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1.  Concerns about hospitalization and rehospitalization of nursing home residents

•         Effects on patients (hospital-acquired infections, delirium, increased use of antipsychotic drugs and physical restraints, increased morbidity and mortality)

•         High costs associated with hospitalization

2.  Three distinct issues (some overlap) are involved:

•         Reducing hospitalization from the community,

•         Reducing hospitalization from nursing homes, and

•         Reducing rehospitalization of acute care patients[1]

3.  Medicare Payment Advisory Commission (MedPAC) (2007) identified seven conditions and procedures that account for nearly 30% of potentially preventable readmissions to hospitals

•         Heart failure; chronic obstructive pulmonary disease; pneumonia; acute myocardial infarction; coronary artery bypass graft surgery; percutaneous transluminal coronary angioplasty; other vascular procedures

4.  MedPAC made recommendations about how hospitals can reduce readmissions

•         Provide better care during inpatient stay

•         Address medication needs at discharge

•         Improve communications with patients before and after discharge

•         Improve communication with community and post-acute providers

•         Implement public reporting by hospitals, followed by

•         Payment adjustments to hospitals

5.  Key MedPAC concerns regarding skilled nursing facilities (SNFs) and SNF residents

•         MedPAC found 16% of discharges were to SNFs, but 20% of readmissions were from SNFs (p. 113)[2]

•         MedPAC (2008) reported that rehospitalizations of nursing home residents for five conditions within 100 days steadily increased from 2000-2005 (Congestive heart failure, respiratory infection, urinary tract infection, sepsis, electrolyte imbalance)

•         Called for new publicly reported quality measure on risk-adjusted potentially avoidable rehospitalization within 100 days[3]

•         Two types of SNF rehospitalizations

•         Home to hospital to SNF to hospital

•         If readmitted to hospital within 24 hours, quality of care in hospital is implicated

•         If readmitted to hospital in a longer period after discharge, quality of care in SNF is more likely implicated

•         SNF to hospital

•         Longer stay in SNF implicates quality of care in SNF[4]

6.  Rehospitalizations of nursing home residents are common, expensive, and increasing  

•         In 2000, 18.2% rehospitalization rate

•         In 2006, nearly 23.5% of nursing home residents were rehospitalized within 30 days of hospital discharge, at a cost to the Medicare program of $4.34 billion. 

•         29% increase in 6-year period 2000-2006

•         There is a “strong relationship” between number of physician visits and rate of rehospitalization within 30 days.

•         Researchers also report MedPAC finding that hospitalizations for five conditions account for 78% of potentially avoidable rehospitalizations of SNF residents within 30 days

•         Congestive heart failure, respiratory infection, urinary tract infection, sepsis, electrolyte imbalance

•         Researchers calculated that these rehospitalizations account for $3.39 billion of $4.34 billion spent in 2006 for rehospitalizations of nursing home residents.[5]

7.  Emergency Department visits by nursing home residents

•         Centers for Disease Control and Prevention (CDC) reported in 2010:

•         In 2004, 123,600 nursing home residents (8%) had emergency department visits in prior 90 days (104,900 residents (85%) had one ED visit in the prior 90 days and 18,400 residents (15%) had two or more ED visits).

•         40% of ED visits (50,300 residents) were preventable.

•         Potentially avoidable ED visits due to:  Injuries from falls (36%),  heart conditions (19%),  pneumonia (12%), other conditions (mental status changes, urinary tract infections, gastrointestinal bleeding symptoms, fever, metabolic disturbances, skin diseases) (33%).[6]

8.  Factors encouraging hospitalization of residents

•         Kaiser Family Foundation (2010):Interviews with physicians, nurses, social workers, families identified factors: limited capacity of SNFs to address medical issues; physician preference; concerns with liability for not hospitalizing; financial incentives for physicians and SNFs; lack of relationship between facility staff, physician, and family; lack of advance care planning; family preference; behavioral health issues.[7]

9.  Efforts to reduce potentially avoidable hospitalizations of residents

•         Many programs and demonstrations projects have been tested and implemented over the years to reduce potentially avoidable hospitalizations of nursing home residents.

•         Value-based purchasing demonstration for nursing facilities − announced in 2005

•         Financial payments to SNFs for improving quality of care

Ongoing demonstration  measures performance re Staffing; Appropriate hospitalizations; Outcome measures; Survey deficiencies

•         Three states: Arizona, New York, Wisconsin

•         Payment pool: reduction in Medicare spending in each state, chiefly from reduced hospitalizations

•         CMS “anticipates higher quality of care will result in fewer avoidable hospitalizations.”[8]

10.  Affordable Care Act

•         Hospital Readmissions Reduction Program, §3025, 42 U.S.C. §1395ww(q)

•         Beginning in fiscal years (FYs) on and after Oct. 1, 2012, Medicare will adjust payments to acute care hospitals with excessive readmissions

•         Readmission defined as admitted or readmitted to hospital within 30 days for certain conditions (heart attack (AMI), heart failure, pneumonia)

•         FY 2015, policy expands to other conditions identified by MedPAC in 2007

•         National Pilot Program on Payment Bundling, §3023, 42 U.S.C. §1866C:

•         5-year pilot program beginning no later than Jan. 1, 2013

•         Payment is made for acute and post-acute care in an episode of care (3 days before, 30 days following hospital discharge) for 1 or more of 10 conditions selected by the Secretary

•         Quality measures to be developed, including reducing rates of avoidable hospital readmissions

•         Independence at Home Demonstration Program, §3024, 42 U.S.C. §1866D:

•         Demonstration to begin no later than Jan. 1, 2012

•         Payment incentive and service delivery model using physician and nurse practitioner directed home-based primary care teams

•         First of 7 explicit goals: reducing preventable hospitalizations

11.  CMS Initiative

•         “Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents” (March 23, 2012)

•         Focuses on beneficiaries eligible for both Medicare and Medicaid, (dual eligibles)

•         CMS-funded research found 45% of hospitalizations of dual eligibles in 2005 (314,000 hospitalizations) were potentially avoidable

•         Initiative provides funding (up to $128 million) to implement evidence-based interventions to reduce avoidable hospitalizations

•         CMS will contract with qualified independent organizations (“enhanced care and coordination providers”) to implement evidence-based interventions to reduce avoidable hospitalizations

•         Eligible organizations are organizations providing care coordination, case management, or related services (nursing homes not eligible)

•         Organizations will “hire staff who maintain a physical presence at nursing facilities”[9]

•         Innovation awards (May 2012) include projects to reduce hospitalizations

•         Massachusetts: Beth Israel Deaconess Medical Center, Boston; Post Acute-Care Transition Program (3 years)

•         Tennessee: Vanderbilt University Medical Center and National HealthCare Corporation; collaboration between acute and post-acute care (3 years)[10]

12.  Advocates’ concerns

•         Avoiding gimmicks about hospital status

•         Recognizing that not all rehospitalizations should be avoided

•         Realizing that longstanding research demonstrates that improved staffing in SNFs would reduce avoidable hospitalizations in a safe way that assured residents got the care they need

•         Avoiding gimmicks

•         Labeling patients “outpatients” (observation status) – so that their return to the hospital is not called an inpatient readmission – is a semantic gimmick; these patients are still patients in the hospital

•         Observation status simply shifts hospital and SNF costs to beneficiaries; shifts nursing home costs to state Medicaid programs

•         The wrong way to reduce hospitalizations

•         Federal legislation promoted in Congress in 2012 would require HHS to establish a hospital readmission reduction target rate for SNFs, using a baseline readmissions rate as of Oct. 2011, with the goal of achieving aggregate Medicare savings of $2 billion for 2014-2021.

•         Once goal met, rehospitalizations could return to prior levels.

•         Not all hospitalizations of nursing home resident should be prevented

•         Imposing artificial numbers of reductions in hospitalizations and rehospitalizations is the wrong way to reduce rehospitalizations

•         “Not all hospitalizations for conditions that can theoretically be managed outside an acute care hospital are preventable”

•         “Not all nursing homes have the capacity to safely evaluate and manage changes in the condition of the clinically complex nursing home population.”[11]

13.  A better way to reduce hospitalizations

•         Ensure appropriate professional and paraprofessional staffing of nursing homes

•         CMS-funded quality improvement project in 3 nursing facilities in Georgia, May 1-Oct. 31, 2007 reported 50% reduction of hospitalizations over 6-month period.

•         Project’s expert panel identified key factors to reduce hospitalization of residents: more on-site physicians, nurse practitioners, physician assistants; more RNs providing care; availability of lab results within 3 hours; capability of nursing home to administer IV fluids.[12]

•         Life Care Centers of America, a nursing home chain, reports that it reduced rehospitalizations from 40% to 15% in one year in its facilities that employed a full-time physician.

•         Corporation reported additional benefits: reduced use of antipsychotic drugs, reduced staff turnover, higher satisfaction rates among families and residents, improved clinical outcomes.[13]

•         Three-year study in three nursing homes

•         Found 48.2% of hospitalizations were caused by social-cultural (i.e., non-clinical) factors, including lack of x-ray and pharmacy services at nursing homes; physician preference; family pressure

•         70% of residents who were hospitalized could have been treated in nursing home if nursing staff had been able to administer IV therapy

•         “insufficient and inadequately trained nursing staff” was primary problem.[14]

14.  Conclusion

•         Reducing hospitalizations of nursing home residents is important, could improve quality of care for residents, and could save money

•         But, Observation Status simply re-names inpatient hospital stays, it doesn’t actually reduce hospital stays (admissions or readmissions)

•         Reducing hospitalization rates needs to be done in a way that assures residents get the care and services they need, whether in the SNF or the hospital.






[1] Katie Maslow, Joseph G. Ouslander, "Measurement of Potentially Preventable Hospitalizations" (White Paper prepared for the Long-Term Quality Alliance) (Feb. 2012),
[2] MedPAC, Report to the Congress: Promoting Greater Efficiency in Medicare, Chapter 5 (Payment policy for inpatient readmissions) (June 2007)
[3] MedPAC, Report to Congress: Medicare Payment Policy, Section 2D (Skilled nursing facility services) (March 2008),
[4] Vincent Mor, Orna Intrator, Zhanlian Feng, David C. Grabowski, "The Revolving Door Of Rehospitalization From Skilled Nursing Facilities," Health Affairs 29, No. 1 (Jan.2010): 57-64.
[5] Id.
[6] Christine Caffrey, CDC, "Potentially Preventable Emergency Department Visits by Nursing Home Residents: United States, 2004," NCHS Data Brief, No. 33 (April 2010),
[7] Michael Perry, et al, “To Hospitalize or Not to Hospitalize? Medical Care for Long-Term Care Facilities (Oct. 2010),
[8] CMS, Nursing Home Value-Based Purchasing Demonstration (Fact Sheet, Aug. 2009).
[11] Joseph G. Ouslander, Robert Berenson, "Reducing Unnecessary Hospitalizations of Nursing Home Residents," New England Journal of Medicine 2011; 365: 1165-1167 (Sep. 29, 2011),
[12] Joseph G. Ouslander, Mary Perloe, JoVonn H. Givens, Linda Kluge, Tracy Rutland, and Gerri Lamb, "Reducing Potentially Avoidable Hospitalizations of Nursing Home Residents: Results of a Pilot Quality Improvement Project," Journal of the American Medical Directors Association, DOI:10.1016/j.jamda.2009.07.001 (2009).  Abstract available at
[13] Kathleen Lourde, "Physicians Moving In; Life Care Centers of America hires full-time, facility-based physicians to reduce rehospitalizations," Provider (Feb. 2012),
[14] J.S. Kayser-Jones, et al., “Factors Contributing to the Hospitalization of Nursing Home Residents,” The Gerontologist (1989).



1.  Basic Requirements to Qualify For Medicare Home Health Coverage:  42 U.S.C. 1395f

•         Beneficiary must require intermittent skilled nursing, or skilled PT or ST

•  OT to continue coverage

•         Beneficiary must be “confined to home” (“Homebound”)

•         Home Health care must be ordered by a physician

•         Under a written plan of care

•         Beneficiary must have a face-to-face “encounter” with a physician, or certain non-physician provider, who certifies need for care and homebound status

2.  Homebound Defined:  42 U.S.C. §1395n(a)(F)

Beneficiary must require the assistance of an individual or supportive device to leave home; or

•         Contraindicated to leave home due to medical condition(s)

•         Requires a “considerable and taxing effort” to leave home

•         Non-medical absences from home are infrequent or of short duration

3.  Intermittent Skilled Nursing Services

Intermittent means:

•         Less than 7 days per week; or

•         7 days per week for 21 days or less, with extensions if the need for daily care has a finite and predictable end-point

•         No more than 28-35 hours per week combined nursing and aide services

4.  Face-to-Face Requirement

•         Affordable Care Act (ACA) §6407, Pub. Law No. 111-148 (March 23, 2010).

      42 CFR §424.22(a)(1)(v).

Effective date delayed from January 1 until April 1, 2011. 72 Fed. Reg. 70372-70486 (Nov. 17, 2010)

•         Face-to-face encounter must be performed by the certifying physician or by a nurse practitioner, or a clinical nurse specialist who is working in collaboration with the physician, or a physician assistant under the supervision of the physician, including a physician who cared for the patient in the hospital or skilled nursing facility

•         The face-to-face encounter must occur no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care by including the date of the encounter

•         The occurrence of the face-to-face encounter must be certified

5.      Who Can Perform the Face-to-Face Encounter?

•         Medicare-enrolled physicians who are also the certifying physician

•         The following physicians are allowed to perform the face-to-face encounter and inform the certifying physician:

•         Physicians (Medicare-enrolled or otherwise) who cared for the patient in an acute or post-acute facility during a recent acute or post-acute stay and have privileges at the facility

•         Because residents (Medicare-enrolled or otherwise) do not have privileges at acute or post-acute facilities, if they are performing the encounter and informing the certifying physician, they must inform the certifying physician under the supervision of their teaching physician who must have such privileges.

•         Non Physicians Providers (NPPs)  allowed to perform the face-to-face encounter:

•         Nurse practitioners or clinical nurse specialists working in collaboration with the certifying physician in accordance with State law

•         Certified nurse-midwives under the supervision of the certifying physician, as authorized by State law

•         Physician assistants under the supervision of the certifying physician. 

•         NPPs are subject to the same financial restrictions with the home health agency as the certifying physician.


6.  Resources

•     Revised Physician Guidance on Home Health Certification, Including Update re

Face-to-Face (May 7, 2012): Includes a “Med Learn” Article and a set of CMS-developed “Q&As”

Medlearn article:

CMS’ Q&As:                                      Network-MLN/MLNMattersArticles/Downloads/SE1219.pdf.

•         Further background material about the home health Face-to-Face requirement see:







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