The HCFO program ended in December 2016.
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Reducing excess readmissions is top of mind among all hospitals in Cleveland. Administrators at the Cleveland Clinic, MetroHealth System and University Hospitals understand the financial implications of patients returning within 30 days of discharge. But as reported in a recent NPR article, reducing readmissions is particularly challenging for providers like MetroHealth and University Hospitals, which serve large numbers of low-income patients.
Established under the Affordable Care Act, Medicare’s Hospital Readmissions Reduction Program (HRRP) penalizes hospitals for excess readmissions. Since 2012, the penalty has increased from a maximum of one percent reduction in Medicare payments to three percent in 2015 for hospitals exceeding the national average readmission rate for certain specified conditions.
To help reduce its readmission rate, the Cleveland Clinic connects its pharmacists and cardiology patients prior to discharge. The pharmacist answers patients’ questions about the medications they are taking and encourages adherence. Since the start of this program, the Cleveland Clinic has seen a reduction in readmissions and an attendant decline in penalties from .74 percent of Medicare payments to .38 percent.
Results are less encouraging for MetroHealth, a county-owned hospital system where about half of the patients are uninsured or Medicaid beneficiaries. From 2013 to 2015, MetroHealth’s readmission penalties have increased from .45 percent to .83 percent of Medicare payments. Chief Quality Officer Dr. Alfred Connors points out that MetroHealth cares for homeless patients who have nowhere to go when they are discharged and no support system. Similarly, University Hospitals serve many of Cleveland’s low-income patients. And, like MetroHealth, they have seen an increase in the Medicare readmission penalty.
Recently, the National Quality Forum launched a two-year trial to test the impact of risk adjustment of performance measures for socio-demographic factors. The trial will include examining readmissions data and considering the role that poverty plays in a hospital’s ability to implement effective strategies to reduce readmissions.
Research and convening supported by the HCFO program is helping to inform these issues.
Kathleen Carey, Ph.D., Boston University, and colleagues examined the intended and unintended consequences of the HRRP, including changes in readmission rates and length of stay for patients admitted for health attack, heart failure or pneumonia. Carey also explored possible strategic behavior by hospitals that may reduce quality of care and/or offset expected savings to Medicare, including increased use of the emergency department and observation stays. Additional information about Carey’s study is available here.
David Zingmond, M.D., Ph.D., University of California, Los Angeles, and colleagues are examining the impact and potential spillover effects of the HRRP. The research team is exploring how the HRRP may be affecting readmissions for Medicare fee-for-service patients, as well as patients with other types of health care coverage – specifically, private insurance, Medicare managed care, and Medicaid. They are also assessing the impact of the program on readmissions for several additional conditions that are expected to be added to the program in FY2014 and FY2015. Finally, the researchers are examining the program’s impact on all-cause medical and surgical index admissions. Additional information on the study can be found here.
In November 2013, HCFO convened a meeting of health care practitioners, administrators, clinical and health services researchers, and policy experts from private sector and government agencies to discuss how the HRRP was working currently and to develop actionable recommendations for refining the program going forward. Meeting participants reached consensus on the need for some refinements to the current HRRP. There was clear support for the Medicare Payment Advisory Commission’s proposed approach for balancing concerns about higher incidence of HRRP penalties being levied on hospitals serving low-income patients with the need to retain data transparency and meaningful incentives for all hospitals to reduce excess admissions. The proposed refinement would divide hospitals into deciles based on the share of low-income patients, and assess the HRRP penalties based on hospitals’ performance compared to other hospitals in their decile. This would reduce or eliminate penalties for better performing hospitals with higher shares of low income patients even though their readmission rates are not as low as the best performing hospitals with lower shares of low-income patients. At the same time, this approach would still provide incentives for all hospitals to reduce excess admissions. For more details, this issue brief summarizes participants’ analytical insights and recommendations.