The Clinton administration is considering tightening the definition of a hospital discharge to reduce Medicare spending on subacute care in its fiscal 1998 budget, sources familiar with the discussions said last week.
Meanwhile, two federal Medicare advisory panels are likely to recommend next year that Congress bundle Medicare payments for post-acute care with inpatient payments.
Both moves are attempts to cope with rising Medicare costs for post-acute-care services.
According to the Prospective Payment Assessment Commission, which advises Congress on Medicare Part A issues, Medicare payments for skilled-nursing facilities have risen to more than $10 billion in 1995 from $2.5 billion in 1990. Home-care costs have increased to $16 billion from $3.9 billion over the same period.
Data released by ProPAC last week showed that hospitals owning post-acute-care agencies have shorter average lengths of stay than hospitals that don't own such agencies. Federal officials are concerned that hospitals, which are paid a fixed fee for inpatient care but on a cost basis for post-acute care, are discharging patients early to maximize reimbursements.
ProPAC, along with the Physician Payment Review Commission, which advises Congress on Medicare Part B issues, met last week and said they would likely recommend that Congress bundle post-acute-care payments with inpatient payments as a way to slow Medicare spending.
That wouldn't make providers happy, however. Operators of freestanding post-acute-care facilities said they were concerned that under such an arrangement, hospitals would be allowed to control the Medicare reimbursements, putting operators of freestanding facilities at their mercy.
Bundling the two services may not become a reality for some time, however. According to several Republican congressional aides, GOP leaders are considering ways to reduce Medicare post-acute spending but were unlikely to support as drastic a step as bundling.
Both the GOP and Clinton administration budgets last year included prospective payment plans for both home care and skilled nursing.
According to sources familiar with White House budget discussions, the administration is considering ways to tighten rules on hospital transfers and discharges. Under the options being considered, total Medicare reimbursements would be reduced when patients are moved from an inpatient setting to a sub-acute-care facility.