Nursing homes face value-based payments

In another sign of healthcare moving more towards value-based payments, Kaiser Health News reported on Medicare awarding bonuses to nursing homes whose residents' readmission rates to hospitals are low and issuing penalties to nursing homes whose residents more frequently end up back in the hospital. While the actual percentages may seem small (1.6% bonuses and almost 2% penalties), the article notes that the differences can be meaningful given that nursing homes often operate on very slim margins.

The piece included one anecdote about one nursing home chain being disappointed with the penalties, noting that since most of the readmissions occurred after the residents left their facilities. If Medicare considered whether the residents had already left the nursing home, they would exacerbate an existing conflict of interest: an earlier return from the nursing home could mean more revenue for the nursing home at the expense of a less healthy patient. Instead, nursing homes now have an additional incentive to coordinate care to help the patients' transitions back to their own homes.