Question: Medicare requires hospitals to include in their discharge plan a list of Home Health Agencies (“HHAs”) or SNFs that participate in the Medicare program and serve the geographic area in which the patient resides. Currently, we simply provide a list of all providers within a particular category. However, we have an ever-increasing need to be more aware of the quality outcomes of such providers, since readmission rates ultimately reflect poorly on us (at least in CMS’s eyes). Would we satisfy Medicare’s requirements if we continue to list all providers, but identify some of them as “preferred providers” based on their quality outcomes?
Answer: It appears that hospitals are not permitted to endorse certain post-hospital providers based on their quality of care. The relevant regulation states:
The hospital must include in the discharge plan a list of HHAs or SNFs that are available to the patient, that are participating in the Medicare program, and that serve the geographic area (as defined by the HHA) in which the patient resides, or in the case of a SNF, in the geographic area requested by the patient. HHAs must request to be listed by the hospital as available….
The hospital, as part of the discharge planning process, must inform the patient or the patient’s family of their freedom to choose among participating Medicare providers of posthospital care services and must, when possible, respect patient and family preferences when they are expressed. The hospital must not specify or otherwise limit the qualified providers that are available to the patient.
42 C.F.R. §482.43(c)(6) – (c)(7) (emphasis added).
In preamble comments in the Federal Register, CMS explained further:
[I]if a hospital chooses to develop its own list of HHAs or SNFs, the hospital would have the flexibility of designing the format of the list. However, the list should be utilized neither as a recommendation nor endorsement by the hospital of the quality of care of any particular HHA or SNF.
69 Fed. Reg. 48916, 49224 (August 11, 2004). Given recent developments with Medicare, it’s possible CMS will change its interpretation of this regulation. However, for the time being, it seems lists of post-hospital providers may not identify “preferred providers.”