Thousands of hospitals across the U.S. yesterday received welcome news thanks to the government considering the battle against COVID-19 when determining fines for poor readmission rates.
Those fines, levied by the Centers for Medicare & Medicaid Services (CMS), will be the lowest in fiscal year 2023 than they've been in a decade.
CMS also won’t include information gathered in its audit of hospital readmissions from the first half of 2020. In addition, the agency won’t factor in patients readmitted with pneumonia, because in many cases it couldn’t be determined whether COVID caused the problem.
Because of these changes, CMS wound up penalizing 2,273 hospitals, the lowest number since 2014, according to an analysis by Kaiser Health News.
Payments to hospitals were reduced to 0.43%, also the lowest since 2014. They will be applied to each Medicare payment to the affected hospitals from Oct. 1 through next September and cost the penalized hospitals $320 million in that 12-month period. But does the program work the way it was meant to?
“There’s a lot of reassessments going on as to whether it’s as necessary as originally thought for improving care and reducing cost,” Michael Millenson, an internationally known expert on quality and care, told Fierce Healthcare. “It’s clear that hospitals have put into effect programs that are much better for patients by improving continuity of care and keeping people from falling through the cracks in the system. So, in many ways, the program has made hospitals more efficient and made patient care better.”
On the other hand, said Millenson, some experts claim that the readmission penalty might diminish patient care if it forces some hospitals to keep patients admitted longer than necessary, and also for minorities who don’t have access to community healthcare resources.
“So, I think the jury’s out on whether what seemed to be an obvious target for improvement when the program began is as useful today,” Millenson said.
The Hospital Readmissions Reduction Program (HRRP) levied 2023 fines on hospitals based on their performance from two fiscal years: July 1, 2018, to Dec. 1, 2019; and from July 1, 2020, to June 30, 2021.
“There’s always a lag between the performance period and the fiscal year when the penalties are applied,” Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association, told Fierce Healthcare.
HRRP, created by the Affordable Care Act, took effect in 2012. The conditions for which hospitals can be fined for unplanned readmissions in fewer than 30 days for Medicare beneficiaries are:
- Acute myocardial infarction
- Chronic obstructive pulmonary disease
- Heart failure
- Pneumonia
- Coronary artery bypass graft surgery
- Elective primary total hip arthroplasty and/or total knee arthroplasty
CMS says that the program prompts “hospitals to improve communication and care coordination to better engage patients and caregivers in discharge plans and, in turn, reduce avoidable readmissions.”
Millenson said there are still questions that need to be addressed about HRRP, however. “How significant are the dollars? And whether the significance of the dollars matters as much as just having a financial incentive to change … we don’t really know.” Having said that, Millenson added: “I think that hospitals remain very much attuned to reducing readmissions.”
Continuity of care after patient discharge certainly matters, says Demehin. “A variety of different research and studies have shown that readmission rates are influenced by both what happens inside the four walls of a hospital, as well as a variety of community factors that affect the patient’s ability to access follow-up care,” he said.
A study in Health Affairs in July reaches the same conclusion. The study found that “the supply of certain post-discharge care options varied widely across the U.S. and that this variation was associated with patients’ risk for readmission after a discharge for acute myocardial infarction, heart failure, or pneumonia. After a wide variety of institutional, demographic, and CMS payment incentives were controlled for, hospitals with catchment areas having greater local availability of primary care physicians and licensed nursing home beds experienced lower readmission rates.”
The researchers added that their “results have important implications for CMS’s risk-adjustment algorithm under the HRRP, which does not account for local post-discharge care supply. Inclusion of post-discharge care supply measures in the HRRP risk-adjustment algorithm would lead to lower readmission targets for hospitals that operate in areas with greater supply of primary care, SNFs, or licensed nursing home beds and higher readmission targets for hospitals with greater availability of home health agencies.”
A new methodological approach should help, said Demehin. Under the 21st Century Cures Act, passed in 2016, CMS implemented a peer-grouping approach that places hospitals into five different categories depending on the proportion of dual eligibles that they treat.
“The reason that that particular peer grouping approach was chosen is that being dually eligible for Medicare and Medicaid is a reasonable proxy for some of the factors we’re talking about in terms of having access to resources in the community,” said Demehin.
CMS said that “estimated payments under the peer grouping methodology (that is, FY 2019 and onward) equal payments under the non-peer grouping methodology (that is, FY 2013 to FY 2018) to maintain budget neutrality.”
A study in JAMA Network Open in April 2019 states that peer-grouping payment “was associated with a reduction in penalties across hospitals included in the program; the greatest reductions were observed among hospitals in the [low socioeconomic status (SES)] group, lessening but not eliminating the previously unbalanced penalty burden carried by these hospitals. Additional public policy research efforts are needed to achieve equitable payment adjustment models for all hospitals.”
Demehin noted that another adjustment to hospital performance measures CMS made because of COVID-19 involves including in the risk adjustment whether the patient has had COVID-19.
“We know that because of things like long COVID that a patient’s clinical course and risk may start to look a little different,” said Demehin. “And so being able to account for that measurement and ensure that hospitals are being assessed accurately and fairly, is important. That’s certainly a step that we were encouraged to see from CMS.”
Demehin says hospitals use multiple mechanisms to ensure they marshal supportive community services for discharged patients.
For instance, Robert Coates, M.D., the interim CMO at Hunterdon Health, which owns Hunterdon Medical Center in Flemington, New Jersey, said in a statement that the facility created a system for identifying patients who are readmitted to the emergency department within 30 days. “Rather than admitting these patients again, we coordinated care so these patients could be seen the next day in their doctor’s office, set up home health monitoring, or social work oversight for non-medical issues.”
Hospital staff also call all discharged patients to make sure that they’ve filled prescriptions and scheduled follow-up visits with providers. “These clinical interventions and the creation of a clinical dashboard helped to ensure our actions resulted in positive outcomes,” Coates said.
Millenson said that the HRRP contains a tool for consumers that allows them to find out if their hospitals had been fined for too many readmissions.
“But no consumer can really put that into context,” said Millenson. “Whether some hospital got a 5% penalty as opposed to a 2% penalty, it’s just unclear what that means. The tool may be useful for employers. It helps insurers and journalists, but consumers can’t really do much with this kind of tool.”
On the other hand, whatever improvements hospitals enact for Medicare beneficiaries they tend to do for all patients, and HRRP helps all the patients in a hospital.
“Oh, absolutely,” said Millenson. “You can’t have a doctor saying this person needs to be discharged because they're 65, but this person doesn’t because they’re 64. That’s not a clinical reason. That’s an economic reason. You just can’t do that. When Medicare improves care and cuts costs because of their programs, a rising tide lifts all ships. There’s no question about that.”