$500M in Readmission Prevention Funds to Bypass Hospitals

Cheryl Clark, October 13, 2011

What if readmissions could be prevented by an Agency-on-Aging type of community-based organization that hires and trains "transition coaches" to improve post-discharge care, rather than leaving the job to hospitals?

Sound crazy? Think again.

This "revolutionary" idea is embedded in just over two pages of the Affordable Care Act's Section 3026, which allocates $500 million in federal spending over five years for the Community-Based Care Transitions Program or CBCTP.

In fact, the law directs CMS to give priority to community-based organizations with programs overseen by the Administration on Aging, known at state or local levels as Area Agencies on Aging. But, of course, there's a catch to who receives this money, and hospitals aren't very happy about it.

The funds are prohibited from being paid directly to hospitals. Instead, it must all go to CBOs, which are supposed to partner with hospitals to get referrals of high-risk Medicare patients about to be discharged. 

Hospitals might get a cut for referring the patient and working with the CBO. But the CBO would get the lion's share – $300 per patient according to one prominent care transitions model – to coach and coordinate support for at least one month after their discharge.

"The CBCTP is meant to provide funding to community-based organizations to address readmissions, regardless of whether the community-based organization partners with a hospital," said Lisa Grabert, senior associate director of policy for the American Hospital Association.

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