Today marks the beginning of year three of CMS’ Hospital Readmission Reduction Program. The program’s launch has coincided with a significant reduction in readmissions nationwide, as CMS has begun to levy harsh penalties on hospitals that readmit higher-than-expected numbers of patients.
Like many other stakeholders in the healthcare community, CipherHealth has been excited about the positive movement occurring nationwide in hospital readmission rates. Data from the Department of Health and Human Services shows a clear downward trend in the number of Medicare patients getting readmitted to the hospital within 30 days.
After staying constant in the 19-19.5% range from 2007-2011, the all-cause 30-day readmission rate for Medicare Patients dropped to 18.5% in 2012 and dropped further to 17.5% in 2013. All told, CMS estimates that this decline translates into an estimated 150,000 avoided hospital readmissions.
The progress reflects a growing trend in the prevalence of readmissions as a key topic in public discourse. One example of this is dramatic increase in the number of times the phrase “hospital readmissions” is being mentioned in the news.
The progress thus far has been encouraging, but what happens next? CMS has given us some interesting clues in recent regulations as to what they intend to do for the Medicare population. Starting today, CMS will begin fining hospitals for patients getting readmitted for exacerbation of Chronic Obstructive Pulmonary Disease and hip/knee replacements. Penalties for patients readmitted after Coronary Artery Bypass Graft procedures are coming in the next two years. Also, CMS indicated that its reading of the Affordable Care Act rules out the use of a blanket hospital-wide all-cause readmission measure. This means that CMS will likely continue to add to its Hospital Readmissions Reduction Program (HRRP) through incremental addition of conditions rather than simply making all 30-day readmissions subject to penalties.
CMS’ policies, while important, become less towering in a landscape where commercial payors are beginning to implement more value-based programs of their own. According to Catalyst for Payment Reform, a national non-profit that tracks trends in value-based payments, 40% of commercial in-network payments are now tied to provider performance. 16.6% of commercial payments nationwide are tied to various capitation programs. 2% of further commercial payments are tied to fee-for-service shared savings programs. 1% of commercial payments are tied to shared risk models. The list goes on.
As consumers in the individual and employer-based markets for health insurance become more conscious of value-based programs that incorporate readmission metrics into hospital payment, providers will have to continue to iterate and innovate on new processes and technologies to reduce preventable readmissions. With many of our partner organizations well below the national average for all-cause readmissions, we’re confident that outcomes for the rest of US hospitals can continue to improve.
This post was written by our dedicated account manager, Doug McPherson.