Hospital readmissions penalties now in 5th year

Some question whether hospitals should be held accountable for readmissions.


With the Hospital Readmissions Reduction Program (HRRP) in its 5th year, what has been the impact on hospitals and on hospitalists?

First of all, a lot of penalties have been paid by hospitals. According to an analysis by Kaiser Health News,1 the Centers for Medicare and Medicaid Services will withhold $528 million from 2,597 hospitals in the current fiscal year, Oct. 1, 2016 to Sept. 30, 2017, for readmissions for six diagnoses that occurred between July 2012 and June 2015. The number of penalized hospitals is down slightly from 2,665 the year before, but the total annual withhold will go up by $108 million.

HRRP exacts Medicare payment penalties from hospitals that have rates of readmissions – within 30 days of discharge – that are higher than expected, based on national rates and the health of their patient population. The maximum penalty is now up to 3% of a hospital’s Medicare reimbursement. Hospitals are being penalized an average of 0.73% of their annual Medicare reimbursement, and cumulative HRRP penalties will reach nearly $1.9 billion by the end of the fiscal year, Kaiser Health News reports.2

Dr. Harlan Krumholz director of Yale New Haven Health System

Dr. Harlan Krumholz

Hospital readmissions were discussed by health policy researchers for years, without much impact on policy, but once there were financial implications, there was more action to improve performance, says Harlan Krumholz, MD, director of the Yale New Haven (Conn.) Health System Center for Outcomes Research and Evaluation and lead researcher on the center’s government contract to develop the 30-day readmission measure used by CMS.3

“Basically, we chose to introduce the idea of measuring readmissions because we felt it represented an adverse outcome for many people that was being ignored; that risk could be reduced; and improvements would yield benefits for people as well as save money for the health care system,” he told The Hospitalist.

“More than anything, HRRP has sharpened the focus on considering the episode of care from the patient’s perspective – rather than just focusing on venues of care like the hospitalization alone,” Dr. Krumholz said. “The focus on readmission forced many of us in the health professions to consider what the experience was like to leave the acute setting – how information flowed, what kind of concerns people had, the degree to which they understood what had happened to them, the extent to which they were prepared for the next steps.”

Once the patient leaves the hospital, there are myriad factors that will influence their likelihood of returning, notes researcher Karen Joynt, MD, MPH, of the Department of Health Policy and Management at Harvard’s School of Public Health, Boston. “The proportion of patients readmitted to the hospital because of gross error is low, but sometimes we’re too optimistic about our patients’ ability to manage postdischarge,” she said.

“We all know we can do better at providing softer landings, and anyone who’s ever been a hospital patient or a family member of one knows that leaving the hospital is incredibly tumultuous. I experienced that with my own parents, and it’s frightening, even if everything is done right. It’s still a very vulnerable time.”

HRRP has fundamentally changed the conversation about hospital care, Dr. Joynt said. “I think we need to change the conversation even more and talk more about how to prevent admissions in the first place. As a clinician, I think we need to be more innovative, recognizing that the ways we’ll make a real difference probably has more to do with what happens outside of the hospital. My personal hope is that new alternate payment models like accountable care organizations will lead to more creative partnerships with other providers.”

What have we learned about readmissions in 5 years?

A lot of recently published research about readmissions has documented modest decreases in overall readmissions nationally, from over 21% to under 18% between 2007 and 2014, although most of the reduction occurred in the first couple of years after HRRP was announced and it has since largely leveled off.

Other research has tried to explore the relationship between readmissions rates and other outcomes that might matter more to patients or that might be better proxies for the quality of the hospital experience. Is readmission rate a true measure of quality, or just a utilization measure? Research has also tried to document what works: what are the best strategies for preventing avoidable readmissions by improving the discharge process, care transitions, and the coordination of care postdischarge in the community – although no silver bullet has yet been identified.

A recent effort to inject more equity into the penalties program, contained in the wide-ranging 21st Century Cures Act signed into law by President Obama in December 2016, requires Medicare to account for patients’ socio-economic backgrounds when it calculates reductions in its payments to hospitals under HRRP. The law directs the government to change the way pay for performance is applied to safety net hospitals by setting different penalty thresholds for hospitals based on the proportion of their patients who are dually eligible for Medicare and Medicaid.

It remains to be seen how this will be implemented and with what impact. But some critics have continued to question whether hospitals should be held accountable for readmissions, whether 30 days is the correct time frame for that accountability, and whether some hospitals might be simply taking the penalty hit rather than investing in the hard work of care transitions.


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