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30-Day Readmission Rates Fell in 2012

 |  By cclark@healthleadersmedia.com  
   March 01, 2013

The threat of penalties as high as 3% of a hospital's Medicare reimbursement has prompted encouraging reductions in costly readmissions, a top representative of the Obama administration told the Senate Finance Committee yesterday.

Jonathan Blum, acting principal deputy administrator and director of the Centers for Medicare & Medicaid Services, in prepared remarks, touted "a decrease in the rate of patients returning to the hospital after being discharged.

"After fluctuating between 18.5% and 19.5% for the first five years, the 30-day all-cause readmission rate dropped to 17.8% in the final quarter of 2012. This decrease is an early sign that our payment and delivery reforms are having an impact," Blum said.

Blum added that the Patient Protection and Affordable Care Act requires Medicare to reduce payments to hospitals that have high rates of readmissions among patients with heart attack, heart failure, and pneumonia, some of the most expensive conditions that bring patients back to the hospital. Those penalties, up to 1% for the first year, began last October 1 for 2,211 hospitals, and rise to up to 2% in FY 2014 and up to 3% in FY 2015.

Blum said that "beginning in fiscal year 2015, we will have the authority to expand the program so that additional measures could be included, and we expect that the program will have an even greater impact.

"Though the payment adjustments took effect only recently, hospitals have been preparing for this program for some time and results suggest it is already having a positive impact," with reductions across the country.

Blum cited ten other measures of quality improvement in care from other initiatives embedded in the new healthcare reform law. They include:

  1. In the last three years, the growth rate in Medicare spending per beneficiary has dropped "lower than any time over the last 50 years."
  2. Fraud recoveries, in part through the use of new anti-fraud tools have increased to a record $4.2 billion in 2012, and $14.9 billion over the last four years. Some of the effort has meant a shift from "pay and chase" practices after fraud is discovered, to prevention of fraudulent payments in the first place.
  3. Medicare beneficiaries now have access to increased coverage of preventive services and lower cost-sharing for prescription drugs, as well as other benefits.
  4. For the first time, Medicare Advantage plans receive payment according to quality of their coverage. "Since those payment changes went into effect, seniors have been able to choose from a broader range of Medicare Advantage plans, and more seniors have enrolled in higher rated plans.
    Also, the number of plans health plans offer to Medicare eligible seniors is now 26 on average in each county. Since the passage of the ACA in 2010, "Medicare Advantage premiums on average have fallen 10% and enrollment has climbed by an expected 28%" by the end of this year.
  5. Accountable care organizations, or Medicare shared savings plans, are starting to take off with more than 250 ACOs in shared savings agreements with CMS, and in "almost every state." CMS estimates that some 4 million Medicare beneficiaries now receive care through an ACO.

  1. The Hospital Value-Based Purchasing Program "will redistribute an estimated $963 million to hospitals based on their quality performance in the FY 2013 payment year.
  2. Likewise, Blum said, the value-based payment system for physicians will apply a payment modifier for physician pay by 2017, he said, depending on the "quality of care furnished compared to cost."  The modifier will begin with groups of 100 or more eligible professionals starting in 2015, based on their performance this calendar year.
  3. For patients with end-stage renal disease who require dialysis, the agency is now imposing specific quality measures. In February, CMS launched the Comprehensive ESRD Care Initiative, which provides incentives for dialysis centers, nephrologists, and others to improve "the entire care experience" for patients receiving dialysis.
  4. Partnership for Patients, CMS' initiative, which aims to avoid unnecessary deaths for 60,000 people by averting hospital-acquired but preventable conditions and readmissions over a three-year period, now has more than 3,700 participating hospitals, as well as other caregiver organizations and consumer groups.
    Hospital Engagement Networks known as HENs are working at the national, regional, state or individual hospital level, Blum said.  P4P seeks to reduce adverse drug reactions, pressure ulcers, premature deliveries, childbirth complications, and surgical site infections.
  5. The Community Based Care Transitions Program, a $500 million effort specified by the healthcare reform law, now works with 82 organizations in 33 states to smooth transitions from hospital to post-discharge settings.

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