Recently, Nashville’s Leadership Health Care hosted several healthcare leaders to hear Tom Scully, general partner at private equity firm Welsh, Carson, Anderson & Stowe and chairman of naviHealth, on the state of the post-acute space and key reforms under way. naviHealth provides post-acute care management services to more than one million beneficiaries across the country through partnerships with health plans and health systems.

Scully highlighted the important role healthcare plays in the current political scene. From his perspective, he covered the pros and cons, the good and the bad of Obamacare, Medicaid expansion, King v. Burwelland how healthcare will influence the 2016 presidential election.  

More importantly, however, Scully dug into the need for reform in the post-acute space. Scully noted that post-acute care accounts for the highest spending growth in the U.S. healthcare system, but is also the least managed.  He’s not alone in this view.  According to MedPAC, Medicare’s payments to post-acute care providers totaled $59 billion in 2013, more than doubling since 2001.  The agency spends nearly as much on post-acute care and readmissions in the first 30 days after discharge as it does for the initial hospital admission. Not surprisingly, CMS is pushing for payment reform. Now that Congress has resolved the “Doc Fix” bill, attention has turned to reforming how Medicare pays post-acute care facilities for their services. In April, the House Energy and Commerce Committee’s health subcommittee held a hearing to consider options for improving Medicare post-acute care delivery while at the same time instituting payment reforms to encourage higher quality of care at lower cost and discourage practices designed to game the system for profit.

But pressure comes from all sides.  With CMS concentrating on payment reform, DOJ and OIG continue to focus on fraud, waste and abuse in the post-acute and long-term care space.  Again, it’s no surprise that these efforts follow the exponential increase in reimbursement for post-acute care.  DOJ and HHS-OIG have devoted a massive amount of resources to investigating and litigating cases in the Post-Acute area, like and have pushed hard to prosecute cases involving fraud, waste and abuse in the home health sector

It’s doubtful that the twin pressures of payment reform and increased enforcement efforts will end any time soon.  Post-acute providers should expect to face continued scrutiny and should pay close attention to developments in these areas.