Penalty program slowed Medicare readmissions, but progress has stalled

By most accounts, the federal government's five-year campaign to stem the tide of hospital readmissions has been a success.

The number of Medicare beneficiaries making a U-turn within 30 days of being discharged has been on a downward slope ever since reimbursement dollars were at risk under the Hospital Readmission Reduction Program.

For example, readmission rates for Medicare beneficiaries suffering congestive heart failure averaged 22% from 2011 to 2014, down from 24.5% from 2005 to 2008, according to a Kaiser Family Foundation analysis of CMS data.

Readmissions for pneumonia patients fell from 18.2% to 16.9% during the same period.

A good thing for patients, reducing readmissions has also helped cut spending. As recently as 2011, all-cause readmissions cost the nation $41 billion, according to a 2014 Agency for Healthcare Research and Quality report. Medicare's tab alone was $26 billion annually, $17 billion of which was attributable to avoidable rehospitalizations. By 2014, Medicare spending on readmissions fell by $9 billion.

While improvements were made during the first three years of the readmissions program, concern is mounting that momentum has stalled. There's been no more than 0.1% reduction on average between 2013 to mid-2016, according to a December 2016 JAMA study.

“It kind of surprised us,” said Dr. Nihar Desai, a cardiologist at Yale New Haven (Conn.) Health System, and lead author of the study, which showed the link between financial penalties for readmissions and improved results.

The Medicare Payment Advisory Commission estimated that 12% of Medicare readmissions in 2011 were avoidable, and that of the 10% of hospitals who were the worst performers, 15% were avoidable. If that's true, that would suggest most hospitals that went from 22% readmissions for a certain condition to 20% already achieved 75% of what is possible.

The reasons for the pla-teau are complicated, said 
Dr. Steve Jencks, whose research was instrumental in helping create the readmissions program. For starters, the number of conditions measured has grown from three—heart attacks, heart failure and pneumonia—to six with the addition of chronic lung disease, coronary artery bypass graft surgery, and hip and knee replacements. Hospitals haven't had as much time to work on the new measures. But, he said, it may also be because after making initial improvements, hospitals are going to have to dig a little deeper to get the next level, and it may take longer to see results.

“Is this the bottom, is what people are asking, and if not, what is the next set of strategies?” said Nancy Foster, vice president for patient safety at the American Hospital Association, adding that experts may have reached the limits of scientific knowledge on how to reduce readmissions.

The Hospital Readmission Reduction Program was a significant part of the Affordable Care Act's efforts to not only control costs, but push providers to improve outcomes. The first round of penalties for high rates of readmissions took hold in 2012, with roughly 2,000 hospitals collectively taking a $290 million hit. Penalties could total $528 million in 2017, according to the Kaiser Family Foundation.

The penalties have worked, Desai's study strongly suggests. Improvements were rapid for hospitals that learned in 2010 that they were likely to be penalized for targeted conditions, with declines of 1.3 to 1.72 points a year over the next two years on average. Compare that with improvements of about 0.8 points in nontarget conditions.

At hospitals that were already below average—where improvements were happening faster than the others before the readmission program's existence—conditions that weren't targeted declined about 0.54% a year, and there was no significant decline in the targeted conditions.

“Our data should suggest places that were not penalized seemed to have conducted broad readmission initiatives that reduced readmissions for everyone,” Desai said.

Hospitals tackled the issue in both treatment—trying to standardize best practices to avoid complications—and by beefing up discharge planning and care coordination.

Renown Health, a not-for-profit health system that serves a 17-county region in northern Nevada and northeastern California, benefited from $9.8 million in grant money the Center for Medicare and Medicaid Innovation awarded to the Regional Emergency Medical Services Authority to incorporate paramedics into a care-coordination program in hopes of improving services for patients at home. During in-home visits, paramedics go over the patient's discharge plan, provide education and medication reconciliation and reinforce the importance of follow-up appointments. The program saved $9.6 million over three years and Renown decided to keep funding it after the grant ended.

Joanne Scillia, Renown's vice president of population health management, said the paramedic program saw Medicaid and Medicare Advantage patients, and delivered consistent reductions in readmissions for patients with congestive heart failure, chronic obstructive pulmonary disease and heart attacks.

Care-management teams at Renown also call recently discharged patients and check that home health aides or Meals on Wheels is on the way. Nurses also ask how patients are feeling and about lingering symptoms.

Renown, which is an accountable care organization, tracks all-cause readmissions by all payers and looks at the figures non-risk-adjusted. From April 2016 through March, 11.38% were readmitted within 30 days, and the system's goal is 10.32% by a year from now. In heart attacks, Renown is below the goal, and within a tenth of a percentage point for pneumonia. COPD rates stand at 18.03% with a goal of 14.84%; with heart failure, the rate is 18.57% and the target is 16.82%.

“Although we're doing well by national statistics, we don't want to rest on our laurels,” Scillia said. “Our CEO, Tony Slonim, is involved in this, and he's driving this for the organization.”

In federal fiscal 2017, Renown's two hospitals in Reno, Nev., were assessed penalties. Renown Regional Medical Center owed 0.31% in penalties, and South Meadows Medical Center owed just 0.03% in penalties, according to a Kaiser Health News analysis of CMS data.

At the 1,500-bed Yale New Haven system, efforts to curb readmissions are continually evolving.

Dr. Ohm Deshpande, director of utilization review and clinical redesign for the system, said the first initiative they tried was to email each attending physician who had a patient return within 30 days and ask if there were specific interventions that could have been done.

“We found only 2.5% to 5% of those emails resulted in a clear process miss or mistake,” he said. “That was just not super helpful.”

Then Yale asked some of the highest-performing inpatient care managers or discharge planners to become transitional care managers, with a 70-100 person caseload, straddling inpatient and outpatient delivery.

Yale also focused on improving charts while the patient was still in the hospital. Previously, clinicians didn't have a clear picture of which patients may have had heart failure or COPD because a DRG wasn't assigned until three to five days after discharge. Now, nurses who review charts are assigning a working DRG within 48 hours of the patient's arrival.

“Clinical documentation is to maximize payment, given the care given,” Deshpande said. “What we've found is it has huge effects on our quality scores as well.”

National Quality Forum CEO Dr. Shantanu Agrawal said hospitals have plucked the low-hanging fruit.

Deshpande described one such initiative, where Yale has invested a lot of effort, but not yet moved the needle. The health system discovered that patients transferred to a skilled-nursing facility were the most likely to return within 30 days. There was also a large degree of variability in the readmissions depending on skilled-nursing facility.

At one nursing home, Deshpande said, 45% of patients returned within 30 days. So Yale used a combination of measures—CMS star ratings, how responsive the facility was to coordinating with Yale, and internal data on readmissions—to identify preferred providers. Overall, the nursing homes that are not recommended by Yale have readmission rates 24% higher than the preferred group.

The proportion of patients who go to the preferred nursing homes has not increased, even though Yale has asked transitional-care nurses to suggest those facilities.

For fiscal 2017, Yale's penalty is 1.91% of its Medicare reimbursement, Kaiser Health News reported , still well below the 3% maximum, but the highest in the state of Connecticut.

Desai's paper speculated that improvements stalled after the first penalties were levied because executives realized the size of the penalty was smaller than it would cost to try to address the issue. “It was much, much smaller than they were expecting,” Desai said. But he said he doesn't believe it's politically feasible to make the penalty bite more. “The American Hospital Association and other groups have really, really been firm in their opposition to this. Even the current program, they were strongly opposed to. The idea of going up is really not viable at all.”

The AHA's Foster suggested that stiffer penalties would actually drive up readmissions. “It would take away the resources to do this coordination, which would be sad,” she said, adding that the hospital group will continue to advocate for a formula that takes a patient's socio-economic status into consideration.

As policymakers, researchers and providers assess the ongoing effectiveness of the readmissions program, they'll likely have to overcome a cultural hurdle as well—keeping people motivated. Deshpande said Yale lost ground on heart failure even as pneumonia and heart attack readmissions improved.

“I don't think we have had the same urgency that we did at that time,” he said, referring to 2012 and 2013. “I think it's because we haven't found an easy intervention.”