Readmission Penalties Looming – Millions at Stake
By John Tempesco, ICA
There is a looming government transition which will occur this fall that will dramatically affect hospital reimbursement … and it’s not the presidential election. It is the implementation of Section 3025 of the Patient Protection and Affordable Care Act, also known as the Hospital Readmission Reduction Program. This program, which takes effect for any admission on or after 1 October 2012, will focus on three diagnoses with inordinately high readmission rates in the 2013 fiscal year. The three diagnoses are Acute Myocardial Infarction (AMI), Heart Failure (HF) and Pneumonia (PN). In FY2014, CMS adds Coronary Artery By-Pass Graphs (CABG) and Chronic Obstructive Pulmonary Disease (COPD) while others will be added in FY2015.
Although the readmission ratios will take into account risk adjustment methodology used by the National Quality Forum (NQF), the Medicare Payment Advisory Commission disclosed that penalties for a high readmission ratio will affect two thirds of all U.S. hospitals. The risk adjustment includes patient demographics, co-morbidities and patient frailty. Discharging hospitals will struggle to improve their readmission ratios simply because: a) they have little impact on patient compliance with discharge plans; b) they do not control protocols in place at other regional hospitals that may readmit their patients; and c) they cannot influence follow-up procedures at post-acute healthcare providers including long term care facilities, rehabilitation centers, home care agencies or ambulatory physician practices.
Although the program’s maximum penalty is one percent of base Medicare reimbursement in the first year, because the penalty applies to all Medicare admissions for the hospital, the cumulative amount of revenue loss across the hospital industry is expected to top $280 million dollars across 2,211 hospitals with 278 hospitals suffering the highest penalty. The penalty rate will increase a percentage point a year over the next three years (2% in FY2014, 3% in FY2015). As a result, hospitals are scrambling to make improvements in identifying targeted patients with diagnoses associated with penalties at admission so that better patient education occurs during their stay; revamping discharge planning procedures to prepare for post-acute care placement and follow-up; establishing relationships with post-acute care facilities, home care agencies and primary care physicians within their market and developing programs to educate and monitor patients through their home care givers. With an aging population with multiple co-morbid conditions and chronic diseases, the efforts to control readmission rates will become increasingly difficult. This is especially true in an era in which patients are discharged as quickly as possible to save money, prevent hospital borne infections and improve patient satisfaction.
No matter what the actual initiatives are to reduce readmissions, communication during each transition in care is key to success. Having the ability to securely provide post-acute facilities and healthcare providers with discharge summaries, care plans, medication changes and follow-up procedures is essential to the post-acute recovery process. Because few healthcare systems have an electronic health record (EHR) that spans every aspect of the continuum of care, NwHIN Direct capabilities can bridge the communication gaps in the short term until a more robust healthcare information exchange infrastructure can be put into place. Direct protocols provide a communication channel between healthcare providers to transport messages and attachments within a secure health internet services provider (HISP) environment. These messages can be accessed by various means based on the technology in place at the sending and receiving facilities.
In cases where EHRs have a built in messaging capability that is Direct compatible, messages can be generated and consumed within the EHR as part of the provider’s normal communication workflow. In cases where a provider’s EHR is not Direct compatible, “plug-ins” are available to incorporate into their current communication application to interact with a HISP. And lastly where there is no EHR capability available, Direct messaging can be achieved through a secure internet portal from anywhere there is connectivity.
This Direct messaging capability has the capability of transporting discharge summaries, care plans and follow-up correspondence to greatly enhance the care coordination and collaboration across the post-acute team. It also provides a mechanism for emergency department personnel to communicate with hospitalists within or outside the original admitting facility for pertinent information that could prevent readmission. From the onset of admission to discharge and beyond the 30-day threshold for readmission calculation, secure Direct messaging can be a valuable tool in combating future readmission penalties for the care coordination team fighting this growing financial burden.
John Tempesco, FACHE, is the Chief Marketing Officer at ICA. This blog post was first published on ICA’s HITme Blog. John has 37 years of healthcare experience, including a two decade career in health information technology in both the government and civilian sectors. He is a Fellow in both the American College of Healthcare Executives and the Life Management Institute, as well as a Certified Managed Care Executive.