Magazine article Drug Topics

Both Hospitals, Nursing Homes Whipsawed by Payment System

Magazine article Drug Topics

Both Hospitals, Nursing Homes Whipsawed by Payment System

Article excerpt

The Balanced Budget Act (BBA) of 1997 has turned into a major pain for hospitals, skilled nursing facilities (SNFs), and their patients. The problem: BBA imposed a capitated prospective payment system (PPS) on Medicare payments to SNFs. But PPS largely ignores the cost of drugs and other non-nursing care for the country's 39 million elderly and disabled Medicare beneficaries. The result: SNFs are refusing to admit patients on expensive therapies, and with no place to discharge patients, hospitals are seeing length of stay-along with cost of care--skyrocket.

"Patients being discharged with TPN (total parenteral nutrition) or tricky IV antibiotic therapies just aren't being admitted [to SNFs]," said Scott Whitmore, director of professional affairs for the Pharmacy Society of Wisconsin. "Longterm care facilities are saying they just don't have the staff or the resources to care for these patients. Under PPS, they don't."

Expensive drug therapy isn't the only reason SNFs are saying No. Occupational therapy, physical therapy, speech therapy, prosthetic devices, and mechanical aids such as ventilators were also left out of the formula used to calculate PPS reimbursements.

Medicare PPS payments are based on resource utilization group (RUG) classification, Whitmore continued. RUG classification is tied to the intensity of resource use, primarily nursing hours or therapy time. There is no direct allowance for differences between patients in terms of disease state, acuity, or underlying conditions. That means RUGs can't account for differences in drug therapy and the resulting cost of care, which are directly related to each patient's medical condition. The more acute the condition or the higher the projected cost of care, the more reluctant SNFs become to accept the patient.

"We're having difficulties placing patients into nursing homes, especially patients on high-cost drug therapies, ' said Bruce Scott, v p.-pharmacy operations for the Allina Health System in Minneapolis. "I don't believe that most hospitals were prepared for the impact of PPS."

The American Hospital Association worries that PPS will reverse the steady downward trend in hospital length of stay. In 1993, said AHA spokeswoman Alicia Mitchell, the average length of stay (LOS) was 6.3 days. In 1997, the latest year for which complete data are available, the average LOS was 5.3 days and continuing to trend downward. …

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