Janet Adamy of the Wall Street Journal has written a fascinating article on the costs associated with patients who are eligible for Medicare and Medicaid:
When a Medicare patient goes from a hospital to a nursing home, Medicare pays the nursing home at an average rate of $422 a day for 100 days.
After that, if the patient is a dual eligible, the nursing home is paid by Medicaid. It reimburses at just $172 a day, on average.
The result is an incentive for the nursing home to send the patient back to the hospital, because if the patient later returns, the higher daily rate will start again.
That setup helps fuel many expensive but avoidable hospital readmissions each year, according to research commissioned by the Centers for Medicare and Medicaid Services.
And if you’re wondering why addressing this perverse incentive hasn’t been a higher legislative priority, it helps to remember that to do so would be to take on entrenched medical providers.