CMS: Readmission rates drop with threat of penalties

The threat of reduced Medicare reimbursements for hospitals with high rates of readmissions has already produced results, a top health official told the Senate Finance Committee yesterday.

The rate of 30-day readmissions dropped to 17.8 percent in the fourth quarter of 2012, down from between 18.5 percent and 19.5 percent during the past five years, said Jonathan Blum, director of the Center for Medicare and acting deputy director for the Centers for Medicare & Medicaid Services.

"This decrease is an early sign that our payment and delivery reforms are having an impact," Blum said in prepared testimony.

On Oct. 1 2012, CMS began enforcing the hospital readmissions reduction program from the Affordable Care Act. While the program now measures readmissions rates for Medicare patients hospitalized for heart attack, heart failure and pneumonia, Blum said CMS has the authority to expand the program in fiscal 2015.

"What I think is exciting is that a couple years ago the general reaction to these policies was that it was impossible to reduce hospital readmissions," Blum said in an interview with The Washington Post. "And what this data shows me is that it is possible. ... I believe that what we are seeing is a fundamental, structural change."

Blum's testimony does not pinpoint reasons for the falling readmissions rate, but points out numbers fell in concert with implementation of the Affordable Care Act readmissions program, the Post noted.

The Medicare Payment Advisory Commission (MedPAC) estimated last September than two-thirds of all hospitals would receive penalties averaging $125,000 for failing to adequately reduce readmissions in the three key areas. The 1 percent penalty in 2013 grows to 2 percent in 2014 and 3 percent in 2015, when readmissions for four more conditions are likely to be measured.

To learn more:
- download Blum's testimony (.pdf)
- here's the Post article