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ORLANDO – When the Centers for Medicare & Medicaid Services imposes financial penalties on hospitals because of excess readmissions for heart failure, the agency gets it wrong nearly 30% of the time, Hung-Mo Lin, Sc.D. asserted at the American Heart Association scientific sessions.
The problem, she said, is that the agency’s 2012 Inpatient Prospective Payment System Final Rule relies on a formula for estimating the risk-standardized excess readmission ratio that doesn’t take into account the uncertainties surrounding the measurements.
This has serious consequences in terms of the resultant substantial probability of hospital misclassification errors, according to Dr. Lin of the Icahn School of Medicine at Mount Sinai, New York.
How substantial is this error rate? To find out, Dr. Lin and her coworkers retroactively applied the CMS formula to roughly 1.5 million heart failure admissions at nearly 5,000 U.S. hospitals during 2005-2008, then developed confidence intervals for the individual hospitals’ excess readmission ratios and ran the numbers again, this time using the updated formula. They determined that the false-penalty rate was 27.5% for the 2,381 hospitals with an elevated excess admission ratio as defined by the current CMS formula.
Conversely, among the 2,549 hospitals that would have been labeled as good performers using the CMS formula and hence not subject to a punitive payment adjustment, 28.8% actually turned out to be poor performers with excessive heart failure readmissions. Those hospitals would have wrongly escaped penalties, she explained.
Hospital volume mattered. When the investigators stratified their results by hospital volume, they found that the probability of hospital misclassification was twice as great for small hospitals – that is, those in the two bottom quintiles for patient volume – compared to hospitals in the top quintile.
Dr. Lin reported having no financial conflicts regarding this health policy study.
ORLANDO – When the Centers for Medicare & Medicaid Services imposes financial penalties on hospitals because of excess readmissions for heart failure, the agency gets it wrong nearly 30% of the time, Hung-Mo Lin, Sc.D. asserted at the American Heart Association scientific sessions.
The problem, she said, is that the agency’s 2012 Inpatient Prospective Payment System Final Rule relies on a formula for estimating the risk-standardized excess readmission ratio that doesn’t take into account the uncertainties surrounding the measurements.
This has serious consequences in terms of the resultant substantial probability of hospital misclassification errors, according to Dr. Lin of the Icahn School of Medicine at Mount Sinai, New York.
How substantial is this error rate? To find out, Dr. Lin and her coworkers retroactively applied the CMS formula to roughly 1.5 million heart failure admissions at nearly 5,000 U.S. hospitals during 2005-2008, then developed confidence intervals for the individual hospitals’ excess readmission ratios and ran the numbers again, this time using the updated formula. They determined that the false-penalty rate was 27.5% for the 2,381 hospitals with an elevated excess admission ratio as defined by the current CMS formula.
Conversely, among the 2,549 hospitals that would have been labeled as good performers using the CMS formula and hence not subject to a punitive payment adjustment, 28.8% actually turned out to be poor performers with excessive heart failure readmissions. Those hospitals would have wrongly escaped penalties, she explained.
Hospital volume mattered. When the investigators stratified their results by hospital volume, they found that the probability of hospital misclassification was twice as great for small hospitals – that is, those in the two bottom quintiles for patient volume – compared to hospitals in the top quintile.
Dr. Lin reported having no financial conflicts regarding this health policy study.
ORLANDO – When the Centers for Medicare & Medicaid Services imposes financial penalties on hospitals because of excess readmissions for heart failure, the agency gets it wrong nearly 30% of the time, Hung-Mo Lin, Sc.D. asserted at the American Heart Association scientific sessions.
The problem, she said, is that the agency’s 2012 Inpatient Prospective Payment System Final Rule relies on a formula for estimating the risk-standardized excess readmission ratio that doesn’t take into account the uncertainties surrounding the measurements.
This has serious consequences in terms of the resultant substantial probability of hospital misclassification errors, according to Dr. Lin of the Icahn School of Medicine at Mount Sinai, New York.
How substantial is this error rate? To find out, Dr. Lin and her coworkers retroactively applied the CMS formula to roughly 1.5 million heart failure admissions at nearly 5,000 U.S. hospitals during 2005-2008, then developed confidence intervals for the individual hospitals’ excess readmission ratios and ran the numbers again, this time using the updated formula. They determined that the false-penalty rate was 27.5% for the 2,381 hospitals with an elevated excess admission ratio as defined by the current CMS formula.
Conversely, among the 2,549 hospitals that would have been labeled as good performers using the CMS formula and hence not subject to a punitive payment adjustment, 28.8% actually turned out to be poor performers with excessive heart failure readmissions. Those hospitals would have wrongly escaped penalties, she explained.
Hospital volume mattered. When the investigators stratified their results by hospital volume, they found that the probability of hospital misclassification was twice as great for small hospitals – that is, those in the two bottom quintiles for patient volume – compared to hospitals in the top quintile.
Dr. Lin reported having no financial conflicts regarding this health policy study.
AT THE AHA SCIENTIFIC SESSIONS
Key clinical point: Nearly 30% of hospitals penalized by Medicare for excess heart failure readmissions are misclassified as such, and a roughly equal percentage of hospitals are wrongly categorized as good performers.
Major finding: The formula Medicare uses to calculate risk-standardized excess heart failure readmission ratios is flawed in that it ignores the uncertainty of the measurements, leading to erroneous imposition of financial penalties.
Data source: This study entailed calculating the level of uncertainty in the Medicare formula, then retroactively applying the formula to nearly 1.5 million heart failure admissions at almost 5,000 U.S. hospitals.
Disclosures: The presenter reported having no financial conflicts regarding this health policy study.
