Some say pending legislation to add a socioeconomic adjustment to HRRP could pass in the waning days of the current Congress.

Sept. 16—Medicare 30-day readmission rates have fallen 8 percent over the last six years, enough to eliminate a half-million readmissions, accord to new federal data. But the continuing decline comes amid rising penalties.

Readmissions declined in 49 states from 2010 to 2015, resulting in an estimated 565,000 fewer hospital readmissions, according to data released this week by the Centers for Medicare & Medicaid Services (CMS). Readmission rates fell by more than 5 percent in 43 states and by more than 10 percent in 11 states, according to CMS officials.

“Across states, Medicare beneficiaries avoided approximately 100,000 readmissions in 2015 alone, compared to if readmission rates had stayed constant at 2010 levels,” wrote Patrick Conway, MD, principal deputy administrator of CMS and Tim Gronniger, deputy chief of staff of CMS. “That means Medicare beneficiaries collectively avoided nearly 100,000 unnecessary return trips to the hospital.”

The CMS officials at least partially credited Medicare’s Hospital Readmission Reduction Program (HRRP), an Affordable Care Act (ACA) program that started penalizing hospitals for excess avoidable readmissions in FY13. CMS officials have argued hospitals increased their focus on cutting unnecessary readmissions when the ACA was enacted in 2010.

That perspective was supported by a survey-based study in the American Journal of Managed Care(AJMC), in which hospital leaders said HRRP had a “significant” or “great” impact on boosting their organization’s efforts to decrease readmissions compared to two CMS-sponsored programs that preceded it.

Since 2010, the HRRP has penalized hospitals a total of $1.9 billion, according to an American Hospital Association (AHA) tally.

But some wonder why those penalties are growing even as the readmissions continue to decline. In August, CMS projected HRRP will cut hospitals’ base operating DRG payments by $528 million in FY17, which starts Oct. 1. Such a cut will be $108 million higher than the one in FY16.

“The expectation would be that if readmissions are going down, then the penalties shouldn’t be increasing,” said Chad Mulvany, director of healthcare finance policy, strategy and development, at HFMA.

The continued penalty increase may arise both from the design of the program, which bases penalties on hospitals’ performance relative to each other instead of to static benchmarks, and from the growing number of patient conditions subject to the penalty.

“If [hospitals] want to get better, they have to do something more than what everybody else is doing to make their readmissions decline; we’re constantly chasing this moving goal,” Nancy Foster, vice president of quality and patient safety policy for AHA, said in an interview.

The FY17 penalty increase was at least partially blamed on the addition of coronary bypass patients to the group whose readmissions can drive hospital payment cuts. CMS already penalizes readmissions of patients who have had heart attacks or heart failure, pneumonia, certain knee or hip surgeries, or chronic obstructive pulmonary disease.

Factors such as the HRRP design elements and new measures are expected to continue increasing the number of hospitals facing a maximum penalty of 3 percent of Medicare revenues beyond the 49 such hospitals in FY17. Thirty-eight received the maximum penalty in FY16.

What Works

Hospital leaders remain concerned that there is relatively little they can do to improve their performance in HRRP because readmission rates are frequently driven by outside factors. In the AJMC survey, hospital leaders said nearly every other mandatory federal quality improvement program was more important to them, which the survey authors suspected was because many executives see readmissions as being outside their control.

“[I]n the setting of competing priorities, perceiving a lack of ability to change an outcome could cause hospital leadership to focus on other areas for intervention,” the authors wrote.

AHA’s Foster agreed.

“We’re absolutely hearing that it can be very challenging to know what can be effective in a given hospital with any group of patients to reduce readmissions,” Foster said.

Among the steps that are “highly likely” to reduce readmissions, AHA has found, are following up with complex patients after discharge and clarifying discharge and medication instructions to improve patient understanding.

Another good idea may be to focus on patient vital signs in the 24 hours before discharge. A recent study in the Journal of General Internal Medicine found one in five patients discharged from hospitals had unstable vital signs, which is associated with an increased risk of death or readmission.

Oanh Kieu Nguyen, MD, an assistant professor at UT Southwestern Medical Center and one of the study’s authors, said hospitals should not simply expect patients with two or more abnormal vital signs to recover after discharge.

“That may not be the case, and it is worth thinking about whether that person should instead stay in the hospital a little longer or whether perhaps they are so sick that they are probably not going to recover from their illness and maybe referral to hospice care might be appropriate instead,” Nguyen said in an interview.

Legislative Fix

Hospital advocates hope pending legislation might address at least some of their concerns that the program unfairly penalizes safety-net and rural hospitals for community health factors beyond their control.

A House-passed bill, the Helping Hospitals Improve Patient Care Act, would adjust HRRP measures for socioeconomic factors. The Senate has not taken up the bill, and some industry observers are doubtful it will advance in the waning days of the current Congress.

But others are cautiously optimistic.

“There are many, many folks who are very supportive of this notion, but, as you know, things are not moving swiftly in Congress these days, so we’re waiting with bated breath,” Foster said.

Addressing other concerns related to the program design will have to wait.

“The full impact of the readmissions reduction program are just becoming known to a variety of policymakers, so it may be the next administration and the next Congress that we work with to try to create some changes to the program to keep it fair and reasonable—beyond the socioeconomic adjustment,” Foster said.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, September 16, 2016