Post-acute care healthcare services aim to facilitate patients’ functional recovery and return to the community, most frequently after acute hospitalization. With all corners of the globe experiencing growth in elderly populations, post-acute care represents not only a significant driver of healthcare costs, but also an opportunity to improve efficiency by delivering the right care, in the right setting, at the right time. In the U.S., annual Medicare fee-for-service spending on post-acute care services is roughly $60 billion,1 with about 40% of Medicare beneficiaries receiving post-acute care services after hospital discharge.2
Effectively understanding and managing the post-acute care continuum is integral to improving clinical and financial outcomes for patients, providers, primary insurers, and reinsurers. This article will discuss the importance of care transitions, integrating acute and post-acute care, the differences between various post-acute care settings, and the impact of post-acute care on claims management.
One of the more common transitions in care (when a patient moves from one setting to another) occurs when a patient is discharged from the hospital. Such transitions in care represent critical moments for patients and the healthcare system as a whole. The potential risks are significant and include adverse clinical events, inappropriate treatment, patient frustration, readmissions, and increased costs, among others.
Put another way, care transitions, and post-acute care services more broadly, directly impact all three components of the Triple Aim: population health, care experience, and cost.
Integrating Acute and Post-Acute Care
Historically, patients were discharged with little coordination between the hospital they came from and the receiving post-acute care facility.3 This has changed over time, though, as provider reimbursement has evolved to include newer and alternative methodologies, such as readmission penalties, bundled payments, and shared-savings agreements. As a result, significant opportunities exist to concurrently improve the quality and efficiency of care delivered through effective integration of acute and post-acute care.
With some of the risk-sharing methodologies mentioned above, providers are incentivized to avoid sending patients to more costly post-acute care settings that they don’t need. At the same time, however, providers may be penalized for readmissions. Succeeding within such reimbursement constructs requires the hospital to carefully consider the most clinically appropriate and cost-effective setting for patients. Without an integrated discharge planning process that accounts for the above complexities, desired clinical and financial outcomes may fall out of reach.
Types of Post-Acute Care Providers
Some of the more frequently utilized post-acute care providers, along with a few of their unique characteristics, are described below.
Skilled Nursing Facilities
- Best suited for patients that require skilled nursing services but are unable to tolerate three hours of therapy per day
- Most frequently provide short-term care; however, some facilities provide long-term custodial care
- Care team typically includes nursing, social work, therapists (PT, OT, SLP), physicians, and ancillary clinical services (e.g., behavioral health, podiatry, pharmacy, radiology, etc.)
- Represent roughly half of Medicare’s total spend on post-acute care4
Inpatient Rehabilitation Facilities
- Patient must be able to tolerate three hours of therapy per day
- Clinical needs should require multiple therapies (e.g., PT, OT, SLP)
- Frequently seen conditions include stroke, spinal cord injury, amputation, major multiple trauma, and brain injury
Long-Term Acute Care Hospitals
- Serves patients with complex medical needs (e.g., ventilator management, intravenous antibiotics, complex wounds, etc.)
- Usually higher level of acuity than skilled nursing, but not necessarily requiring hospital level care
- Represent the most expensive post-acute care setting in the U.S.5
Home Health Agencies
- Intermittent healthcare services, including PT, nursing, wound care, speech, nutrition, OT, etc.
- Frequently used when patient is homebound
- Ordered by physician
- Most frequently used post-acute care setting in the U.S.6
While typically smaller from a market share perspective, other post-acute care services include hospice and palliative care, infusion therapy, and respiratory therapy.
Post-Acute Care Market Dynamics
With an aging population and increased prevalence of chronic diseases (including, but not limited to, neurologic, oncologic, and behavioral health conditions), it’s no surprise that the demand for post-acute care services is anticipated to continue growing rapidly. At the same time, however, healthcare labor shortages and changing reimbursement methodologies have created headwinds for post-acute care market expansion.
How this will play out in the future, and which specific post-acute care providers may ultimately benefit from, or be harmed by, these dynamics remain to be seen. One thing is certain, though: post-acute care providers will need to demonstrate their value, in the form of clinical quality, cost effectiveness, and user satisfaction, to patients, referring providers, and insurers in order to be successful in the future.
Effective Claims Management
To effectively manage post-acute quality of care, cost, and member satisfaction, payers must work closely not only with patients, but their providers and caregivers as well. Robust care coordination and discharge planning serve as cornerstones of length of stay management, without which clinical and financial goals are frequently unachievable.
Claims professionals should inquire about potential barriers to discharge early and on an ongoing basis. Additionally, they should refer individuals with comorbid conditions that lead to longer lengths of stay and higher readmission rates (e.g., behavioral health, chronic pain, etc.) to appropriate case management programs.
Ultimately, care transitions, which are part and parcel of post-acute care, present tremendous risks and opportunities for all stakeholders. Healthcare payers and providers must successfully identify, manage, and capitalize on these risks and opportunities in order to succeed in an increasingly value-based system.
- MedPAC (Medicare Payment Advisory Commission), “July 2021 Data Book: Health Care Spending and the Medicare Program,” (2021), https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/data-book/july2021_medpac_databook_sec.pdf.
- “A Unified Medicare Payment System For Post-Acute Care Is Feasible", Health Affairs Blog, September 28, 2016, https://www.healthaffairs.org/content/forefront/unified-medicare-payment-system-post-acute-care-feasible.
- King, BJ et al. The consequences of poor communication during transitions from hospital to skilled nursing facility: a qualitative study. J Am Geriatr Soc. 2013 Jul;61(7):1095‐102, https://pubmed.ncbi.nlm.nih.gov/23731003.
- Id. at note 1.
- Makam AN, Nguyen OK, Miller ME, Shah SJ, Kapinos KA, Halm EA. Comparative effectiveness of long-term acute care hospital versus skilled nursing facility transfer. BMC Health Serv Res. 2020 Nov 11;20(1):1032, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7656509.
- Makam AN, Grabowski DC. Policy in Clinical Practice: Choosing Post-Acute Care in the New Decade. J Hosp Med. 2021 Mar;16(3):171‑174, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7929615.