New Policy Paper Urges Super Committee to Evaluate Cost Efficiency of Nursing Facilities and Their Key Role in Health Care Cost Containment

Sep 23, 2011, 10:33 ET from Alliance for Quality Nursing Home Care

New Fall 2011 "Care Context" Policy Series Spotlights Value of Nursing Facility Sector in Care Continuum

WASHINGTON, Sept. 23, 2011 /PRNewswire-USNewswire/ -- As the Congressional Super Committee pursues deficit reduction this fall, the new September 2011 "Care Context" health policy series, released today by the Alliance for Quality Nursing Home Care with research and analytic support from Avalere Health, states, "Policymakers should consider nursing facilities' ability to treat patients with certain hospital diagnoses at a lower cost to Medicare than other post-acute care (PAC) providers. As a lower cost institutional setting, with the ability to provide high quality care to a broad range of patients, NFs are poised to be a critical part of Congressional and CMS efforts to reduce overall Medicare expenditures and reform healthcare delivery."

In describing how NFs "treat the majority of patients requiring post-hospital care," and noting "rehabilitation therapy promotes shorter lengths of stay and increases the likelihood of community discharge," the new Care Context also compares the mean Medicare PAC payment for the top five hospital conditions discharging to facility-based PAC with major severity of illness. The comparison finds NFs are the lowest cost setting vis-a-vis Long Term Care Hospitals (LTCHs) and Inpatient Rehabilitation Facilities (IRFs). Specifically, the data finds the following:

Mean Medicare Payment, 2009

MS-DRG, SOI Level 3




291: Heart Failure and Shock w/MCC




871: Septicemia or Severe Sepsis w/o MV 96+ hours w/MCC




633: Renal Failure w/CC




689: Kidney and Urinary Tract Infection w/MCC




193: Simple Pneumonia & Pleurisy w/MCC




(Source: Avalere Health analysis of 2009 Medicare 100 Percent Standard Analytic File (SAF) claims data base from CMS for SNFs, LTCHs, IRFs, HHAs and Inpatient Hospitals (See Figure 11, Page 10 of Care Context for actual chart)

Alan G. Rosenbloom, President of the Alliance, said the comparative cost analysis between settings contained in the new September 2011 Care Context underscores the need for policymakers to assess the details surrounding post-acute care costs, and the benefits of optimizing nursing facilities' contribution to new models of care, while ensuring the current system promotes high quality care and outcomes.

"America's nursing facilities already play a key role in the post-acute care continuum, and are poised to play a still greater role as Congress, President Obama and providers work collaboratively to better rationalize and improve the nation's Medicare post-acute payment system," stated Rosenbloom. "Our primary point of emphasis to the Super Committee, President Obama and the public at large is that nursing facilities are part of the solution to health care cost containment. Weakening the sector with an overwhelming barrage of regulatory and budgetary cuts – with yet more funding cuts contemplated -- is counterproductive and illogical."

To better understand NFs and their role in the post-acute care continuum, Avalere Health will host an hour-long audio conference on September 27th at 2pm EDT as experts discuss the evolving role of nursing facilities, changes in the patient population, care outcomes, and the impact of changes in reimbursement on nursing facility quality. Featured participants include Vince Mor, Ph.D., Florence Pirce Grant Professor of Community Health, Brown University; and R. Tamara Konetzka, Ph.D., Associate Professor, Health Services Research, University of Chicago.

To participate in this audio-conference please log on to the Avalere website at Registration is complimentary. For those who cannot join this call, you may be able to access an archived version by contacting Kim Thomas at 202-459-6265 or

SOURCE Alliance for Quality Nursing Home Care