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Hospital Discharges to Home Health Rebounding, But SNF Volumes Lag

Summary

New Avalere Health analysis of Medicare fee-for-service (FFS) claims data reveals large decreases in skilled nursing facility (SNF) and home health care use following the widespread decline in inpatient hospitalizations amid the response to the COVID-19 pandemic. Avalere’s analysis further suggests that as inpatient procedures resume in some areas, the volume of inpatient hospital discharges to home health is starting to rebound, whereas the volume of discharges to SNF remains below 2019 levels.

Discharges to Post-Acute Care Decline Amid COVID-19 Crisis

Recent Avalere analysis shows that as inpatient hospital volume fell in response to the COVID-19 pandemic, discharges to SNF and home health experienced a similar decline. Specifically, Avalere’s analysis evaluated the relationship between lower hospital volumes and discharge to SNF and home health among Medicare FFS beneficiaries month over month for January–July 2019 and January–July 2020.

“In the early months of the COVID-19 outbreak in the US, we saw a substantial decrease in hospital discharges to both skilled nursing facilities and home health agencies,” said Heather Flynn, Consultant at Avalere. “Hospital discharges are steadily moving back to pre-pandemic levels, but our analysis points to an uneven ‘return to normal’ across care settings.”

The study revealed a stark decline in inpatient hospital discharges and discharges to both SNF and home health beginning in February 2020 (Figure 1). The analysis further indicated that the skilled nursing industry has experienced a more drastic and lasting decline in patient volume relative to total hospital volume and discharges to home health (where rebounds were observed beginning in May). Of note, discharges to home health experienced a year-over-year increase in June 2020, at 4.6% greater discharge volume when compared to June 2019, while discharges to SNF remained notably below pre-pandemic levels at a 25.4% decrease in year-over-year discharges.

The uneven return to use of skilled nursing and home health following inpatient hospitalization may be a consequence of the differential impact of COVID-19 in institutional versus community settings. As states aim to curb the spread of COVID-19 in institutional settings, patients may be more likely to be discharged home with home health or without post-acute care. The observed rebound in volume of discharges to home health suggests the potential to surpass pre-pandemic levels as the rebound in inpatient hospital volumes continues.

Figure 1. Year-Over-Year Percentage Change in Total Inpatient Hospital Discharges, Discharges to Skilled Nursing, and Discharges to Home Health, January–July 2019 and 2020
Figure 1. Year-Over-Year Percentage Change in Total Inpatient Hospital Discharges, Discharges to Skilled Nursing, and Discharges to Home Health, January–July 2019 and 2020

Post-Acute Care Volume Rebound Expected to Continue as Other Healthcare Services Return

Avalere experts expect post-acute volumes to continue to rebound as elective surgeries and primary care services that refer into post-acute care continue to reopen. However, given continued surges in COVID-19 cases in different areas of the country and the potential for ongoing COVID-19 impact, it is conceivable that volumes will continue to fluctuate, and some post-acute providers may not experience a full return in volume for the remainder of 2020 and into 2021. In the near team, lower than expected volume will put pressure on providers’ financial health. In the longer term, changes in care delivery broadly as a consequence of COVID-19 may influence how post-acute care is utilized following hospital discharge. Further examination of care trends by geography can help determine the severity of COVID-19 impacts, identify potential shifts in patient characteristics by care setting, and inform provider planning for 2021.

This dramatic decrease in patient volume comes at a time when many post-acute providers are still adapting to new Medicare payment policies. For SNFs, the Patient Driven Payment Model was introduced in October 2019, while home health shifted to the Patient Driven Groupings Model in January 2020.

“Although volumes appear to be on the rebound, the potential for additional COVID-19 surges as we enter the fall and winter could cause another rupture in the trendlines,” said Fred Bentley, Managing Director at Avalere. “We’re working closely with our post-acute and long-term care clients to evaluate their growth trajectory under different scenarios. It’s an entirely new set of factors to consider, and organizations need to adapt quickly.”

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Methodology

Avalere used Inovalon provider-sourced clearinghouse data to examine the discharge destination recorded on inpatient hospital claims for Medicare FFS beneficiaries. The provider clearinghouse data are comprise submitted, pre-adjudicated claims and represents approximately 5%–7% of the total Medicare FFS volume nationally on average. Results of the analysis are valid as of September 18, 2020. Volume may be impacted by potential lags in provider claim submissions.

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