The volume of hospital discharges to skilled nursing facilities is not likely to return to anything like pre-pandemic levels in the near future, said Fred Bentley, managing director of Avalere, a healthcare consulting firm.

Fred Bentley
Fred Bentley

“There’s a challenge ahead,” Bentley told McKnight’s Long-Term Care News. “It’s our expectation that these volumes start to return, but not any time soon. For some of those facilities for whom the relief funds are running out, they are going to have a cash crunch, no doubt about it.”   

A recent study released by Avalere found that skilled nursing experienced a more drastic and lasting decline in inpatient hospital discharges compared to home health during the pandemic. Discharges to home health experienced a year-over-year increase in June 2020, and at 4.6% greater discharge volume when compared to June 2019. Discharges to SNFs, however, remained notably below pre-pandemic levels at a 25.4% decrease in year-over-year discharges.

One reason for the disproportionate impact, according study authors, is the differential impact of COVID-19 in institutional versus community settings.

“As states aim to curb the spread of COVID-19 in institutional settings, patients may be more likely to be discharged home with home health or without post-acute care,” researchers found.

“It’s definitely a hit,” Bentley pointed out. “These are Medicare fee-for-service Part A patients. This is [SNFs’] lifeblood. They depend on that business to cross-subsidize Medicaid business, which is by far the largest part of their business. They typically run at some loss in some states worse than others. [They] count on the short-stay [business] to offset those losses.”

Pay-for-performance incentives

In addition to the likelihood that hospitals will continue to discharge patients more often to home settings, the government may persist in tying coronavirus provider payments to performance, Bentley said. 

He pointed to the $2 billion worth of COVID-19 relief funding that the Department of Health and Human Services is disbursing to nursing homes through an incentive-based payment program. HHS said last month it would use two outcomes to measure a provider’s performance to determine whether they qualify for the funding: coronavirus rates and mortality.

“I think that’s a harbinger of things to come, in terms of connecting payment to facilities to performance,” Bentley said.

This type of initiative is likely to take place even under a Biden administration, should candidate Joe Biden become president, Bentley noted. It’s a way to demonstrate that the federal government is “making an investment, that they are effectively managing COVID and keeping case volume and mortality down. It’s strings attached with the dollars.”

The move, while it may be perceived as unfair by those facilities that fail to keep out COVID-19 despite their best efforts, is a continued push toward value-based care, Bentley said.

“They want to create this value-based payment model and pay for performance,” he said.  

No ‘free money’

 Along these lines, Bentley also anticipates that COVID-19 is going to force states to think more creatively about how they use their dollars to promote the best outcomes for Medicaid beneficiaries.

“It ties in with ‘I don’t think this will be free money and no strings attached,’” he said. “There will be an expectation you will deliver value. In this era, that means you are going to protect patients.”