In October, 2018, CMS will begin imposing value-based payment penalties on skilled nursing facilities (SNFs) that exhibit high hospital readmission rates, just as it also penalizes hospitals that have high readmission rates.

The hope is that the measure will further reduce costly, avoidable hospital readmissions; the initial rollout of payment penalties on acute care facilities resulted in a 1.6% drop in avoidable readmissions between 2011 and 2016.

“Nursing homes have been unintentionally rewarded by decades of colliding government payment policies, which gave both hospitals and nursing homes financial incentives for the transfers,” noted NPR’s Jordan Rau. “That has left the most vulnerable patients often ping-ponging between institutions, wreaking havoc with patients’ care.”

“Keeping patients out of hospitals,” Rau reported, “also requires frequent examinations and speedy laboratory tests — all of which add costs to nursing homes.”

Under new CMS guidelines, both sides of the equation will now face strong financial disincentives for providing low-quality care.

Hospitals, already subject to the penalties, are incentivized not to discharge patients too early, or to send them to nursing homes that realize poorer outcomes relative to peer providers. Likewise, SNFs will now be incentivized to staff appropriately and to provide more rigorous preventative care.

Get the full story and analysis here, from NPR.