Think safety net hospitals are set up to fail on readmissions? Here's how one is succeeding

NEW YORK CITY—During her 9½ years as director of nursing at Bellevue Hospital's emergency department, Susanne Greenblatt came to know many of its regulars on a first-name basis.

“The one yesterday? He comes in every day,” said Greenblatt, now associate executive director for case management at NYC Health & Hospitals/Bellevue, as it is officially called. The patient, a homeless man and substance abuser, had recently been hospitalized for several days for a brain injury. After initially refusing to go to a nursing home, he had returned to Bellevue a day earlier, having finally changed his mind.

His decision represented a bittersweet victory. Bellevue is a safety net hospital, the kind charged with taking care of everyone no matter how poor or sick. Such hospitals tend to see disproportionate numbers of patients who are homeless, uninsured or simply sicker because they can't afford regular medical care.

As a result, safety net hospitals say, they are handicapped in not only healing these patients, but in keeping them from returning to the hospital after the initial discharge.

“How are you going to convince somebody who's homeless to take their medication, and know what time it is?” Greenblatt asked. “You have to be very innovative.”

The challenges of treating poorer, sicker patients are indeed spurring ingenuity at some safety net hospitals, but they are also driving a fiery dispute in healthcare, tied to government reimbursements and quality metrics for hospitals. Should these hospitals be held responsible if their patients, often lacking a stable place to live, often without money for medicines, bounce in and out of the hospital?

How this question gets resolved will have huge financial implications, since factoring the social determinants of health into Medicare's Hospital Readmissions Reduction Program could lower the penalties many face under the program.

Advocates for safety net hospitals say the penalties unfairly punish them. The CMS, which has long insisted its methodology is fair, has finally agreed to revisit the question.

Yet not every safety net hospital is suffering under the program. At Bellevue—a storied hospital along the East River just below midtown Manhattan—hospital officials have been able to make significant strides in reducing its readmission penalties in recent years. A deeper dive into its approach outlines the contours of this complex, simmering debate, even as it reveals significant variability in the penalties' impact from hospital to hospital.

The CMS' Hospital Readmissions Reduction Program, rolled out in October 2012, penalizes hospitals for readmissions that occur within 30 days for Medicare patients with certain conditions. The program does make adjustments for “clinically relevant” factors such as co-morbidities.

The data are drawn from a three-year period ending more than a year before the fine actually applies. Thus, for fiscal 2017, which begins Oct. 1, penalties were based on readmissions from July 1, 2012, to June 30, 2015.

Then, the CMS compares those readmissions against a national average. For hospitals that fare worse than the average, the CMS docks Medicare reimbursements. It started with a maximum penalty of 1%, and now stands at up to 3% for fiscal 2017.

Modern Healthcare examined five years' worth of publicly available readmission penalties for 161 hospitals that are members of America's Essential Hospitals, which advocates for safety net hospitals and health systems. The review found wide variation in hospital performance.

For fiscal 2017, 12 hospitals face no penalties. Three—Queens Hospital Center in New York; University of Virginia's Culpeper (Va.) Hospital; and St. Joseph's Wayne (N.J.) Hospital—will be slapped with the maximum of 3%. Queens Hospital Center, which like Bellevue is under the purview of safety net operator NYC Health & Hospitals, worsened more in the past five years than any other safety net hospital except Fayette (Ala.) Medical Center.

Of the 161 AEH hospitals—which operate more than 220 safety net hospitals and related campuses—99 had higher readmission penalties in fiscal 2017 than 2013. Six had no change in 2017 compared with 2013, although some incurred penalties in the intervening years. The remaining 56 hospitals improved. In other words, readmission penalties—and, by proxy, readmission rates—for safety net hospitals run the gamut.

The CMS has long maintained that adjusting for patient socio-economic status would effectively hold hospitals to different standards. Most of its quality measures “are already adjusted for clinical co-morbidities to account for the illness-burden of the population,” Dr. Kate Goodrich, director of the Center for Clinical Standards and Quality, wrote on the CMS' blog in July.

However, the CMS also said it is working with several groups to “study the effect of socio-economic status on quality measures and payment programs based on measures” to “determine what next steps, if any, should be taken to adjust our measures.”

“The readmissions program makes an assumption that readmissions are a result of poor quality of care, and that's just not true,” said Maryellen Guinan, a policy analyst with America's Essential Hospitals. “Readmissions are largely driven by patient circumstances after discharge.”

From First Avenue, six hefty stories of outpatient clinics conceal the original brick facade of the main entrance of an institution that dates from the 1830s, yet only gained nationwide fame in the 1930s for its psychiatric wards. Visitors pass beneath the newer building to reach the expansive atrium, formed as the outpatient floors arc away from the historic facade and up toward a ceiling of skylights. Tucked in one corner of the lobby is a branch of the eatery Au Bon Pain, which Bellevue's care managers use as a reference point for rendezvousing with homeless patients to discuss medicines and treatment plans.

Since 2012, Bellevue has steadily whittled away at its readmission penalties. In fiscal 2013, it was docked 0.95% of Medicare reimbursements. The next year it dropped to 0.64%, and then 0.52%, and then 0.45%. For fiscal 2017, Bellevue will be docked only 0.31%. Percentage-wise, that penalty is the lowest incurred by any of New York City's safety net hospitals.

If Bellevue's patient demographics are proof that safety net hospitals serve sicker patients, then its experience is also a testament to the power of hospitals to take charge of their outcomes.

Even before penalties kicked in, Bellevue was implementing initiatives such as Project RED (for Re-Engineered Discharge), developed at Boston University in 2009 and now used in dozens of hospitals. A key part of the program requires care managers to track patients for 90 days after discharge to ensure they obtain prescriptions or see primary-care doctors.

In September 2011, Bellevue started using a tidy, color-coded intake spreadsheet in its emergency department that allows Dr. Raj Gulati, the department's chief of service, to keep close tabs on arriving patients. In addition to critical details such as the patient's name, vital signs and medications, it contains triggers that alert doctors and nurses if the patient has been admitted within the past 30 days. In a department that sees 280 patients daily, such alerts help keep patients at high risk of readmission on providers' and care managers' radar.

In the past, a doctor might readmit a patient before a care manager had a chance to intervene and say, “Hey, wait a minute. You're admitting this guy, but he was just here. What can I do to help you undo this admission?” Gulati said. By then, it would be too late.

Now, the emergency department's care managers can home in on patients who might be equally well served in an outpatient clinic, or by staying for observation—a category in itself that has come under scrutiny as a tactic to avoid readmission penalties.

Besides reducing unnecessary readmissions, these changes lead to more cost-effective and efficient care, Bellevue administrators and providers say.

Vital to Bellevue's success has been robust cooperation between its inpatient and outpatient care departments. A decade ago, the hospital opened an outpatient clinic that is physically attached to the hospital.

The clinics give the inpatient departments direct access to their scheduling, which enables them to make follow-up appointments for patients soon after discharge, said Reina Smith, Bellevue's senior associate executive director for community health services. They adjusted the system when necessary to get better results. When emergency room patients were failing to show for follow-up visits, clinic staff tweaked the process and began calling patients to remind them of their appointments.

“We have continuous improvements embedded in how we work,” Smith said.

In 2014, 36% of visitors to NYC Health & Hospitals' emergency rooms were on Medicaid and 36% had no insurance. Medicare beneficiaries made up 10%. By comparison, 13% of emergency room visitors at voluntary hospitals in Manhattan were uninsured, 40% were on Medicaid and 17% were on Medicare, according to Bellevue's 2016 community health needs assessment. In inpatient settings at Bellevue, only 20% were Medicare beneficiaries; at other hospitals, 36% were.

These statistics raise a slightly uncomfortable question: To what extent do hospitals—or, which ones—suffer from insufficient risk adjustment, especially if Medicare beneficiaries constitute a fraction of patients? Under the Hospital Readmissions Reduction Program, the penalties that the CMS exacts are based solely on readmission rates for Medicare beneficiaries, and not those covered by Medicaid or commercial insurers.

For NYC Health & Hospitals, the total estimated impact of these readmission penalties for fiscal 2016 was $1.16 million, out of its $7 billion operating budget. For Bellevue, the dollar figure for that fiscal year came to $97,200.

Still, advocates insist that the partial loss of reimbursements for even a sliver of patients can hit safety net hospitals hard. “These penalties really cut at the core of the business of taking care of the poor,” said Dr. Janis Orlowski, chief healthcare officer for the Association of American Medical Colleges. “These are hospitals that have provided care in areas where it's not just the Medicare population, but it's the Medicaid population,” she added. “They're also seeing people who were uninsured or uninsurable.”

And when hospitals are barely scraping by, even the slimmest reimbursement reductions matter, Orlowski said.

Researchers have come up with competing conclusions when it comes to the question of how much a patient's social conditions impact health outcomes. Advocates of adjusting for socio-economic status point to evidence that hospitals with poorer patients struggle with higher readmission rates. But proponents of the current methodology are now able to cite a study in Health Affairs this month that found that readmission rates did not change when authors accounted for patients' socio-economic status.

Readmission measures already adjust for patients' illness levels, said Dr. Susannah Bernheim, lead study author and the director of quality measurement programs at the Center for Outcomes Research and Evaluation at Yale-New Haven (Conn.) Hospital, which works with the CMS on developing hospital-based outcome metrics.

As Modern Healthcare found in its analysis, some safety net hospitals such as Bellevue have low readmission rates and score well on quality.

Orlowski suggested penalties could be used to signify areas where community-based services that affect readmissions—access to primary care or pharmacies, for instance—are lacking. “It's a way for us to almost heat map where we need to be providing more services,” she said. “This should not just be a punishment system. We should be learning: Where do we put our public health dollars and our Medicare dollars?”