Office of the Vice President for Global Communications

Tuesday, September 8, 2009

New nursing home reimbursement system reflects changing
patient population

The classification of nursing home patients for Medicare reimbursement will change significantly for the first time in about 10 years, under proposed new rules developed by a team co-led by a researcher from the School of Public Health (SPH).

One reason an accurate classification system is so important is because it provides incentives for nursing homes to accept more expensive patients, says Brant Fries, a professor at SPH who led the data analysis for the new proposed rules.

For instance, nursing homes are housing more patients with AIDS, severe mental illness and traumatic brain injury than they did in years past, and that should be reflected in the reimbursement system, says Fries, who also is a research professor in the Institute of Gerontology.

While government payment rates adjust annually, the actual patient classification system hasn’t changed substantially since the late 1990s, Fries says. Researchers looked at 204 nursing homes and conducted time-and-motion studies for each type of staff caring for different types of patients and devised a cost burden.

It’s tough to quantify the impact of the new proposed rules, Fries says, because each nursing home’s costs are different depending on the patient composition.