CMS 30-Day Hospital Readmission Penalty: Current & Future Strategies
Hospitals should reconfirm the effectiveness of their readmission efforts.
Summary
The 2010 Hospital Readmission Reduction Program (HRRP) places financial penalties to incentivize hospitals to decrease 30-day readmission for target conditions.
In fiscal 2017, 79% of acute care hospitals received a Center for Medicare & Medicaid Service (CMS) penalty, totaling $528 million.
After an initial improvement, trends lack measurable changes in 30-day readmission rates.
Various strategies have been explored significantly associated with 30-day readmission rate reduction.
Background
Hospital readmission rates for all Medicare beneficiaries is approximately 19.6% at 30 days and 34.0% at 90 days’ post discharge. Over 70% of readmissions occur in medical patients. The current cost to CMS of hospital readmission is $17.4 billion
The HRRP was enacted as part of the Affordable Care Act, starting in 2010, with a penalty free period until September 2012. Initial target conditions were: Heart Failure, Acute Myocardial Infarction, and Pneumonia.
The HRRP penalty is based on the premise that 30-day readmission rates are a reflection of quality of care and can be up to 3% of a hospital’s entire inpatient Medicare payment, NOT just the target condition payments.
Review
When HRRP was passed, hospitals began implementing changes to avoid penalties. Since this initial change, there has not been a favorable measurable trend on 30-day readmission. The initial change in 30-day readmission rates may have been due to several factors, including:
Hospital up-coding – some suggest up-coding contributed up to two-thirds of the observed reduction
Increased use of observational stays
Delayed readmissions beyond the 30th day
The 30-day readmission rate may not be an adequate reflection of quality metrics. 30-day mortality may be a better patient centric metric. In addition, readmissions occurring greater than 1 week after discharge may be a reflection of other factors, independent from the problem causing the initial hospitalization.
HRRP penalties are disproportionate to “Safety Net” hospitals (those providing care to a large patient population of uncompensated care.
Only 2% of U.S. acute care hospitals are Safety Net hospitals, but provide 20% of the uncompensated care to patients.
The disproportionate HRRP burden, does not appear to significantly decrease the total financial margins for Safety Net hospitals. This indicates the penalties are made up with non-patient revenues.
Although these penalties may not create financial hardship for these hospitals as feared, the funds used to shore up the financial penalties could potentially be used for other community needs.
The best strategy has been the development of ideal transitional care interventions which span the continuum of care (FIGURE).
10 key components have been identified in the transition care model.
No singular intervention has produced a significant decrease in readmissions
Focusing the application of transitional interventions on high risk patients has been found to produce an absolute 30-day readmission reduction of 11-28%.
Conclusions
Incentives on improvements in care transition processes or socioeconomic factors may be better determinants of quality of care.
Trials and pilots of proposed reimbursement changes before widespread implementation better support evidence based health policies.
Applying transitional interventions and risk predictions to high risk patients allows a focused approach and are more likely to have better results.
Single individual interventions have not been found beneficial. The optimal combination is unknown.