Reform is curbing readmissions, CMS says

The Obama administration says provisions of the healthcare reform law have led to fewer Medicare patients returning to hospitals within 30 days of discharge.

Readmission rates fell to 17.8% of Medicare hospitalizations in November 2012 after averaging 19% in the past five years, according to the CMS. The improvement meant 70,000 fewer readmissions last year, the agency said.

Jonathan Blum, director for the Center for Medicare at the CMS, highlighted the drop in testimony before the Senate Finance Committee on Thursday as an example of initiatives authorized by the Patient Protection and Affordable Act already helping to lower costs and improve care quality in the healthcare system.

“I believe that through the payment policies and the innovation models that are being created that there is some result,” Blum said about the drop in readmissions, which are widely considered a flag for lapses in care that may have caused their return.

In October the CMS initiated its first round of penalties for hospitals with higher-than-expected numbers of patients who return to the hospital within 30 days of a discharge by cutting their overall Medicare reimbursements from 0.01% to 1%. Those maximum penalties are scheduled to jump to 2% in 2014 and 3% in 2015.

That first round of penalties cost 2,217 hospitals an estimated $280 million, according to the agency, with the magnitude of the penalty determined by a calculation of an excess readmission ratio based on 30-day readmission rates for heart attack, heart failure and pneumonia.

Blum cautioned that the findings were based only on first-year results for program and that clearer results are expected in subsequent years as additional measures were added, including for cardiac bypass surgery, cardiac stenting, and other vascular procedures.

Hospital advocates have warned that the program could have a disproportionate impact on safety net hospitals who serve higher ratios of poor patients because those patients are less likely to follow post-discharge treatment directions.

The Premier healthcare alliance, which is coordinating the participation of 450 hospitals in HHS' Partnership for Patients, found its rural and critical access hospitals had larger readmissions improvements than its overall group of hospitals averaged. The rural hospitals had a 11.2% drop in readmissions in the period studied by CMS, compared to an average 10.2% drop in readmissions among Premier group hospitals.

“We know the critical access hospitals don't always keep or manage the more chronically difficult and sick patients, so they have actually fared better” said Monica Barrington, a vice president at Premier.

She credited a range of quality initiatives that Premier has implemented at its hospitals aimed at lowering their readmission rates. Their best performing hospitals adopted all of the procedural changes, such as the use of discharge screenings that ensure any needed referrals. “It's a slow and steady improvement, which tells you that these are sustainable processes,” Barrington said.

Hospitals also have worried that the program can penalize them for post-discharge developments with patients that are beyond the hospitals' control.

But supporters of the readmission penalty program said it appears to have encouraged a growing number of hospitals to partner with other providers in their communities to ensure continuing care for discharged patients. Provider consolidations have brought their own concerns about reduced patient choices and increased prices.

The CMS aims to further improve readmission rates through a focus on the large regional disparities that its data show persist among hospital readmission rates.

“There are some parts of the country that are much lower than 17.8%,” Blum said. “We know it is possible to drive the average down further.”