A Path to Better Care for Older Adults: Optimizing Medicare and Medicaid Payments Through Implementation of the CMS Age Friendly Hospital Measure

Current State/Background

By 2030, people over age 65 will comprise approximately 21% of the US population. ¹ People aged 65 and older are projected to reach 77 million by 2034, when older adults will outnumber children under 18 for the first time in US history. ¹

While longevity is one of the greatest successes of the past century, by virtue of advances in public health and the biomedical sciences, the quality of US health, and health care for older adults has not kept pace in comparison with other countries.

Hospital utilization and cost data show a disproportionate representation of older adults in hospitals and as a portion of related health care expenses. While comprising about 16% of the population, people aged 65 and older account for more than double that representation in hospitals – approximately 35% of hospital stays and 40% of hospital days. ² The average hospital length of stay of an older adult is 5.2 days compared to 3.8 days for younger adults. ³

Hospital care for older adults too frequently leads to harm, including iatrogenic conditions. Older adults may well survive surgery, only to suffer from iatrogenic conditions such as pressure ulcers, infections, and delirium. ⁴ During hospitalizations, 30% of older adults lose their ability to function independently ¹ and they are more likely to experience adverse drug reactions. ⁵

Delirium impacts 29% to 64% of hospitalized older adults ⁶ and is significantly associated with increased mortality.^7,8 The average added costs of health care delivery attributed to delirium are $44 291 per patient.^6,9,10 Health care costs for older adults attributable to postoperative delirium nationally are estimated at $32.9 billion annually. ⁹

Medicare data shows that around 20% of patients who are over 65 years old are readmitted within 30 days of discharge ¹¹ indicating quality of care issues, as well as care coordination and transitions issues, which negatively impact cost, experience, and quality of life for older adults and their family caregivers.

Older adults and their families have come to fear such harm and may put off needed care to avoid safety hazards associated with health care. ⁴

And yet there are evidence-based initiatives that hospitals can implement to prevent or reduce iatrogenic harm in older adults including falls, adverse drug events, and delirium,^12,13 reduce length of stay in emergency departments, ¹⁴ improve outcomes, reduce length of stay,^15,16 and reduce overall cost of care to Medicare. ¹⁷ At the core of these initiatives are the clinical practices found in Age-Friendly Health Systems – assessing and acting on the evidence-based 4Ms – What Matters, Medication, Mentation, and Mobility.

CMS’s Inpatient Quality Reporting (IQR) Program and CMS Age Friendly Hospital Measure

The Centers for Medicare & Medicaid Services (CMS) has a key role in focusing hospitals’ attention on improving the quality of older adults’ care^7,18, preventing iatrogenic harm, improving health outcomes, and reducing costs. CMS’s IQR Program drives this hospital quality improvement through public reporting and quality related payment incentives.

To date, however, CMS’s measures have mostly focused on specific diseases or conditions. CMS has introduced the Age Friendly Hospital Measure, a meaningful addition to the Inpatient Quality Reporting (IQR) program ¹⁹ in response to the compelling need to bring attention and focus to structural improvements that reduce harm to older adults across conditions, hospital service lines, and specialties. It also raises awareness of older adult and family caregivers as consumers of health care and aligns the care of older adults with evidence-based care. ²⁰

To fulfill the CMS Age Friendly Hospital Measure, as of January 2025, hospitals must attest to whether the care they provide is consistent with the following 5 domains:

The CMS Age Friendly Hospital Measure takes a comprehensive approach, addressing a broad spectrum of needs that can affect seniors’ health outcomes, driving improvement beyond 1 condition, disease, procedure, or stay. ²¹ The measure recognizes that older adults often have complex health issues, including chronic conditions, cognitive decline, mobility challenges, and social isolation and focuses the hospital on the delivery of the 4Ms clinical practices of an Age-Friendly Health System:

Hospitals participating in the IQR program must report on the CMS Age Friendly Hospital Measure to receive their full Medicare payment updates. While the payments and reductions are set each year, the IQR measure updates are typically 2% to 3% of their total Medicare spend.

Hospitals receive their full update if they report on the measure in good faith and hospitals that do not report face a penalty. The American College of Surgeons estimated the penalty for an 800-bed hospital may be up to $3 264 000 for 1 year of not reporting on the CMS Age Friendly Hospital Measure. ²²

Hospitals can receive the full reimbursement even if they attest negatively to any of the Measure’s domains. Significantly, the requirement focuses attention on improvements that result in improved outcomes for older adults and their family caregivers and lower costs. This is an important signal to health systems that it is imperative to focus on the population health of older adults.

Meeting the Measure

The Age-Friendly Health Systems initiative emphasizes clinically assessing and acting on the 4Ms (What Matters, Medication, Mentation, and Mobility) as a set of clinical interventions which, when practiced together, represent evidence-based interventions that have demonstrated reduction in iatrogenic harms, improved outcomes for older adults while reducing health care costs. This set of clinical interventions, which are also the core of the Geriatric Surgery Verification and Geriatric Emergency Department Accreditation initiatives, provides the clinical framework for the CMS measure. ²²

In addition to fulfilling the clinical core of the CMS Age Friendly Hospital Measure, implementation of these 3 initiatives offers multiple advantages, as demonstrated by several studies showing enhanced quality of care for older adults, improved patient satisfaction and outcomes, and reduced health care costs.^{13,23 -29}

The CMS Age Friendly Hospital Measure cites multiple organizations for collaborating “to identify and establish age-friendly initiatives based on evidence-based best practices that provide goal-centered, clinically effective care for older patients.” According to the measure, “The collective evidence from these age-friendly efforts demonstrates that hospitals should prioritize patient-centered care for aging patient populations with multiple chronic conditions. With CMS being the largest provider of health care coverage for the 65 years and older population, proposing a quality measure aimed at optimizing care for older patients, using a holistic approach to better serve the needs of this unique population, is timely.” ³⁰

Summary

CMS adoption of this structural measure, an attestation, is a first step toward a more outcomes-focused measure. The CMS Age Friendly Hospital Measure is just 1 driver, but an important driver, of improvement in the quality of older adults’ care. Hospitals can avoid penalties through attestation to the 5 domains. The measures also bring focus to the quality improvements that reduce iatrogenic harm to older adults, reduce costs, and improve outcomes.

Age-Friendly Health Systems, the Geriatric Surgery Verification and Geriatric Emergency Department Accreditation initiatives are all supported in part by The John A. Hartford Foundation and represent pathways for hospitals to achieve the 5 domains of the CMS Age Friendly Hospital Measure. Achieving the 5 domains of the measure will improve care for older adults. The measure will also be reported publicly and transparently so that older adults and family caregivers who have the opportunity to choose care providers can select those providers that meet the Age-Friendly Hospital Measure. The CMS Age Friendly Hospital Measure is a game-changer in prompting hospitals to assure dependable, evidence-based care that is goal concordant with the older adult is the standard for every older adult.