The COVID-19 pandemic will impose unprecedented stresses on our Nation’s hospitals, whose capacity falls well short of the projected demand for beds. As one option to expand capacity, public health officials should consider the possible contribution of post-acute providers – e.g., specialty hospitals and nursing homes – to provide a safe institutional alternative for certain non-infectious patients that would otherwise take up a scarce hospital bed.

Even as we clear hospitals of elective surgery patients to expand capacity, hospitals will still face demand for other, non-virus-related healthcare emergencies and needs. Much of this demand will come from already-fragile older adults at risk for falls and other infections.

Fortunately, there are over 28,000 post-acute healthcare providers who can help create a path to increasing hospital capacity to care for COVID-19 patients. While fragmented, the U.S. has a robust system of “post-acute care providers,” who, in normal times, create capacity and reduce costs in short-term inpatient hospital settings by handling a range of medical challenges that arise over a longer period of time.

In this national health emergency, these post-acute providers can relieve hospital capacity pressures. To do so, the federal government must continue to relax several regulatory barriers.

Post-Acute Care Types and Regulatory Barriers

These providers are distributed across four types:

  1. Long-term Acute Care Hospitals (LTACHs) (378),
  2. Inpatient Rehabilitation Facilities (IRFs) (1,110),
  3. Skilled Nursing Facilities (SNFs) (16,652), and
  4. Home Health Agencies (HHAs) (10,180).

Each of these care settings has its own set of capabilities and specially created system of calculating payments. To fend off overuse of these settings and overpayment for care, the Medicare program has created an elaborate series of regulatory “speed bumps” to limit the types of patients each provider is able to serve and the types of services that are eligible for payment. These regulatory limitations – which are important in normal times – prevent post-acute providers from treating “non-traditional” patients and providing “non-traditional” services.

The Centers for Medicare & Medicaid Services (CMS) has begun to alleviate some of these pressures. For example, LTACHs are permitted to exclude patient stays from the average 25-day length of stay requirements when the admission or discharge occurred to meet emergency demands and SNFs are permitted to waive 3-day stay requirements for individuals impacted by COVID-19. This new flexibility for providers is critical but can be expanded further.

Expanding Hospital Capacity

Our Nation’s hospitals and health systems need full and unfettered access to re-direct non-infectious patients to specialty post-acute hospital settings (LTACHs and IRFs), especially, and also to rely on resources and services provided by SNFs and HHAs. Leveraging these providers will free up hospital capacity and divert non-COVID-19 patients from what will increasingly be a dangerous emergency room and inpatient environment.

To assure that payment follows the patient, CMS and health plans must broadly amend their payment rules. While CMS has started to expand regulatory waivers to facilitate hospital transfers to lower acuity settings, emergency amendment of payment rules is required to provide clarity to hospitals and post-acute providers. As payment rules are relaxed, the flexibility must be communicated clearly and swiftly to providers.

Identifying Ventilator Options

In some areas, depending on how the virus spreads, we may need to call on LTACHs and certain SNF providers to further expand capacity by caring for COVID-19 patients. ATI Advisory analyzed Medicare claims and identified roughly 170 SNFs across the country that may be able to care for very high acuity patients. We also identified 378 LTACHs, each of which has ventilators and support staffing (see map from ATI Advisory).

Taken together, these broader regulatory flexibilities and full use of the delivery system will be essential to curb the growth and impacts of COVID-19.

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