Medicare Skilled Nursing Facility Use and Spending Before and After Introduction of the Public Health Emergency Waiver During the COVID-19 Pandemic

Abstract

In response to the COVID-19 pandemic, Medicare introduced a public health emergency (PHE) waiver in March 2020, removing a 3-day hospitalization requirement before fee-for-service beneficiaries could receive skilled nursing facility (SNF) care benefits. To assess whether there were changes in SNF episode volume and Medicare spending on SNF care before and during the PHE among long-term care (LTC) residents and other Medicare beneficiaries. This retrospective cohort study used Medicare fee-for-service claims and the Minimum Data Set for Medicare beneficiaries who were reimbursed for SNF care episodes from January 2018 to September 2021 in US SNFs. The prepandemic period (January 2018-February 2020) vs the PHE period (March 2020-September 2021). The main outcomes were SNF episode volume, characteristics, and costs. Episodes were defined as standard (with a preceding 3-day hospitalization) or waiver (with other or no acute care use). Skilled nursing facility care was provided to 4 299 863 Medicare fee-for-service beneficiaries. Medicare beneficiaries had on average 130 400 monthly SNF episodes in the prepandemic period (mean [SD] age of beneficiaries, 78.9 [11.0] years; 59% female) and 108 575 monthly episodes in the PHE period (mean [SD] age of beneficiaries, 79.0 [11.1] years; 59% female). All waiver episodes increased from 6% to 32%, and waiver episodes without preceding acute care increased from 3% to 18% (from 4% to 49% among LTC residents). Skilled nursing facility episodes provided for LTC residents increased by 77% (from 15 538 to 27 537 monthly episodes), primarily due to waiver episodes provided for residents with COVID-19 in 2020 and early 2021 (62% of waiver episodes without preceding acute care). Skilled nursing facilities in the top quartile of waiver episodes were more often for-profit (80% vs 68%) and had lower quality ratings (mean [SD] overall star rating, 2.7 [1.4] vs 3.2 [1.4]; mean [SD] staffing star rating, 2.5 [1.1] vs 3.0 [1.2]) compared with SNFs in the other quartiles. Monthly Medicare spending on SNF care was $2.1 billion before the pandemic and $2.0 billion during the PHE. For LTC residents, monthly SNF spending increased from $301 million to $585 million while spending on hospitalizations remained relatively stable. This cohort study found that the PHE waiver for SNF care was associated with a marked increase in the prevalence of SNF episodes without a preceding hospitalization, especially in the first year of the COVID-19 pandemic. The waiver was used primarily among certain types of facilities and for LTC residents with COVID-19. Although the effect of the waiver cannot be differentiated from that of the pandemic, overall SNF care costs did not increase substantially; for LTC residents, the waiver was applied primarily for COVID-19 care, suggesting the waiver's successful implementation.