EXECUTIVE SUMMARY

The Medicare readmission reduction program has been in place for five years but, despite decreasing readmissions, hospitals are still receiving penalties — $528 million in fiscal 2017 alone.

  • The program has been criticized for basing penalties on a tiered structure so hospitals may be penalized despite cutting readmissions, and for not taking into account socioeconomic issues and other factors beyond hospitals’ control that result in patients getting sicker.
  • To help hospitals succeed, and to provide better care, case managers should work to prevent readmissions for all patients, including the Medicaid population, and adapt readmission prevention initiatives to meet the specific needs of patients in different demographic groups or with different conditions.
  • Case managers should work closely with their counterparts at other levels of care to develop consistent educational tools and share information via the electronic medical record or nurse-to-nurse calls to ensure smooth transitions and provide follow-up education and medication reconciliation for patients discharged to home.
  • Case managers in the ED are essential to begin the discharge planning assessment while the family is still present and to prevent readmissions by lining up services in the community when appropriate.

It’s been five years since the Centers for Medicare & Medicaid Services (CMS) rolled out its readmission reduction plan, but many hospitals are still struggling to keep patients from coming back — and the penalties keep climbing.

For fiscal 2017, hospitals will lose up to 3% of Medicare reimbursement for discharges on or after Oct. 1, 2016, based on readmission rates for acute myocardial infarction, heart failure, pneumonia, hip and knee replacement, and coronary artery bypass graft. A total of 2,597 hospitals will receive penalties totaling $528 million, according to an analysis by Kaiser Health News. Since the penalty part of the program began in fiscal 2012, CMS has levied nearly $1.9 billion in penalties in the readmission reduction program.

“What has been troubling and problematic is that despite the success hospitals have had in improving patient care and reducing the rate of readmissions, penalties have continued to climb,” says Akin Demehin, director of policy for the American Hospital Association.

The readmission reduction program has been in place for five years, but hospital efforts to address readmissions go back further, he says. “Hospitals have long recognized that keeping patients from returning to the hospital when it is not necessary is important,” he says.

The readmission reduction program bases penalties on a tiered structure, with hospitals that perform in the bottom tiers receiving penalties. In other words, there is always going to be a bottom tier and hospitals in that tier will be penalized.

“It’s very likely that some hospitals will receive penalties despite making progress in reducing readmissions. In order to avoid penalties, hospitals will have to perform better than they did in the previous year and better than other hospitals as well. Even when the field as a whole improves, there are still going to be hospitals receiving the penalties because of the way the program is structured,” he says.

It may get harder to reduce readmissions after the low-hanging fruit is gone, says Wanda Pell, MHA, BSN, a director with Novia Strategies, a national healthcare consulting firm.

“Some hospitals may be close to maxing out their potential readmissions reductions, but most still have a lot of work to do,” Pell says.

Hospitals have made some progress in preventing readmissions but most have a long way to go, says Amy Boutwell, MD, MPP, president of Lexington, MA-based Collaborative Healthcare Strategies and one of the original co-developers of the Institute for Healthcare Improvement’s STAAR (State Action on Avoidable Rehospitalizations) initiative.

Most hospitals are working on patient education and medication issues to prevent readmissions, but few hospitals are focusing on ensuring patients have follow-up after discharge, and few track services delivered and outcomes after discharge, she states.

“Not many hospitals have processes to coordinate with community providers, and few are working on efforts that require shared accountability. They need to expand their efforts if they are going to succeed,” Boutwell adds.

Readmission penalties are grounded in the belief that hospitals should be responsible for ensuring patients don’t return within 30 days, but some of the causes of readmissions are outside the hospitals’ control, adds Teresa Marshall, RN, MS, CCM, senior managing consultant for Berkeley Research Group.

“It’s easy to say that hospitals should ensure that patients and family members are educated on what to do after discharge, and that hospitals should be accountable for improving post-discharge care across the continuum, but it’s difficult for hospitals to own all of it,” she says.

An ongoing concern among many in the hospital industry is the lack of an adjustment in the readmission program to account for socioeconomic issues, Demehin says.

“When outcomes are measured beyond the four walls of the hospital and over a significant period of time, other factors start to influence performance,” he adds.

To avoid a readmission, patients need to have good resources for follow-up, access to a pharmacy, the ability to afford their medication, and access to rehabilitation and other post-acute services, he says.

“In some communities, these kinds of resources are lacking. As a result, hospitals that get the biggest readmission penalties tend to be those caring for the poorer patients,” he adds.

Two bills pending in Congress address the need for the readmission reduction program to address sociodemographic issues, but neither has made a lot of progress. The Establishing Beneficiary Equity in the Hospital Readmission Program Act of 2015 was introduced March 10, 2015, and referred to a committee. Some of the components were included in the Helping Hospitals Improve Patient Care Act, which passed the House of Representatives on June 7, 2016. (Editor’s note: As this issue went to press, the U.S. House of Representatives passed the 21st Century Cures Act, which includes a provision to allow hospitals to adjust for patient socioeconomic status in the Hospital Readmission Reduction Program.)

The CMS readmission reduction program has created blinders on hospitals and limited the understanding of the problem by focusing on Medicare patients and a limited number of diagnoses, Boutwell says.

The diagnoses cited by CMS in the readmission reduction program are not the diagnoses that most frequently lead to readmission, Boutwell points out. According to a 2011 study by the Healthcare Cost and Utilization Project of the Agency for Healthcare Research and Quality (AHRQ), heart failure is the top reason for Medicare readmissions, followed by sepsis, pneumonia, chronic obstructive pulmonary disease, and arrhythmia. Two of the top five causes of readmission — sepsis and arrhythmia — are not included in the readmission reduction program, she says.

The diagnosis-specific approach to readmission also eliminates focusing on other high-cost patients such as frequent ED utilizers, patients with complex social needs, behavioral health comorbidities, or limited functional status, Boutwell says.

In addition, the focus on Medicare patients excludes other high-risk patient groups, such as adults on Medicaid who have higher readmission rates than patients with Medicare fee-for-service coverage, she adds.

Many hospitals are focusing their readmission prevention initiatives on patients who are at highest risk and who are hospitalized for conditions with a penalty, Pell says. She recommends that case managers include all patients who are chronically ill. “As the disease progresses, patients with chronic illnesses are going to come back,” she says.

Boutwell suggests hospitals include Medicaid patients in their readmission reduction efforts. She points out that Medicaid patients have high readmission rates — in many cases, significantly higher than Medicare rates. Readmissions for heart failure patients covered by Medicaid average 29.1% compared to 23.7% for Medicare patients, Boutwell says.

However, case managers may need to tweak their strategies for preventing readmissions among Medicare patients to meet the specific needs of the Medicaid population, Boutwell says. For instance, Medicaid patients tend to have a higher rate of behavioral health comorbidities than Medicare patients.

Hospitals have to adapt their strategies to the new conditions CMS is adding to the program, Pell adds. For instance, what is an effective strategy for a patient with pneumonia may not be so effective for a patient who has had knee replacement surgery.

“There’s a difference in preventing readmissions in medical patients versus chronically ill patients versus surgical patients,” she adds.

Preoperative teaching is a key to preventing readmissions in total hip and knee patients, and those who are scheduled for coronary artery bypass graft surgery, she says.

“In surgical patients, one of the major reasons for readmission is that patients have signs or symptoms they don’t understand. Preoperative teaching helps the patient and family members know what to expect after surgery. If they are educated on what will happen, it will reduce their anxiety,” she says.

Pell advises case managers to partner with the surgeons to bring patients in before surgery to educate them on what is going to happen before, during, and after surgery. Take the opportunity to assess patients on the need for post-acute care, she advises.

Many hospitals already have preoperative education for joint replacement patients, but there also are opportunities for educational sessions for coronary artery bypass graft surgery, Pell says.

Responsibility for reducing readmissions is often assigned to case managers who already are juggling a multitude of tasks, Pell says. “It’s a new day for case managers. With all the responsibilities they have, a caseload of 20 to 25 patients is no longer appropriate. Hospital case managers are responsible for patients on the unit, but they also have to be concerned with observations patients, outpatients, and recently discharged patients in the community,” she says.

The obvious solution is a larger case management staff, but demonstrating a return on investment for adding staff is difficult, particularly as hospitals are facing reduced reimbursement, she adds.

Instead, case managers have to partner with other clinicians to get things done. “The nurse on the unit can do a lot of the education. Case managers should reach out to the nursing staff at post-acute providers and work with them on preventing readmissions,” she says.

Handing patients off to navigators who work with patients after discharge is another strategy, she says. Navigators in the community may be nurses, nurse practitioners, or paramedics, she says.

When it comes to preventing readmissions, case managers are the key players, Demehin says. “They are among the most attuned members of the team, and so focused on connecting the patient with resources in the community that they can make a difference,” he says.