Maryland price-setting commission focuses on readmissions

Maryland is the only state where regulators set hospital prices and its Health Services Cost Review Commission (HSCRC) has come up with a new way to keep costs down--by discouraging readmissions.

The HSCRC recently voted to put a new readmission incentive program in place by fiscal 2016, according to the Baltimore Business Journal. The program would pay hospitals a bonus of up to one-half of one percent of their overall revenue.

Nationwide, hospitals spend about $41.3 billion a year on patients who are readmitted within 30 days of discharge, according to recently released data from the Agency for Health Care Research and Quality. Chronic conditions, such as congestive heart failure, and fairly treatable conditions, such as pneumonia, are among the leading drivers for hospital readmissions. Medicare financially penalizes about two-thirds of hospitals nationwide for having too many readmissions.

Maryland has one of the highest rates of inpatient readmission within 30 days of discharge in the country, about 19 percent of patients in 2013, compared to 17.6 percent of patients nationally, according to the Business Journal. However, the state recently entered into a waiver with the Centers for Medicare & Medicaid Services to bring its readmission rates down to the national average or below within the next five years. Based on the overall downward readmission trend, that means Maryland hospitals may have to cut their readmission rates by as much as 6.8 percent in the coming years.

Experts from both the payer and provider sectors suggest that improving coordination of post-discharge care and using predictive analytics to identify surgical patients more likely to suffer complications can help reduce readmissions.

In addition to the incentive program, the HSCRC may also create financial penalties for hospitals in order to further prod them to bring their readmissions down further, according to the Business Journal.

To learn more:
- read the Baltimore Business Journal article