How Medicare Wastes $4.6 Billion A Year On Long-Term Care Hospitals

Mom falls and breaks her hip. Her injury is repaired at the local acute care hospital but she needs intensive rehab and post-surgical care. She could be sent home or to a skilled nursing facility (SNF) but instead she is discharged to a long-term care hospital (LTCH)—a facility that specializes in intensive post-acute services.

But a new study, published by the National Bureau of Economic Research, finds that in 2014, Medicare paid LTCHs three-times what it paid SNFs, or about $33,000 more, for each discharge. And there is no evidence, according to the research, that mortality is any lower than for nursing facility patients. Overall, according to the authors, Medicare could save $4.6 billion annually by reimbursing LTCHs like SNFs—with no harm to patients.

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