Tuesday, May 21, 2013

Hospital Readmission Penalties Create Continued Policy Debate

---Terri Bernacchi, PharmD, MBA,  Senior Partner, Valiant Health (See also:  http://www.valianthealth.com/blog/hospital-readmission-penalties-create-continued-policy-debate/ )
 

A by-product of CMS’ cost reduction efforts associated with payment (or penalty) for quality results, is the much vilified Star Rating measure on All-Cause Hospital Readmissions. These efforts hit the Medicare Advantage plan’s Star Ratings results but also impact hospitals Medicare reimbursement rates directly. 

Two-thirds of hospitals are now facing readmission penalties totaling approximately $280 million in 2013, according to experts.  These 2,271 U.S. hospitals were found to have readmission rates higher than the CMS models predicted, and each of them will receive a penalty this year, as high as 1% of their reimbursement for Medicare patients. (Penalties will increase to 3% by 2015.)

The number of hospitals penalized is much higher than most observers would have anticipated on the basis of CMS's previous public reports, which identified less than 5% of hospitals as outliers.  (See NEJM Article by Drs. Karen E Joynt, MD & Ashish K. Jha, MD)  Path Forward on Medicare Readmissions at http://www.nejm.org/doi/full/10.1056/NEJMp1300122 )

The debate includes concerns that the safety-net hospitals caring for a higher proportion of members with socio-economic challenges are those least able to afford a penalty. Most agree, however, that setting a lower quality standard for these hospitals would not be ideal.   Many hospitals (and associated Medicare Advantage Plans) now have placed special focus on “helping patients make the transition from inpatient care to outpatient or community settings”.  A key part of this coordination is the ability to identify and intervene early in the hospitalization and post-discharge course.


Terri is a Senior Partner at Valiant Health, LLC, and founder of Cambria Health Advisory Professionals.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers or clients nor other Valiant Health colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA. 

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