Here’s what you need to know about new hospital readmission penalties

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Emergency department
Photo by KOMUnews via Flickr

Since 2012, the federal Centers for Medicare & Medicaid Services has had a logical approach to getting hospitals to decrease high readmission rates within 30 days of discharge: It penalizes hospitals whose rates for patients with six specific conditions are higher than expected. Those conditions are chronic lung disease, coronary artery bypass graft surgery, heart attacks, heart failure, hip and knee replacements and pneumonia.

Given that the number of hospitals getting such fines has declined, it is possible to say that by at least one measure, the program has been successful. While readmission rates have dropped since 2012, almost a quarter of all heart failure patients return to the hospital within a month of discharge. Why is that? You would think after five years of addressing this problem that hospitals would have learned what works and what doesn’t when sending these patients home.

In a new tip sheet, Jordan Rau, a senior correspondent for Kaiser Heath News, explains that evaluating whether a hospital is managing readmissions within 30 days of discharge effectively or not is a complex undertaking.

CMS announced in August that readmission penalties will reach a new high this the new fiscal year that began in October. Medicare will withhold more than $500 million in payments to hospitals that have higher than expected readmission rates for patients with the six conditions. The increase is due in part to the fact that CMS raised the bar when it added CABG surgery for 2016.

The penalties are based on the number of Medicare patients who left the hospital from July 2012 through June 2015, Rau explained. “For each hospital, the government calculated how many readmissions it expected, given national rates and the health of each hospital’s patients. Hospitals with more unplanned readmissions than expected will receive a reduction in each Medicare case reimbursement for the upcoming fiscal year that runs from Oct. 1, 2016 through September 2017,” he wrote.

Rau points out in this tip sheet that about one of every six hospitalized Medicare patients is readmitted within 30 days, and researchers believe about one-third of those readmissions may be preventable.

While penalties may be preventable, such prevention involves understanding many factors, some of which may be beyond a hospital’s control. “Readmission rates can be a reflection not only of the quality of a hospital but also the quality of the broader health care system in a community,” Rau wrote.

For journalists covering hospitals, Rau outlines many of the complex factors that go into readmissions and the steps that hospitals take to prevent then. “You can do stories about ‘hot spotting’ efforts to keep ‘frequent flyer’ patients out of the hospital,” Rau explained. These stories can provide many human-interest angles as well as plenty of fodder for anyone interested in health policy.

“Look at the particular health challenges facing low-income patients and the strategies hospitals employ to treat them,” he suggested. “Examine which hospitals are improving and which are not; or see how hospitals in your city, county, region or state compare to those in other places.

Joseph Burns

Joseph Burns is AHCJ’s health beat leader for health policy. He’s an independent journalist based in Brewster, Mass., who has covered health care, health policy and the business of care since 1991.

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