OIG Looks at Interrupted-stay for Long-term Hospital Care

June 5, 2014
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The U.S. Department of Health & Human Services Office of Inspector General (OIG) conducted a study in 2010 and 2011, which showed Medicare paid $10.3 billion to 449 long-term care hospitals (LTCHs) for services of nearly 254,000 beneficiaries. OIG took a closer look at the expenditure data for these services.

LTCHs are used to treat patients with complex medical conditions, and sometimes patients may leave treatment at an LTCH and return later. These services are costly, and to save money, Medicare counts the LTCH stay before and after an interruption as a single stay, rather than considering the second LTCH stay as a readmission (or two separate stays). After a certain number of days (fixed-day period), however, Medicare considers interrupted stay as a second stay and will pay accordingly. They also will pay for a second stay if the patient receives services from other facilities before returning to the LTC.

Data from LTCHs and other facilities between 2010 and 2011 identified that Medicare was making improper payments for these interrupted stays. Some areas vulnerable to improper payments, according to the OIG’s “Vulnerabilities in Medicare’s Interrupted-stay Policy for Long-term Care Hospitals,” were:

  • LTCHs had a high number of readmissions immediately after the fixed-day period and after multiple short intervening-facility stays.
  • LTCHs located in the same building or on the same campus as another provider (co-located LTCHs) had inappropriate payments, financial incentives to delay readmissions, and potential overpayments.
  • Concerns about whether financial incentives, rather than beneficiaries’ medical conditions are influencing LTCHs’ readmission decisions.

The OIG wants CMS to analyze whether financial incentives influence LTCHs’ readmission decisions and to take action regarding LTCHs exhibiting certain readmission patterns and against identified overpayments.

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