of a group of providers to get money for services they want."
However, another committee member, Susan Bailis, countered that the private sector already is compensating for subacute-care services and that providers are going to "seek new ways of compensation and reimbursement (for subacute care) whether ProPAC likes it or not."
Ironically, the one thing the commission agreed on is the opinion that subacute care, if implemented, won't result in any savings for Medicare.
According to a ProPAC summary, adding subacute care to Medicare "would not result in Medicare savings, even if the subacute stay were less costly than the forgone acute days."
"This is because (the prospective payment system) reimburses hospitals a set amount for a comprehensive stay. Efforts to decrease the length of stay benefits the hospital if costs are reduced."
Earl Reed, chief financial officer of Vencor, urged the commission to keep its current Medicare reimbursement policies intact rather than develop new ones for subacute care.
Louisville, Ky.-based Vencor operates about 30 long-term hospitals nationwide. Unlike acute-care hospitals, long-term hospitals already receive a higher, cost-based reimbursement from Medicare because they typically care for chronically ill patients an average of 25 days or longer.
Adding yet another level of reimbursement for subacute services would only result in greater revenues for the nursing-home industry, Mr. Reed argued, without necessarily improving patient care for patients with medically complex problems.
"The current reimbursement structure works," Mr. Reed said. "You have an intensive-care level. You have an acute-care level. You have a nursing-home level. You have existing regulations that seem to work."