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The Bottom Line Impact of Hospital Readmissions

Posted by Matthew Smith on Sep 18, 2015 10:03:14 AM

By Tawnya Bosko, DHA, MS, MHA, MSHL, Vice President and Tina Pike, RN, MSN, MBA, HCM, Senior Manager, The Camden Group

Hospital ReadmissionsYes, there is controversy surrounding the Hospital Readmissions Reduction Program (“HRRP”). Many hospitals feel that the costs to effectively manage readmissions are more than the penalty that is incurred, thus making readmission reduction efforts a net loss; and still others feel that the formula is flawed and disproportionately impacts certain facilities such as academic medical centers and those hospitals serving communities of lower socioeconomic status.

While either of these scenarios may be true, the reality is that reducing readmissions is in the best interest of all hospitals as an initial step in transitioning to a more population health-based delivery system. Potentially avoidable readmissions result in approximately $17 billion in excess spending by Medicare alone. Additionally, potentially avoidable readmissions are a reflection of the quality of care provided across the continuum. Understanding your hospital’s current performance, the performance of care providers in the delivery network, and identifying solutions to reduce readmissions are of significant importance. Acting now will prevent larger revenue impacts in the future and will position the hospital for success.

Although readmission rates have been declining overall, 75 percent of all hospitals eligible for the HRRP (i.e., 2,610 hospitals) are receiving a penalty this year, which is an increase of 433 hospitals receiving penalties over the previous year. The average penalty is .63 percent of their Medicare reimbursement for every Medicare stay, not just those readmitted. Overall, the hospitals receiving penalties will experience an estimated $428 million reduction in Medicare reimbursements, with the largest readmissions penalty to any hospital being approximately $13.3 million.

While the financial implications are important, hospitals need to be aware of the data collection and reporting periods that impact their penalty. This year brings the maximum penalty allowed by law (3 percent) as well as additional measures, but the data for this year’s penalty was collected July 1, 2010 through June 30, 2013. This means that hospitals cannot impact their penalty for 2016 at this point in time and have only four months remaining to make any impact for 2017, which will bring a new diagnosis (Coronary Artery Bypass Graft [“CABG”]). Of importance is taking action now to protect revenue in 2018 and beyond.

Readmissions_Table1-resized-600

If a hospital is subject to a penalty and/or attempting to improve current performance, a detailed analysis stratifying readmitted patients by payer, diagnosis, and source of the readmission should be completed in order to identify priority areas. From there, hospitals should assess the internal organizational processes related to care delivery and care management. This not only includes assuring high quality care during the hospitalization, but incorporates the preparation, planning, and communication needed for a successful transition of care to a post-acute or home-based setting. 

Paths_ReadmissionsDetermination of process effectiveness includes incorporating patient goals into discharge planning and instructions, including medication reconciliation with easy to use patient tools, as well as other tailored patient and caregiver education and programs focused on certain medical conditions. Coordination with community physicians for follow-up visits is imperative. Qualitative factors such as short patient or caregiver interviews at the time of readmission may also shed light on non-obvious reasons for readmission. Additionally, the hospitalist program should be assessed from a coordination perspective with care management, discharge planning, and primary care physicians. Paths for controlling readmissions include: pre-discharge processes internal to the hospital, performance of the post-acute network, and factors associated with discharge to home. Assessing and improving these pathways is recommended.

As the U.S. healthcare system continues its transition from volume to value, readmissions penalties appear to be here to stay. The penalties will impact each hospital in a different manner, and the costs and benefits of reduction efforts must be weighed. However, controlling and reducing avoidable readmissions is a solid first step toward delivering more accountable care. Hospitals should be aware of the penalties, the impact to their facility, and the drivers of potentially avoidable readmissions. Deploying proactive and effective strategies for improvement is necessary for success in today’s healthcare marketplace.

The Camden Group, Hospital Readmissions, Readmissions Reduction


Ms. Bosko is a vice president with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

 

Ms. Pike is a senior manager with The Camden Group with over 25 years of clinical, business, and management experience in the healthcare industry. Ms. Pike’s areas of expertise include business development, strategic planning, operations management, Lean strategies, and performance and process improvement. She may be reached at tpike@thecamdengroup.com or 585-512-3900.

 

 

Topics: Hospital Readmissions, Tawnya Bosko, Readmissions Reduction, HRRP, Tina Pike, Hospital Readmissions Reduction Program

CMS Issues FY 2016 IPPS Final Rule: Signals Continued Transition to Value-Based Reimbursement

Posted by Matthew Smith on Aug 3, 2015 3:07:54 PM

By Tawnya Bosko, DHA, MS, MHA, MSHL, Vice President, The Camden Group

value-based reimbursementsOn July 31, CMS issued the FY 2016 Inpatient Prospective Payment System (“IPPS”) final rule, which will take effect October 1, 2015. The final rule includes a payment update of 0.9 percent, a slight decrease from the proposed increase of 1.1 percent.

This 0.9 percent update applies to those acute care hospitals that participate in the inpatient quality reporting (“IQR”) program and are meaningful users of a certified electronic health record (“EHR”). The actual market basket update is 2.4 percent but is adjusted by the factors in Table 1:

 


 Table 1: FY 2016 IPPS Final Rule Payment Update

Market Basket Update 2.4%
Less Multi-Factor Productivity -.5%
Less ACA Mandated -.2%
Less Documentation and Coding Recoupment -.8%
TOTAL IMPACT 0.9%

The final rule also impacts disproportionate share hospital (“DSH”) payments in that the 75 percent of what otherwise would have been paid to hospitals based on their relative share of the total amount of uncompensated care is being adjusted to approximately 63.69 percent of the amount to reflect changes in the percentage of individuals that are uninsured and additional statutory adjustments. Ultimately, CMS projects this impact to be a downward payment adjustment of approximately 1 percent as compared to the Medicare DSH payments and uncompensated care payments distributed in FY 2015.

Hospitals that do not participate in IQR are subject to a penalty of 25 percent of the market basket update and those that are not meaningful users of a certified EHR are subject to a penalty of 50 percent of the market basket update. Additionally, the FY 2016 IPPS final rule updates and continues penalties for Readmissions, Hospital Acquired Conditions (“HACs”), and bonuses or penalties for hospital-Valued Based Purchasing (“VBP”).

  • Readmissions: While no changes were made to the current or planned readmission measures (see table 2) in the FY 2016 IPPS final rule, the pneumonia readmission measure has been refined to expand the measure cohort for FY 2017 and subsequent years. The modified version will include patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia and with a principal diagnosis of sepsis with a secondary diagnosis of pneumonia. Patients with a principal discharge diagnosis of respiratory failure or severe sepsis are not included as had been previously proposed.

Table 2: Current and Planned Readmissions Measures

Fiscal Year Readmissions Measures Maximum Penalty
2013 Acute Myocardial Infarction, Heart Failure, and Pneumonia 1%
2014 Same as FY 2013 2%
2015 FY 2014 Measures plus: 1) Hip/Knee Replacement and 2) COPD 3%
2016 Same as FY 2015 3%
2017 FY 2015 Measures plus: Coronary Artery Bypass Graft ("CABG") 3%

  • HACs: The 1 percent payment reduction will continue to apply to those hospitals that rank in the top quartile relative to the national average of all applicable hospitals for HACs. The FY 2016 IPPS final rule changes the HAC program in several ways. First, it expands the population covered by the central line-associated bloodstream infection (“CLABSI”) and catheter-associated urinary tract infection (“CAUTI”) measures to include patients in select non-intensive care units, including pediatric and adult medical wards, surgical wards, and medical/surgical wards locations beginning in FY 2018. It also changes the relative contribution of each measure within domain 2 and the domain weighting of the total HAC score, which could impact the mix of hospitals receiving the HAC penalty.
  • VBP: In the final rule, the program has been expanded to include additional measures. Specifically, the rule adds a care coordination measure beginning with the FY 2018 program year and a 30-day mortality measure for chronic obstructive pulmonary disease beginning with the FY 2021 program year. Additionally, the rule signals future policy changes that will affect certain National Health Safety Network measures beginning with the FY 2019 program year.

Further, CMS has added seven new measures for the IQR: three new claims-based measures and one structural measure for the FY 2018 payment determination and subsequent years; and three new claims-based measures for the FY 2019 payment determination and subsequent years.

While acute care hospitals are continuing to see limited increases in reimbursement and an increasing focus on reimbursement tied to value and quality based metrics, long-term care hospitals were more drastically impacted by the FY 2016 IPPS final rule with a projected negative payment update of -4.6 percent.

CMS was clear in its final rule that it is committed to increasingly shifting Medicare payments from volume to value. When we discuss “value” in healthcare, we typically mean the quality of healthcare received per dollar spent on achieving that outcome. In essence, hospitals’ focus needs to be on providing the highest quality healthcare at the lowest relative price. Government and commercial payers alike are signaling the decline of per unit reimbursement. All hospital leaders should be taking the necessary steps now to understand and improve quality, understand and decrease the cost of care, both while managing in a blended reimbursement environment. Future success depends on actions taken now.

Source: The Center for Medicare and Medicaid Services (2015): https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-31-4.html, accessed August 2, 2015.


Ms. Bosko is a vice president with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

Topics: CMS, Acute Care Hospitals, Hospital Readmissions, Tawnya Bosko, IPPS Final Rule

Hospital Readmissions Reduction Strategies: The Impact of the Hospitalist

Posted by Matthew Smith on Apr 22, 2015 10:24:03 AM

By: Tawnya Bosko, MHA, MSHL, MS, Senior Manager, and Vinnie Sharma, MBA, MPH, Manager, The Camden Group

RA-thumb5As penalties associated with avoidable readmissions continue, hospitals across the country are attempting to identify the most effective approaches to tackle this challenge in order to limit monetary as well as reputational losses. While the solutions required will likely be as multi-faceted as the problem itself, one specific group that can play a pivotal role in reducing readmissions are the hospitalists.

Hospitalists play a central role in process improvement within hospitals, which gives them a head start in tackling the readmissions challenge. However, in certain cases, over-emphasis on length-of-stay (LOS) reduction may contribute to the problem, which can lead to higher readmissions, patient dissatisfaction, and increased liability for the physicians and the hospital. Thus, the hospitalists and the hospital leadership need to develop a proactive, coordinated set of strategies to achieve the desired results of efficient care as well as reduced readmissions. Use the following ten tips to support your organization’s coordinated strategy.

1. Promote a Team Approach

Reducing readmissions requires a team effort with other physicians, nurses, care coordinators, case managers, family members, and post-acute providers. Hospitalists typically work in a team-based environment and are used to playing “quarterback” to a multidisciplinary team of healthcare professionals to improve inpatient processes and quality, and thus are best qualified to lead efforts to reduce readmissions. Because many of the areas that can impact readmissions are outside the immediate purview of the hospitalists (e.g., case management or post-acute care), some organizations utilize a dyad approach where the hospitalist co-chairs the taskforce with an administrative leader.

2. Coordinate Discharge Planning

Hospitalists are often asked to balance hospital efficiency (e.g., through managing LOS and cost per case) while ensuring that the patient receives appropriate care in the most appropriate setting. Hospitalists can manage this balancing act by working with case managers and care coordinators to develop a plan of care starting on the first day of admission. The tasks of planning post-discharge care, coordination with the Primary Care Physician (“PCP”), specialists, and communication with family should be initiated as early as possible.

3. Improve Patient Education

The best preventers of readmissions are often the patients themselves. If properly educated on symptoms, medications, warning signs, and need for follow-up with PCPs, many of the most common problems that result in readmissions can be prevented. While it certainly depends on the ability of the patient to follow instructions, hospitalists can lead the effort by providing written as well as verbal instructions in an easy to understand way. Depending on the situation, it may be appropriate to engage family members. Additionally, deploying a patient education specialist or case manager to follow-up with the patient to make sure they understand the hospitalist’s recommendations and plan of care identifies areas where patients may be unclear and resolves those issues before discharge. This also serves as a vehicle to improve patient experience. Optimally, patients should be given a phone number to call should they have questions after their discharge. That number should be given by the hospital, hospitalist, case manager or in coordination with the PCP.

4. Strive for Smoother Hand-offs

Transition from the inpatient setting to post-acute or home setting is a critical step in preventing adverse outcomes and potential readmissions. Effective communication about the needs of the particular patient applies to not just the inpatient stay, but to the discharge process and post-discharge environment. Hospitalists need to pay particular attention to effective and timely communication with the PCPs or post-acute providers. While a letter or faxed copy of discharge notes is common practice, it is usually not sufficient; phone calls can be much more effective in relaying important information and developing a game plan, especially for complex patients. Additionally, electronic exchange of health information and shared viewing of the electronic patient record is optimal. This often remains a challenge due to lack of integration between inpatient and ambulatory records.

5. Schedule Follow-up Appointments

Patient follow-up appointments should be scheduled with the PCP before discharge, and an appropriate outreach and communication process should be structured so that patients who miss their follow-up appointments are identified. This requires a tightly coordinated effort between the hospitalists, the hospital and the patient’s PCP or other relevant specialty provider. Further, home health agencies can support the transition to home with home visits to assess the patient’s condition, home environment, and ensure compliance with medications. Hospitalists should drive the communication with the PCP and coordinate efforts with internal hospital departments to ensure appropriate post-discharge visits are arranged.

6. Improve Medication Reconciliation

Multiple studies have demonstrated that proper medication reconciliation can result in a significant decrease in readmissions and adverse events. Hospitalists can take a leading role in improving medication reconciliation through a coordinated effort with the pharmacist, pharmacy technicians, and nursing staff. Depending on the approach, the process may require additional staffing resources, and the hospitalists can spearhead the task of communicating the expected benefits to administrative leaders. Further, medication reconciliation doesn’t stop within the hospital walls. Ensuring that the PCP is updated regarding changes in medications while in the inpatient setting and the ambulatory record is updated are pertinent; as is coordination with post-acute care providers.

7. Utilize Post-Acute Care

As the healthcare system moves to an integrated delivery model, hospitalists can play an important role in the post-acute arena to improve care coordination. Several organizations now send hospitalists to round in skilled nursing facilities (“SNFs”) and nursing homes to ensure a safe transition and follow-up. Some organizations have dedicated physicians to the SNF setting, often referred to as “SNFists.” For less acute patients, several programs offer post-discharge clinics that are staffed either by hospitalists or through a partnership with the PCP. While utilizing hospitalists or advanced practice professionals with hospitalists’ oversight, outside of the inpatient setting, may require financial support from the organization, the benefits from reduced readmissions, lower costs, and higher patient satisfaction can be significant.

8. Identify Those at Greatest Risk for Readmissions

Hospitalists are in the best position to identify patients that are at greatest risk for readmissions. Using data analysis to provide a greater level of detail and feedback to hospitalists is important to overall success, as is instituting a feedback process to account for the hospitalist’s identification of high risk individuals, processes and conditions. Utilizing a risk stratification tool and arming hospitalists with information from that tool at the time of admission are recommended.

9. Encourage Communication Between Admitting and Discharging Physicians

Studies have shown that often there isn’t communication between the admitting and discharging hospitalists regarding patients that are readmitted. While basic information is often exchanged, there isn’t a tightly coordinated effort to discuss readmitted patients between the physicians that are involved in the care. Closing the communication loop between hospitalists could provide valuable information and lessons learned and ultimately reduce readmissions as well as improve quality and support a team-based environment.

10. Design Incentives Models that Matter

Having clear guidelines and processes that should be followed by the hospitalist program are important. Additionally, since the readmission penalty is structured to only impact the hospital at this time, and hospitalists are still compensated for seeing readmitted patients, creating an incentive model methodology that bonuses the hospitalists for improving or maintaining a given readmission rate may help align overall incentives in the program and engage hospitalists in the process. Hospitals should work collectively with the hospitalists group and other stakeholders to design effective incentive models.

Readmissions reduction requires a well-coordinated approach among many providers along the continuum of care as well as with the patient, family, and other participants. Hospitalists can play a critical role in the development of a culture of safety that improves patient outcomes, reduces penalties for the hospitals, and also minimizes the medical-legal risk exposure. Readmissions reduction is a clear first step in transitioning to a more value-based delivery system, and hospitalists can and should play a critical role in this process.

The Camden Group, Hospital Readmissions, Readmissions Reduction


 

bosko_headshotMs. Bosko is a senior manager with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization (“PHO”) and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

 

 

Vinnie_Sharma_SquareMr. Sharma is a manager with The Camden Group with more than ten years of experience providing advisory services to physician organizations and health systems. Mr. Sharma has an extensive background in managing or consulting for medical groups, faculty practice plans, and health systems, with a focus on operational and financial improvement. He may be reached at vsharma@thecamdengroup.com or 310-320-3990.


 

Topics: Readmissions, Hospital Readmissions, Tawnya Bosko, Readmissions Reduction, Vinnie Sharma, Post-Acute Care, Patient Education

New White Paper Download: What is Your Plan for Avoiding Readmissions?

Posted by Matthew Smith on Mar 19, 2015 2:55:00 PM

Readmissions White Paper IconAs the U.S. healthcare system continues its transition from volume to value, readmissions penalties appear to be here to stay. The penalties will impact each hospital in a different manner, and the cost/benefit of reduction efforts must constantly be weighed. However, controlling and reducing avoidable readmissions is a solid first step toward delivering more accountable care.

The latest White Paper from The Camden Group, titled, What is Your Plan for Avoiding Readmissions? Understanding the Penalty and Solutions, examines:

  • Readmissions penalty history and trends
  • Distribution of HRRP penalties
  • Readmissions results vs. U.S. national rate
  • Readmissions measures and maximum penalty by fiscal year
  • States with the highest percentage of hospitals receiving penalties
  • Readmissions penalty calculations and projections (including CMS formula)
  • Solutions for controlling readmissions

To download the PDF White Paper, please click the button below:

The Camden Group, Hospital Readmissions, Readmissions Reduction

Topics: Readmissions, Hospital Readmissions, Readmissions Reduction, Hospital Readmissions Reduction Program

Hospital Readmissions: How Are They Impacting Your Bottom Line?

Posted by Matthew Smith on Mar 5, 2015 11:10:00 AM

By Tawnya Bosko, MHA, MSHL, MS, Senior Manager and Tina Pike, RN, MSN, MBA, HCM, Senior Manager, The Camden Group

Revolving DoorYes, there is controversy surrounding the Hospital Readmissions Reduction Program (“HRRP”). Many hospitals feel that the costs to effectively manage readmissions are more than the penalty that is incurred, thus making readmission reduction efforts a net loss; and still others feel that the formula is flawed and disproportionately impacts certain facilities such as academic medical centers and those hospitals serving communities of lower socioeconomic status.

While either of these scenarios may be true, the reality is that reducing readmissions is in the best interest of all hospitals as an initial step in transitioning to a more population health-based delivery system. Potentially avoidable readmissions result in approximately $17 billion in excess spending by Medicare alone. Additionally, potentially avoidable readmissions are a reflection of the quality of care provided across the continuum. Understanding your hospital’s current performance, the performance of care providers in the delivery network, and identifying solutions to reduce readmissions are of significant importance. Acting now will prevent larger revenue impacts in the future and will position the hospital for success.

Although readmission rates have been declining overall, 75 percent of all hospitals eligible for the HRRP (i.e., 2,610 hospitals) are receiving a penalty this year, which is an increase of 433 hospitals receiving penalties over the previous year. The average penalty is .63 percent of their Medicare reimbursement for every Medicare stay, not just those readmitted. Overall, the hospitals receiving penalties will experience an estimated $428 million reduction in Medicare reimbursements, with the largest readmissions penalty to any hospital being approximately $13.3 million.

While the financial implications are important, hospitals need to be aware of the data collection and reporting periods that impact their penalty. This year brings the maximum penalty allowed by law (3 percent) as well as additional measures, but the data for this year’s penalty was collected July 1, 2010 through June 30, 2013. This means that hospitals cannot impact their penalty for 2016 at this point in time and have only four months remaining to make any impact for 2017, which will bring a new diagnosis (Coronary Artery Bypass Graft [“CABG”]). Of importance is taking action now to protect revenue in 2018 and beyond.

Readmissions_Table1-resized-600If a hospital is subject to a penalty and/or attempting to improve current performance, a detailed analysis stratifying readmitted patients by payer, diagnosis, and source of the readmission should be completed in order to identify priority areas. From there, hospitals should assess the internal organizational processes related to care delivery and care management. This not only includes assuring high quality care during the hospitalization, but incorporates the preparation, planning, and communication needed for a successful transition of care to a post-acute or home-based setting. 

Determination of process effectiveness includes incorporating patient goals into discharge planning and instructions, including medication reconciliation with easy to use patient tools, as well as other tailored patient and caregiver education and programs focused on certain medical conditions. Coordination with Paths_Readmissionscommunity physicians for follow-up visits is imperative. Qualitative factors such as short patient or caregiver interviews at the time of readmission may also shed light on non-obvious reasons for readmission. Additionally, the hospitalist program should be assessed from a coordination perspective with care management, discharge planning, and primary care physicians. Paths for controlling readmissions include: pre-discharge processes internal to the hospital, performance of the post-acute network, and factors associated with discharge to home. Assessing and improving these pathways is recommended.

As the U.S. healthcare system continues its transition from volume to value, readmissions penalties appear to be here to stay. The penalties will impact each hospital in a different manner, and the costs and benefits of reduction efforts must be weighed. However, controlling and reducing avoidable readmissions is a solid first step toward delivering more accountable care. Hospitals should be aware of the penalties, the impact to their facility, and the drivers of potentially avoidable readmissions. Deploying proactive and effective strategies for improvement is necessary for success in today’s healthcare marketplace.

The Camden Group, Hospital Readmissions, Readmissions Reduction

bosko_headshotMs. Bosko is senior manager with The Camden Group and specializes in designing and implementing clinical integration, high growth medical service operations (“MSO”) and finance, physician hospital organization (“PHO”) and MSO development, managed care strategy, and physician alignment. She may be reached at tbosko@thecamdengroup.com or 310-320-3990.

 

 

 

pike_headshot

Ms. Pike is a senior manager with The Camden Group with over 25 years of clinical, business, and management experience in the healthcare industry. Ms. Pike’s areas of expertise include business development, strategic planning, operations management, Lean strategies, and performance and process improvement. She may be reached at tpike@thecamdengroup.com or 585-512-3900.

 

 

Topics: Hospital Readmissions, Tawnya Bosko, Readmissions Reduction, HRRP, Tina Pike, Hospital Readmissions Reduction Program

Infographic: 7 Cities With Highest Hospital Readmission Rates

Posted by Matthew Smith on Oct 22, 2014 3:23:00 PM

Infographic, Healthcare, GraphicThe seven cities with the highest hospital readmission rates include: Chicago, Brooklyn, Philadelphia, Baltimore, Manhattan, Boston and Los Angeles, according to a new analysis by Kaiser Health News, depicted in an infographic by Becker's Healthcare.

Nineteen hospitals in Chicago exceeded the national average readmission rate. The infographic details how many hospitals in each of the other cities exceeded the average.

Hospitals, Readmissions, Hospital Readmissions, Population Health

Topics: Infographic, Hospital Readmissions

Big Hospitals to Be Biggest Losers of Federal Medicare $$

Posted by Matthew Smith on Jan 30, 2013 4:26:00 PM
Via MedPage Today, Published: January 22, 2013

Hospital ReadmissionsLarge, teaching, and safety-net hospitals are those most likely to be penalized for failing to reduce hospital readmissions, researchers found.

In the federal Hospital Readmissions Reduction Program (HRRP), 40% of large hospitals will likely see big cuts in their fiscal 2013 Medicare reimbursements compared with 28% of small hospitals, according to Karen Joynt, MD, of Brigham and Women's Hospital in Boston, and Ashish Jha, MD, of the Harvard School of Public Health.

In addition, major teaching hospitals are more likely to be highly penalized than nonteaching hospitals (44% versus 33%) as are safety-net hospitals compared with hospitals that do not have the safety net designation (44% versus 30%), they wrote in a research letter in the Journal of the American Medical Association online.

The HRRP took effect on Oct. 1, 2012; under the program, CMS determines whether a hospital's readmission rates were higher than would be predicted by its models. Those with higher-than-predicted rates will have their total 2013 Medicare reimbursement cut by up to 1%.

The authors noted that prior studies "have shown that readmission rates are related to severity of illnesses and socioeconomic status."

To measure penalty risks under HRRP, Joynt and Jha analyzed publicly available data on 3,282 Medicare reimbursement-eligible hospitals and calculated the odds of receiving any penalties for each hospital type.

Hospitals were categorized as having received high, low, or no penalties, based on whether their penalty size was greater or less than the top half of penalties. The authors linked this data to 2011 American Hospital Association survey data to identify hospitals that are likely to care for sicker patients (large hospitals with 400 beds and major teaching hospitals with membership in the Council of Teaching Hospitals), along with safety-net hospitals.

The authors identified safety net hospitals as sites "in the highest quartile of the disproportionate share hospital index."

Roughly two-thirds of hospitals in the sample (66.7%) will receive pay cuts under HRRP. Almost half (47%) of small hospitals in the analysis won't suffer Medicare payment cuts compared with 24% of large hospitals.

Compared with nonteaching hospitals, teaching hospitals were less likely to avoid a penalty (19% versus 33%).

A small percentage of safety-net hospitals will avoid penalties compared with nonsafety-net hospitals (20% versus 37%).

In a multivariate analysis of all hospital types, safety-net hospitals were more likely than other sites to receive a high penalty under the new reimbursement regulations (odds ratio 2.38, 95% CI 1.91 to 2.96, P<0.001).

"It is unclear exactly why [large, teaching, and safety-net] hospitals have higher readmissions rates than their smaller, nonteaching, nonsafety-net hospital counterparts," the authors noted, but added that "prior research suggests that differences between hospitals are likely related to both case mix and socioeconomic mix of the patient population."

They also noted that there was "less evidence that differences in readmissions are related to measured hospital quality."

The study was limited by the inability to identify institutions that care for the sickest patients. The authors also found that missing data for fiscal years 2014 and 2015 in the current study limits whether penalties will persist past the first year of the HRRP.

Topics: Medicare, Hospitals, Hospital Readmissions

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