Long-term care hospitals, or LTCHs, and the other three post-acute care settings have been central to our recovery from COVID-19. The pandemic has particularly highlighted the distinct clinical competencies of LTCHs. However, a study from the National Bureau of Economic Research that has gotten renewed attention lately makes the erroneous suggestion that shifting patients from LTCHs to skilled nursing facilities can save Medicare money without affecting patient care. 1

LTCHs focus on a patient population that is generally much sicker than patients in other settings, including skilled nursing facilities. An AHA analysis shows that the complexity of care for traditional short-term acute care hospital patients transferred to an LTCH is more than two-and-a-half times higher than that of patients transferred to a skilled nursing facility. Patients stayed almost twice as long in acute care hospitals before being discharged to LTCHs when compared with skilled nursing facilities, including, on average, more than four times as many days in intensive care units. Yet, unfortunately, the paper has no apples-to-apples comparison between LTCH and skilled nursing facility patient clinical complexity and their different resource needs.

The authors ignore new LTCH rules from 2016. These rules began to restrict traditional LTCH payments to the sickest LTCH patients. Since the paper was originally written in August 2018, updated in April 2019 and then again in February 2020, there was ample opportunity to capture this shift. Instead, the paper relies on unrelated data from 1998-2014 to claim that treating LTCH patients in skilled nursing facilities could lower spending without reducing clinical outcomes.  

The paper relies on old data. In doing so, it fails to account for the steady decline in LTCH patient volumes and payments, as reported in the Medicare Payment Advisory Commission’s (MedPAC) annual reports to Congress. MedPAC has reported that in 2015, LTCHs treated 131,129 patients, whereas in 2019, they treated just 91,147 patients. Also, aggregate spending by Medicare steadily declined in those years, with a drop from $5.3 billion in 2015 to $3.8 billion in 2019. 2 Lastly, the authors assert that Medicare spending on the sickest LTCH patients did not drop under the new dual-payment structure. But MedPAC reports that even for this subgroup of LTCH patients, Medicare spending was 5% lower in 2019 than it was in 2016.

Until these trends can be included in the analysis, the paper’s findings offer limited use for policymakers in guiding Medicare through the post-pandemic transition and beyond.

LTCHs’ focused COVID-19 response role highlights their value. In fact, during the winter surge in December 2020, 1 out of 2 LTCH patients was either being actively treated for or had contracted the virus in the past, according to AHA analysis. LTCHs’ clinical focus on treating the critically ill will continue to help hotspots and other communities by treating many of the sickest COVID cases and other highest-acuity patients. We owe it to them to recognize their current contributions when developing long-term policy.

1 Einav, Liran, A. Finkelstein and N. Mahoney, “Long-Term Care Hospitals: A Case Study in Waste,” University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2018-68, posted 27 August 2018, last revised 7 February 2020 (first published as NBER Working Paper No. w24946).
2 Medicare Payment Advisory Commission, “Report to the Congress: Medicare Payment Policy, March 2018, p. 306 and March 2021, p. 291.

Aaron Wesolowski is AHA’s vice president of policy research, analytics and strategy

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