Doctor points to where patient should sign medical record.

Referrals from hospitals to skilled nursing facilities are increasing, but by the first quarter of this year, the rate of referral rejection among SNFs had climbed to 88%, primarily due to diminished staff capacity.

That’s according to a report released Wednesday by Overland Park, KS-based health and community care technology company WellSky.

Conclusions in the white paper, “Opportunities and Challenges: The Transformation of Post-Acute Care in America,” were derived after a review of admission, discharge and transfer and referral data sourced from more than 130,000 post-acute care providers and 1,000 hospitals, along with publicly available Medicare data.

“Post-acute care is an integral component of the care continuum and has the power to transform care delivery as we know it today,” WellSky CEO Bill Miller said in a statement. “Effective post-acute care is proven to reduce expensive rehospitalizations, improve health outcomes and lower the overall cost of care. Understanding the key drivers of change in this part of the industry is critical to sustaining its growth and ensuring the system continues to deliver positive benefits for patients.”

Early in the pandemic, in the second quarter of 2020, SNF referrals dropped while inpatient rehabilitation and hospice referrals gained momentum, according to the report. Now, SNF referrals are recovering, but referrals to all other post-acute venues have returned to pre-pandemic levels, noted report author Sharon Harder, president of C3 Advisors.

When patients do arrive at a SNF from a hospital, they are coming sicker than patients were in the past. For instance, obesity is up 11% among SNF residents this year, according to WellSky data.

But SNFs also are facing a public that increasingly favors home health, the report noted. SNF referrals have been “significantly” outpaced by home health referral volume every month after April 2020, according to the paper. By May 2022, home health referrals still accounted for most of the new post-acute destination volume, with home health referrals at 123% of 2019 levels.

Home health faces its own challenges, though. Home health referrals doubled from 2019 to 2022, but the sector’s rejection rate grew to a high of 71%. And the sector faces increasingly sicker patients as well; rates of hypertension and diabetes among home health patients are up by 25% and 34%, respectively, according to the report.