Healthcare Business News

Reform Update: Congressional measure may ease concerns over readmission penalties

By Sabriya Rice
Posted: June 23, 2014 - 4:00 pm ET

As support grows for the need to adjust 30-day readmission-rate penalties for hospitals serving impoverished communities, hospital groups remain concerned that new measures and higher penalties anticipated next year will continue to hurt efforts to achieve the very quality measures the penalties are supposed to address.

Last Thursday, a group of U.S senators introduced legislation called the Hospital Readmission Accuracy and Accountability Act, which would require the CMS to account for patient socio-economic status when calculating risk-adjusted readmissions penalties. The impact of that measure could be to reduce some penalties for hospitals in the most impoverished areas by adjusting for readmission factors beyond a hospital's control.

Holding all other factors constant, socio-economic conditions—such as poverty, low levels of literacy, limited English proficiency, minimal social support, poor living conditions and limited community resources—likely have direct and significant impacts on avoidable hospital readmissions. Adjusting for these factors would improve accountability and quality of care, according to the text of the bill.

“Having the financial resources to do quality improvement work is important,” said Akin Demehin, senior associate director of policy for the American Hospital Association. “The program is complex, the formula is complex and it's an area we'd like to see some improvement.”

By fiscal 2015, under current CMS requirements enacted as part of the Patient Protection and Affordable Care Act, hospitals with excess readmissions will be fined up to 3%.

When CMS' Readmission Reduction Program began in fiscal 2013, there was a maximum 1% penalty for hospitals with excess readmissions for three conditions: heart failure, heart attack and pneumonia.

In 2014, more than 2,200 hospitals across the U.S. received Medicare readmission penalties, according to the CMS, a total loss of nearly $230 million in Medicare funding. In fiscal 2015, total hip replacement, total knee replacement and COPD will be added to the measures, and penalties are estimated at $440 million.

The individual hospital impact varies based on each hospital's volume of Medicare patients. For some the penalty could be in the hundreds of thousands, and others well into the millions. The penalties add additional burden that makes it harder for hospitals to meet their quality goals, some hospital policy leaders argue.

“Taking away resources puts tremendous financial strain on hospitals who are trying to do right by their patients,” Demehin said. “When you're looking at a measure, you want to be sure you're isolating those pieces that are critical to a hospital's role.”

Earlier this year, a National Quality Forum open comment period generated more than 650 responses for a project in which the forum seeks to develop a set of recommendations on the inclusion of socio-economic status , race and ethnicity into risk adjustment for outcome and performance measures, including 30-day readmissions.

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Healthcare reform had no early impact on disparities in Massachusetts heart care

Healthcare reform did not have an early impact on racial, ethnic, gender or socio-economic disparities in cardiovascular care in Massachusetts, according to research from the Brigham and Women's Hospital and the Howard University College of Medicine.

Black patients in the state were 30% less likely than whites to receive coronary revascularization, an interventional procedure to alleviate the symptoms of coronary heart disease and improve survival. Hispanic patients were 16% less likely to receive the procedure. Compared to men, women were 50% less likely to undergo revascularization.

Also, those living in neighborhoods with higher educational levels and individuals who were privately insured were more likely to have the procedure. The study looked at the likelihood of receiving coronary interventions by gender, race and ethnicity or socio-economic status before and after statewide healthcare reform was enacted. Findings were published June 17 in Circulation, the journal of the American Heart Association.

New rule imposes 90-day wait period limit on employer-based insurance eligibility

Employers cannot make workers wait more than 90 days to become eligible for health insurance benefits, as outlined in a final rule issued Friday by HHS and two other federal agencies.

The rule is effective for coverage that begins in 2015 and clarifies a provision of the Patient Protection and Affordable Care Act. The agencies also determined that orientation periods—during which it’s determined if an employee is eligible for benefits—cannot exceed one month. “The creation of a clear maximum prevents abuse and facilitates compliance,” the rule states.

Follow Sabriya Rice on Twitter: @MHSRice

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