The CMS says fac­tor­ing pa­tient so­cio-eco­nomic sta­tus into read­mis­sion penal­ties won’t change much

Modern Healthcare - - NEWS - By Vir­gil Dickson

“Even small gains in lev­el­ing the play­ing field for all hos­pi­tals are an im­por­tant step in the right di­rec­tion to mak­ing care more ac­ces­si­ble and af­ford­able for all pa­tients.” Dr. Shan­tanu Agrawal CEO Na­tional Qual­ity Fo­rum

When the 21st Cen­tury Cures Act last year in­cluded a pro­vi­sion re­quir­ing Medi­care to ac­count for pa­tient back­grounds when it cal­cu­lated hospi­tal read­mis­sion penal­ties, safety-net providers re­joiced.

But the CMS re­cently es­ti­mated the pol­icy would do lit­tle to help providers who feel they are un­fairly pe­nal­ized be­cause they see a dis­pro­por­tion­ate num­ber of low­in­come and sick pa­tients.

The con­tin­u­ing de­bate over the rel­e­vance of so­cioe­co­nomics on a per­son’s health comes as hos­pi­tals are hit with the high­est amount of penal­ties they’ve ever seen un­der the 4-year-old readmissions re­duc­tion pro­gram.

Hos­pi­tals face $564 mil­lion in read­mis­sion penal­ties next year. That’s up $27 mil­lion from this fis­cal year.

Hos­pi­tals are at fault if, within 30 days af­ter dis­charge, pa­tients re­turn to the hospi­tal for the same rea­son they were orig­i­nally ad­mit­ted.

But some hos­pi­tals are lo­cated in im­pov­er­ished ar­eas, and many of their pa­tients can­not af­ford to buy med­i­ca­tion or healthy food, or they lack trans­porta­tion to at­tend check­ups with pri­mary-care doc­tors.

The CMS re­ported to Congress in De­cem­ber that hos­pi­tals with high rates of pa­tients el­i­gi­ble for both Medi­care and Med­i­caid, who tend to be both poor and very ill, were most pe­nal­ized un­der the qual­ity im­prove­ment pro­gram,

In De­cem­ber, safety net providers said the pro­vi­sion in the 21st Cen­tury Cures Act—a bill that was ini­tially aimed at bio­med­i­cal in­no­va­tion but was turned into a smor­gas­bord of health­care poli­cies—would com­pel the CMS to take into ac­count the so­cio-de­mo­graphic makeup of pa­tients.

Some pol­icy ex­perts, how­ever, warned that the ef­fec­tive­ness of risk ad­just­ment de­pended on the de­tails of its im­ple­men­ta­tion, which were scant in the leg­is­la­tion.

Start­ing Oct. 1 of next year, the CMS will as­sess penal­ties based on a hospi­tal’s per­for­mance rel­a­tive to other hos­pi­tals with a sim­i­lar pro­por­tion of pa­tients who are du­ally el­i­gi­ble for Medi­care and full-ben­e­fit Med­i­caid.

Those pa­tients are of­ten ex­pen­sive to serve, ac­count­ing for nearly a third of to­tal Medi­care fee-for-ser­vice spend­ing in 2012 de­spite con­sti­tut­ing only 18% of ben­e­fi­cia­ries, ac­cord­ing to the Medi­care Pay­ment Ad­vi­sory Com­mis­sion.

But the law failed to spec­ify how providers would be com­pared to one an­other.

Af­ter assess­ing the im­pact of those changes, the CMS in a fi­nal in­pa­tient pay rule re­leased Aug. 2 ad­mit­ted lit­tle would change as far as the over­all per­cent­age of hos­pi­tals be­ing pe­nal­ized.

It pre­dicted fewer ru­ral hos­pi­tals would see cuts, with the rate drop­ping from 0.64% to 0.61%. The per­cent­age of safety-net hos­pi­tals, which are of­ten found in poor com­mu­ni­ties with pre­dom­i­nantly black or Latino res­i­dents, fac­ing penal­ties would drop to 54% from 63%.

Hos­pi­tals not el­i­gi­ble for dis­pro­por­tion­ate-share pay­ments, which are funds paid to help off­set the costs of high num­bers of low-in­come and unin­sured pa­tients, would see an in­crease to 65% be­ing pe­nal­ized com­pared with 59%.

Qual­ity mea­sure de­vel­op­ers were pleased that any progress would be made un­der the change.

“Even small gains in lev­el­ing the play­ing field for all hos­pi­tals are an im­por­tant step in the right di­rec­tion to mak­ing care more ac­ces­si­ble and af­ford­able for all pa­tients,” said Dr. Shan­tanu Agrawal, CEO of the Na­tional Qual­ity Fo­rum.

The CMS did not of­fer any rea­son for its find­ings, only say­ing it came to its con­clu­sion by us­ing his­tor­i­cal Medi­care claims data.

Maryellen Guinan, se­nior pol­icy an­a­lyst at Amer­ica’s Es­sen­tial Hos­pi­tals, said this con­clu­sion demon­strates that more work is needed to level the play­ing field. Her group is urg­ing the CMS to in­cor­po­rate risk ad­just­ment for so­cio-de­mo­graphic sta­tus, lan­guage and post-dis­charge sup­port struc­ture.

The Na­tional Ru­ral Health As­so­ci­a­tion is also push­ing the CMS to work harder to avoid pe­nal­iz­ing hos­pi­tals with high­risk pop­u­la­tions. The group’s mem­bers be­lieve their pa­tients are more likely to strug­gle given few provider op­tions, lit­tle or no pub­lic trans­porta­tion and the long dis­tances many must travel. Di­ane Cal­mus, the group’s gov­ern­ment af­fairs and pol­icy man­ager, said the CMS is not tak­ing into ac­count “the true so­cio-de­mo­graphic risk ad­just­ment that is needed in the readmissions penalty pol­icy.”

Akin De­me­hin, di­rec­tor of pol­icy at the Amer­i­can Hospi­tal As­so­ci­a­tion, said her group is urg­ing the CMS to re-eval­u­ate and reg­u­larly up­date its ap­proach to ad­dress­ing pa­tient dis­par­i­ties.

Re­searchers have yet to fig­ure out how to re­li­ably pre­dict the im­pact of pa­tient de­mo­graph­ics and so­cioe­co­nomic sta­tus.

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