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OIG to CMS: Add hospitalization rates to nursing home quality ratings and surveys

December 12, 2013
by Alan C. Horowitz, RN, JD
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One out of every four Medicare nursing home residents was hospitalized in FY 2011, according to a recent study by the Health and Human Services Office of the Inspector General (OIG).1 According to OIG’s study, more than 825,000, or 24.8 percent of Medicare residents were hospitalized during FY 2011, costing Medicare $14.3 billion. On average, Medicare spent $11,255 every time a nursing home resident was hospitalized. That amount is about 33 percent higher than the average cost of hospitalizations for all Medicare beneficiaries. As a result of the rate of hospitalizations and associated costs, providers can expect the Centers for Medicare and Medicaid Services (CMS) to scrutinize this aspect of long-term care even more closely.

In addition to examining the rate of hospitalizations and related costs, OIG also looked at the specific medical conditions triggering hospitalizations; the extent to which the hospitalization rates varied according to the type of nursing facility making the hospital transfer; and whether the hospitalization rates correlated to specific nursing home characteristics, such as a facility’s rating on the CMS Five-Star Quality Rating System.

OIG found that among the hospitalizations, 15 primary diagnosis categories accounted for more than 60 percent of all resident hospitalizations. Topping the list of diagnoses are septicemia (13.4 percent), pneumonia (7 percent), congestive heart failure (5.8 percent) and urinary tract infections (5.3 percent). Those four categories alone accounted for more than 31 percent of the hospitalizations.

A nursing home’s annual resident hospitalization rate varied according to four discrete factors: 1) the facility’s location, 2) its size, 3) its CMS Five-Star rating, and 4) the category of ownership. While 1,059 nursing facilities experienced annual hospitalization rates greater than 40 percent, the average nursing home had an annual hospitalization rate of 25 percent, according to OIG. Arkansas, Louisiana, Mississippi and Oklahoma had the highest annual hospitalization rates, with Louisiana’s rate of 38.3 percent being 14 percent higher than the national average.

CMS’ Five-Star Quality Rating System rates facilities in four separate areas: 1) health inspections (i.e., surveys), 2) staffing, 3) quality, and 4) overall. OIG found that facilities that rated one through three stars in health inspections, staffing and overall experienced a higher annual hospitalization rate than those facilities rating four and five stars. The largest difference in hospitalization rates correlated with the staffing metric. Interestingly, OIG found that facilities rated one, two and three stars in the quality metric had the same hospitalization rate as those facilities rated four and five stars for quality.



Alan C. Horowitz

Partner at Arnall Golden Gregory

Alan C. Horowitz

Alan C. Horowitz, Esq., is a partner at...