CMS Readmission Reduction Program Successful, but Criticism Persists

A new study published in the Annals of Internal Medicine suggests that CMS’ Hospital Readmission Reduction Program (HRRP) has successfully reduced hospital readmissions nationwide. It noted that the rate of improvement substantially increased after the passage of the ACA in 2010. While it is true that readmission rates have decreased over time, the number of penalized hospitals continues to grow, and a significant number of hospitals consistently fail to meet their readmission targets. In addition, the program has earned some criticism for its methodology and fundamental assumptions about the readmissions process that may not truly reflect hospital quality.

The HRRP tracks hospitals’ 30-day readmission rates for multiple conditions, including heart attack and heart failure, pneumonia, COPD, total joint replacement, and beginning in 2017, coronary artery bypass graft surgery. Currently, if a hospital’s combined readmission scores exceed its target score, which is adjusted for demographic factors, it can be penalized by up to a three percent reduction in its Medicare reimbursement for the year.

The study in Annals of Internal Medicine found that all hospitals achieved some level of improvement under the program, ranging from roughly 68 to 95 prevented readmissions per 10,000 patients compared to pre-ACA levels. Hospitals with the highest original readmission rates experienced the greatest decline, presumably because they faced a potentially higher penalty and were more motivated to improve or it was easier for them to tackle the “low-hanging fruit” of readmission prevention efforts. The results are consistent with other studies, such as a recent CMS review which determined readmission rates had fallen eight percent nationally between 2010 and 2015.

Though providers are doing better, questions remain about the effectiveness of the program. One potential problem is that comparatively few hospitals ever meet their readmission targets. For the most recent performance year, about 80 percent of hospitals received penalties, a percentage that’s remained relatively constant over the life of the program. In addition, roughly half of all participating facilities have been hit with reimbursement cuts for all four years from 2013 to 2017, according to a Definitive Healthcare analysis. During the same period, the number of penalized hospitals grew by about 470, though part of the increase stems from a rule change in 2015 that added new care episode measurements and expanded overall participation. The high penalty rate has led some observers to question if hospitals’ readmissions targets are adequately adjusted for factors beyond their control, especially for safety-net hospitals that manage low-income populations. If the criticism is justified, the new episode of care measurements taking effect in 2017 will only exacerbate the problem.

total hospitals given reimbursement penalties
Source: Definitive Healthcare

Another study published in the September 2016 edition of Health Affairs  suggests that the 30-day readmission rate CMS uses to score hospitals may be too arbitrary, and that shorter readmission intervals can better identify quality differences. According to the study, readmission risk associated with hospital quality was only observable in the first seven days after the initial discharge. After the first week, income and demographic factors became a better indicator of readmissions. While CMS derived the 30-day measurement from the assumption that hospitals can and will effectively manage patients’ post-acute care, the authors contend that no strong research exists indicating that hospitals are capable of doing so for such a long period. Accordingly, nearly all hospitals received a penalty for at least one year during the program, and only about a tenth successfully met their targets in all four consecutive years.

It’s unclear if CMS will make any major adjustments to the program in response to these concerns. The HRRP has saved Medicare over a billion dollars since its inception, including projected savings for 2017, and overall readmission rates have declined. However, CMS has altered the methodology of its programs in the past due to industry pressure and adjusted the HRRP for FY 2015 to include planned admissions. In addition, the incoming Trump administration’s general antipathy towards the ACA has made it more likely that initiatives like the HRRP could be heavily modified or eliminated altogether. But given the imperative to reduce healthcare costs, it seems probable that an official effort to cut preventable readmissions will continue.

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