Azar pushes for payment model change for skilled nursing facilities

A proposed change to skilled nursing facility payments would improve quality of care and incentivize SNFs to finally transition to value-based care, Health and Human Services Secretary Alex Azar said Tuesday.

Speaking at the meeting for the American Health Care Association and National Center for Assisted Living in Washington, Azar said the Medicare proposal for the SNF Patient-Driven Payment Model (PDPM) would support the agency's value-based care efforts starting in fiscal 2019. The model is a type of value-based payment arrangement that would tie reimbursements to patient outcomes while also reducing reporting burdens.

It would also beef up quality metrics with four new data points for SNFs to report in the future. The proposal was first released in April. HHS is seeking feedback from providers.

Even so, Azar said the process of measuring and rewarding quality could be both complex and costly.

"We strive to make SNF quality assessments as simple as possible while still gathering the necessary meaningful data," Azar said. He also said one of the virtues of the PDPM program is an expected reduction in hours spent on paperwork over time.  

Azar acknowledged looming concerns about healthcare costs for an aging baby boomer population, saying it represents an opportunity for caregivers who provide services to the elderly. "It's much better to be running a nursing home these days in American than running a college or university," Azar said.

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He pointed to a report from Deloitte highlighting the divide between older baby boomers and younger members of the same generation. While the older baby boomers typically moved somewhere else and made major lifestyle changes as they aged, younger baby boomers expect to age in place, he said.

They also have more exposure to consumer-driven elements of the health system, more experience interacting with health IT and higher rates of chronic illnesses such as diabetes.

"All this means change is necessary," Azar said.