Readmissions are a top concern of hospital executives, and for good reason. In 2014, more than 2,000 hospitals will lose a combined $280 million in Medicare funds due to excess readmissions—with more cuts to come in subsequent years if rates don’t improve.
The cuts come from the Hospital Readmissions Reduction Program (HRRP), mandated by the Patient Protection and Affordable Care Act in 2012. Each hospital’s assessment is based on 30-day readmission rates for heart failure, myocardial infarction and pneumonia.
The Centers for Medicare & Medicaid Services began enacting reimbursement cuts to hospitals and health systems with high readmission rates in October 2012. Hospitals also face a penalty equal to 2 percent of their total Medicare billing in 2014 if an excessive number of patients are readmitted. The penalty started at 1 percent in 2013 and will increase to 3 percent in 2015.
The HRRP is intended to reign in Medicare spending, which reached $555 billion in 2012. Hospital inpatient costs make up a quarter of that spending and the Congressional Budget Office projects the spending will increase rapidly over the next decade as baby boomers retire and spending per beneficiary rises.
Today, nearly one in five Medicare patients return to the hospital within a month after discharge, costing the government $17.5 billion in 2010. The guidelines and penalties under health-care reform have pressed hospitals and other health-care providers to work together to improve patient outcomes and the hospital’s bottom line.
Readmission Risk Factors
Until health-care reform, hospitals had little financial incentive to reduce readmissions. Medicare would reimburse hospitals regardless of whether a readmission occurred.
Now, hospitals are under financial pressure to prevent avoidable readmissions while reducing patient length of stay. While some studies show that shorter hospital stays don’t compromise care, some hospitals are finding that post-surgery complications typically surfacing during a patient’s hospital stay are now happening at home. Almost one in 10 general surgery patients return to the hospital with post-operative complications, according to Fierce Healthcare.
Social factors, including age, race, employment status, living situation and income level can affect the risk of readmission, according to a study in the Journal of General Internal Medicine. The type of insurance, marital status and economic status were factors tied to heart failure patients’ readmission and mortality rates.
Are Penalties Fair?
Even though patients are often discharged to in-home care or post-acute care facilities such as skilled nursing homes, the hospital takes the financial hit under HRRP if the patient is readmitted. Some hospitals suggest the penalties aren’t fair, saying that Medicare doesn’t do an adequate job of distinguishing between necessary and planned readmissions and ones that could be avoided, according to Kaiser Health News.
Safety-net hospitals—which provide much of their care to low-income, uninsured or extremely ill patients—also cry foul. They say getting medicine and follow-up care can be difficult for this group. Dr. John Lynch, chief medical officer at Barnes-Jewish Hospital in St. Louis, told the New York Times recently that the penalties are prejudiced to hospitals that have the double burden of caring for very sick and poor patients. “For us, it’s not a readmissions penalty. It’s a mission penalty.”
Ways to Reduce Avoidable Readmissions
Whether or not they face readmission penalties, hospitals have been implementing new transitional care models and revamping their discharge processes to make them more efficient and cost-effective. Here are some ways hospitals can chip away at avoidable readmissions:
Work closely with post-acute partners. Until today, hospitals and post-acute care providers tended to work independent of one another. Now hospitals are starting to strengthen more post-acute partnerships and do more measurements on patient outcomes after discharge. A shared electronic platform between hospitals and post-acute partners can help both regularly analyze patient data, identify trends and discuss strategies to dissolve common problems.
Focus on patient experience. Hospitals facing readmission penalties should take a close look at their patient satisfaction scores, according to HealthLeaders Media. Press Ganey, which conducts Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) surveys as required by health-care reform’s value-based purchasing regulations, found that hospitals that have higher patient experience scores also have lower 30-day readmission rates. Patient communication and engagement—or lack thereof—is directly reflected in HCAHPS scores.
Pick up the phone. Health Affairs reported that calls to patients from nurses can reduce readmissions and cut $1,225 in costs per patient. Researchers from the University of Wisconsin School of Medicine and Public Health studied more than 600 patients enrolled in their transitional care program, where high-risk patients received weekly phone calls from a case manager for one month. Nearly 100 percent of patients participated, which is key, the researchers said. For resource-strained safety-net hospitals that can’t afford home visits by nurses, these nurse calls can help.