Federal officials "ignored Congress's intent" when it wrote its proposed rules governing how hospitals will be penalized up to 1% for higher readmission rates, said American Hospital Association executive vice president Rick Pollack.
That's in part because the May 11 document by the Centers for Medicare & Medicaid Services does not exclude all planned and unrelated readmissions from being counted against the 3,393 hospitals affected by the penalty rule, which will take effect Oct. 1, the AHA says.
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Additionally, the formula CMS proposes is viewed as discriminatory against hospitals with higher percentage of non-white patients, higher percentages of so-called dually-eligible patients who are covered by both Medicaid and Medicare.
And, hospitals contend, it places at a disadvantage those hospitals that receive disproportionate share funding, called DSH facilities, because they have more underinsured and uninsured patients. Pollack said that readmissions among such patient populations are "beyond (the) hospitals' control."
Pollack made his remarks to CMS last week in a 62-page letter that included objections to several other parts of the proposed Inpatient Prospective Payment System rule, for which the comment period ends Monday, June 25.
Another AHA concern targets a 1.9% negative payment adjustment to account for case-mix coding between 2007 to 2009, which CMS indicates made it look like certain patients were more expensive to care for than they actually were. And a third issue deals with potential loss of "Sole Community Hospital" favorable payment classification, given to facilities with fewer than 50 acute care beds that are rural or at least 35 miles away from a similar hospital.
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Readmissions
On the proposed rule's language on readmissions, Pollack's letter said, the AHA has "continually urged CMS to make changes to these readmission measures" to:
- Properly adjust for patient characteristics (dual-eligible status and race/ethnicity);
- Differentiate between planned and unplanned readmissions;
- Differentiate between related and unrelated readmissions; and
- Exclude extreme circumstances (transplant, end-stage renal disease, burn, trauma, psychosis and substance abuse.)
"The AHA strongly disagrees with CMS's decision and believes that the agency has ignored Congress's intent that the measures be modified to address thee factors," Pollack wrote.
Section 3025 of the Patient Protection and Affordable Care Act specifically calls for negative payment adjustments for higher rates of readmissions take into consideration "exclusions for readmissions that are unrelated to the prior discharge (such as a planned readmission or transfer to another applicable hospital)."
Metrics questioned
The AHA says that the measures that gauge whether a hospital has high rates of readmissions are unreliable "for a majority of hospitals. This is especially important to consider in light of the penalties that are at stake. In our analysis of the inpatient PPS impact file, some hospitals may be penalized by almost $3 million in FY 2013. Penalizing hospitals while failing to guarantee that these measures have even a moderate rate of reliability is completely inappropriate."
The AHA also wants CMS to allow hospitals to indicate designate during the discharge process which admissions would include a planned readmission.
The trade organization also wants CMS to remove admissions and readmissions for beneficiaries who died in the hospital, were transferred to another hospital, were discharged against medical advice and those patients who received percutaneous transluminal coronary angioplasty or coronary artery bypass grafts (CABG).
Much of the AHA's argument was devoted to its contention that the proposed federal rule is biased against hospitals that serve the poor and that CMS should install some adjustment mechanism to correct for that disadvantage.
"There has been extensive research illustrating that readmission rates are statistically higher among dually eligible versus non-dually eligible and non-white versus white beneficiaries," Pollack's letter said. "These factors are beyond the control of a hospital and must be adjusted for when calculating a hospital's readmission rate."
The letter includes two charts showing large differences in readmission rates between hospitals that serve more dually-eligible patients compared with non-dually eligibles, and between hospitals stratified by white versus non-white beneficiaries for each of three disease categories covered under the readmission penalty: heart attack, pneumonia and heart failure.
For example, hospitals serving non-dually eligible beneficiaries have readmission rates at 18.7%, 17.3%, and 23.7%. But hospitals serving dually eligibles have readmission rates that are much higher, at 24.3%, 20.1% and 27.4% respectively.
By race, hospitals serving white beneficiaries have readmission rates at 19.3%, 17.7% and 24.1%, while hospitals serving non-white beneficiaries have readmission rates at 22.9%, 20.5% and 26.9% for those three disease categories.
Under the proposed rule, starting Oct. 1, payment adjustments to the hospital's base DRG take effect with the following breakdown:
- 481 hospitals would receive the maximum 1% penalty
- 76 hospitals will receive a .9% – .99% penalty
- 77 hospitals will receive a .8% – .89% penalty
- 110 hospitals will receive a .7% – .79% penalty
- 118 hospitals will receive a .6% – .69% penalty
- 129 hospitals will receive a .5% – .59% penalty
- 180 hospitals will receive a .4% – .49% penalty
- 196 hospitals will receive a .3% – .39 penalty
- 228 hospitals will receive a 2% – .29 penalty
- 280 hospitals will receive a .1% – .19% penalty
- 347 hospitals will receive up to a .09% penalty and
- 1,171 hospitals would receive no readmission penalty
Coding
The AHA also says it has serious concerns over the proposed rule's plan to cut 1.9% and another .8% that in essence attempt to correct for case-mix coding problems between 2007 and 2010.
But the AHA says "there is a fundamental flaw in CMS's methodology for determining the effect of documentation and coding...The AHA is extremely troubled by this proposal and by the fact that CMS continues to compare hospitals' documentation and coding practices to their documentation and coding practices under an entirely different system in FY 2007."
The final rule is expected to be released in August.