Financial and Work-flow Benefits of Reducing Avoidable Hospitalizations of Nursing Home Residents

Objectives: 1) Explain the financial benefit of potential revenue recapture (PRR) for non-billable days due to hospitalizations of nursing home (NH) residents using a six-year longitudinal analysis of 11 of 16 NHs participating in the Missouri Quality Initiative (MOQI); and 2) Discuss the work-flow benefits of early detection of changes in health status using qualitative data from all MOQI homes. Design: A CMS funded demonstration project with full-time advanced practice registered nurses (APRN) and operations support team focused on reducing avoidable hospitalizations for long stay NH residents (2012–2020). Setting and Participants: Setting was a sample of 11 of 16 US NHs participating in the CMS project. The NHs ranged in size between 121 and 321 beds located in urban and rural areas in one midwestern geographic region. Methods: Financial and occupancy data were analyzed using descriptive methods. Data are readily available from most NH financial systems and include information about short and long stay residents to calculate non-billable days due to hospitalizations. Average hospital transfer rates per 1000 resident days were used. Qualitative data collected in MOQI informed the work-flow benefits analysis. Results: There was over $2.6 million in actual revenue recapture due to hospitalization of long stay residents in the 11 participating NHs during five years, 2015–2019, with 2014 as baseline; savings to payers was more than $31 million during those same years. The PRR for both short and long stay residents combined totaled $32.5 million for six years (2014–2019); for each NH this ranged from $590,000 to over $5 million. On average, an additional $500,000 of revenue each year per 200 beds could have been recaptured by further reducing hospitalizations. Workflow improved for nurses and nursing assistants using INTERACT and focusing on early detection of health changes. Conclusions: Reducing avoidable hospitalizations reduces costs to payers and increases revenue by substantially recapturing revenue lost each day of hospitalization. Implications: Focusing nursing staff on early illness recognition and management of condition changes within NHs has benefits for residents as the stress of hospital transfer and resulting functional decline is avoided. Nurses and nursing assistants benefit from workflow improvements by focusing on early illness detection, managing most condition changes within NHs. NHs benefit financially from increased revenue by reducing empty bed days.