Lowering payments following acute hospitalization requires vigilant monitoring

Although Medicare payment reforms mandated in the Affordable Care Act for postacute care have great potential to lower costs without harming patients, policy makers will need to be vigilant to ensure that these cuts do not result in one-time savings that revert to rising costs, according to a study published in Health Affairs.

“We expect that the Affordable Care Act’s dramatic cuts in payments to providers for postacute care will lead to decreased utilization and lower spending,” David Grabowski, PhD, professor of health care policy at Harvard Medical School, stated in a press release. “Our work suggests that those changes will not have a dramatic effect on outcomes, based on analysis of patient mortality and hospital readmissions under previous cuts.”

Grabowski and colleagues studied the effects of payment reforms from 1997, 1998 and 2002 and analyzed Medicare claims data to measure the impact of reforms on patient mortality and hospital readmissions for postacute care recipients.

Overall, study results showed that, immediately after implementation, each of these previous payment reforms caused a steep downtick in postacute care costs. However, as reimbursements were renegotiated and providers changed the ways they managed patient care, expenses quickly resumed their upward trend.

“Policy makers will need to be vigilant in monitoring the impact of the Affordable Care Act reforms and be prepared to amend policies as necessary to ensure that the reforms exert persistent controls on sending without compromising the delivery of patient-appropriate postacute services,” the researchers concluded.

“If it works the way it’s meant to, patients will use only those services that are the most efficient,” Grabowski said. “The overall goal of these experiments is to find ways to improve overall care and make services more cost effective. In any system this complex, there are always going to be tradeoffs, so monitoring results closely to minimize any issues will be critical.”

For more information:

Grabowski DC, Huckfeldt PJ, Sood N, et al. Medicare postacute care payment reforms have potential to improve efficiency of care, but may need changes to cut costs. Health Aff. 2012;31:1941-1950.

Disclosure: Grabowski had no relevant financial disclosures.

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