Medicare Needs to Pay for Some of Hospitals’ Discharge Delays, AHA Says

Patients’ average length-of-stay at U.S. hospitals is increasing, jumping 19.2% across the country for patients this year compared to 2019 levels, according to a report released Tuesday by the American Hospital Association. The increase is even greater for patients who are being discharged to post-acute care providers — their average length of stay rose by nearly 24%.

The report showed that hospitals are having a difficult time discharging patients in a timely manner. This is often because there are no available spots for patients who need to be transferred to outpatient facilities, such as centers for skilled nursing or behavioral health.

“Without anywhere safe to discharge these patients, hospitals are left to care for these patients longer than is medically necessary, resulting in added expenses to the hospital and less beds available to meet patient demand, and creating patient bottlenecks,” said Bharath Krishnamurthy, AHA’s director of policy and health analytics. “Also, the data show that patients, on average, are now sicker and more complex to treat compared to pre-pandemic levels which requires some patients to stay in the hospital longer.”

To remedy the increased costs that hospitals are burdened with as a result of this issue, Medicare should establish a temporary per diem payment for cases in which a patient is ready to leave the hospital but is unable to be discharged appropriately, Krishnamurthy declared.

He pointed out that Medicare doesn’t pay hospitals based on the number of days a patient stays in the hospital, but rather pays a fixed amount for each patient based on their illness.

“For example, in an acute care hospital, Medicare pays a predetermined amount based on diagnosis-related groups,” Krishnamurthy said. “Therefore, hospitals bear the burden of added costs associated with the additional days that patients are waiting to be discharged to their next level of care. Given the current workforce challenges, these delays have increased dramatically.”

Under the temporary Medicare per diem payment model that Krishnamurthy has proposed, the hospital would need to demonstrate that they made multiple attempts to contact providers at the next level of care. It would also need to document the reason these providers are not able to admit the patient. This would then trigger a payment, which would “be determined based on per diem methodologies that already exist in the Medicare program,” Krishnamurthy said.

Hospitals are clamoring for these types of interventions from the federal government as providers across the country continue to face extreme financial pressure. Hospitals’ expenses are expected to rise by $135 billion this year, according to Kaufman Hall. The consulting firm also predicted that 68% of hospitals will end the year operating at a financial loss.

“Ensuring that hospitals remain financially stable for the near term means that targeted support is critically needed now to ease the dramatic financial pressures faced by hospitals as a result of these discharge delays,” Krishnamurthy said.

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