June 20, 2011
Donald Berwick, MD
Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8011
Baltimore, MD 21244-1850
File Code CMS-1518-P
Re: Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2012 Rates - Comments on proposed Hospital Readmissions Reduction Program
Dear Dr. Berwick:
The Healthcare Financial Management Association (HFMA) appreciates this opportunity to comment on the Centers for Medicare and Medicaid Services' (CMS) proposed rule for the Hospital Inpatient Prospective Payment System, published in the May 5, 2011, Federal Register. As part of the proposed rule, HFMA appreciates CMS's efforts to promulgate regulations associated with Section 3025 of the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010.
HFMA is a professional organization of more than 37,000 individuals involved in various aspects of healthcare financial management. HFMA has formed a primary advisory committee in the areas of health payment and delivery system reform in order to address the unique characteristics of health service organizations.
HFMA supports CMS's initiatives to transition Medicare payments from a volume- to value-based system. This includes the development of a Hospital Readmissions Reduction Program. However, HFMA has several areas of concern regarding the proposed rule, which include:
- Endorsed Measures with Exclusions for Unrelated Admissions
- Minimum Number of Discharges for Applicable Conditions
- Risk Adjustment
- Expected Readmissions Ratio
Below, please find our detailed comments on the proposed Hospital Readmissions Reduction Program.
Endorsed Measures with Exclusions for Unrelated Admissions
HFMA appreciates the careful consideration that CMS has given readmissions that should be excluded from a hospital's actual readmissions rate. However, we are concerned about both the limited number of excluded conditions from the Readmissions Reduction Program and CMS's proposal to account for transfer cases.
The proposed rule identifies a limited number of excluded "planned readmissions," as defined by the NQF, from the 30 day risk-standardized AMI measure. As a result, Percutaneous Transluminal Coronary Angioplasty (PTCA) and Coronary Artery Bypass Graft (CABG) are excluded from the AMI 30-day risk standardized readmissions measure unless the principal discharge diagnosis for the readmission is one of the following diagnoses that are not consistent with a scheduled readmission: heart failure, acute myocardial infarction, unstable angina, arrhythmia, and cardiac arrest. No such exclusions exist for the 30-day risk standardized measures for HF and PN.
HFMA believes that CMS needs to reevaluate its list of excludable readmissions. At a minimum CMS should exclude readmissions related to random events (e.g. patient falls in the home or motor vehicle accidents) from the 30 day risk-standardized readmissions measure for the current set of conditions and any added in the future. The definition of random events should include hospital discharges and readmissions during a time of natural disaster or declared states of emergency. For example, hospitals providing services in areas subject to hurricanes may find it necessary to cancel elective procedures and discharge patients or readmit patients due to curtailed community care services (e.g., home care) during the time of hurricane warnings or watches and during disaster recovery after the event. Hospitals should not be penalized for managing patient admissions and discharges during disaster preparation and recovery. Further, the ability to identify and remove readmissions related to random events will be even greater with the implementation of ICD-10, which coincides with the start of the preventable readmissions policy.
The proposed rule also excludes from a hospital's standardized readmissions rate any cases where the patient was transferred to another hospital and subsequently readmitted. While we believe this is appropriate, we suggest that CMS monitor transfers to ensure that patients who are potentially a high-readmissions risk aren't unnecessarily transferred.
Minimum Number of Discharges for Applicable Conditions
The rule proposes 25 discharges for each condition as the minimum number needed to be included in the Hospital Readmissions Reduction Program. CMS chose this number as it is the current minimum required for reporting in the Inpatient Quality Reporting Program (IQR). The rule further states that CMS is "currently conducting additional analyses to further evaluate the appropriate minimum number of discharges needed to yield reliable excess readmission ratios for the three proposed measures."
HFMA strongly believes that in the absence of complete certainty around a minimum threshold to "provide sufficiently reliable information on hospital performance," CMS needs to increase the minimum threshold to a sufficient size to guarantee data reliability. While unreliable data is an undesired outcome in a reporting program, it is completely unacceptable in a program that could potentially reduce a hospital's inpatient Medicare revenue by up to three percent. The national average hospital operating margin in 2009 was 1.98%. (1) Given that Medicare inpatient payments are 18 percent(2) of total hospital payments, any reduction due to unreliable data will irreparably harm hospital finances and threaten hospitals' ability to serve the communities that depend on them. Further, a low (and therefore unreliable) minimum threshold will disadvantage smaller hospitals as not only will they have lower volumes for each condition, but also will tend to have smaller margins and a higher reliance on Medicare revenue to sustain operations.
Section 1886(q)(4)(C)(i)(I) of the Act requires that the number of readmissions used in the excess readmission ratio be risk adjusted. HFMA is pleased that the rule proposes to use the current NQF backed methodology, which takes into account patient demographic factors, patient coexisting medical conditions, and indicators of patient frailty that are collected from the prior 12 months of Medicare claims data. However, we are concerned that the demographic factors included in the adjustment are limited to the mean age and percentage of the patient population that is male for each facility.(3)
While it is important to use age and sex as part of the risk adjustment algorithm it is insufficient. Both a litany of academic research and our members' practical experience has shown that hospital readmissions are driven by a multitude of demographic factors, aside from age and sex, which are beyond hospitals' control. Some examples of these factors include, but are not limited to, socioeconomic status, literacy, and presence of caregiver in the home.
In the proposed rule CMS stresses the importance of risk adjustment to "level the playing field" and account for factors outside of a hospital's control. However, the absence of key demographic factors from the risk adjustment methodology will further disadvantage safety net and other hospitals who primarily serve socioeconomically challenged communities. To avoid this undesired outcome, HFMA strongly recommends that CMS modify the current risk adjustment methodology to account for socioeconomic and other demographic factors that significantly contribute to hospital readmissions.
The inclusion of additional factors in the risk adjustment algorithm must reflect a balance between their explanatory impact on hospital readmissions and the administrative burden required to collect them.
Expected Medicare Readmissions Ratio
While it was not mentioned in the proposed rule, HFMA strongly recommends that CMS provide hospitals with their expected readmissions ratio and actual readmissions counts on a quarterly basis. Along with their expected readmissions ratio, hospitals should receive all Parts A, B, and D claims data for the prior 12 months for any readmission attributed to them. Hospitals should have access to their expected readmissions ratio and claims data for attributed readmissions immediately. This will help hospitals understand the nature of readmissions attributed to them and allow hospitals to put processes in place to reduce preventable readmissions.
Readmission Rates for All Patients
CMS has requested comments and suggestions for issues related to implementing the calculation of readmission rates for all patients. Readmission rates are influenced by a multitude of external factors beyond the quality of care provided by a hospital. For instance, readmissions rates may be impacted by coverage decisions made by the patient's payer for post-acute care or the availability of community-support services. We urge CMS to take into account factors outside a hospital's control when calculating readmission rates for all patients.
HFMA looks forward to any opportunity to provide assistance or comments to support CMS's effort to create a preventable readmissions reduction program. As an organization, we take pride in our long history of providing balanced, objective financial technical expertise to Congress, CMS, and advisory groups.
We are at your service to help CMS gain a balanced perspective on this complex issue. If you have additional questions, you may reach me, or Richard Gundling, Vice President of HFMA's Washington, DC, office, at (202) 296-2920. The Association and I look forward to working with you.
Richard L. Clarke, DHA, FHFMA
President and Chief Executive Officer
Healthcare Financial Management Association
1 Almanac of Hospital Financial and Operating Indicators, Ingenix, 2011
2 2009 CMS HCRIS Database
3 2010 Measures Maintenance Technical Report: Acute Myocardial Infarction, Heart Failure, and Pneumonia 30-Day Risk-Standardized Readmission Measures
HFMA is the nation's leading membership organization for more than 37,000 healthcare financial management professionals. Our members are widely diverse, employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant.
HFMA is a nonpartisan professional practice organization. As part of its education, information, and professional development services, HFMA develops and promotes ethical, high-quality healthcare finance practices. HFMA works with a broad cross-section of stakeholders to improve the healthcare industry by identifying and bridging gaps in knowledge, best practices, and standards.
Publication Date: Monday, June 20, 2011