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Most Hospitals Fined by Medicare Over Readmissions

More than 80 percent of all hospitals subject to Medicare’s hospital readmissions reduction program, and half of all of hospitals in the country, will be penalized in FY 2021 under that program because they have what Medicare considers to be too many avoidable readmissions.

In all, 2556 of the 3080 hospitals subject to the Centers for Medicare & Medicaid Services program will be penalized.  More than 600 will see their inpatient payments cut one percent as a result and the average cut will be 0.69 percent.

The penalties are based on hospital performance with patients experiencing congestive heart failure, heart attacks, chronic obstructive pulmonary disease, coronary artery bypass graft surgery, pneumonia, and knee and hip replacement.  Such patients are considered readmitted if they return to the hospital within 30 days of their discharge for these conditions unless their return to the hospital was planned as part of their treatment.

Learn more about hospital performance under Medicare’s hospital readmissions reduction program and find links to tools to look up individual hospitals and download nation-wide hospital 2021 readmissions data in the Kaiser Health News article “Medicare Fines Half of Hospitals for Readmitting Too Many Patients.”

Feds Penalizing Wrong Hospitals for Readmissions, Study Finds

Medicare’s hospital readmissions reduction program often penalizes the wrong hospitals for excessive readmissions.

Or so concludes a new study published in the journal JAMA Cardiology.

According to the study,

…the percentage of hospitals that were incorrectly penalized was 10.1% for acute myocardial infarction, 10.9% for heart failure, and 12.3 percent for pneumonia.

The study also found that the readmissions reduction program is failing to penalize some hospitals that do deserve penalties based on the program’s standards, writing that

…in fiscal year 2019, the percentage of hospitals that should have been penalized by the program, but were not, was 20.9% for acute myocardial infarction, 13.5% for heart failure, and 13.2 percent for pneumonia.

Learn more about the study’s findings and why Medicare’s hospital readmissions reduction program is missing its mark in the JAMA Cardiology report “Misclassification of Hospital Performance Under the Hospital Readmissions Reduction Program.”

 

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among issues on MedPAC’s September agenda were:

  • context for Medicare payment policy
  • the effects of Medicare Advantage “spillover” on Medicare fee-for-service spending and coding
  • evaluation of the hospital readmissions reduction program
  • Medicare indirect medical education (IME) policy, concerns, and considerations for revising

These issues are important to most private safety-net hospitals.

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

Safety-Net Hospitals, Others Benefit From Changes in Medicare Readmissions Program

Safety-net hospitals are among the leading beneficiaries of changes implemented this year in Medicare’s  hospital readmissions reduction program.

According to a new study, safety-net, academic, and rural hospitals have enjoyed improved performance under the program since Medicare began organizing hospitals into peer groups based on the proportion of low-income patients they serve rather than simply comparing individual hospital performance to that of all other hospitals.

While the current fiscal year is still under way, it appears that safety-net hospitals will enjoy a collective decline of $22 million in Medicare readmissions penalties while 44.1 percent of teaching hospitals and 43.7 percent of rural hospitals will face smaller penalties than last year.

NASH was one of the leading and most outspoken proponents of leveling the playing field in the readmissions reduction program, encouraging policy-makers to reform the program so it would compare hospital readmission rates among similar hospitals instead of to those of all hospitals.  NASH’s multi-year effort proved successful and private safety-net hospitals are now benefiting from that success.

Learn more about the readmissions reduction program and how changes in that program have significantly altered its outcomes in the JAMA Internal Medicine study “Association of Stratification by Dual Enrollment Status With Financial Penalties in the Hospital Readmissions Reduction Program.”

Readmissions Reduction Program Results Overstated?

A new study suggests that the encouraging results of Medicare’s hospital readmissions reduction program may not actually be as encouraging as people thought.

According to a new study published in the journal Health Affairs, data on reduced readmissions may be more the result of changes in hospital coding practices than improved quality performance by hospitals.

The report suggests that new industry standards for reporting were implemented at roughly the same time Medicare launched the value-based purchasing program and may account for most or even all of the reported improved performance by hospitals.

Learn more from the Health Affairs study “Decreases In Readmissions Credited To Medicare’s Program To Reduce Hospital Readmissions Have Been Overstated.”

New Approach to Readmissions Program Takes Effect

Medicare’s hospital readmissions reduction program is moving in a new direction beginning in FY 2019 after Congress directed the Centers of Medicare & Medicaid Services to compare hospitals’ performance on readmissions to similar hospitals instead of to all hospitals.

The policy change, driven by a belief that safety-net hospitals were harmed by the program and excessive penalties because their patients are more challenging to serve, results in all hospitals being divided into peer groups based on the proportion of low-income patients they serve.  The readmissions performance of hospitals is then compared only to other hospitals within each peer group.

As a result of this new approach, readmissions penalties against safety-net hospitals are expected to decline 25 percent in FY 2019 while the average penalty for hospitals serving the fewest low-income patients will rise.

NAUH was one of the leading proponents of this major change in how the readmissions reduction program treats hospitals.

Kaiser Health News has published a detailed story describing the policy change and its implications for hospitals, which face penalties of up to three percent of their Medicare revenue for what is considered “excessive” readmissions of Medicare patients within 30 days of their discharge from the hospital.  Included in the article is a searchable database of every hospital in the country that lists the peer group for each hospital, its FY 2018 and FY 2019 readmissions penalties by percentage of Medicare revenue, and the change in readmissions penalty expected from FY 2018 to FY 2019.  Go here to see the article “Medicare Eases Readmission Penalties Against Safety-Net Hospital.”

NAUH Comments on Proposed Changes in Medicare Payments (Part 3 of 3)

In a letter to the Centers for Medicare & Medicaid Services, the National Association of Urban Hospitals has offered extensive comments on CMS’s proposed regulation describing how it intends to pay hospitals for Medicare-covered services in FY 2019.  NAUH offered these comments in response to CMS’s request for stakeholder input.

In this space yesterday NAUH presented its comments on the Medicare Hospital Readmissions Reduction Program, quality reporting, multi-campus hospitals, and documentation required for Medicare cost reports.  On Wednesday NAUH presented its comments to CMS regarding how the agency proposes calculating Medicare disproportionate share (Medicare DSH) payments in the coming fiscal year.  Today, NAUH shares its views on aspects of the proposed regulation that address the Medicare hospital readmissions reduction program, Medicare’s quality reporting program, multi-campus hospitals, and documentation required when filing Medicare cost reports.

Today, NAUH shares its response to CMS’s request for comments on the Medicare area wage index system.

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Medicare Area Wage Index:   Response to Request for Comment

While acknowledging the challenges that the current Medicare area wage index poses at times, in general NAUH supports the current Medicare area wage index system and believes it superior to any alternative that has been proposed in recent years.  We believe wage adjustments based on the cost of labor in different parts of this country are absolutely essential for Medicare because those costs vary so greatly in different geographic areas.  The concerns periodically expressed by some that certain parts of the country are ill-served by the current wage index system are, in our view, based on sentiment and emotion rather than on fact; the data does not support their assertions, and when circumstances change, the current system gives those who feel ill-served by that system ample and fair opportunities to address what they perceive to be inappropriate treatment.

We are especially concerned about a proposal that appears to resurface every few years:  that the wage data upon which wage adjustments are made should come from the Bureau of Labor Statistics (BLS) rather than from actual, real-time hospital wage data.  NAUH believes this is a bad idea.  We do not see the value of using broad categories of data that fail to reflect real employment markets and conditions when actual hospital wage data that does reflect actual hospital wage costs is available and verifiable.

One of the most important factors in wage index calculations, for example, is wages paid to nurses.  BLS data, however, does not capture important differences within the nursing profession, inappropriately lumping nurses who work in different settings into a single category.  In so doing, BLS data ignores the sometimes considerable differences in skill and education levels required of nurses in different settings – hospitals, nursing homes, doctors’ offices, public health facilities, and others – and the considerable differences in wages required to recruit nurses to these different settings and then retain them.  Hospital nurses, for example, require a different, higher level of skill and education than nurses in other settings.  They also work in a more stressful environment and work less desirable hours, including evening and overnight shifts.  As a result, hospitals must offer nurses more money than nursing homes, doctors’ offices, and others.  Some states, moreover, have legal nurse staffing requirements that increase the demand for hospital nurses, which in turn increases how much money hospitals must pay to ensure that they can meet their nurse staffing requirements.  BLS data reflects none of these distinctions and therefore would offer a poor foundation upon which to make broad policy decisions that would have a major impact on hospitals and, no less important, on the communities hospitals serve.  In addition, reporting wage data to BLS is voluntary, and in any geographic areas where BLS concludes that it did not receive enough responses to calculate average wage costs, it infers such data.  NAUH disapproves of this approach and again believes it is better to use actual hospital wage data than incomplete and possibly even inferred data.

NAUH strongly encourages CMS to reject any shift to the use of BLS data in the calculation of Medicare wage adjustments and instead urges CMS to continue to base hospital wage adjustments on real hospital wage costs as reported by hospitals and as audited periodically by CMS.  In addition, if CMS wishes to pursue possible changes in the wage index system, NAUH urges it subject the process to fresh analysis – many of the reviews that call attention to the system’s challenges are outdated – and to convene a broad-based group of providers and other stakeholders to evaluate the challenges and explore potential improvements or alternatives.

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.

Study Raises Questions About Progress Toward Reducing Readmissions

A new study suggests that the reduction in hospital readmissions of recent years may not be as meaningful a reflection of improved quality of care as some observers believe.

According to a new study published in the New England Journal of Medicine, at the same time that hospitals have reduced their readmissions of Medicare patients in response to penalties imposed through Medicare’s hospital readmissions reduction program, the rate of readmission of patients who are hospitalized for observation stays after visiting the emergency room has increased 35 percent.  This increase in readmissions for observation stay patients comes at a time, moreover, when hospitals are making far greater use of observation stays to serve emergency patients than they did in the past.

Learn more about these new findings and their potential implications in the study “Excluding Observation Stays From Readmission Rates – What Quality Measures are Missing,” which can be found here, or go here for a Fierce Healthcare summary.

 

Time to Raise the Bar on Preventable Hospital Readmissions?

A new report suggests that hospitals can have the greatest impact on reducing preventable readmissions within seven days of discharge and not through the 30-day mark at which they are currently judged by Medicare.

According to a study published in the Annals of Internal Medicine,

Early readmissions were more likely to be preventable and amenable to hospital-based interventions.  Late readmissions were less likely to be preventable and were more amenable to ambulatory and home-based interventions.

The study, conducted at 10 academic medical centers and involving more than 800 of their patients who had been readmitted to the hospital, concludes that readmissions within seven days may more accurately reflect the quality of care hospitals provide than the 30-day measure applied by Medicare’s hospital readmissions reduction program.

To learn more about the report, its findings, and their implications, go here, to the web site of the Annals of Internal Medicine, to see the study “Preventability of Early Versus Late Hospital Readmissions in a National Cohort of General Medicine Patients.”