Hospital at home 2022 PYA
Published April 21, 2022

Hospital at Home: Are You Ready? Should You Be?

A recent Healthcare Financial Management Association (HFMA) article declared, “Hospital-at-home care promises to reshape healthcare delivery in the United States.” [1] In response, hospital leaders have been asking whether they were ready (or how soon they could be ready) to provide acute care services in patients’ homes rather than the traditional hospital setting.   

There are numerous considerations:

  • Optimal patient type
  • Staffing requirements
  • Effective monitoring
  • Ancillary service delivery
  • Quality assurance, legal, and compliance issues
  • Reimbursement methodology

The “hospital-at-home” concept is not new. Many health systems have grappled with these questions and implemented small-scale programs to deliver acute care services in patients’ homes. (In fact, Hospital at Home® is a registered trademark of Johns Hopkins HealthCare Solutions.[2]) The term “acute care at home” (AC@H) better describes the services provided. 

AC@H is not home health; it is an alternative for patients who would otherwise qualify for inpatient admission. With few exceptions, AC@H is not currently recognized as a reimbursable service. Some components of AC@H (e.g., home visits, remote physiologic monitoring) may be separately reimbursable, but not at the level to cover the costs of delivering acute level care in a patient’s home.

Brief History of AC@H

In the early 2000s, the National Demonstration and Evaluation Study tested an AC@H model for pneumonia, congestive heart failure, chronic obstructive pulmonary disease, and cellulitis.[3] The study, which involved 455 patients across three sites, found statistically significant shorter lengths of stay (3.2 vs 4.9 days), lower costs ($5,081 vs. $7,480), and fewer complications. This first major U.S. study of an AC@H model stirred interest among providers, but apparently did not capture payers’ attention.

Between 2014 and 2017, the Icahn School of Medicine at Mount Sinai in New York City tested a mobile acute care team care delivery and payment model with funding from the Center for Medicare & Medicaid Innovation’s Health Care Innovation Award.[4] While providers reported positive impacts on the delivery of care and patients’ outcomes, the evaluators were unable to determine the program’s financial impacts.

Several other pilot projects and clinical trials have reported favorable results, including lower readmission rates, lower rates of adverse events, lower costs, and higher patient satisfaction. The research, however, tends to involve small samples of highly selected patients, raising questions regarding generalization.[5]

In 2017, the Physician-Focused Payment Model Technical Advisory Committee (PTAC) (an independent federal advisory committee that makes recommendations to the U.S. Department of Health and Human Services [HHS]) recommended a refined version of Mount Sinai’s AC@H model, concluding it satisfied PTAC’s 10-point criteria.[6]  A few months later, PTAC recommended another AC@H model championed by Marshfield Clinic and Contessa Health.[7] HHS, however, rejected both models, citing concerns with specific design aspects and noting it was “exploring a model that allows beneficiaries with certain acute illnesses or exacerbated chronic diseases to receive hospital-level services in their homes.”[8]

COVID-19 Public Health Emergency (PHE)

With many hospitals operating beyond their capacity during the PHE, AC@H made the jump from pilot program to large-scale deployment. In November 2020, the Centers for Medicare & Medicaid Services (CMS) launched the Acute Hospital Care at Home (AHCaH) program as part of its Hospitals Without Walls initiative to address hospital capacity issues during the PHE. A hospital approved for the program may receive its standard DRG payment for delivering inpatient-level care in the beneficiary’s home, provided it delivers these services in compliance with program requirements.      

Payment is available only for patients originating in the hospital’s emergency department and hospital inpatients who meet hospital-developed eligibility criteria. The hospital must provide the following for each AHCaH patient: 

  • Initial in-person evaluation by medical staff member
  • At least once/daily visit by medical staff member (remote or in-person)
  • At least two in-person daily visits by a registered nurse or Mobile Integrated Healthcare/ Community Paramedic (MIH/CP) (if both in-person visits by MIH/CP, additional daily remote RN visit to develop nursing plan)
  • Arrangements for home delivery of services required during inpatient hospitalization (including monitoring [≥2 sets of patient vitals/day], pharmacy, infusion, respiratory, diagnostics, transportation, dietary, durable medical equipment, therapies, social work, and care coordination)  
  • Immediate, on-demand remote audio connection with AHCaH team member who can immediately connect appropriate RN or medical staff member
  • Appropriate emergency personnel response to patient’s home within 30 minutes, if needed
  • All documentation completed in the hospital’s electronic health record accessible to all clinicians/contracted services, including those who would treat patient in the event of escalation

A participating hospital must report volume, escalation rate, and unanticipated mortality to CMS on a regular basis. Also, a hospital must establish a local safety committee to review the reported metrics.

As of April 14, 2022, CMS has approved 210 hospitals to participate in the AHCaH program,[9] less than 4% of all community hospitals. During the first 11 months of the program (November 2020 through October 2021), 1,878 patients received care, an average of 10 patients per hospital.[10] Even with committed resources and reimbursement (and in the face of PHE-related capacity issues), participating hospitals identified only a few patients for whom AC@H was appropriate. 

Beyond the PHE

Because CMS relied on its authority under Section 1135 of the Social Security Act to create the AHCaH program, it will terminate at the end of the PHE. A bill introduced in March 2022 would  extend the waiver for two years, but the legislation has not yet gained traction.[11] CMS has not made any announcements regarding any future AC@H programs, presumably waiting to fully evaluate the experience with the AHCaH program. Other than a limited number of pilot programs, no other payers have announced plans to reimburse for AC@H services.

Despite an uncertain future, increasing provider interest in AC@H is evidenced by the rapid growth of the Hospital at Home Users Group™, an organization that bills itself as “a dynamic collaborative of Hospital at Home programs across the United States and Canada.”[12] The group includes nearly 100 full members (all of whom have provided or are providing AC@H to at least one patient) and another 250 affiliate members (organizations in the planning stages of an AC@H program and others supporting such programs). In addition to providing resources to help members build programs, the group also is working to develop program and policy standards to inform regulatory and reimbursement policies. 

For those wanting a more hands-on approach, third-party vendors, including Medically Home, Johns Hopkins Health Care Solutions, and Contessa Health, offer turnkey solutions for hospitals ready to stand up AC@H programs. Medically Home has secured $275 million in funding for expansion, including $110 million in January 2022, indicating its commitment to this care model.[13] 

Evaluating the AC@H Opportunity – The Six S Approach 

With so much buzz around AC@H, one may fear falling behind absent some investment in this opportunity. To inform that investment, we recommend providers evaluate the AC@H opportunity by implementing a “Six S” approach.   

  1. System

While a single champion may lead the charge, the successful implementation and operation of an AC@H program requires a systematic approach. This necessitates engagement with and buy-in from governance, management, medical staff, hospital patient care staff (nursing, care management, therapies, pharmacy, imaging, laboratory), and operational support (finance, information technology, legal, compliance).   

Evaluate stakeholder knowledge of and willingness to engage with an AC@H initiative. Consider your organization’s current capacity to develop and manage a program requiring such a level of coordination and cooperation across the entire system.  

  1. Strategy

Does an AC@H program align with and support your organization’s current strategic imperatives? Consider the following:

  • Organizational capacity (time, talent, and treasure) to pursue AC@H, given other priorities, especially given present lack of reimbursement
  • Assets and relationships currently available and deployable to support an AC@H program (e.g., skilled nursing facility, home health)
  • Hospital capacity issues that may require capital replacement or expansion
  • Capacity issues preventing accepting higher acuity patients
  • Market demand for AC@H services at the present time or in the future
  • Impact of an AC@H program on an organization’s reputation/market position
  • Opportunity to expand traditional service area
  1. Service

Assuming an AC@H program aligns with your overall strategy, the decision of whether to proceed will depend on the program’s demonstrable return on investment (ROI). The first step in the ROI calculation is defining the population the program will serve. This requires one to establish an enrollment algorithm addressing the following:

  • Patient origin, i.e., admitted to AC@H from the community, the emergency department, and/or inpatient stay; for example, a hospital may initially focus on reducing inpatient length of stay by transitioning patients to home earlier, given the present lack of reimbursement for other admissions
  • Admitting diagnoses
  • Disqualifying medical conditions or complications
  • Home environment requirements (e.g., distance from hospital, full-time caregiver, internet access)
  • Patient financial class

Once the eligible population is identified, estimate the number of patients likely to be served by the program. As noted previously, adequate patient volume has proven a significant challenge for existing programs. Consider how you would pursue medical staff buy-in and patient recruitment to maximize enrollment over time.

  1. Staffing 

Next, develop a staffing model based on preliminary volume projections. As a starting point, use the AHCaH waiver requirements regarding level and frequency of service (e.g., daily nursing visits). Consider the following:

  • To what extent can existing patient care team members be trained and re-deployed to provide AC@H services?
  • Will you need to use third-party contractors to meet staffing needs?
  • Will physician service agreements need to be re-negotiated? Will new physicians and/or practitioners need to be recruited? What training will they require?
  • What is the appropriate compensation and incentive model for AC@H providers?
  • Will work rules or any union contracts need to be modified?
  1. Savings           

The direct financial ROI for an AC@H program is derived from reductions in variable costs for acute hospital services furnished in the home versus the hospital, assuming no difference in reimbursement. Unless and until payers reimburse for AC@H services directly (or unless your organization bears full risk for a specific population) these savings will be limited to a reduction of the in-facility portion of the total length of stay. 

After accounting for AC@H program start-up costs (electronic health record configuration and staffing), savings are calculated by comparing AC@H per diem direct variable costs and facility costs. 

There are different methods by which to calculate facility per diem costs for purposes of this comparison:

  • Develop an adjusted cost per diem based on historical financial statement data.
  • Apply a cost-to-charge ratio approach to billed charges to calculate encounter-level cost.
  • Use facility-derived DRG-level cost accounting system average direct variable cost per day.
  • Divide Medicare base operating DRG reimbursement by average length of stay to calculate a DRG-specific per diem.

These methods’ reliability depends on the veracity of the underlying costing data relative to the facts and circumstances of care provided under this model.

  1. Sustainability

Even absent of substantial savings, an AC@H program still may be sustainable based on indirect financial impact. Consider the following:

  • Future participation in risk-based arrangements.
  • Existing reimbursement. Consider presently available fee-for-service reimbursement for specific services furnished through an AC@H program (e.g., remote patient monitoring).
  • Relieving capacity issues. Reducing length of stay for lower acuity patients enables a hospital to care for a greater number of higher acuity patients.
  • Competitive advantage. A hospital with a well-publicized AC@H program may be viewed more favorably by the public and payers.

AC@H Competencies

Even if your organization is not ready to commit to a formal AC@H program, there are present opportunities to develop or enhance key competencies that will lay the groundwork for the success of a future program.

  • Transitional care management. Developing a formal program to provide direct support for patients meeting specific criteria during the 30-day period following inpatient discharge is a logical first step in providing care outside the four walls of the facility. Also, these services are proven to reduce readmissions and are reimbursed by many payers.
  • Remote patient monitoring. Selecting appropriate devices and data transmission platforms and implementing workflows for remote monitoring programs for post-discharge patients and those with chronic conditions will support the more comprehensive monitoring required for acute care services. And new reimbursement for these services helps sustain these programs.
  • Screening for social determinants of health. Developing and implementing these processes will better prepare your organization to provide appropriate services in the home based on patients’ specific circumstances.


While AC@H may be a concept whose time has come, it is difficult to predict how quickly these programs will become mainstream. For decades, hospitals have organized to deliver care within a facility, and adapting to a new environment—in fact, multiple environments—will be challenging. The decision to invest resources in an AC@H program, therefore, should be made based on careful consideration of your organization’s specific circumstances—not simply to follow the crowd.  

If you would like assistance evaluating the AC@H opportunity in your community, or for assistance with any matter related to strategy, reimbursement, compliance, or valuation, contact a PYA executive below at (800) 270-9629.

[1] “Hospital-at-home care promises to reshape healthcare delivery in the United States” (Oct. 2021), available at


[3] Leff B, et al. Hospital at home: Feasibility and outcomes of a program to provide hospital-level care at home for acutely ill older patients. Ann Intern Med. 2005 Dec;143(11):798-808

[4] Evaluation of the Health Care Innovation Awards, Round 2: Final Report (Sept. 2020), available at

[5] D. Clark, et al, Acute Hospital Care at Home: The CMS Waiver Experience,  NEJM Catalyst (Dec. 7, 2021), available at

[6] “HaH-Plus” (Hospital at Home Plus) Provider-Focused Payment Model (Oct. 20, 2017), available at

[7] Home Hospitalization: An Alternative Payment Model for Delivering Acute Care in the Home (May 7, 2018), available at



[10] D. Clark, et al, Acute Hospital Care at Home: The CMS Waiver Experience, NEJM Catalyst (Dec. 7, 2021), available at 

[11] S. 3793, Hospital Inpatient Services Modernization Act, available at



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