The Hospital Readmissions Reduction Program: Cautions and Caveats

Ask most wonks – especially ones who never took care of a patient - about “readmissions,” and, after this article, these health policy Urkels will tell you that returning to a hospital is the poster-child of all that ails U.S. medical care. Providers who can’t get it right the first time, they say, are not only giving slipshod care, but are double dipping because their mistakes generate even more fat fees the second time around.

“Balderdash!” says the Disease Management Care Blog. Many Medicare inpatients are so sick that it’s a miracle that they get to go home in the first place.  Keeping patients in the hospital can be more life-threatening than the home environment and, when things don’t get well after a discharge, it’s often more a function of social support than medical skill. 

That doesn’t mean that CMS is going to listen to docs and back off of its Hospital Readmissions Reduction Program (HRRP). Using risk-adjusted actuarial projections, every U.S. hospital will be prone to a possible payment reduction if their observed rate of readmissions for heart attack, heart failure, and pneumonia exceeds the expected rate. Based on those projections, approximately two thirds of hospitals could be penalized.

Writing in the New England Journal of Medicine, Karen Joynt and Ashish Jha point out that hospitals are concerned because 1) readmissions fall outside of their control and 2) the actuarial projections are imperfect.  As a result, hospitals that care for the most fragile and socioeconomically disadvantaged are at risk for paying more than their fair share of CMS’s $280 million claw-back penalty. 

The NEJM authors recommend three modifications to CMS’ HRRP:

1. Include patients’ socioeconomic status in any risk adjustment modeling. One easy-to-obtain modifier, for example, could be whether the patient is on Supplemental Security Income.  Patients on SSI are less able to cope, which is why they quality for the program in the first place.

2. Include hospitals’ mortality rates in any risk adjustment modeling.  Hospitals with special expertise are less likely to have borderline patients die on their inpatient services, which means they’ll have their more than their fair share of fragile survivors.

3. Limit the penalty to readmissions that occur within hours or days of a discharge, instead of the current problematic policy of counting any readmission that occurs within 30 days.  It makes sense to believe that a premature discharge or slipshod discharge planning is at fault if the patient returns within 3 days instead of three weeks.

Since it’s unlikely that HRRP program is going away, the DMCB agrees with the three recommendations.  In the meantime, it also suggests:

1. CMS should be held accountable by Congress to execute well on the program,

2) Claims analytics – possibly using a “Big Data” approach – should be applied to Medicare claims to examine whether hospitals are turning to two potential options to undermine the program:

a) gaming the system by altering how they “code” the billing for their readmission patients, or

b) accepting the penalty because of favorable income from readmissions.

Image from Wikipedia