Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

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Healthcare Costs Rise With Regional Post-Acute Care Variations

Rural hospitals tend to use more skilled nursing facility versus home health care services compared to their urban counterparts, leading to higher healthcare costs, a study stated.

Regional post-acute care utilization

Source: Thinkstock

- Despite receiving similar post-acute care services overall, rural hospital patients tend to undergo more skilled nursing facility treatment than home health care versus urban hospital patients, contributing to higher healthcare costs, according to recent research in the American Journal of Accountable Care.

With increased skilled nursing facility use, healthcare costs rise. The average cost of a skilled nursing facility stay is $11,357 versus just $2,720 for a home health care episode, the study stated, citing a March 2015 Medicare Payment Advisory Commission (MedPAC) report.

Colorado-based researchers examined the 2012 National Inpatient Sample from the Health Care Cost and Utilization Project to determine how post-acute care utilization and Medicare spending varies by geographic region.

The data revealed that post-acute care utilization was similar among patients discharged from rural versus urban hospitals. Rural hospital patients were only slightly less likely to receive post-acute care with an odds ratio of 0.95.

In the study, an odds ratio less than 1 indicated that patients were less likely to receive post-acute care, while ratios greater than 1 signified a higher chance of utilizing post-acute care services.

READ MORE: Developing Post-Acute Networks for APM Reimbursement Success

Instead, post-acute care utilization patterns varied more based on factors other than whether a hospital resided in a nonmetropolitan area. The factor with the greatest association with post-acute care utilization was the index hospital length of stay with an odds ratio of 2.72.

Researchers also found associations between post-acute care utilization and patient age (odds ratio of 1.57), sex (odds ratio of 1.22 for females), and race and ethnicity (odds ratio of 0.84 for Native Americans, 0.80 for Hispanics, and 0.80 for Asians and Pacific Islanders).

In addition, they noted that whether a hospital admission was elective generated a stronger association with post-acute care use with an odds ratio of 1.43.

While rural and urban hospital patients faced similar post-acute care levels despite their geographic differences, the study uncovered significant utilization differences within diagnostic categories.

Notably, rural hospital patients underwent more overall post-acute care services for acute cerebrovascular accidents with an odds ratio of 1.11.

READ MORE: MedPAC Targets Post-Acute Care for Healthcare Payment Reform

Although they were slightly less likely to receive post-acute care services for sepsis with an odds ratio of 0.92, hip fractures with a ratio of 0.82, and particularly elective joint arthroplasties with a ratio of 0.59.

Even within the diagnostic categories, the data showed significant geographic post-acute care utilization variations with the type of services received. For example, rural hospital patients underwent substantially more skilled nursing care facility care and less home health care for 6 of the top 10 most commonly treated diagnoses.

Researchers explained that the regional difference in what type of post-acute care is used may be caused by market forces in rural areas.

“Although there are several possible etiologies for this difference, including differences in premorbid physical function—an important variable we were unable to evaluate in this analysis—we speculated this difference may be due to decreased access to or availability of HHC in rural areas,” wrote researchers.

There may be a significant number of rural patients who would qualify for and benefit from home health care services, but the lack of agencies in the area prevents them from receiving the necessary care.

READ MORE: Preparing the Healthcare Revenue Cycle for Value-Based Care

The tendency for rural hospitals to use more skilled nursing facility services may also signify a “lack of consensus on the use of PAC [post-acute care], particularly in borderline cases where patients might be expected to regain function with enough time and therapy either inside or outside the hospital.”

However, some patients with diagnoses, such as elective joint arthroplasty and acute hip fracture, at rural hospitals experienced the opposite pattern, receiving less skilled nursing facility and more home health care services.

In particular, elective joint arthroplasties and post-acute care utilization significantly contributed to higher healthcare costs. Researchers pointed out that almost 1 million hospitalizations occur every year for the elective procedure with an average cost per hospital stay and 30-day post-acute care episode totaling about $18,225, the Health Care Cost and Utilization Project stated.

As a result, the procedure alone with an accompanying post-acute care episode totaled about $15.7 billion annually.

Understanding how post-acute care utilization varies by geographic region and impacts healthcare costs should help stakeholders develop more comprehensive guidelines for appropriate post-acute care use, researchers concluded.

Stakeholders should further evaluate how specific post-acute care use, such as skilling nursing facility or home health care services, affect patient outcomes.

For example, researchers mentioned that different post-acute care use impacts patient outcomes for common conditions that precede a post-acute care episode, including stroke and hip replacement. Patient outcomes may be worse for critical access hospital patients because the hospital tends to use less home health versus skilled nursing facility services.

The study’s findings may also affect bundled payment models that impose financial responsibility on providers for the post-discharge period.

“Given this difference, evaluating PAC [post-acute care] outcomes in these populations is a critical next step,” the study stated. “It is especially important now, as Medicare’s expansion of Bundled Payment for Care Improvement, which encompasses the acute hospitalization and 90 days of post-discharge care (including PAC), expanded to 67 metropolitan areas in April 2016 using elective lower extremity joint replacement as the first targeted condition.”

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