Hospital Readmissions Reduction Program--A Misguided Approach to Reduce Medicare Spending

         

Hospital Readmissions Reduction Program:

A Misguided Approach to Improve Quality of Care and Reduce Costs

I.                    What is all the recent uproar about hospital readmissions? 
 

The Centers for Medicare and Medicaid Services (CMS) has recently started the Hospital Readmissions Reduction Program (HRRP).  The program was bad news for health care providers.  The program was implemented with little warning but it had great consequences for hospitals. 

On October 1, 2012, CMS began penalizing certain hospitals who have high readmission rates for Medicare beneficiaries 65 or older due to congestive heart failure (CHF), acute myocardial infarction (AMI), and pneumonia. (CMS Readmissions). CMS will withhold a portion of the hospital’s total Medicare payments for unplanned readmissions of their Medicare beneficiaries that occur within thirty days of discharge.   The HRRP will urge hospitals to identify high-risk patients and improve discharge planning for those patients, as well as other patients.  

The HRRP will include a “floor adjustment factor,” which limits the potential payment reduction to 1% in 2013, 2% in 2014, and 3% in 2015.

            The Patient Protection and Affordable Care Act (PPACA) does adjust payment reductions by using a risk adjustment factor.  “The risk adjustment factor adjusts for comorbid conditions, age, and gender, but does not [adjust] for socioeconomic status, race/ethnicity, and community factors.” (The Commonwealth Fund).

II.                  What exactly is the purpose of the Hospital Readmissions Reduction Program?

          Hospital readmissions are becoming a growing concern for hospitals in the United States.  High rates of unplanned hospital readmissions for Medicare beneficiaries have called attention to the quality and cost of care.  As Jowl Swider said in his article, “A Dose of Reality: Unintended Consequences of Penalizing Hospital Readmissions in the PPACA,” nearly one-fifth of Medicare patients hospitalized in 2009 were readmitted within 30 days of their initial hospital stay.[1]  In 2004 the government disbursed $102.6 billion to cover Medicare expenses; approximately $17.4 billion of that amount was spent on unplanned readmissions.  By looking at the numbers spent on Medicare in 2004 it can be concluded nearly 17% of all Medicare expenditures are spent on unplanned readmissions.  The Congressional Budget Office (CBO) predicts the HRRP will save Medicare $7.1 billion by the year 2019.
          The HRRP is intended to incentivize providers to improve quality of care by implementing better coordination systems and improved efficiency.[2] Other intentions include: evaluating the entire spectrum of care, identifying systematic changes that will make care safer and more effective, reducing complications during delivery of care, implementing better patient discharge practices, reconciling medications, and providing patients with better information on transitioning from inpatient to outpatient care.[3]  

III.                Many people are not happy with the program.

          Here are several reasons the Hospital Readmissions Reduction Program is a BAD idea:

1.      Readmissions have a great deal to do with patient population—NOT how hospitals treat their patients. 

2.      Hospitals may be forced to close their doors if they lose any more funding.

3.      Hospitals will have to come up with ways to ensure patients are not readmitted.

4.      There is no differentiation between related readmission and unrelated readmission.

          Jordan Rau said the HRRP does not account for each hospital’s patient population. (Pressure to Avert Readmissions). The sickest heart patients are referred to certain hospitals for transplants and other interventions.  As Dr. Lynch told Rau in an interview, “The weaker your health, the more advanced your emphysema, the more likely you are to be readmitted to the hospital.”

          Policymakers were very misguided when drafting the HRRP because the emphasis is on hospital care alone and it does not account for other causes. (Truth and Consequences).  27% of hospitals readmissions were found to be preventable in a recent systematic hospital review.  Hospital readmissions are not always a result of poor quality of care but rather “a hospital’s patient population and the resources of the community in which it is located.”  Hospital readmissions are not solely due to the quality of health care received during a patient’s stay alone but are a part of a larger issue involving a patient’s social circumstances, presence of a primary care physician, and access to health care prior to the serious illnesses which lead to hospitalization.

          Swider goes on to say the HRRP will lead to “increases in hospital bankruptcies, decreases in quality of care, and decreases in access to care for minority populations.” Most businesses in times of recession are forced to cut costs; hospitals are one of those businesses.  Pressures to cut costs during recessions include “growing costs, decreasing revenues, and unsustainable debt loads.”  One popular way to decrease costs is to reduce staff.  Reduced staffing is a problem when the number of patients needing care does not decrease, causing hospitals to be overcrowded and understaffed.  A readmission is not necessarily avoidable just because it is unplanned. 

          Hospitals are forced to ensure ways patients are not readmitted and must start making decisions on who should receive care and under what conditions.  An increase in quality of care provided does not necessarily reduce readmissions.  Many readmissions are unavoidable; therefore, hospitals may begin to turn people away for problems such as a heart attack if they have already been admitted within the last 30 days, even though they should be admitted.  Hospitals will need to find ways to reduce patient readmissions that might not necessarily better patient care.

         Certain patients have a higher likelihood of unplanned readmission, including African-Americans and those living in povery.  Hospitals in higher minority populated communities or public hospitals tend to have more needy and expensive patients.  As a result, hospitals with higher minority populations may be forced to cut services in order to keep costs down; therefore, access to certain services will decline and the whole community will suffer.

          One of the major shortfalls to the HRRP is that the program does not differentiate between related and unrelated readmission.  According to Swiders, a recent study showed at least 80% of hospital readmission were unrelated to the initial admission.

          The authors of the HRRP have voiced the need for the penalty multiplier to be adjusted for fairness and effectiveness, saying: “At the present time, it is difficult to distinguish between random variation and true performance improvement for hospitals with small number of cases.” (Burning Platform Has Arrived).

          As Swider said, there are no rewards for providers or hospitals to reduce readmissions, but only a penalty for not doing so.  One of the main problems with the readmissions reduction program is that hospitals had a very small time window to create policies and procedures to reduce 30-day readmissions.  Penalties to hospitals should be given in situations the hospital has control over.  Many readmissions happen because patients fail to follow their provider’s instructions after discharge.  A more realistic readmission reduction program must be implemented for hospitals to successfully reduce hospital readmissions without punishing them for readmissions that are out of their control. 

          Hospitals are at a loss right now.  Numerous consultants and companies are appearing and offering services and plans that will reduce hospital readmission rates; however, there isn’t much hard evidence showing which plans are most effective. (Hospitals Question Rules on Readmissions). In fact, successfully preventing hospital readmissions may be different from hospital to hospital.  However, two Massachusetts Hospitals are reducing readmissions by assigning high risk patients a “transitional care coach.” (Patient Eduction). The “transitional care coach” is a nurse who helps patients with at-home care.  The two hospitals reported less than 10% of patients who are assigned a “transitional care coach” are readmitted for care.    

          There are too many things that could go wrong with the HRRP.  CMS may want to seriously reconsider their program and come up with other incentives to make hospitals reduce their readmission rates.  Too many factors that contribute to hospital readmissions are out of the hospital’s control.  Hospitals should not be punished for things they have no control over.  Maybe CMS should have implemented the HRRP by first testing it in a few areas, similar to what they are doing with their Bundled Payment for Care Improvement Initiative.  Regardless, the HRRP is here to stay, for better or worse.    

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[1] Jowl Swider, A Dose of Reality: Unintended Consequences of Penalizing Hospital Readmissions in the PPACA, 9 Ind. Health L. Rev. 361, 362 (2012).

[2] Vernessa Pollard & Chandra Branham, FDA Medical Device Requirements: Legal Framework for Regulating Health Information Technology, Software, and Mobile Apps, 2011 WL 5833341.

[3] Becky Sutherland Cornett & Tina Latimer, Managing Hospital Readmissions: An Overview of the Issues, 13 No. 6 J. Health Care Compliance 5 (2011).     

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