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Healthcare Business News
 

Hospitals face reimbursement penalties over readmission rates


By Jay Greene, Crain's Detroit Business
Posted: December 10, 2012 - 1:00 pm ET
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Dr. Bill Conway, chief quality officer with Henry Ford Health System in Detroit, said the seven-hospital system has been reducing inappropriate readmissions the past five years—but not enough to avoid Medicare reimbursement cuts that began Oct. 1.

Most "every hospital in Detroit will take a hit" on readmissions, Conway said. "We have been improving in our suburban hospitals, but readmissions have been flat" at 802-bed Henry Ford Hospital in Detroit.

Conway said it is difficult for large urban teaching hospitals like Henry Ford to reduce readmissions because they are regional referral centers that tend to attract larger numbers of sicker patients.

Federal studies also show poor and minority populations are more prone to be readmitted because they either are uninsured or do not have a primary care physician.

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Nationally, 2,217 hospitals were financially penalized starting Oct. 1 for readmissions within 30 days of discharge that exceed the national average for congestive heart failure, heart attack and pneumonia. The cost-containment rule is contained in the Patient Protection and Affordable Care Act of 2010.

Of those hospitals, 307 will have their Medicare reimbursement cut the full 1 percent during the next year, including four hospitals in Southeast Michigan. They are Beaumont Hospital Troy and the Detroit-based hospitals of DMC Harper University Hospital, St. John Hospital and Medical Center and Henry Ford Hospital.

"We thought we could cut readmissions in half five years ago when we began," Conway said. "Now we get below 18 percent (in September from 22 percent in January 2009) and are happy with it. There are 100 things that need to go well to reduce readmissions" and many "are out of our control."

In 2013, Henry Ford Health System projects to lose $2.2 million from readmissions with $1 million of those losses coming from Henry Ford Hospital.

Those cuts for the Henry Ford system will increase in 2014 to $4.3 million, including $2 million at Henry Ford Hospital, because the penalties will increase to 2 percent in 2014 and 3 percent in 2015.

The readmission penalties are part of a broader push under health care reform to improve quality while saving money. Medicare plans to add other conditions to the list in coming years.

But data shows hospital readmissions, which average about 20 percent within 30 days and cost U.S. taxpayers more than $17.5 billion a year, have dropped very little the past three years, illustrating the difficulty and limitations hospitals have in managing sick patient populations without more control over patients.

For example, 24.7 percent of patients were readmitted for heart failure within 30 days in 2012, down only by 0.1 percent. Heart attack patients had a 0.1 percent decrease to 19.7 percent. Those with pneumonia were readmitted at a higher rate during those three years, up 0.1 percent to 18.5 percent.

Other hospitals in Southeast Michigan that expect to lose Medicare base reimbursement under readmissions include Botsford Hospital, 0.78 percent; Henry Ford Macomb Hospital, 0.75 percent; Detroit Receiving Hospital, 0.72 percent; University of Michigan Health System, 0.68 percent; Beaumont Hospital Royal Oak, 0.52 percent; Beaumont Hospital Grosse Pointe, 0.46 percent; and Mt. Clemens Regional Medical Center, 0.30 percent. Despite reducing actual readmission rates, Detroit Medical Center expects to lose $1.7 million, or 0.8 percent of Medicare payments, by not meeting the strict readmission standards, said Dee Prosi, DMC's senior vice president of marketing and business development.

Dearborn-based Oakwood Hospital and Medical Center stands to lose $1.2 million in 2013, or 0.82 percent of base Medicare reimbursement, according to an Oakwood statement.

St. John Providence Health System expects to lose $2.3 million in fiscal 2013, despite making progress in reducing readmissions, CFO Pat McGuire said.

Hospital quality officials interviewed by Crain's say Medicare is not giving them enough credit for their efforts to reduce hospital admissions.

Dr. Sam Flanders, chief quality officer with Beaumont Health System in Royal Oak, said some hospital readmissions can't be prevented.

"We are talking about really sick patients," Flanders said. "There is a lot of frustration with this. The process is out of our control. We can't lower readmission rate where we do not suffer penalties."

Medical chart reviews often show that patients most often readmitted within 30 days have similar problems. For example, most patients fail to make appointments with their physician after discharge or do not understand or remember what they are supposed to do after they are discharged.

Moreover, hospitals that never treated certain patients sometimes must readmit those patients for either one of the three original conditions or for an entirely new medical problem. When hospitals do readmit a patient within 30 days, for whatever reason, Medicare considers that a failure and hospitals lose revenue.

"We have found there is not a direct cause and effect to why patients are readmitted," Flanders said.

For example, Flanders said he recently conducted medical chart reviews of patients being readmitted in Beaumont Royal Oak's emergency department.

"I found they are really sick people who had medical issues that needed to be taken care of in the hospital," he said. "There was no lack of coordination after (original) discharge."

As a result, Flanders said, Beaumont will lose $2.9 million in Medicare reimbursement for readmitted patients from Oct. 1, 2012, to Sept. 30, 2013.

Despite studies and projects to coordinate care among home health agencies, nursing homes and physicians, Flanders said "nobody has found the magic bullet for this."

Medical professionals initially thought the use of telemedicine and home medical monitoring devices like blood pressure cuffs and wireless weight scales showed early promise, Flanders said.

"We looked at the data and there was no improvement in readmission rates for patients using telemedicine versus those who didn't get it," Flanders said.

Now, Beaumont, Henry Ford and other hospitals and home health agencies are experimenting with systems to identify patients who are at higher risks for readmission.

Greg Solecki, vice president of home health with Henry Ford at Home, said working with recently discharged patients referred to home health services helps to coordinate care to avoid readmissions.

"We are all moving in the same direction, but there are so many variables when they go home we have to take them all into account," Solecki said. "We are developing report cards of patients at skilled nursing facilities with high-risk for readmissions. We think this will help."

For example, Beaumont is using the "LACE" system to track high-risk patients. LACE is an acronym that takes into account length of stays the patient previously had before discharge, the acuity, or sickness, of a patient at admission, the comorbidity (multiple health problems) and the number of emergency visits the last six months.

Flanders said Beaumont has done all the recommended checks after discharge, including making sure patients contact their physician for appointments one week or less after discharge and make sure they have all their medications.

"Right now we are planning for budget losses," Flanders said. "It will be quite some time" before hospitals improve enough to avoid penalties.


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