Medicare's nursing-home benefit: variations in interpretation

Area of Science:

• Health Services Research
• Public Health Policy
• Healthcare Administration

Background:

• Medicare beneficiaries' use of skilled-nursing facilities (SNFs) shows considerable state-level variation.
• This variation may stem from differing administrative interpretations of Medicare coverage rules.

Purpose of the Study:

• To investigate whether variations in SNF care days reflect differences in claims reviewer discretion.
• To identify the extent of variability in Medicare coverage decisions among reviewers.

Main Methods:

• Developed nine hypothetical patient cases designed to test reviewer discretion.
• Presented cases via telephone to claims reviewers at fiscal intermediaries and professional standards review organizations.
• Analyzed reviewer decisions and justifications for coverage.

Main Results:

• Significant differences observed in reviewers' decisions to cover or deny patient care.
• Reviewer reasoning for coverage decisions also varied markedly.
• Consensus among 18 reviewers was reached in only two of the nine hypothetical cases.

Conclusions:

• The observed variation in SNF coverage is attributed to the complexity of Medicare rules and decentralized administration.
• Recommendations include more centralized review and oversight by Medicare's central office.
• Enhanced reviewer training focused on complex cases is suggested to improve judgment consistency.