Reducing fines for readmissions
Preventable readmission penalty brings concerns
Hospitals want to do their part to reduce preventable readmissions, hospital lobbyists say, but a forthcoming penalty on high readmission rates in the health reform law needs some tweaking before it can be fairly implemented.
In particular, the American Hospital Association will be leaning on Congress to re-examine the penalty, so that it “only addresses those readmissions that were unplanned and could have been prevented, instead of having all readmissions be subject to penalty,” said Nancy Foster, vice president for quality and patient safety for the American Hospital Association.
The Obama administration has long touted high readmission rates as a costly problem that needs to be reined in. A recent report from California’s Office of Statewide Health Planning and Development added grist to this argument, concluding that readmissions added $31 billion to charges billed to Medicare in 2005, accounting for half of all charges for hospital services in the state. In addition, readmissions cost the state Medicaid program $10 billion and private insurers $11 billion.
“Readmissions are an important issue because they are expensive, can involve additional difficulties for patients and caregivers, and often can be preventable,” David Carlisle, director of the Office of Statewide Health Planning and Development, said in response to the report’s findings. “Our hope is that this data can spur discussion on lowering rates of readmissions to effect change in direct patient care, discharge planning and case management.”
Changes are good, claim the hospital indus-
for any of those three conditions they will be subject to a penalty although the CMS still has to work out the exact formula. Some hospitals, particularly low volume providers, will be excluded from the penalty.
Based on the way the law is written, unrelated or unplanned readmissions also shouldn’t count, Foster said. As an example, “If I go in for treatment for a heart attack and am asked to come back in two weeks so the hospital can implant a defibrillator device, that readmission wouldn’t count against the hospital.”
The caveat is how the CMS will account for these things when they issue their regulations, Foster said. According to the AHA, a mathematical error in the legislative language could result in far greater penalties than what’s actually warranted for excess readmissions, she said.
If, for example, a hospital treats 100 heart attack patients within a given year, and 25 were readmitted but the CMS calculates that only 20 readmissions should have occurred, “you would expect the penalty for the hospital to apply to just those five excess readmissions,” Foster said. But that’s not what the law does, she continued. Instead, the formula would penalize the hospital for the cumulative number of readmissions—in this case, 25, meaning the hospital would incur a penalty of $100,000, based on the fact that a heart attack patient on average costs about $4,000 per case, she said.
The AHA has brought up this issue with the CMS and lawmakers, and the response has been “that this was not an error, that they chose to penalize hospitals in this way,” Foster said. A CMS spokeswoman said this was a matter for Congress, since it involved statutory language.
Bottom line is “we need to get the letter of law changed,” Foster said.
A spokesman for Rep. Pete Stark (D-Calif.), the House Ways and Means Health Subcommittee chairman, said that the panel was “pleased with the readmissions policy as it will change provider behavior, reduce preventable readmissions and thereby improve patient care. We will monitor implementation closely, as with all parts of the Affordable Care Act within our jurisdiction.” The committees believe the readmissions policy under the law could be extended to post-acute providers as well and physicians, if feasible.
Most hospitals acknowledge that they need to “own” the readmissions issue, but to keep in mind that other players are involved in preventing readmissions. “To put it all on hospitals and say it’s the hospital’s fault oversimplifies the problem,” said Marcia Nelson, vice president for medical affairs at Enloe Medical Center, Chico, Calif.
In her view, the entire concept of penalizing hospitals makes it seem as if “there’s this one arm of this very complex healthcare system that’s dropping the ball, whereas readmissions are complex.” While it’s true that hospitals need to address this issue in part by raising the bar on best practices, “we also need to make sure the insurance companies are paying for necessary services.”
Patients play a role in the readmissions figures as well, other experts say. Some patients are grossly overweight and their chances of getting readmitted for high blood pressure or congestive heart failure are fairly high, said Marion Goldberg, partner at Winston & Strawn, Washington. If a readmission occurs, “is it the hospital’s responsibility?” Goldberg said.
Goldberg: Patients play a role in readmissions as well.