PHC4 Releases Readmissions Report
On April 26, 2012 the Pennsylvania Health Care Cost Containment Council (PHC4) released a report detailing hospital readmission statistics from 2010 data. The report is particularly noteworthy because this month the first group of Accountable Care Organizations (ACOs) begin participating in the Medicare shared savings program. One of the quality measures on which health care providers participating in the ACO are evaluated is hospital readmissions. Later this year, all Medicare providers will also be subject to the Hospital Readmission Reduction Program.
As described in the PHC4 report, hospital readmissions are costly. In Pennsylvania in 2010 Medicare paid $498 million for care in connection with readmission to the hospital. Medicaid paid $29 million. The average Medicare and Medicaid payments for each readmission was $9,416 and $6,822, respectively. The PHC4 report notes that
The Medicare Payment Advisory Commission has reported that potentially preventable readmissions might account for as much as $12 billion per year in medical costs.
The costs for hospital readmissions is great, as are the potential savings if those readmissions can be reduced. This is why CMS has integrated a goal of reducing readmissions into the ACO quality measures.
Taking it even further, however, under the Hospital Readmission Reduction Program beginning in October 2012 hospitals that have an excess preventable readmission ratio within 30 days of discharge for three conditions — pneumonia, acute myocardial infarction, and heart failure — will be penalized through reimbursement reductions. In 2015, the list will expand to include additional diagnoses.
In view of the ACO quality measures and Hospital Readmission Reduction Program, the PHC4 report is notable. The overall rate of readmission within 30 days of discharge was 13.5%. Heart failure — one of the conditions for which CMS will reduce readmission reimbursement rates — was the leading condition associated with readmission to the hospital in Pennsylvania in 2010.
How can hospitals lower readmission rates to improve quality scores and avoid reimbursement penalties? The PCH4 report suggests the following:
A considerable body of information suggests that hospitals can lower early readmissions by reducing the risk of infection within the hospital, paying closer attention to medications, ensuring that patients are clinically ready for discharge and that they understand their post-hospitalization care plans, and by more closely engaging the community outside the hospital that will have a role in care after discharge.
Not every readmission or infection is avoidable. Hospitals will spend significant money, however, seeking to prevent as many readmissions and infections as possible. Everyone will agree that this is good medicine and good for patients. The hospitals that do not take those steps will still pay, but in the form of reimbursement reductions and exodus of patients as more information becomes available to the health care consumer.