Provider-Based Population Health

Until recently, a hospital’s responsibility for care may have ended when a patient was discharged. While health systems have used a variety of techniques to reduce readmissions, they have experienced mixed results. But new government incentives, plus a rising awareness of the need to improve patient safety, are placing an increased emphasis on discharge planning and post-acute care.

New CMS Regulations Begin October 2012

Front and center are the Centers for Medicare and Medicaid’s (CMS’) new regulations on preventable readmissions. Starting Oct. 1, 2012, hospitals with “excessive” readmissions—situations in which that number of patients readmitted to a hospital is significantly higher than expected—will lose a percentage of their Medicare reimbursement across the board. In FY 2013, the decrease can be up to one percent of reimbursement, rising to two percent in 2014 and three percent in 2015.

In the first year of this program, CMS will examine 30-day readmission rates for patients with heart failure, acute myocardial infarction, and pneumonia—three of the leading conditions for which patients are readmitted. Beginning in FY 2015, CMS may also scrutinize chronic obstructive pulmonary disorder and several cardiac and vascular surgical procedures.

Lowering Readmissions through Partnership for Patients

CMS has also launched other programs that might contribute to lower readmission rates. To begin with, the agency plans to spend $500 million—or half of the $1 billion earmarked in the Affordable Care Act for improving patient safety—to help hospitals and their community partners decrease readmissions over a five-year period ending in 2016. Through the government-sponsored Partnership for Patients, CMS will pay these “community-based organizations” a set amount per discharge for managing Medicare beneficiaries at high risk for readmission.

Other Incentives: Payment Bundling and ACOs

Two other CMS initiatives authorized by the health reform law are worth considering: payment bundling and accountable care organizations ACOs). Under CMS’ recently announced plan for its bundling demonstration, providers may choose among four different options. One option includes all care provided from admission to the hospital to 30 or 90 days after discharge. Another would cover only post-acute care for up to 30 days.

In both scenarios, providers would be paid on a fee-for-service basis, adjusted retrospectively for variance from a budgeted amount. While neither option penalizes providers for readmissions, both encourage improvements in the quality of post-acute care, which should reduce the number of readmissions.

Shared-Savings Program for ACOs

Finally, next year CMS will launch its shared-savings program for ACOs, which are groups of hospitals and doctors that are committed to raising the quality and lowering the cost of care. To receive financial rewards from CMS, these organizations will have to save money, which will give them a strong incentive to cut readmissions.

Nevertheless, it will be difficult for healthcare organizations to decrease readmissions significantly in our fragmented, uncoordinated healthcare system. While most of the levers of improvement are known, reengineering inpatient processes and engaging patients and outpatient providers remains challenging.

Leveraging Technology to Auomate the Post-Acute-Care Process

Fortunately, new applications of health information technology now offer inexpensive ways to automate post-acute-care processes. These solutions can raise the effectiveness of care managers, improve the communications between inpatient and outpatient providers, and make it easier for patients and caregivers to absorb and apply the knowledge required for self-management of complex conditions.

Written by: Dr. Richard Hodach on October 27, 2011.