National Health Policy Forum

Issue Brief

No. 847
Date: DECEMBER 7, 2012
Title: Medicare's Post-Acute Care Payment: A Review of the Issues and Policy Proposals
Author: Kathryn Linehan
Summary: Medicare spending on post-acute care provided by skilled nursing facility providers, home health providers, inpatient rehabilitation facility providers, and long-term care hospitals has grown rapidly in the past several years. The Medicare Payment Advisory Commission and others have noted several long-standing problems with the payment systems for post-acute care and have suggested refinements to Medicare’s post-acute care payment systems that are intended to encourage the delivery of appropriate care in the right setting for a patient’s condition. The Patient Protection and Affordable Care Act of 2010 contains several provisions that affect the Medicare program’s post-acute care payment systems and also includes broader payment reforms, such as bundled payment models. This issue brief describes Medicare’s payment systems for post-acute care providers, evidence of problems that have been identified with the payment systems, and policies that have been proposed or enacted to remedy those problems.