Bundled payments significantly cut SNF lengths of stay and use, report shows

The average length of skilled nursing facility stay dropped 1.3 days for patients who underwent orthopedic surgery through the Bundled Payments for Care Improvement initiative, according to a new federal report.

The report, prepared for the Centers for Medicare & Medicaid Services by healthcare policy research firm the Lewin Group, is the second annual evaluation of the BCPI program's impact on care costs and quality.

Report authors found the decrease in skilled nursing stays to be significant when compared to the lengths of stay for beneficiaries discharged from non-BPCI hospitals, which “remained virtually unchanged.”

The overall use of institutional post-acute care services by orthopedic surgery patients in bundled payment models also dropped from 64% to 57% during the study period, a greater decline than beneficiaries in traditional payment models, researchers noted. A similar pattern was seen in the use of institutional post-acute care for cardiovascular surgery patients.

While those drops in usage and length of stay resulted in modest Medicare savings, having fewer bundled payment patients heading to post-acute care after hospital discharge could pose a problem for skilled nursing providers, the study's authors warned.

“Reducing SNF length of stay directly reduces SNF Medicare revenues, which could make this a difficult trade-off for SNF [episode-initiating providers],” the report reads. “They would need to calculate their potential financial rewards under BPCI for reducing length of stay in comparison to foregone daily Medicare payments.”

Overall, early results of the first two years of the BCPI initiative were “encouraging,”even though “there is more work to be done,” said CMS Principal Deputy Administrator and Chief Medical Officer Patrick Conway, M.D., in a blog post.

An additional study by the Lewin Group, focusing strictly on the outcomes of hip and knee replacements in the BCPI initiative, found the program has reduced Medicare costs but not produced significant changes to care quality. The findings were published Monday in the Journal of the American Medical Association.