The Centers for Medicare & Medicaid Services (CMS) announced it will test whether a new payment model for nursing facilities and practitioners will further reduce avoidable hospitalizations, lower combined Medicare and Medicaid spending, and improve the quality of care received by nursing facility residents.

This next phase of the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents seeks to reduce avoidable hospitalizations among beneficiaries eligible for Medicare and/or Medicaid by providing new payments to practitioners for engagement in multidisciplinary care planning activities, according to an announcement from the agency. In addition, the participating skilled nursing facilities will receive payment to provide additional treatment for common medical conditions that often lead to avoidable hospitalizations.

Through this model, CMS would facilitate practitioner engagement when a nursing facility resident needs higher-intensity interventions due to an acute change in condition. Medicare currently pays physicians less for a comprehensive assessment in a skilled nursing facility than in a hospital but this model would equalize the payments between the sites of care. 

Participating skilled nursing facilities will be expected to enhance their staff training and purchase new equipment to improve their capacity to provide intravenous therapy and cardiac monitoring.

“This Initiative has the potential to improve the care for the most frail, most vulnerable Medicare-Medicaid enrollees—long-stay residents of nursing facilities,” said Tim Engelhardt, director of the Medicare-Medicaid Coordination Office. “Smarter spending can improve the quality of on-site care in nursing facilities and the assessment and management of conditions that too often now lead to unnecessary and costly hospitalizations.”

This new four-year payment phase of the Initiative, slated to begin fall 2016, will be implemented through cooperative agreements with the following six providers:

• Alabama Quality Assurance Foundation – Alabama
• HealthInsight of Nevada – Nevada and Colorado
• Indiana University – Indiana
• The Curators of the University of Missouri – Missouri 
• The Greater New York Hospital Foundation, Inc. – New York
• UPMC Community Provider Services – Pennsylvania