Ring 1: Value-Based Purchasing
April 3, 2015Ring 3: Electronic Medical Records / Information Technology
April 20, 2015
In recent years hospitals have mobilized massive action to avoid readmission penalties. Under the Patient Protection and Affordable Care Act (PPACA…or ACA for short), providers that re-admit Medicare patients at a higher than average rate, face a reimbursement penalty in 2015 of up to 3% of their Medicare revenue.
CMS (Centers for Medicare/Medicaid Services) calls this the Readmissions Reduction Program, and it has been a threat to hospital in-patient Medicare reimbursement integrity since October 1, 2012. In its current form, the hospital is compelled to report its 30 day readmissions to CMS. These data are submitted with Medicare Inpatient data, plus quality data files, and are then reported publicly on the CMS HospitalCompare website: medicare.gov/hospitalcompare
Readmissions targeted for reduction are currently (2015) limited to the following diagnoses:
- Acute Myocardial Infarction (AMI or Heart Attack)
- Heart Failure
- Pneumonia
- Chronic Obstructive Pulmonary Disease (COPD)
- Total Hip Arthroplasty (THA) and Total Knee Arthroplasty (TKA)
Therefore, not all readmissions affect Medicare payment. However, private payers have been observed establishing provisions in their contracts with hospitals that target a variety of readmissions.
When a patient is admitted to hospital A for the same measured readmissions diagnosis (above) within 30 days, it increases that hospital’s readmissions rate. if a hospital has “above average” readmissions, a proportional Payment Adjustment is enacted that reduces the overall Medicare Reimbursement rates for the hospital.
Note that readmissions penalties are calculated in aggregate, and therefore poor performance on one case category can affect the overall readmission ratio. However, high performance in some categories can offset poor performance in others.
The readmission penalty calculations are designed by CMS to avoid penalizing hospitals for admitting and treating more severe cases, as well as to encourage reductions in readmissions, while maintaining high quality services and a positive patient-hospital experience.
There have been notable improvements in readmission rates nationally, and the Readmission Reduction Program has earned some credit for this change. Hospitals and physicians are beginning to plan transitions of care, coordinating with post-discharge providers, and supplying more care and administration of the patient in the pre-post discharge segment of care.
Suppliers should consider how your solution can assist hospitals in reducing their measured readmissions, i.e., “nailing” the diagnosis, coordinating care delivery, improving workflow, and pre-post discharge assessment of the patient.
By:
Total Innovation Group, Inc. Senior Partner
and
Gunter F. Wessels, Ph.D., M.B.A.
Total Innovation Group, Inc. Practice Principal, Parter
To Read more about 5 Rings of Healthcare Reform℠ see other Blog post below: