CMS Testing Plan to Avoid Hospital Visits by Nursing Home Residents

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By Michael D. Williamson

March 24 — Reducing hospitalizations of nursing home residents is the goal of a CMS pilot project unveiled March 24.

An industry group for nursing homes, the American Health Care Association (AHCA), welcomes the pilot project, James Michel, the AHCA's senior director for Medicare, told Bloomberg BNA March 24.

The Centers for Medicare & Medicaid Services will test whether a new payment model for nursing facilities and practitioners will further reduce avoidable hospitalizations, cut combined Medicare and Medicaid spending and improve the quality of care received by nursing facility residents, an agency statement said.

Through this model, the CMS will encourage health-care practitioners to provide additional treatments for especially ill or frail nursing home residents.

Medicare currently pays physicians less for a comprehensive assessment at a skilled nursing facility than for the same assessment at a hospital, the statement said. However, the CMS said this model would equalize the payments between the sites of care.

Removing potential barriers to effective treatment within a skilled nursing facility can improve residents’ care experience and mitigate the need for disruptive and costly hospitalizations, according to the agency.

Starts This Fall

The pilot project is actually the next phase of an already existing program known as the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents.

A January report from the CMS showed the seven provider organizations involved with the program reduced avoidable hospitalizations among long-stay nursing home residents and lowered Medicare spending .

Specifically, the newly announced pilot project “seeks to reduce avoidable hospitalizations among beneficiaries eligible for Medicare and/or Medicaid by providing new payments to practitioners for engagement in multidisciplinary care planning activities,” the statement said. In addition, the CMS noted participating skilled nursing facilities will receive payment to provide additional treatment for common medical conditions that often lead to avoidable hospitalizations.

The initiative's next phase, which will test the increased treatment regimen and altered payment rates, is slated begin this fall, the CMS said. Programs taking place under the first phase of the initiative will continue throughout 2016, according to the statement.

Six Provider Participants

Six provider organizations will participate in the pilot project, each of which participated in the initiative's first phase. The participating providers are the Alabama Quality Assurance Foundation; HealthInsight of Nevada; Indiana University; the Curators of the University of Missouri; the Greater New York Hospital Foundation Inc.; and the University of Pittsburgh Medical Center Community Provider Services.

These six organizations will select up to 250 long-term care facilities to implement the pilot project, a program website said.

Catholic Health Initiatives/Alegent Creighton Health in Nebraska participated in the project's first phase, but isn't on the list of participating organizations for the pilot project.

The Medicare-Medicaid Coordination Office established the initiative, in collaboration with the Center for Medicare and Medicaid Innovation.


The AHCA is still reviewing the details of the pilot project, Michel told Bloomberg BNA. However, “we believe most skilled nursing providers would welcome the opportunity to test an alternative payment model that would allow them to play a more central role in the care of their residents,” he said.

Michel also cautioned against interpreting the initiative as a bundled payment program. The pilot project should test whether enhanced payments to skilled nursing centers will help to reduce avoidable hospital admissions of long-term care residents who develop one of six acute conditions, such as pneumonia, he told Bloomberg BNA.

The intent of the CMS with the initiative is for skilled nursing providers to use additional revenue to maintain appropriate staffing, equipment and technology necessary for caring for a higher-acuity population, according to Michel. Overall, the initiative “seems to recognize, better than the ongoing bundling demonstrations, the extremely valuable role post-acute care providers can play in preventing costly, unnecessary hospitalizations among the most vulnerable of Medicare and Medicaid beneficiaries,” he said.

The Association of American Medical Colleges (AAMC), an industry group for teaching hospitals, also welcomed the pilot project. It is difficult to be against something that seeks to reduce hospitalizations and enhance treatment options for nursing home residents, Ivy Baer, the AAMC's senior director of health care affairs and regulatory council, told Bloomberg BNA March 24.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Janey Cohen at

For More Information

Details on the agency initiative are at