Feds bringing out the big hammer to reduce rehospitalizations

Health care reform act will drive significant changes

The federal government has made clear many times in the past that if an industry can't clean up its own house, the feds will come in and do it for them — in a way far more onerous than anything the industry might have done on its own. That's what is about to happen with discharge planning, say some industry insiders.

The Patient Protection and Affordable Care Act (PPACA) contains provisions that will move the government a step closer to instituting penalties for rehospitalizations that will force providers to find a solution to this vexing problem, says Vincent Mor, PhD, professor of medical science in the Department of Community Health at Brown University Medical School in Providence, RI. Mor is the lead author of a commentary in the Journal of the American Medical Association addressing the coming changes in discharge planning.1

Discharge planning is now the focus of government regulators like never before, Mor says.

"There has always been discussion about discharge planning, but in terms of the daily operation of a hospital and what gets emphasis, what people have their hands spanked for, it's not been discharge planning problems," Mor says. "The hospitals essentially aren't penalized for falling down on the job or not doing a great handoff."

CMS has been moving toward penalties

Over the last decade, the Centers for Medicare & Medicaid Services has made minor revisions to hospital reimbursement rules designed to penalize hospitals for discharging patients prematurely to post-acute settings, Mor explains. However, the length of hospital stay has continued to decrease, and rehospitalization rates have increased, he says.

"It is no surprise, then, that the Affordable Care Act has multiple provisions designed to reduce rehospitalization," Mor and his colleague wrote in JAMA. "In the next year, the Centers for Medicare & Medicaid Services is charged with developing penalties for health care organizations whose patients are rehospitalized 'too often.' Whether hospitals or the post-acute care organizations will be penalized has not yet been specified, but this provision of the law has raised anxiety levels throughout the acute and post-acute care sectors."

PPACA requires that the government develop and implement a strategy for reducing rehospitalizations by Jan. 1, 2012. Mor tells Discharge Planning Advisor that although there is much uncertainty regarding what will happen in the near future, there is no doubt that providers will be forced to address discharge planning in a more effective way — not simply because it is the right thing to do for patients and can avoid rehospitalization costs for the provider, but because the government-imposed penalties will be unbearable.

"Changes are coming. It's just a matter of exactly what kind. There will be some form of penalty for someone for what they call excessive rehospitalizations," he says. "It's not clear yet who will take the hit, but it's likely going to be the hospitals."

ACOs seen as one solution

Mor explains that two strategies have been proposed to increase clinical accountability for transitions. One is the creation of accountable care organizations (ACOs), composed of consortia of hospitals, physician groups, and other health care organizations designed to serve populations of patients within a global budget. The other involves "bundling" Medicare acute and post-acute payments.

A big unanswered question is how hospitals, medical staffs, and post-acute referral sources will collaborate to share the payment bundle and reduce rehospitalizations, Mor says. Some options include nurse case managers or other "coaches" in the hospital or in the community following discharge, for instance, but how would those care managers be reimbursed? Would they be part of the hospital staff or the primary care physician staff?

"There are a number of demonstration projects now that are considering how bundling might be implemented, so there are scenarios that could be used nationwide," Mor says."These might be packaged in some form of pay-for-performance with a focus on rehospitalization, just like the current CMS demonstration in three states that focuses on nursing home care."

Hospitals have little incentive to collaborate and reduce hospitalizations unless there is a penalty for having the patient readmitted, Mor says, and the government seems to have realized that is a key part of the solution. Whatever form the penalty takes, health care providers can count on rehospitalization becoming a bigger financial hazard than it already is for hospitals, Mor says.

"Large geographic variation in the supply of acute as well as post-acute settings means that solutions will by necessity have to be different," the authors write. "This level of flexibility is characteristic of how ACOs are being discussed, but to date there has been little mention of the roles post-acute and other community-based service organizations might play in ACO networks. It is time to begin such discussions to address the dilemma of patients and families being forced to make hurried and poor choices during the most stressful times of their lives."

Identify post-acute care partners

Clearly, there are exceptions to the rule, and some hospitals have created outstanding discharge programs that serve their communities well, Mor says. The federal incentives will force other hospitals to raise their game, he says.

So, how can hospitals improve their focus on discharge planning and be best prepared for the federal incentives? Mor suggests that hospitals begin to identify post-acute care providers — home health, long-term care, skilled nursing facilities, or others — with whom they want to establish protocols and close linkage. The goal should be not only to support the hospitals in preventing the patients from bouncing back, but also to ensure that the patients directed to those facilities are chosen properly and their needs can be met, Mor says.

"The post-acute care providers need to be your partners if you're going to make this work. You have to work together if you want to have a real impact on rehospitalizations," Mor says. "My colleagues in the world of long-term care say that hospital CEOs are answering their phone calls for the first time in a long while. That's a good indicator that people are waking up."


1. Mor V, Besdine RW. Policy options to improve discharge planning and reduce hospitalization. JAMA 2011; 305:1-2.


Vincent Mor, PhD, Professor of Medical Science, Department of Community Health, Brown University Medical School, Providence, RI. Telephone: (401) 863-2959. E-mail: vincent_mor@brown.edu.