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What is "Site Neutral Payment?"

Site Neutral Payment is the concept of paying the same amount for rehabilitation regardless of whether the patient is treated in an inpatient rehabilitation hospital or nursing home.

Problems with Site Neutral Payments for Rehabilitation

  • Vulnerable Medicare beneficiaries risk being diverted into a less intensive, less appropriate rehabilitation setting simply because it is less expensive.
  • The rationale is that the daily cost of care in the nursing home is lower than the hospital, and that the care is the same.  But this is not true. Inpatient rehabilitation facilities (IRFs) offer more intensive, coordinated treatment, better results, and fewer risks of adverse outcomes (see below).
  • Site neutral payments would result in patients who need intensive inpatient rehabilitation being diverted inappropriately to less intensive settings based solely on their diagnosis, despite their clinical needs. This is clearly a mistake, and could endanger vulnerable beneficiaries.

Nursing Homes and Rehabilitation Hospitals are NOT the Same

  • Rehabilitation hospitals and nursing homes are not the same and should not be treated as such by MedPAC, Congress or the Medicare program.
  • Rehabilitation hospitals must meet stringent criteria to be licensed as a hospital and follow specific regulations that govern the required intensity, multi-disciplinary therpaies, and coordination of rehabilitation services. Physicians must manage IRF care, and must be available 24-hours per day.
  • Conversely, there are few regulations that set standards for how or what rehabilitation is provided in nursing homes. Physicians and coordinated multi-disciplinary care are not available daily, 24-hours per day.
  • MedPAC acknowledges these differences, stating that rehabilitation hospitals have more extensive requirements regarding the amount of therapy and physician supervision of their patients.

IRFs v. SNFs – Significant Differences in Patient Outcomes

  • Patients treated in inpatient rehabilitation hospitals have better outcomes, go home earlier and live longer than similar patients treated in nursing homes, according to a 2014 study by Dobson DaVanzo & Associates, LLC.
  • Across all 13 conditions examined in this Study, including some of those being proposed for Site Neutral payments, patients treated in nursing homes have more emergency room visits, are readmitted to hospitals more often, and have an increased risk of death compared to clinically similar patients treated in rehabilitation hospitals.
  • This study demonstrates the risks of denying Medicare patients the IRF care they need.

What Should be Done?

  • All Medicare policies should ensure patients receive individualized assessments of their need for care, including for the intensive, coordinated rehabilitation provided only by IRFs.
  • Congress should ensure that MedPAC and Medicare policies do not override individualized, clinical judgment regarding where a patient should receive care.
  • Medicare policies should be evidence-based and use comparable data.
  • Post-acute reforms should not be implemented before the recently enacted "IMPACT Act," which, for the first time, will provide a chance to analyze comparable data on patient outcomes across different settings of post-acute care. Without comparable data, policy makers are left making decisions on payment reform based on cost alone, without the ability to truly consider patient care and outcomes

The Center for Medicare Advocacy is a member of the Coalition to Preserve Rehabilitation (CPR), a coalition of national consumer, clinician and membership organizations with the goal of preserving access to rehabilitation services. CPR advocates for policies that ensure access to rehabilitative care so that individuals with injuries, illnesses, disabilities, and chronic conditions may regain and/or maintain their maximum level of independent function.

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