The Impact of Medicare Copayments for Skilled Nursing Facilities on Length of Stay, Outcomes, and Costs

The purpose of this article was to investigate the impact of Medicare's skilled nursing facility (SNF) copayment policy, with a large increase in the daily copayment rate on the 20th day of a benefit period, on length of stay, patient outcomes, and costs. The authors used retrospective cohort study from 2012 to 2016 including Medicare claims and SNF assessment data, including SNF admissions for Medicare fee-for-service beneficiaries. The authors first estimated how changes in Medicare's SNF copayment on the 21st day of a patient's benefit period affect length of SNF stay. They then then used benefit day on admission as an instrumental variable to estimate the impact of SNF length of stay related to the copayment policy on readmission and Medicare payment. Medicare's SNF copayment policy is associated with shorter lengths of stay and worse patient outcomes, suggesting the copayment policy has unintended and negative effects on patient outcomes.