The Five W’s of the IMPACT Act

Authored by Erin Shvetzoff Hennessey, Vice President, Business Solutions


Congress passed the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act), a bipartisan bill, on September 18, 2014, and it was signed into law on October 6, 2014. The bill was sponsored by Rep. Dave Camp [R-MI-4] and was co- sponsored by Rep. Sander Levin [D-MI-9], Rep. Kevin Brady [R-TX-8], Rep. Jim McDermott [D-WA-7], Rep. Earl Blumenauer [D-OR-3], Rep. Don Kind [D-WI-3], Rep. Patrick Tiberi [R-OH-12], Rep. Diane Black [R-TN-6], and Rep. Linda Sanchez [D-CA-38].

The House Ways and Means and Senate Finance Committees stated, “The IMPACT Act is the core building block needed for future Medicare PAC reforms, leading to more accountable, quality-driven services.”


The IMPACT Act requires the submission of standardized data by post-acute care (PAC) settings, including skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs). The statute requires: development of uniform quality and resource measures; a core set of assessment items across settings; and, detailed timelines and objectives. These requirements provide data uniformity, improved care and outcomes, the ability to compare quality and data across care settings, improved acute care discharge planning, and the sharing of data to improve care coordination. Assessment items include:

  • Skin integrity and changes in skin integrity;
  • Functional status, cognitive function, and changes in function and cognitive function;
  • Medication reconciliation;
  • Incidence of major falls;
  • Transfer of health information and care preferences when an individual transitions;
  • Resource use measures, including total estimated Medicare spending per beneficiary;
  • Discharge to community; and,
  • All-condition risk-adjusted potentially preventable hospital readmissions rates.

Over 5.5 million Medicare enrollees are served in PAC settings and over 42 percent of Medicare fee-for-service beneficiaries are discharged from acute care to PAC:

  • SNF—15,600 facilities, average length of stay (ALOS) of 39 days, Medicare spending of $287 billion
  • HHA—12,311 agencies, Medicare spending of $18 billion
  • IRF—1,166 facilities, ALOS of 13 days, Medicare spending of $6.7 billion
  • LTCH—420 facilities, ALOS of 26 days, $5.5 billion

Implementation of the IMPACT Act comprises five parts:

  1. Incorporation of standardized assessment into existing assessment tools across PAC providers.
  2. Development and public reporting of quality measures across settings.
  3. Hospitals and post-acute care providers required to provide quality measures to consumers when transitioning to a PAC provider; not doing so results in 2 percent penalty.
  4. Government is required to conduct studies and provide reports to link payment to quality.
  5. Centers for Medicare and Medicaid Services (CMS) receives $11 million in funding to use payroll data to measure staffing in SNF setting.

Key implementation milestones include:

  • October 2016: standardized resource use measure; some quality reporting begins.
  • October 2017: confidential feedback provided on previous year’s reports.
  • October 2018: standardized assessment data required; public quality data available; penalties go into effect.
  • October 2021: CMS and MedPAC to report on prospective payment; study on hospital assessment data.

The escalating cost of post-acute care, combined with lack of uniform data and reporting across post-acute care, has created a focus on reduction of post-acute care spending. The goals of the IMPACT Act are to improve clinical outcomes and reduce Medicare expenses through an interoperable core data site, site-neutral payment policies, value-based payment approaches, and improved care transition and discharge planning.


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