The COVID-19 pandemic caused an increase in the utilization of skilled nursing facilities (SNFs) following the waiver of rules governing reimbursement for Medicare beneficiaries. The waiver allowed patients to receive care in SNFs without a preceding hospitalization, leading to an increase in waiver episodes. Long-term care residents saw a significant increase in SNF episodes, mainly due to COVID-19 infections, and overall spending on SNF care remained constant during the pandemic.
The COVID-19 pandemic has been a challenging period for healthcare systems globally, including the United States. To cope with the pandemic’s challenges, the Centers for Medicare and Medicaid Services (CMS) implemented waivers of rules governing reimbursement for Medicare beneficiaries. Following one of the waivers, Medicare fee-for-service plans are no longer required to fund skilled nursing facility (SNF) stays that were preceded by a three-day hospital stay. This waiver aimed to reduce hospitalizations, increase SNF capacity, and limit exposure to the virus in hospitals. This study investigates how the PHE waiver impacted SNF utilization, care patterns, and spending.
Researchers used fee-for-service SNF and inpatient claim files from January 1, 2017, to December 31, 2021, and the Medicare Master Beneficiary Summary File to determine how the PHE waiver impacted SNF utilization, care patterns, and spending. Episodes with a preceding three-day hospitalization were defined as “standard,” while episodes with other or no acute care use were referred to as “waiver episodes.”
Between January 2018 and September 2021, almost 4.3 million Medicare beneficiaries had an SNF episode. There were 3.39 million SNF episodes before the pandemic and 2 million episodes during the pandemic. The share of SNF episodes provided for long-term care (LTC) residents increased from 12 percent to 25 percent during the PHE.
The share of waiver episodes without a preceding three-day hospitalization increased from 6 percent before the PHE to 32 percent during the PHE. Waiver episodes with other acute care use grew from 3 percent to 14 percent, while waiver episodes without any acute care increased from 3 percent to 18 percent. The number of monthly SNF episodes among LTC residents increased by 77 percent during the PHE, mainly due to waiver episodes without any preceding acute care. Overall, 62 percent of these episodes were provided for patients with COVID-19. Among beneficiaries not in LTC, the average number of monthly episodes fell by 29 percent.
Overall spending on SNF care episodes did not change significantly during the pandemic. The average monthly Medicare Part A spending on SNF episodes was $2.1 billion before the PHE and $2 billion during the PHE. However, monthly spending on SNF episodes among LTC residents increased from $301 million to $585 million, indicating a 94 percent increase during the PHE. Despite this substantial increase, monthly spending on SNF care for LTC residents amounted to 45 percent of the spending on hospitalizations before the PHE. Monthly spending on all SNF care was equal to 88 percent of spending on hospitalizations during the PHE.
The study found that the PHE waiver increased SNF utilization and a change in care patterns. The waiver allowed for more patients to receive care in an SNF without a preceding hospitalization, leading to an increase in waiver episodes. There was also an increase in SNF episodes provided for long-term care residents, likely due to COVID-19 infections. Despite the changes in care patterns, overall spending on SNF care episodes did not change significantly during the pandemic.