Skilled Nursing Facility Participation in Medicare's Bundled Payments for Care Improvement Initiative: A Retrospective Study

Abstract

Objective: To investigate differences in facility characteristics, patient characteristics, and outcomes between skilled nursing facilities (SNFs) that participated in Medicare's voluntary Bundled Payments for Care Improvement (BPCI) initiative and nonparticipants, prior to BPCI.

Design: Retrospective, cross-sectional comparison of BPCI participants and nonparticipants.

Setting: SNFs.

Participants: All Medicare-certified SNFs (N=15,172) and their 2011-2012 episodes of care for chronic obstructive pulmonary disease, congestive heart failure, femur and hip/pelvis fracture, hip and femur procedures, lower extremity joint replacement, and pneumonia (N=873,739).

Interventions: Participation in a bundled payment program that included taking financial responsibility for care within a 90-day episode.

Main outcome measures: This study investigates the characteristics of bundled payment participants and their patient characteristics and outcomes relative to nonparticipants prior to BPCI, to understand the implications of a broader implementation of bundled payments.

Results: SNFs participating in BPCI were more likely to be in urban areas (80.8%-98.4% vs 69.5%) and belong to a chain or system (73.8%-85.5% vs 55%), and were less likely to be located in the south (13.1%-20.2% vs 35.4%). Quality performance was similar or higher in most cases for SNFs participating in BPCI relative to nonparticipants. In addition, BPCI participants admitted higher socioeconomic status patients with similar clinical characteristics. Initial SNF length of stay was shorter and hospital readmission rates were lower for BPCI patients compared to nonparticipant patients.

Conclusions: We found that SNFs participating in the second financial risk-bearing phase of BPCI represented a diversity of SNF types, regions, and levels of quality and the results may provide insight into a broader adoption of bundled payment for postacute providers.

Keywords: Healthcare reform; Medicare; Quality of healthcare; Rehabilitation.