Impact of the Medicare Catastrophic Coverage Act on Nursing Homes

Abstract

The Medicare Catastrophic Coverage Act (MCCA) of 1988 altered eligibility and coverage for skilled nursing facility (SNF) care and changed Medicaid eligibility rules for nursing‐home residents. Detailed data on the residents of a for‐profit nursing‐home chain and Medicare claims for a 1 percent sample of beneficiaries were used to examine the impact of the MCCA on nursing homes. The case mix of nursing‐home admissions was scrutinized, specifically for length of stay, discharge disposition, rate of hospitalization, and changes in payer source. Findings revealed that, although the proportion of Medicare‐financed nursing‐home care increased, as did the case‐mix severity of residents during the MCCA period, there was no corollary reduction in hospital use by nursing‐home residents.

Waiving The Three-Day Rule: Admissions And Length-Of-Stay At Hospitals And Skilled Nursing Facilities Did Not Increase

“…Our results differ from studies of the effects of the Medicare Catastrophic Coverage Act, 10 and there are two potential reasons for the difference. First, in contrast to the traditional Medicare program, Medicare Advantage plans may deploy active care management and utilization review strategies to decrease enrollees' cycling between a skilled nursing facility and the hospital and to reduce the duration of hospital and skilled nursing facility stays.…”

“…Such conversions were allowed during the year that the Medicare Catastrophic Coverage Act was in effect but are prohibited under traditional Medicare's three-day qualifying stay policy. 10 …”

“…9 In contrast, under the ill-fated Medicare Catastrophic Coverage Act of 1988, which eliminated the three-day hospital stay requirement for one year until the act was repealed, relatively small reductions in the use of hospital care were accompanied by substantial increases in skilled nursing facility days. 10–12 More recent studies are lacking.…”

Changes in Hospitalization Associated with Introducing the Resident Assessment Instrument

“…The 1‐year (1989) it was in effect, Medicare eligible nursing home residents who became clinically eligible for Medicare skilled nursing services could receive them without first having to pass through an acute hospital. Analyses of the hospitalization rate among a national sample of Medicare eligible nursing home residents revealed only a small reduction in the rate of hospitalization between 1988 and 1989, controlling for episode duration 34 …”

Postacute Care Following Stroke or Hip Fracture

“…Non-Medicare episodes with a gap of fewer than 60 days were joined to represent one episode of care. We have used this methodology in previous studies (Berg, Mor, & Calore, 1995;Laliberte et al, 1997).…”