Many think about the Affordable Care Act (ACA) as the requirement to hold health insurance, yet major initiatives were also included in the ACA to slow the growth of health care costs over time. One of the main ways this is happening is by reducing the readmission rate of patients back into hospitals within 30 days -- also known as the HHCR or Hospital Readmission Reduction Program. This is a $26B industry of which $17B is estimated to be pegged to preventable readmission. The overall readmission rates are declining and home care services are proving to be a key player in that strategy.
How can home care agencies use hospital readmission rates? Care coordination and transition models are critical in preventing hospital readmissions. The old school method of discharge was to send the patient home with a bunch of paper instructions that overwhelmed the patient. Private-pay home care can have a significant impact in preventing readmission when combined with post discharge instructions. Assisting patients to appointments, medication reminders and adherence, and maintaining a proper diet are critical in the conditions that are subject to high readmission. If you're an owner or marketer of a home care agency, the readmission rates for every hospital for the first three years of the program are posted and downloadable. Approaching hospitals who have declining or higher than the national average of readmission with a message of helping contain their rate and cost should resonate with their pain.
Why do hospitals care? As part of the HHRC, the Centers for Medicare & Medicaid Services started imposing readmission penalties in 2013 to hospitals for lower than expected performance in managing readmission. In fiscal year 2013, the maximum penalty was one percent of the hospital’s base inpatient claims, increasing to two percent for 2014, and reaching and remaining at three percent in fiscal year 2015 and beyond. For many hospitals, the financial penalty isn't enough to sway major behavior but the reputation penalty can be significant for hospitals operating in competitive markets.
What are the targeted conditions? In the first year of the program three conditions were targeted -- Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN). In 2014, chronic lung problems including COPD and emphysema, hip replacement, and total knee replacement were added to the list.
Which hospitals are exempt? More than 1,400 hospitals are exempted from the penalties, including certain cancer hospitals and critical access hospitals. Some facilities that support patients with psychiatry or rehabilitation services are also exempt. A unique exemption also exists in Maryland because the state has a unique payment arrangement with Medicare.
After three years, how are they doing? The majority of hospitals expect to receive a penalty in fiscal year 2015 but the overall readmission rates are declining, in part due to the avoidance of CMS imposed penalties. While, almost across the board, hospitals did better at preventing readmission rates for AMI, HF, and PN, the inclusion of the new conditions made many hospitals jump up to the maximum three percent penalty.
There is some controversy. Much unofficial buzz in the industry cites healthcare professionals wondering, in a system where $17B is actually cut out of readmission costs, how that will affect hospitals financially. A revolving door of patients, while bad for the patients, is good for business. Some professionals also expect CMS to reduce the rate of reimbursement when sustained improvements are proven -- for example, CMS payments may reduce the reimbursable rate of $15K for a kidney admission if, all of a sudden, hospitals can prove they can do it for $12K. Some analysts also question if the readmission rate is really decreasing as observation stays have gone up. Safety net hospitals that treat low-income patients are facing the highest penalties because these patients, who have lower access and logistical support (such as transportation to appointments or health insurance), are more likely to get sicker after a discharge.
How can home care companies use the data to get involved? Care coordination and transition models are critical in preventing readmissions. The old school method of readmission was to send the patient home with a bunch of paper instructions that overwhelmed the patient. Private-pay home care can have a significant impact in preventing readmission when combined with post discharge instructions. Assisting patients to appointments, medication reminders and adherence, and maintaining a proper diet are critical in the conditions that are subject to high readmission. If you're an owner or marketer of a home care agency, the readmission rates for every hospital for the first three years of the program are posted and downloadable. Approaching hospitals who have declining or higher than the national average of readmission with a message of helping contain their rate and cost should resonate with their pain.
