In 2007, the Medicare Payment Advisory Commission (MedPAC) found that 17.6 percent of hospital admissions were readmissions occurring within 30 days after discharge, accounting for $15 billion in spending. Three years later, a group of researchers found that 78 percent of hospital readmissions were avoidable, resulting in an excess cost to Medicare of $3.39 billion, and that these readmissions were primarily due to poor care-transition planning. a These data and other similar empirical studies were the rationale Congress used to include in the Affordable Care Act a provision to implement the Hospital Readmissions Reduction Program. b Implemented in 2012, the program reduced payments to hospitals with high readmission rates for patients admitted with selected medical diagnoses (i.e., acute myocardial infarction [AMI], chronic obstructive pulmonary disease [COPD], congestive heart failure, pneumonia, and stroke) and surgical diagnoses (i.e., total hip arthroplasty, total knee arthroplasty, and in 2017, coronary artery bypass graft). During the program’s first two years, Medicare readmissions fell from 19 percent to 17.5 percent, for an 8 percent reduction of about 150,000 hospital readmissions.
Following the success of the Hospital Readmission Reduction Program, Congress passed the Protecting Access to Medicare Act in 2014, establishing the Skilled Nursing Facility (SNF) Value-Based Purchasing Program, which includes “a measure to reflect an all-condition risk-adjusted potentially preventable hospital readmission rate for skilled nursing facilities.” c
The Secretary of Health and Human Services (HHS) published the Skilled Nursing Facility (SNF) Value Based Purchasing final rule on Aug. 4, 2015, which included a SNF all-cause, all-condition hospital readmission measure with an effective date of Oct. 1, 2018. The final rule underscores the need for collaboration to reduce hospital readmissions, stating, “Hospitals and other health care providers can work with their communities to lower readmission rates and improve patient care in a number of ways, such as … improving communication with community providers responsible for post-discharge patient care, improving care transitions….”
a. Mor, V., Intrator, O., Feng, Z., and Grabowski, D.C. The Revolving Door of Rehospitalization From Skilled Nursing Facilities,” Health Affairs, January-February 2010.
b. CMS, Readmissions Reduction Program (HRRP), Page last updated, April 18, 2016.
c. See HR 4302—Protecting Access to Medicare Act of 2014, became law April 1, 2014.
d. CMS, “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNFs) for FY 2016, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, and Staffing Data Collection,” Federal Register, Aug. 4, 2015.