When 2% isn’t enough: GAO says Medicare should further cut Medicare payments to SNFs with high hospital readmissions

Skilled nursing facilities that continually have high hospital readmission rates and emergency room visits among residents could see a reduction in their Medicare payments if Congress moves forward with a recommendation made by the federal government’s top watchdog. 

The Government Accountability Office issued the recommendation in a report Monday that focused on improving SNF staffing. The report found SNFs with low registered nursing staffing levels generally had higher rates of critical incidents than facilities with more RNs on staff.

In 2018, about 23.6% of SNF admissions in the lowest RN staffing group resulted in a hospital readmission within 30 days of the SNF admission date. That’s compared to a 21.3% readmission rate among SNFs in high RN staffing group, according to GAO researchers.

The difference translated to about 2,265 more hospital readmissions, the agency found. 

“GAO estimated that in 2018 Medicare spent over $5 billion on critical incidents that CMS defines as potentially preventable — which are mostly about 377,000 hospital readmissions occurring within 30 days of the SNF admission,” the agency wrote. 

Current law also directs the Centers for Medicare & Medicaid Services to make reductions of up to 2% to certain SNF payments to incentivize them to improve care, but does not address additional reductions. 

“Experts have noted that payment incentives under current law may not be sufficient to motivate SNFs to improve their staffing, which in turn could lead to reductions in critical incidents,” the GAO said. “Without stronger payment incentives, Medicare is unlikely to reduce the billions in spending on potentially preventable critical incidents or the patient harm that can occur from them.” 

The report also found that while 99% met the federal requirement to have at least one RN on site at least 8 hours per day, fewer (47%) met CMS’ measures when adjusted for case-mix, which calculates staffing levels based on the severity of residents’ medical needs. 

Additional recommendations made by the GAO called for CMS to report report weekend decreases in RN and total nurse staffing levels on Care Compare; report minimum RN and total nurse staffing thresholds below which SNF residents are at increased risk of quality problems; and assess the feasibility of incorporating the staffing data into the Five-Star System.