Nursing Home Transfers and Mean Length of Stay in the Prospective Payment Era

Abstract

Under Medicare's Prospective Payment System (PPS), hospitals have incentives to discharge Medicare patients as quickly as medically feasible, but because of shortages of nursing home beds and differential long-term care arrangements, some hospitals may encounter difficulty placing patients in nursing homes, leading to hospital backup days. This study relied on Tobit and weighted least-squares analysis to examine the determinants of hospital mean length of stay and transfer rates to skilled and intermediate care homes for selected diagnosis-related groups (DRGs) with high levels of postacute service use. Hospitals in low bed supply areas were found to have proportionately fewer nursing home transfers and longer mean lengths of stay. Having swing beds or a long-term care unit led to speedier discharges and higher skilled nursing facility (SNF) transfers, especially for patients with hip or femur procedures or major joint and limb reattachment procedures (DRGs 209 and 210). The results suggest that Medicare should consider compensating hospitals for back-up days and that bundled payment experiments could reduce current inequities resulting from differential access to nursing home care.