Program to reduce hospital readmissions would link nursing homes with partners

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Melanie Bella, Director of CMS's Medicare-Medicaid Coordination Office
Melanie Bella, Director of CMS's Medicare-Medicaid Coordination Office
The federal government announced a new program intended to reduce hospital readmissions on Thursday.
The Centers for Medicare & Medicaid Services is setting aside $128 million for organizations that collaborate with nursing homes to establish programs that prevent residents from going back to hospitals within a month. Physician groups, accountable care organizations and other independent entities would be eligible.
“We are tremendously excited about the opportunity here” said Melanie Bella, Director of CMS's Medicare-Medicaid Coordination Office. She said that nursing homes can benefit by improving their quality scores during surveys. Moreover, facilities will be better equipped to reduce rehospitalizations while better managing the conditions that fuel them, she added.

Bella noted that as many as 45% of hospital readmissions from nursing homes could be avoided.

Participating organizations would work with at least 15 nursing facilities, as part of the four-year initiative. To be considered, they would be required to submit evidence-based proposals to the government. Participating organizations would also be expected to ensure adequate staffing, communication coordination, transfer management and medication monitoring, she noted.

Andrew Kramer, M.D., CEO at Providigm, offered several suggestions on reducing hospitalizations during a McKnight's webinar yesterday. Kramer said it's important for skilled care operators to measure their hospital readmission rates. Operators must also be careful to measure risk adjusted rates, he added.

"SNFs can intervene to keep readmissions down,” he said.

Larry Minnix, the president and CEO of LeadingAge, said the organization applauds CMS for seeking "evidence-based solutions to reducing rehospitalization rates among nursing home residents."

"We also look forward to additional initiatives that will help nursing homes with low rehospitalization rates pay for the additional resources required," he said, noting that many nursing homes "are already partnering in their communities and revamping their processes to address this serious problem." 

Reducing rehospitalizations has become a national issue in recent years. There are two main reasons why: they are often expensive and preventable.

In fact, CMS estimates that costs associated with preventable readmissions exceed $17 billion each year. A study by the Agency for Healthcare Research and Quality found that among Medicare patients aged 65 and older, about 19%of all hospital stays were readmissions within 30 days.

Beginning in October, CMS will begin penalizing hospitals with high readmission rates. The initial penalty will be 1% of total Medicare billings for readmissions within 30 days of an initial discharge. The penalty goes up to 2% in fiscal year 2014, and 3% in 2015.

The ACA also established a Medicare Shared Savings program, hospital value-based purchasing, and bundled payment demonstrations as ways to reduce readmissions.

A growing number of states are adjusting their Medicaid programs in an effort to reduce readmissions.  In addition, many health plans have implemented innovations designed to do the same.

High hospital readmissions among Medicare beneficiaries are often linked to the way hospitals are paid. Medicare reimburses acute-care operators based on diagnosis-related groups. This sets aside a payment for services related to a specific diagnosis, rather than the actual level of services required. Hospitals are essentially incentivized to deliver care at or below the DRG rate. But when a hospital discharges a patient before it is medically appropriate to do so, that patient is more likely to return to the hospital for additional care.