On April 30, the Centers for Medicare & Medicaid Services (CMS) published a 1500-page draft regulation detailing how it proposed paying hospitals for the inpatient care they provide to their Medicare patients in FY 2016 and invited comment on its proposal from stakeholders and interested parties.

On June 12, the National Association of Urban Hospitals provided its written comments in a letter to CMS. This week NAUH presents those comments in this space:

  • Monday: Medicare DSH
  • Yesterday: Hospital inpatient rates
  • Today: the hospital readmissions reduction program
  • Tomorrow: short hospital stays and outliers

Hospital Readmissions Reduction Program

NAUH is disappointed that this year’s draft regulation does not include a proposal to reform the hospital readmissions reduction program.

For the past four years NAUH has responded to the proposed inpatient prospective payment system regulation by asking CMS to modify the readmissions reduction program to add a risk adjustment component based on our belief that the program, as currently constituted, is unfair to private urban safety-net hospitals and is harming them because it lacks such risk adjustment. While in the beginning NAUH was among the very few expressing such a concern, the passage of time has seen many come to share our view. MedPAC and the National Quality Forum feel the same way; scholarly articles in the New England Journal of Medicine, Health Affairs, and Health Services Research have echoed this view and presented research to support it; the U.S. Department of Health and Human Services’ own Agency for Healthcare Research and Quality shares this perspective as well; and legislation currently before Congress contemplates imposing changes in the program for this very reason.

NAUH LogoShowing concern and sensitivity about this problem, last year CMS invited public comment and recommendations on the subject. Despite this, despite the growing consensus that the readmissions reduction program is flawed and needs to be reformed, and despite the continual harm this program is causing to many urban safety-net hospitals, this year’s proposed regulation does not call for any changes in the program. Unlike many other aspects of Medicare policy and health care reform, CMS has the authority to address this problem on its own. We are disappointed that it did not do so this year through the proposed FY 2016 inpatient prospective payment system regulation and urge it to act on this important matter in time for reforms to be introduced when FY 2016 begins on October 1.