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Nursing Homes May Face Readmission Penalties Similar to Hospitals

In an effort to promote quality care and reduce expenses, the Affordable Care Act mandated payment reductions for hospitals with high rates of readmissions. Now it appears that nursing homes may also be held accountable for hospital readmissions.

The U.S. Department of Health and Human Services (HHS) 2014 budget proposal includes a package of Medicare legislative proposals that could save $371.0 billion over ten years. One recommendation included in the proposal would impose payment reductions to skilled nursing facilities for preventable hospital readmissions.

The HHS cites analysis by the Medicare Payment Advisory Commission which indicates that nearly 14 percent of individuals on Medicare discharged from a hospital to a skilled nursing setting are readmitted to the hospital for conditions that could potentially have been avoided. The HHS 2014 budget proposal recommends reducing payments by up to three percent for skilled nursing facilities that are determined to have high rates of preventable hospital readmissions. The proposed penalties would take effect in 2017, with an estimated $2.2 billion in savings over 10 years.

View the Department of Health and Human Services 2014 budget proposal.

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