It is well known that payers and providers are targeting readmissions to reduce health expenditures and improve quality of care and patient outcomes. Interest in this policy issue predated the Affordable Care Act and will re-emerge even if the entire law is struck down. If the Supreme Court upholds part or all of the ACA, the Medicare Hospital Readmission Reduction Program (HRRP), scheduled to begin on October 1, is likely to move forward as planned. The HRRP lowers Medicare payment rates for hospitals with greater-than-expected 30-day readmission rates for specific conditions. Hospitals with excessive readmission rates will have their Medicare payments reduced by up to 1% in fiscal year 2013 and up to 3% by fiscal year 2015.

What is less well-known is the role post-acute care providers will play in this rapidly-changing environment. While post-acute care providers currently face no penalty related to readmissions, this is not a reason for complacency: policymakers are contemplating expanding the readmissions policy to post-acute care providers, and as hospitals face pressure to improve care coordination, they will be increasingly interested in partnering with the highest-performing post-acute care providers in their local market. With this change comes potential for increased volume for post-acute care providers – especially if they can demonstrate their performance related to quality of care and readmissions.
In this new era of coordinated care, there are four crucial steps post-acute care providers must take to survive and thrive:

Follow the data
To succeed in this outcomes-based environment, the first thing hospitals will do is develop capabilities to measure readmission rates and understand the sources of readmissions. This will include tracking post-acute care providers’ readmission rates, especially for the three conditions initially targeted by HRRP in fiscal year 2013: acute myocardial infarction (AMI), heart failure and pneumonia.

A recent Avalere analysis of Medicare inpatient and outpatient fee-for-service (FFS) claims data for these three conditions identified questions hospitals will begin to ask about the source, timing and nature of readmissions to ensure patients are going to high-value facilities.

  • On a national level, hospitals discharged almost 40% of AMI, heart failure and pneumonia Medicare FFS patients to post-acute care settings. Skilled nursing facilities received 50%t of referrals after initial discharge, followed by home health agencies (43%), inpatient rehabilitation facilities (4%), and long-term acute-care hospitals (3%).
  • In order to understand the potential impact of patient flow data at a local level, we analyzed one hospital’s referral patterns around the three conditions listed above and found that the skilled nursing facility receiving the highest number of cases did not have the lowest readmission rate. While there are many possible reasons for this disparity, it is important to note that hospitals are increasingly using data like these to identify their highest-performing post-acute care providers.

What these data tell us is that the days of the hospital discharge planner whose only goal is to find an empty bed are over: post-acute care providers need to know their own 30-day readmission rates and how they compare to other providers in the market.
Design and Document
Understanding the data is just the first step. Hospitals will look to post-acute care providers to both design programs aimed at reducing readmissions for at-risk conditions and be able to successfully document the results of these programs. Post-acute care providers will need to make strategic investments in staff training and education, systems for capturing data, and the ability to develop, adopt and evaluate new programs and protocols.
Managing this paradigm shift will require clear communication, both internally and externally. To bring staff along, post-acute care providers will need to develop and articulate clear readmission goals, deliver information on current readmission rates, and share results of program efforts. Externally, providers will need to communicate progress to hospitals and community provider partners enlisted to ensure compliance with follow-up care.

Last, but certainly not least, post-acute care providers must be proactive and initiate conversations with hospitals and other community provider partners to ensure they are at the table when strategic partnerships are developed. They must come to these conversations armed with a more sophisticated understanding of their own readmission rates and a clear roadmap on how they plan to reduce them over time. Now is the time for post-acute care providers to position themselves as a solution to their hospital partners’ problems.
Anne Tumlinson, senior vice president, directs Avalere’s post-acute and long-term care practice group. She focuses on understanding opportunities for improving healthcare delivery and reducing costs for the most expensive Medicare subpopulations, including dual eligibles, Medicare beneficiaries living in nursing homes or assisted living facilities, or those living at home with significant functional impairment. Anne can be reached by phone at 202-207-1314 or by email at . You can also see her slides from a May presentation on readmissions by downloading here.