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Care Coordination Cuts Nursing Home Spending, Hospitalizations

A Medicare care coordination program for nursing homes has resulted in fewer preventable hospitalizations and lower spending levels, though quality performance is mixed.

By Jennifer Bresnick

- Improved care coordination techniques are reducing the number of preventable hospitalizations among patients residing in long-term nursing home facilities, according to new data published by CMS this week.   

Care coordination and medicare spending

Most healthcare providers participating in the Enhanced Care and Coordination Providers (ECCP) program are producing steady declines in preventable admissions and the associated costs for care over the four year study period, the report says, although there were clear variations in spending and performance on quality measures between the different states where the providers operate.

“Nursing facility residents often experience potentially avoidable inpatient hospitalizations,” CMS explains. “These hospitalizations are expensive, disruptive, and disorienting for frail elders and people with disabilities. Nursing facility residents are especially vulnerable to the risks that accompany hospital stays and transitions between nursing facilities and hospitals, including medication errors and hospital-acquired infections.”

In 2014, between 25 and 30 percent of all nursing home patients experienced at least one hospitalization, and between 10 and 15 percent underwent a preventable hospitalization.  Emergency department visit rates ranged between 15 and 25 percent across the seven states participating in the program, with approximately 5 to 10 percent of ED visits qualifying as avoidable trips.

Spending levels on Medicare nursing home services also varied according to geographic region.  ECCP facilities in New York, Indiana, and Nevada incurred higher expenditures than providers in Alabama, Nebraska, Missouri, and Pennsylvania.  Medicare spending was highest in New York, averaging $29,652 and lowest in Nevada, at $23,957. 

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While these expenses were marginally higher than long-term care providers not enrolled in the care coordination program, the initiative produced statistically significant declines in potentially avoidable service utilization and associated increases in performance on quality measures such as the use of physical restraints and antipsychotic medications.

Results from the state-by-state performance assessment include the following:


Between 2012 and 2014, all-cause hospitalizations decreased by 4.4 percent.  Potentially avoidable hospitals dropped by 5.4 percent, while all-cause ED visits saw a 20.1 percent decline and providers slashed avoidable ED visits by nearly a quarter.

Medicare expenditures, presented in dollars per resident, also saw a 0.5 percent overall decline.  Expenses related to all-cause hospitalizations dropped by 1.9 percent, while spending on potentially avoidable hospitalizations and ED visits fell by 8.2 percent and 13.4 percent respectively. 

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In Indiana, all-cause hospitalizations fell by 21.2 percent, while preventable hospitalizations saw a 29.3 percent decline.  The participants reduced all-cause ED visits by 11.6 percent, but only cut potentially avoidable ED use by 1.2 percent.

Medicare spending results were significantly better.  Total spending dropped by 6.2 percent, with all-cause hospitalization spending down by 18.9 percent and all-cause ED spending seeing a 30.9 percent decline. 

However, the report notes that it is difficult to say whether or not the ECCP program contributed to these improvements, as quality measure performance swung across positive and negative changes.


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Care coordination techniques deployed in Missouri, along with steady commitment to the ECCP program among initiative participants, produced statically significant results, CMS says.  “The ECCP intervention was associated with a decrease in the count of all-cause hospitalizations by 0.105 per resident (p < 0.01), on average, or a 21.4 percent reduction from the average count per resident in 2012, which was 0.491,” the report states.

Potentially avoidable hospitalizations saw a 34.5 percent decline, while avoidable ED visits dropped by a staggering 39 percent.  Total Medicare expenditure reductions were more modest, at 0.5 percent, but saw the greatest gains from the reduced use of ED visits and unnecessary hospital inpatient stays.


Participants in Nebraska focused on care coordination strategies such as integrating nurse practitioners into the care team, improving communication, and providing additional educational programs.  The nurse practitioners contributed to reducing workloads for overextended physicians and improved support of other clinical staff.

These efforts reduced all-cause hospitalization spending by an estimated $971 per resident, resulting in a 24.5 percent overall reduction in expenditures compared to 2012 levels.  Total Medicare spending rates dropped by 7.9 percent, due in part to a 33.9 percent cut in potentially avoidable hospitalization costs.


Nevada participants produced a 17.5 percent decline in all-cause hospitalizations and a 5.2 percent decrease in potentially avoidable hospitalizations, but failed to reduce emergency department usage or spending rates.

In contrast to many other states, Nevada saw an 8 percent increase in all-cause ED visits, including a 70 percent increase in potentially avoidable ED usage.  Costs for emergency department visits increased by 36.1 percent for all-cause use and 102.2 percent for potentially avoidable emergency department interactions.

The study points out that “although [ED utilization and spending rate increases] could result if hospital admissions are being converted to ED visits with observation, there is no evidence at this time of ECCP activity to encourage this shift.”

New York

By increasing care coordination education for providers and implementing data-driven care solutions for nursing facilities, New York was able to produce trends headed in the right direction. All-cause hospitalizations dropped by 9.3 percent, resulting in an 8.9 percent reduction in spending for those incidents.  Potentially avoidable hospitalizations fell by 15.1 percent, while avoidable ED visits saw an 11.1 percent decline.  Total Medicare expenditures were slashed by 4.6 percent over the life of the program thus far.


Nurse practitioners once again made their mark in Pennsylvania, where their care coordination efforts were “very popular” and “appreciated” by their fellow providers.  In contrast to some other states, Pennsylvania providers produced “strong evidence” for the effectiveness of the ECCP framework across most utilization and expenditure metrics.

 “The ECCP intervention was associated with a decrease in the count of all-cause hospitalizations by 0.490 per resident (p < 0.01) on average, a reduction of 25.9 percent compared to the average count per resident in 2012,” the report says. “Potentially avoidable hospitalizations were reduced by 0.192 per resident (p < 0.05), a 27.8 percent reduction from the 2012 average resident count. Potentially avoidable ED visits also decreased by 0.090 visits per resident (p < 0.01), a 40.0 percent reduction from the 2012 average resident count.”

Total spending decreased by 16.8 percent, with potentially avoidable hospitalizations and ED visits exhibiting a 30.3 percent and 35.5 percent decline respectively.


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