The Critical Role of Post-Acute Care in Addressing the COVID-19 Public Health Emergency

By Lane Koenig, PhD, Berna Demiralp, PhD, Elizabeth Hamlett, BS and Julia Sheriff, BM
March 22, 2021

Over the past year, the COVID-19 pandemic has ravaged the country and overwhelmed the U.S. healthcare system with overflowing intensive care units (ICUs) and overworked medical professionals. Although short-term acute care hospitals (STACHs) are the nation’s frontline in treating severe COVID-19 cases, the post-acute care (PAC) sector—home health agencies (HHAs), skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long term care hospitals (LTCHs)—has played an important supporting role. Early on in the pandemic, some advocated for an expanded role for LTCHs and SNFs to aid in the response to the pandemic, while others noted that limits in institutional PAC capacity would potentially require greater use of HHAs to address the pandemic. Now, a year into the public health emergency, an examination of Medicare claims data confirms the role that the PAC sector played during the initial months of the nation’s COVID-19 response.

Medicare Post-Acute Care Patterns Shifted Under COVID-19 Pandemic Relative to 2019

Medicare fee-for-service (FFS) claims data from the first wave of the pandemic (April 2020-June 2020) indicate that PAC utilization patterns shifted, in terms of the distribution of patients across PAC settings and patient mix. Despite an overall decrease in PAC volume, compared to the previous year, the percent of patients transferred from a STACH to a PAC setting increased in the second quarter of 2020. However, a smaller share of STACH patients was transferred to SNFs relative to 2019, while a significantly greater share was discharged with a home health referral. In addition, the transfer rate to LTCHs was almost 4 times higher for COVID-19 patients than non-COVID-19 patients in June 2020. While COVID-19 patients were also more likely to transfer to a SNF than non-COVID-19 patients (twice as likely in June 2020), the opposite is true for patients transferred to an IRF or HHA.

Between April and June 2020, Medicare Volume Was Down and Patient Complexity Was Up in PAC

  • Medicare PAC admissions from STACHs fell due to large reductions in hospitalizations. STACH discharges fell by 30.4% when comparing volume for 2019 Q2 to 2020 Q2. As a result, overall volume of hospitalized patients discharged to PAC providers was also down significantly (HHA: 18.2%; SNF: 42.1%; IRF: 20.7%; LTCH: 21.2%). Due to COVID-19, Medicare FFS cases that died in the STACH increased by 7.1% in 2020 Q2.
  • Average complexity, as measured by case mix index (CMI), for hospitalized patients discharged to a PAC setting increased. We measured patient complexity based on Medicare CMI, which is the average of the Medicare Severity Diagnosis Related Group payment weights at the STACH. Across all Medicare FFS discharges from STACHs, the CMI increased by 6.4% between 2019 Q2 and 2020 Q2. After excluding COVID-19 cases, we observed that CMI increased by 4.1%. We also observed higher case complexity for patients discharged to each of the PAC settings, ranging from a 2.3% increase for patients discharged to an IRF to 5.1% for cases discharged to an LTCH.
  • The percent of STACH discharges transferred to a SNF fell significantly; offset by increases in transfer rates to HHAs, IRFs, and LTCHs. In June 2020, hospitals discharged 15.6% of cases to a SNF as compared to 18.9% in June 2019. HHAs saw the biggest increase in transfer rates between June 2019 (18.4%) and June 2020 (22.4%). Although smaller on a percentage point basis, we also observed an increase in transfer rates to IRFs and LTCHs during the April to June 2020 period relative to 2019. For context, it is important to bear in mind that PAC is dominated by SNFs and HHAs, of which there were 15,114 and 11,356, respectively, in 2019; by comparison, there were only 371 LTCHs and 1,152 IRFs in operation in 2019. [1]

LTCHs and SNFs Shifted their Focus to COVID-19 Patients

The transfer rate of COVID-19 cases to LTCHs and SNFs was significantly higher than for non-COVID-19 cases. In June 2020, a Medicare beneficiary with COVID-19 was almost 4 times more likely to go to an LTCH than a non-COVID-19 patient. During the same period, COVID-19 patients were twice as likely to go to a SNF as non-COVID-19 patients. In contrast, COVID-19 patients were roughly half as likely to go to an IRF or HHA as non-COVID-19 patients. The large differential in likelihood of transferring to an LTCH between COVID-19 and non-COVID-19 patients demonstrates the significant role these specialty hospitals have played during the public health emergency.

Future Work Needed to Gain a Deeper Understanding of PAC Role in COVID-19 Pandemic

At the beginning of the pandemic, the Centers for Medicare & Medicaid Services (CMS) instituted a number of waivers for PAC providers that provided some needed flexibility in responding to the needs of their communities. While our findings should be considered preliminary because it is based on an early release of Medicare claims data, our findings suggest that the waivers had the intended effect of allowing PAC providers to address the pandemic more easily.

Once we get past the acute phase of the pandemic, there will undoubtedly be a thorough assessment of where the U.S. healthcare system succeeded and struggled, with identification of ways to improve the effectiveness and equity of our care delivery systems. That work should include an assessment of PAC. Understanding PAC utilization patterns during the public health emergency may help shed light on the roles of these different PAC providers in caring for Medicare beneficiaries and how those roles can be improved going forward.


[1] Medicare Payment Advisory Commission. A Data Book: Health Care Spending and the Medicare Program. July 2020. Chapter 8 accessed at http://medpac.gov/docs/default-source/data-book/july2020_databook_sec8_v2_sec.pdf?sfvrsn=0

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