NY hospitals don't know how to use funds for Medicaid patient admissions

New York hospitals will receive millions of dollars in funding to cut down on avoidable Medicaid patient admissions. The only problem: executives at many organizations have no idea what to do with the money, according to a survey released Monday by KPMG.

Of 90 hospitals surveyed throughout New York, 49 percent did not know what to do with the funds, which are part of the delivery system reform incentive payment (DSRIP).

"Research from New York State shows that up to 16 percent of all Medicaid hospital admissions could be avoided if the right care were provided at the right setting," said Marc Berg, M.D., a KPMG principal who leads the firm's healthcare strategy transformation practice. "When you add the number of avoidable emergency room visits, which the state estimates at nearly 60 percent, you get a complete picture of just how much impact this program is intended to have on New York's healthcare infrastructure."

Altogether, New York officials estimate that avoidable hospitalizations cost the state's Medicaid program $1.6 billion a year. The DSRIP program, which began as part of a federal waiver in 2011, aims to reduce avoidable hospitalizations by 25 percent, according to a report issued by the New York State Department of Health.

New York began reshaping Medicaid payments to improve the quality of care in 2008, when it decided to stop paying for "never events" that may have occurred while Medicaid patients were hospitalized.

Hospitals do have a blueprint of sorts for reducing avoidable readmissions: in 2013, the Center for Medicaid and CHIP Services (CMCS) declared that hospitals can greatly reduce costs by focusing on its "super users"--the 5 percent of Medicaid enrollees that account for more than half of the program's overall costs. CMCS recommended that hospitals target this patient cohort with early intervention and highly coordinated primary care to keep them out of the hospital setting, FierceHealthcare previously reported. And poorer patients also say they prefer hospitals to other settings for care, which providers could change with broader educational efforts.

To learn more:
- here's the KPMG announcement
- read the New York State Department of Health DSRIP report (.pdf)

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