One of the lesser known provisions of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014 contained requirements for all providers, including hospitals, to incorporate quality and resource utilization data into their respective discharge planning processes. The Centers for Medicare & Medicaid Services (CMS) published a final rule on hospital discharge planning that is set to go into effect on November 30, 2019—a few short weeks from now (see excerpts at end of this post). This is the first major update to hospital discharge planning rules since surveyor guidelines were updated in 2013.

Although exactly how this final rule gets interpreted by CMS and hospital surveyors remains to be seen, these changes have the strong potential to be a game changer for the relationship between hospitals and post-acute care.

Background on New Hospital Discharge Planning Rules Affecting Post-Acute Care

CMS initially proposed changes to the hospital discharge planning rules in 2015. In the intervening four years, CMS expanded the number and scope of post-acute care quality and resource measures that are publicly reported on the post-acute “Compare” sites, as well as by post-acute care providers in their respective Quality Reporting Programs (QRPs). More recently, CMS added a consumer alert icon to Nursing Home Compare for skilled nursing facilities (SNFs) that have been cited for abuse, neglect, or exploitation, further heightening the importance of these metrics for those providers.

The final rule on hospital discharge planning contains a myriad of changes affecting the entire hospital discharge planning process. Hospitals were relieved when the 2015 proposal, with its highly prescriptive rules and near $1 billion economic impact, was amended to provide more flexibility and discretion in some, but not all, cases.

Here we will focus on the rules regarding discharges to post-acute care, which require that hospitals must:

  • Assist patients needing post-acute care by using and sharing data on quality and resource use that is relevant to a patient’s needs.
  • Provide a list of relevant post-acute care providers in the patient’s geographic area.
  • Make patients aware of the need to verify which providers are in-network if the patient is enrolled in managed care.
  • Preserve freedom of choice.
  • Disclose financial interest in post-acute care providers.

Some of these requirements, like providing lists of SNFs and home health agencies (HHAs) and preserving freedom of choice, have been around for years and are not new. But the requirement for hospitals to assist patients by using and sharing data on post-acute quality and resource use is new and was driven by the statutory language in the IMPACT Act. Moreover, the scope of all these requirements has been increased to include inpatient rehabilitation facilities (IRFs) and long-term care hospitals (LTCHs).

There are still some aspects of the final rule needing clarification, and hospitals are given flexibility in the manner and form of meeting this requirement. However, the intent is clear: objective and broad-based quality and resource use data is to be provided to patients at a critical juncture—prior to hospital discharge for persons needing post-acute care. It is also clear that using quality and resource use data from the post-acute Compare sites will be the clearest and quickest path to compliance with the requirement. But some questions remain.

Future of Preferred Post-Acute Networks Created by Hospitals?

Of note, in the preamble to the final rule, it flatly states that hospitals “must not develop preferred lists of providers.” This is significant because many hospitals have developed and use preferred post-acute networks for their ACO or bundling programs and/or as part of a broad-based quality improvement strategy. For the most part, these networks have been developed by examining quality and resource use metrics across a range of post-acute providers (though not necessarily all providers that a patient could theoretically be referred to).

Further, CMS has implicitly condoned the use of preferred networks for ACOs and bundlers (see for example, FAQs on Bundled Payments for Care Improvement Advanced regarding use of preferred networks). CMS has shown no sign of backing off on its desire to see Alternative Payment Models grow.

So, as this rule marches towards implementation, there are nuances that will need to be carefully considered by all stakeholders, including:

  • The rule specifically defines purposeful patient steering as “directing patients and/or their caregivers to post-acute care providers that do not align with the patient’s goals of care and treatment preferences.”
  • Availability of specialty post-acute care, such as ventilator care, dialysis, and complex wound care; these services are not readily addressed with publicly available data alone.
  • CMS clarified, in response to a commenter, that it is permissible for hospitals to augment the publicly available data, so long as the information presented aligns with the patient’s goals of care and treatment preferences.

Given the scope of the changes to the hospital discharge planning rules, as well as other payment policy changes (such as PDPM, PDGM, and Alternative Payment Models), and ongoing concerns about the overall effectiveness of preferred networks, now is a good time for hospitals to conduct a wholesale re-evaluation of how their preferred provider programs are set up and how they are aligned with these new requirements. If the hospital is augmenting the publicly available data, that needs to be done in a thoughtful manner to ensure compliance. Those hospitals moving to downside risk as part of bundling or an ACO should also be thinking about moving to a risk-based contracting approach with their post-acute partners, instead of just relying on a preferred network strategy.

For post-acute care providers, the message is clear. Take any and all steps to improve your metrics and put your best foot forward in terms of operational excellence. Given the Medicare payment reforms for SNFs and HHAs, now is also the time to consider upgrading your clinical capabilities as part of a strategy to increase your value proposition. But be careful, we often see that providers with the highest clinical complexity have lower star ratings—a comment on both the star rating systems and the operational challenges of taking higher acuity patients.

Transition Assistance

HDG can assist both hospitals and post-acute care providers in making this transition to a new relationship. We understand the new rules and both sides of the hospital/post-acute relationship; we understand the data and the policy; and most important, we are firmly grounded in the realities of operating in today’s changing landscape. There is opportunity to reset the relationship based on win-win strategies, but it will be important to avoid landmines along the way. These rules will go into effect shortly, so both immediate and longer-run strategies should be considered. For more information, visit our website and contact us at 763.537.5700 or


Brian Ellsworth - Hospital Discharge Planning Consultant

Authored by: Brian Ellsworth, MA,
Vice President, Public Policy and Payment Transformation






Key Points from Hospital COPs Finalized in October 2019

Effective November 29, 2019

  • 482.43 Condition of participation: Discharge planning (excerpted)

Requirement to Assist Patients in Selecting PAC

The hospital must assist patients, their families, or the patient’s representative in selecting a post-acute care provider by using and sharing data that includes, but is not limited to, HHA, SNF, IRF, or LTCH data on quality measures and data on resource use measures. The hospital must ensure that the post-acute care data on quality measures and data on resource use measures is relevant and applicable to the patient’s goals of care and treatment preferences.

List of Medicare Participating Providers for Post-Acute Discharges

The hospital must include in the discharge plan a list of HHAs, SNFs, IRFs, or LTCHs 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, IRF, or LTCH, in the geographic area requested by the patient. HHAs must request to be listed by the hospital as available. The hospital must document in the patient’s medical record that the list was presented to the patient or to the patient’s representative.

Managed Care Enrollees

The hospital must make the patient aware of the need to verify with their managed care organization which practitioners, providers, or certified suppliers are in the managed care organization’s network. If the hospital has information on which practitioners, providers, or certified suppliers are in the network of the patient’s managed care organization, it must share this with the patient or the patient’s representative.

Preserve Freedom of Choice

The hospital, as part of the discharge planning process, must inform the patient or the patient’s representative of their freedom to choose among participating Medicare providers and suppliers of post-discharge services and must, when possible, respect the patient’s or the patient’s representative’s goals of care and treatment preferences, as well as other preferences they express. The hospital must not specify or otherwise limit the qualified providers or suppliers that are available to the patient.

Disclosable Financial Interest

The discharge plan must identify any HHA or SNF to which the patient is referred in which the hospital has a disclosable financial interest, as specified by the Secretary, and any HHA or SNF that has a disclosable financial interest in a hospital under Medicare. Financial interests that are disclosable under Medicare are determined in accordance with the provisions of part 420, subpart C, of this chapter.