Penalizing hospitals isnt the answer to decreasing the number of avoidable hospital readmissions, industry representatives said last week in response to an influential advisory groups report.
The Medicare Payment Advisory Commission in its annual June report outlined a two-step policy option to encourage hospitals to reduce readmissions: public reporting of hospital-specific readmission rates for a subset of conditions, and adjusting the hospitals underlying payment method to create incentives for lower readmission rates. The commission makes recommendations to Congress on improving the efficiency of the Medicare program.
The MedPAC report identifies potential savings of up to $12 billion per year through trimming readmissions.
But healthcare provider executives say that MedPACs approach to trying to capture those savings could unfairly affect them. Chip Kahn, president of the Federation of American Hospitals, said he was all in favor of the reporting initiatives, but enactment of financial incentives should be used only after public reporting is tried out. MedPAC may call it an incentive, but one mans incentive is another mans cut, because policymakers always try to enact these initiatives in a budget-neutral manner, Kahn said.
Similarly, Rusty Holman, chief operating officer with Nashville hospitalist company Cogent Healthcare and president of the Society of Hospital Medicine, said that given the highly complex nature of hospital readmissions, the issue would best be addressed through careful assessment of a given institutions root causes, then implementing proven strategies or best practices to improve readmission rates.
Aligning payment mechanisms is challenging, since there needs to be shared accountability among the multiple stakeholders, Holman said.
Hospital readmissions are often indicators of poor care or missed opportunities to better coordinate care, MedPAC said in its report. More than 17% of all admissions result in readmissions within 30 days of discharge. Medicare spending on these potentially preventable readmissions is substantial, the report stated, $5 billion for cases readmitted within seven days and up to $12 billion for cases readmitted within 30 days, on an annual basis. In 2005, the average Medicare payment for a potentially preventable readmission totaled about $7,200.
Hospitals could improve their readmission rates by improving communication with beneficiaries and their caregivers and improving the quality of care during the initial admission, MedPAC stated. Yet, theres currently no method of rewarding hospitals for reducing their readmission rates.
The commission outlined several ways that Medicare could adjust its payment method to account for readmission rates. The CMS, for example, could institute a penalty-only policy, which could motivate hospitals to meet patients needs during the transition from the hospital to home or post-acute care. By not paying more under current law to high performers, Medicare saves money and encourages all hospitals to be efficient, the report stated.
The CMS could also pair a penalty with a reward for good performance to help offset possible lost revenue associated with lower rates of readmissions and the costs for those actions. Hospitals, for example, may have to hire more nursing and discharge planning staff or enact longer lengths of stay, to reduce their rates of readmission, the report stated.
Such incentives or penalties, however, dont take into account the varying reasons for hospital readmissions, or the fact that hospitals have no control of the planning or care of patients once theyre discharged, industry sources countered.
People are readmitted to the hospital for three basic reasons: worsening chronic illness, adverse drug reactions, or infections theyve acquired in the hospital, said Bill Williams, chief medical officer for clinical effectiveness at Tenet Healthcare Corp.
Chronically ill patients make up the vast majority of readmissions cases. These patients are often suffering from conditions such as congestive heart failure, chronic obstructive lung disease, and diabetes associated with worsening kidney function, and may also be suffering from other problems such as depression.
If they relapse medically, is that the hospitals fault because of poor quality care? Usually not, Williams said. The majority of these patients with severe congestive heart failure, for example, may not survive beyond three additional years, and as their failure worsens they will naturally continue to be admitted more and more frequently, he said.
These variables illustrate why readmission rates are not always a reliable indicator of quality of care at a hospital, Williams said.
MedPAC in its report acknowledged that it would be necessary to risk-adjust hospitals rates of readmission because the severity of a patients illness or a patients adherence to discharge instructions would affect these rates. One way to address this problem is to allow hospitals to indicate that a patient was nonadherent upon discharge or readmission, the report stated. Such readmissions would not be counted in the providers overall rate, according to the report.
The planned implementation of severity-adjusted diagnosis related groups would also help in adjusting for factors that are beyond a hospitals control, the report stated. The Medicare Severity DRGs, or MS-DRG system, in the CMS proposed inpatient payment rule seeks to achieve this goal (June 18, p. 10).
However, one of the unfortunate consequences of a penalty system is it creates a disincentive for a hospital to take very sick patients in the first place, said Don May, vice president of policy at the American Hospital Association. Hospitals wanting to keep their rates of readmission down may start screening complex cases, he said.
May noted that MedPAC didnt make any firm recommendations on hospital readmissions, probably because of the issues complexity related to the large number of players involved in a patients care, including the hospital, physicians, post-acute providers such as a skilled nursing facility, and the patients caregivers at home.
Policymakers dont fully understand all of the complexities of addressing payment changes for readmissions and the payment mechanics for aligning hospitals, physicians and other providers are not in place, May said. Before we even start to think about a new payment strategy for readmissions, we should think about how to bring all of the players together rather than just holding one of those players (such as hospitals) accountable.
Reducing readmission rates involves careful discharge planning and communications among the patient, the physician and the patients caregivers, said Tenets Williams. The hospital is only one player in this team effort, he said. The nurses need to talk with the patient and the family, and the physician has to take the time to go over details of new medications and care arrangements with the family.
As for in-hospital infections, the CMS has already taken steps in a proposed rulemaking to stop paying hospitals for the additional costs of treating a patient that acquires certain infections or conditions during a hospital stay, Williams said. The provision was included in Medicares fiscal 2008 proposed rule on inpatient hospital payments.