The Hospital Readmissions Reduction Program (HRRP) will move forward in October 2012, changing the Medicare Payment Policy. The Centers for Medicare and Medicaid Services (CMS) will reduce Medicare payments to applicable hospitals based on all admissions, especially higher than expected rates of readmissions.
Over the next several years, we will have a host of data to examine best practices as systems continue to address how to reduce readmissions. Most experts agree that a robust transition care management system coupled with quality community-based partners will succeed. Dr. Robert Smith, HPCCR Medical Director wrote, “Increased utilization of hospice services can help hospitals and physicians with the challenges of reducing readmissions. When physicians have those most difficult conversations with a patient whose illness is no longer responding to aggressive, disease- specific treatment and a referral for hospice care is made, the patient is less likely to opt for expensive treatments”.
Hospice agencies that utilize industry best practices such as; Accreditation with National agency, ability to take high-acuity cases, specialized disease programs and have response times less than two hours are more apt to admit patients who are at high risk for readmissions.
Many insurance companies are mirroring CMS’s strategy and contracting with newly created Accountable Care Organizations on cost sharing programs. Rehospitalization oversight and its expected savings appear to be here to stay for all payer sources. Healthcare systems have dramatically reduced Medicare length of stays (over 30% in the last 15 years), reduced the 30 day mortality rate (16%) and have efficiently increased patient transfers to nursing homes (60%). Rehospitalizations have increased by 18% in the same timeframe, negating much of the cost savings of the shorter length of stay.
The penalty cap limits are up to 1% of each hospital’s base operating revenues for FY 2013, 2% for FY 2013 and 3% for FY 2014 and subsequent federal fiscal years. There is debate of how great a financial penalty this will create for hospitals; will the cost of intense medical management system override Medicare penalties? Data has shown that lower socioeconomic areas experience increased rehospitalizations raising the question of the new model’s fairness.
The statistics that support the HRRP include: two-thirds of Medicare beneficiaries are readmitted or die within one year of readmission; hospitalizations account for 31% of total healthcare expenditures; readmissions contribute significantly; as almost one in five Medicare patients discharged from a hospital are readmitted within 30 days accounting for over 18 billion dollars.
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