In the years immediately following the introduction of prospective payment systems (PPS) for skilled nursing facilities (SNFs), large numbers of hospital-based SNFs closed. During the same time period, long-term care hospitals (LTCHs) expanded rapidly, especially in certain areas of the country. Some of the increase in LTCH services was provided to medically complex beneficiaries who previously might have been treated in SNFs. Because LTCH payments are typically much higher than SNF payments, this trend might well represent an increase in Medicare spending with little or no corresponding benefit to patients.
Between 1997 and 2007, both the number of hospital-based SNFs and the number of beds declined by over 50%; the number of LTCHs more than doubled. The supply of LTCH beds increased more rapidly in cities that lost hospital-based SNFs than in cities that did not. The analysis of PAC episodes found sharp declines in medically complex patients admitted to hospital-based SNFs (from 26% in 1997 to 9% in 2006). In communities that experienced a loss of hospital-based SNF, admissions of medically complex patients to LTCH increased in cities that expanded LTCH. In cities without a LTCH, medically complex care shifted to freestanding SNFs.
Report Title: Substitutability Across Institutional Post-Acute Care Settings: 1998-2006 http://aspe.hhs.gov/daltcp/reports/2009/instPAC.htm
Agency Sponsor: OASPE-ODALTCP, Office of Disability, Aging, and Long-Term Care Policy
Federal Contact: Susan Polniaszek, 202-690-6443
Performer: Mathematica Policy Research
Record ID: 9343 (Report issued June 25, 2010)