“And Then There’s Statistics”—The Hospital Readmissions Reduction Program

Reducing readmissions to hospitals is sound medical and administrative policy. No one who’s been admitted for surgery, illness, or injury wants to return shortly after discharge because of an infected incision or some other complication. These readmissions are also costly, and the Center for Medicare/Medicaid Services (CMS) was tasked with reducing Medicare Fee-for-Service readmission rates.

The Hospital Readmissions Reduction Program (HRRP), a provision of the Affordable Care Act (ACA) implemented in 2013, is designed to encourage better, more cost-effective care by leveraging reduced Medicare reimbursements for hospitals that sustain higher-than-average readmission rates.

A readmission is defined as a patient returning to the same or different hospital within 30 days of discharge. The US national readmission rate fell to 13.5% in 2013, after maintaining at about 19% for years.

Not all readmissions are counted as avoidable. Certain readmissions do not count against a hospital’s total:

1) Planned readmissions, where the patient returns for scheduled follow-up treatment, or a second condition was discovered at the initial visit and requires timely attention.

2) The patient is transferred to another hospital.

3) The patient leaves the hospital on their own accord against medical advice.

However, CMS includes readmits unrelated to the original admission in calculating the Excess Readmission Ratio (ERR). Have a heart attack patient break his arm in an accident two weeks after release? Sorry, it gets counted.

At the beginning of the HRRP program in FY2013, readmissions were tracked for three expensive, high-volume reasons for original hospitalization, specifically, acute myocardial infarction, pneumonia, and heart failure.

In FY2015, as authorized by the ACA, the HHS Secretary added total hip/knee replacement and chronic obstructive pulmonary disease (COPD), while FY2017 will see the addition of coronary artery bypass graft (CABG) to the list. Penalties for readmissions that exceed the national average totaled 1% of Medicare reimbursement for readmissions in 2013, 2% for 2014, and top out at 3% for 2015 and beyond. With the combination of multiple tracked conditions and an increased penalty rate, hospitals that score worse than the national average can suffer a substantial financial sanction.

But it’s not only substandard performers who can be hit in the pocket. Since the calculations for excess readmissions are based on a confusing mix of national averages, a ratio of discharges to readmissions, and a multiplier based on ALL admissions, even hospitals showing improvement can be penalized.

A hospital that reduces its readmission rate, but not by as large a percentage as the nation, can still see reductions in reimbursement in spite of its improved performance. And if the overall number of discharges in a particular hospital drop by a greater degree than their readmits decline, the penalty can increase even more. Throw in multipliers to the formula, and some hospitals could pay back to CMS more than the excess readmissions cost Medicare. This is especially troublesome, because as more and more medical conditions are added to the list by the HHS Secretary, it’s likely that most hospitals will routinely suffer cuts in reimbursements. As the HRRP now exists, it appears more a way to recoup money to CMS than a program designed to improve patient care and quality of life.

In fact, some have argued that the program does not account for other factors affecting readmissions that are beyond the control of the institutions being rated. In response, CMS conducts what it terms Risk Adjustment, an attempt to balance the scales by considering a hospital’s patient population as part of its calculations. CMS now acknowledges that age, gender, co-morbidities, and frailty all contribute to readmissions, and that hospitals have little control over these factors.

Factors that CMS does not consider are those socio-economic conditions that may also play a role in determining whether patients stay out of the hospital once they are discharged. The poor are often without the local support that more affluent patients enjoy. These patients may have difficulty understanding written or verbal instructions regarding care and/or medications provided them at discharge. They are often not aware of the availability of home nursing, tele-health, health coaches, or nutrition counseling. They may even lack basic transportation for follow-up visits with their Primary Care Provider (PCP). While there have been attempts by some in Congress to address this issue, as of this writing, socio-economic factors are not included in the Risk Adjustment.

Obviously, the goal of reducing readmissions is both morally imperative and financially smart. However, the HRRP needs tweaking to achieve the goal of reducing readmissions without penalizing hospitals that make good-faith efforts to achieve better outcomes. In addition to implementing clinical improvements within hospitals, many institutions are working to assist patients even after discharge, including measures to reduce readmits in their most vulnerable populations. Teams are identifying high-risk patients, providing health coaches, assisting them in obtaining community-based support, and co-ordinating their care with pharmacies and PCPs. To insure CMS can maintain support for the HRRP, some changes in calculating penalties are also in order.

Instead of comparing apples and oranges, establish a baseline for each hospital, and measure that hospital’s improvement, or lack thereof, versus the baseline, not some national standard that doesn’t account for the hospital’s size or the socio-economic area the hospital serves. Correct the current imbalance between penalty amounts and the actual cost of readmissions, and count only those readmissions directly related to the original reason the patient was hospitalized.

The willingness of regulators to address these concerns will demonstrate to both the public, and the medical community, that CMS is committed to improving the quality of care for the nation’s seniors, and not just cutting costs. This issue needs to be addressed urgently, before the combination of cuts in reimbursements, and an increasing number of tracked medical conditions threatens the sustainability of the program.