First, I want to clarify something about a term used by Medicare for healthcare providers. Value-based purchasing, or VBP, can sound like a good idea unless you realize that it’s actually the purchaser getting the value, along with the Medicare program, and not the provider or patient. It would be less popular but more accurate for Medicare to call it “You’re Spending Too Much” instead.
On Oct. 1, 2016, Medicare started to provide a new type of data for skilled nursing facilities, more commonly called SNFs.
Medicare began providing data for SNF patients readmitted to acute-care hospitals at that time. The readmissions included both patients readmitted directly from the SNF and patients that had gone home or to other healthcare providers after leaving the SNF and then returned to the hospital.
The new data could be considered helpful, but it had an ominous undertone.
The data is being collected in order to compute penalties for SNFs that have too many patients readmitted to the hospital.
Patients who are readmitted to acute-care hospitals are very expensive. What Medicare is trying to say is that because the patient was readmitted after treatment at the SNF, Medicare feels that the SNF did something wrong that eventually caused the readmission. In other words, Medicare clearly believes it did not get good “value” for the service it paid for.
To make this determination, Medicare came up with a measurement for SNFs: the SNF 30-Day All-Cause Readmission Measure. It has some exclusions. You do not have to count a readmission if:
· The patient was treated at the acute hospital for cancer before coming to the SNF.
· The patient did not have Medicare Part A for the 12-month period before the hospital discharge to the SNF.
· The patient went to another SNF within the 30-day period after discharge.
· There was more than one day from the day the patient was discharged from the acute hospital and admitted to the SNF.
· The patient left the SNF against medical advice.
· The principal diagnosis in the acute hospital was for rehabilitation, fitting of prosthetics, or adjustment of devices.
· The hospitalization was for pregnancy (very unlikely).
Like many of Medicare’s other cost-cutting measures, Medicare is using the “frog in a pot” method to reduce public outcry. Data collected for 2017 will be used to compute penalties starting Oct. 1, 2018.
For those not aware of the “frog in a pot” analogy, let me explain. A frog dropped into a pot of boiling water will jump out. A frog placed in a pot of cool water slowly heated to boiling will let itself be turned into a frog legs dinner.
Since SNFs do not face an immediate penalty, they are tending to ignore the data collection or complain about the regulations.
As VBP becomes more and more ingrained in payment system, issues related to VBP also will become compliance issues. If an unusually high number of patients are being readmitted to an acute-care hospital after a SNF stay, did that stay really meet the requirements of care as spelled out by Medicare?
What Can You Do?
SNFs can download listings of patients that were readmitted to an acute-care hospital after discharge from a Medicare-secure website. Once they have the data, they can:
· Appeal patients that should have been excluded based on the exceptions listed above.
· Compare the number of readmissions to the SNFs around them and see whether they are doing better or worse than their peers.
· Perform root cause analysis of the readmissions. Is it a particular hospital, physician, or referral partner driving the problems?
A Silver Lining
Every patient in a SNF that is directly readmitted to an acute-care hospital costs the SNF in both direct cost and lost revenue. Reducing readmissions makes you money. Reducing readmissions also makes your SNF more attractive to reffering hospitals facing their own readmission penalties and issues. Make it a win-win situation and use the data to improve your dialogue with your referral sources.
Here’s the uncomfortable truth: many hospitals and state Medicaid plans, under pressure from HR1 data analysis needs, are paying eye-watering markups to for-profit CPA and
As discussed last week, payments to Medicare Advantage (MA) plans are adjusted to account for expected healthcare resource consumption by enrollees. Higher risk scores increase
Please log in to your account to comment on this article.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY26 IPPS, including new ICD-10-CM/PCS codes, CCs/MCCs, and MS-DRGs, plus insights, analysis and answers to your questions from two of the country’s most respected subject matter experts.
Get clear, practical answers to Medicare’s most confusing regulations. Join Dr. Ronald Hirsch as he breaks down real-world compliance challenges and shares guidance your team can apply right away.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.
Learn how to navigate the proposed elimination of the Inpatient-Only list. Gain strategies to assess admission status, avoid denials, protect compliance, and address impacts across Medicare and non-Medicare payors. Essential insights for hospitals.
Prepare for the 2025 CMS IPPS Final Rule with ICD10monitor’s IPPSPalooza! Click HERE to learn more
Get 15% OFF on all educational webcasts at ICD10monitor with code JULYFOURTH24 until July 4, 2024—start learning today!
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
