Reducing CMS Readmission Penalties: Stay Two Years Ahead of the Data

Monday, November 19th, 2012
This post was written by Patricia Donovan

Even hospitals making measurable progress today in reducing preventable readmissions should also be looking two years ahead to avoid potential penalties, advised Dr. Amy Boutwell during a recent webinar on a cross-continuum approach to reducing CMS readmission penalties.

Dr. Boutwell reminded participants that CMS penalties are based on a rolling three-year average of readmissions data, which means that today’s efforts will be just one-third of the total score in 2016, and will be examined along with readmission rates in the next two fiscal years.

“You should look at the current penalty and the projected penalties that your hospital is experiencing not only for this year but for the 2 percent increase planned for FY 2014 and then the 3 percent increase in fiscal 2015,” advised Dr. Boutwell, president of Collaborative Healthcare Strategies and co-founder of the IHI’s STAAR (State Action on Avoidable Rehospitalizations) initiative.

That means hospitals may not have the luxury of a long-term pilot, she said, but should consider moving quickly from pilot to program, even applying lessons learned in one area of the hospital or with one high-risk population to another.

This year, CMS reduced reimbursement for 2,217 hospitals. The financial penalties totaled about $280 million, with an average penalty of $125K, she said.

Organizations should also keep in mind CMS’s plans to expand the list of affected conditions over the next few years, as well as its increased focus on the quality of hospitals’ transitional care. “Beginning January 1, there will be three new care transitions questions on the HCAHPS survey,” she said, referring to a quality assessment tool that figures heavily in a hospital’s overall value-based purchasing score.

“Make sure that all of the items and medications and tests and procedures and education that patients need when they leave our care in the hospital and transition to the next setting of care have been clearly planned out at the time of transition,” Dr. Boutwell advised. There is a wealth of material to support these efforts from CMS and other sources, she noted.

Hospitals should also thoroughly analyze their own data, slicing and dicing it based on conditions, payors, discharge disposition and length of time to readmission, to identify very specific actionable target populations. “This is really relevant when you see that although maybe a quarter or a third of your Medicare patients are being discharged to the SNF or home health environment, you can see that the readmission rate among people discharged to just SNF’s is probably much higher.”

Dr. Boutwell also strongly advised healthcare organizations to know their partners, and know what’s going on within and across settings. “I can’t tell you how many times a patient will say to us: ‘I was discharged from the hospital, I was at a SNF for 20 days, I left on day 20, I went home and here I am back in your ED a day or two later. If that readmission happens in your catchment area, even though it seems like you have handed the patient off to the next setting of care, that readmission accrues to you,” she cautioned.

Each state’s quality improvement organization can run data and identify all transitions between a hospital and other settings of care as well as the frequency and directionality of transitions between facilities, Dr. Boutwell explained, which provides an opportunity to engage with these providers in efforts to reduce avoidable readmissions. A good starting point would be to have a hospital’s case management director identify the two to five SNFs and home health agencies it discharges to most often and begin efforts there, she noted.

There is no one single approach to reducing avoidable readmissions, she concluded, and urged hospitals not to work on readmissions efforts without cross-continuum providers.

“Readmissions are a phenomenon, consisting not just of good discharge planning and good patient education. You need that care plan to be executed, and you need the education and the messages to be consistent across providers as patients travel from one care setting to the next.”

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