Ask the legal expert: How will healthcare reform affect sub-acute providers?

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Attorney John Durso, Ungaretti & Harris LLP
Attorney John Durso, Ungaretti & Harris LLP

Q: How do you think healthcare reform will affect sub-acute care providers?

A: On June 29, the Sixth Circuit Court of Appeals upheld the constitutionality of the Patient Protection and Accountable Care Act. Although the Sixth Circuit is only the first appellate court to rule on the constitutionality of the act, and the U.S. Supreme Court is widely expected to decide the issue in the coming years, the federal government's victory is nonetheless a sign that the act is likely to survive in some form. Therefore, it is imperative that sub-acute care providers continue to adjust to the new requirements and reimbursement models created under the act. As reimbursement shrinks, hospitals will seek more cost-effective ways to treat elderly patients. Hospitals are likely to increase their affiliations with sub-acute care facilities, which include skilled nursing care, and place patients sooner with those providers in an effort to decrease costs.  

For example, under the proposed rules for Accountable Care Organizations (“ACOs”), payment for the treatment of a patient's hospitalization will be bundled; that is, one payment to the physicians, hospital, and sub-acute provider for the three days before hospitalization, the hospitalization stay, and 30 days of sub-acute care.

Medicare also will make certain incentive payments for good patient results. Hospitals will be the driving force in establishing ACOs that encompass physicians and providers, but sub-acute care facilities will want the referrals of patients from the hospital.

Consequently, sub-acute care providers should make sure they have the space, equipment and expertise to handle greater numbers of patient transfers from hospitals and take on an even greater responsibility for the healthcare outcomes of those patients.

Please send your legal questions to John Durso at ltcnews@mcknights.com.

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