Home Health Up, Skilled Nursing Facility Down in Updated CMS 2018 Projections
May 18, 2017 03:29 PM
The Centers for Medicare and Medicaid Services (CMS) expects a continued shift from institutional health care, such as skilled nursing facilities and inpatient hospitalization, to outpatient care, according to the Medicare Advantage (MA) Final Call Letter for 2018.
The MA Final Call Letter provides data on the projected Medicare spending and the new update is based on CMS’ most recent spending and utilization data. The shift away from institutionalization spending and toward outpatient care spending means a dip in Medicare Part A utilization and an increase in Medicare Part B utilization.
The drop in skilled nursing care spending for 2018 is particularly noticeable, with the CMS currently projecting a 10.6 percent decrease, from a per capita $594.31 previously down to $531.30. That 10.6 percent decline was the biggest among all service types for both Medicare Part A and Part B.
However, projected home health Part A spending is now projected to increase from per capital $128.29 to $131.65, a jump of 2.62 percent. This increase is very possibly due to a substitution of home health services at the expense of skilled nursing facility spending.
The decline in projected skilled nursing facility spending is probably due, in part, to increased use of long-term services and supports programs (LTSS). Medicaid is trying to move beneficiaries away from institutions and into their own communities. Consequently, there are fewer patients who live in nursing homes going to the hospital and then back to the nursing home, where they receive skilled nursing facility care payments from Medicare.
In addition, Accountable Care Organizations try to avoid the expense associated with skilled nursing facility care for their beneficiaries, instead preferring a move away from inpatient care to outpatient care.
There has been a gradual, but sustained drop in nursing home residents of about two percent per year, a trend NAHC applauds, as we know the vast majority of people prefer to age in place, in their own homes and communities.
The new CMS projections for Medicare Part B also include substantial spending reductions for durable medical equipment of 10.14 percent and carrier lab of 9.85 percent. Outpatient hospital spending is projected to increase 3.30 percent for Medicare Part B, while inpatient hospital spending for Medicare Part A is projected to drop 3.15 percent.
Home health agency spending under Medicare Part B is projected to remain basically unchanged.