When You Have a Hammer,
Everything Looks Like a Nail:
Medicaid Bed-hold Policy and
Medicare SNF Re-hospitalizations
David C. Grabowski, Harvard
Zhanlian Feng, Brown
Orna Intrator, Brown
Vincent Mor, Brown
Funded by: Robert Wood Johnson HCFO; P01 AG27296 (PI: Mor); R01 AG20557(PI: Mor); R01
AG23622 (PI: Mor); NIA R01 AG30079 (PI: Grabowski);
Data Use Agreement: #12432
Background
• NH market consists of two distinct patient
populations
– Chronically ill, long-stay residents, mainly financed by
Medicaid
– Post-acute, short-stay residents mainly financed by
Medicare
• Although there is specialization, majority of
Medicare (87%) residents are cared for
alongside Medicaid recipients (and vice versa)
Commonality in NH Care?
• There may be care “spillovers” across
Medicaid and Medicare NH residents
due to:
– Federal laws prohibiting discrimination by
payer type
– Economies of joint production
– Cost shifting
– Professional norms
Previous NH Literature
•
•
•
•
•
Using 1983 Texas Medicaid cost report data, McKay (1989) found
that the mix of Medicaid and private-pay residents did not affect a
facility’s marginal, average or total costs
Troyer (2004) found similar mortality across Medicaid and privatepayers within facilities
Grabowski, Gruber, Angelelli (2008) found 12 QMs to be relatively
common within facilities and within persons following spend-down
Konetzka et al. (2006a; 2006b) found that Medicare SNF PPS
affected QMs for long-stay residents
No empirical work to date on Medicaid policy and Medicare
outcomes
State Medicaid Policy
• State Medicaid programs have much discretion
in setting payment methods and rates
• Large literature showing Medicaid payment
policies matter for Medicaid quality
– Bed-hold policies pay NHs to hold empty bed while
Medicaid recipient is hospitalized
• Good news: promote continuity of care (Intrator et al., 2009)
• Bad news: presence of bed-hold policy associated with 36%
higher odds of hospitalization among long-stay (~Medicaid)
residents (Intrator et al., 2007)
• Does Medicaid bed-hold matter for short-stay
SNF re-hospitalizations?
Data and Cohort
• Minimum Data Set (MDS) to identify first-time
admissions over the period 2000 thru 2005
(N=3,307,263 in 15,506 facilities)
• Facility data from CMS Online Survey
Certification and Reporting (OSCAR) system.
• Medicare claims of all re-hospitalizations within
30 days of discharge
• Medicaid payment data from surveys of state
Medicaid office (Grabowski et al 2004; 2007)
General Empirical Approach
Yijt = β1BEDHOLDjt + γXijt + ηj + νt + εijt
Where:
Yijt is 30-day re-hospitalization for person i in SNF j at time t
BED_HOLDjt is coded using two different schemes
Xijt is a vector of person, NH level and policy control variables
ηj = facility fixed effects
t = quarter fixed effects
εijt is a randomly distributed error term
Coding State Bed-hold Policies
• Scheme I: Dichotomous
• 1=Policy in place, 0=Policy not in place
• Scheme II: Equivalent Reimbursement
Days (ERD)
• ERD = (% Rate) * (Annualized max # days)
Methods
• Estimated using linear probability model
• Clustered standard errors by facility
Unadjusted 30-day re-hospitalization rate, by
state bed-hold policy (Y/N)
30-Day Re-hospitalization Results
Bed-Hold
ERD
Other covariates
Facility FE
Quarter fixed effects
N
Model 1
0.0028+
Model 2
---
---
0.0002**
Y
Y
Y
3,307,263
Y
Y
Y
3,307,263
** p<.01, * p<.05, + p<.10
Magnitude of Estimates
• Using the bed-hold “dummy” specification, the
introduction of a bed hold increases Medicare rehospitalizations by 1.5% of average, which represents…
– ~10,000 hospitalizations over 2000-2005 period at a total cost of
$84 million
• Using the ERD specification, one SD (21-day) increase
in ERD raises Medicare re-hospitalizations by 2.2% of
average, which represents…
– ~15,000 hospitalizations over 2000-2005 period at a total cost of
$124 million
Summary of Results
• Across both specifications, results suggest
modest relationship between bed-hold and
re-hospitalizations
• Supports the idea that Medicare NH
outcomes are related to Medicaid NH
policies
Implications
• There are benefits to bed-hold in terms of
continuity of care (Intrator et al., 2009)
• However, the increased risk of hospitalization
outweigh these benefits
– Direct risks to long-stayers (Intrator et al., 2007)
– Indirect risks to short-stayers (this paper)
• Bed-hold is a lose-lose-lose for beneficiary,
Medicare, Medicaid
– Only potential winners are providers
Implications (cont.)
• There are often externalities to Medicaid/Medicare policy
decisions
• Medicare and Medicaid rarely consider welfare of other
program’s beneficiaries
– Even though beneficiaries are often dually eligible!
• There would be efficiency gains if both programs would
internalize these costs and benefits as they pertain to the
other program
– Collaboration of States & Feds
• Medicare-only solutions like bundling won’t solve this issue.