Readmission Prevention: Solutions Across the Provider Continuum

By Josh Luke

As a result of the Affordable Care Act (ACA), readmissions have become a new area of focus as care delivery moves from a volume-based model to a value-based one. Acute hospitals are calling upon post-acute providers to assist them in improving care coordination to avoid penalties. Post-acute providers are taking steps to become the provider of choice as hospitals, health systems, and managed care organizations turn to them for support. In the absence of proven historical programs, this book gives hospital executives and post-acute care providers proven tactics and tools they can apply to reduce and prevent unnecessary hospitalizations. Written in a conversational style by a seasoned healthcare executive, the book starts by defining the origins of readmissions and the impact of the ACA, then describes three phases of readmission prevention planning and offers innovative strategies for executives to position their facility as a provider of choice. Specific readmission prevention tactics are addressed for different levels of post-acute care, including:

Acute care hospitals and health systems Skilled nursing facilities Physicians and Pharmacists Long-term acute care and acute rehabilitation hospitals Home health agencies Hospice and palliative care agencies Assisted-living facilities Home care and private-duty nursing

Throughout the book, short perspectives written by experts in the different specialty areas provide additional viewpoints on critical issues in care transitions. The book concludes with case examples from healthcare organizations that have successfully implemented new tactics and strategies as part of a larger coordinated program in preventing readmissions.

• Language: English
• Publisher: Health Administration Press
• Release date: Jan 7, 2015
• ISBN: 9781567937114

Book preview

Part I

DEFINING READMISSIONS AND THEIR IMPACT ON THE HEALTHCARE DELIVERY SYSTEM

CHAPTER 1

The Affordable Care Act and the Readmission Problem

This chapter provides a historical perspective on how readmissions were identified as a concern and how the issue has evolved since the Hospital Readmission Reduction Program (HRRP) was introduced in October 2012 (see Exhibit 1.1 for a timeline of the program's implementation). The chapter is more data driven than the rest of the book because a quantitative perspective is necessary to understand the readmission problem.

HOSPITAL READMISSION: A PRACTICAL DEFINITION

As it pertains to the penalty program, the Affordable Care Act (ACA 2010, §3025) defines a readmission as a person being admitted to the same or a different acute care hospital within 30 days of discharge from the initial hospital stay. The initial hospital stay is referred to as the index stay. The readmission penalty applies to all Medicare fee-for-service beneficiaries except those enrolled in a Medicare Advantage program, those enrolled in Part A or Part B only, and those who age in after January.

In short, the entire readmission penalty program is simply the stroke of a key in the Medicare Inpatient Prospective Payment System (IPPS) database. At the end of the year, the IPPS database spits out a report that lists all patients who were discharged from an acute care hospital and subsequently admitted to the same or another acute care hospital within 30 days. Regardless of the reason the patient is readmitted to the hospital, the readmission counts against the hospital that originally discharged the patient during the index stay. The patient's primary discharge diagnosis during the index stay determines the disease-specific classification of the penalty.

For example, suppose Jane, a Medicare fee-for-service patient, is admitted to her hometown hospital with pneumonia. After four days she is discharged to a skilled-nursing facility for two weeks and then is discharged home. All of the caretakers across the continuum of care met and exceeded the care plan goals, and Jane returned home safely. One week later she drives three hours to attend her grandson's graduation from college. On the way, she is in a car accident and is admitted to the local hospital. Although the second stay is not related to the initial diagnosis of pneumonia, it counts as a readmission against her hometown hospital, which cared for her during the index stay.

HISTORICAL BACKGROUND OF THE READMISSION PROBLEM

The Centers for Medicare & Medicaid Services (CMS), which has been studying the problem of unnecessary hospital readmissions for years, believes the continued increase in readmission rates signifies a decline in the quality of care being provided at hospitals nationwide (Khan 2013). Of about 31 million Medicare beneficiaries, each year approximately 4 percent, or 1.2 million patients, are readmitted to the hospital within 30 days (CMS 2014). Such readmissions cost the Medicare program approximately $17.5 billion in inpatient spending in 2010 (ACA 2010, §3025). Furthermore, the CMS spends an estimated $11,200 per readmission, and the current all-cause readmission rate is 21.2 percent (Rizzo 2013).

The ACA introduced penalties for acute care hospitals with excessive readmissions under Medicare's IPPS (ACA 2010, §3025). In 2007, the Medicare Payment Advisory Commission (MedPAC) identified seven conditions and procedures that accounted for almost 30 percent of preventable readmissions, and CMS worked in conjunction with the National Quality Forum to identify three of these disease categories—acute myocardial infarction, congestive heart failure, and pneumonia—that would be included in the initial readmission penalty for fiscal year (FY) 2013 (ACA 2010, §3025; CMA 2014). For FY 2015, CMS expanded the readmission penalty to include two more disease-specific categories, chronic obstructive pulmonary disease (COPD) and knee and hip surgeries.

Although the initial ACA legislation had exclusions for planned readmissions for a number of diagnosis codes, planned surgeries, or transfers to another hospital, the hospital community perceived the list of exclusions to be very small (ACA 2010, §3025). The CMS expanded the list of exclusions for FY 2015 when it added COPD and total knee and hip replacement (Federal Register 2013). Studying and understanding these exclusions can be a complicated process, and most hospitals and health systems do not have the resources to invest in such studies. To date, the financial penalties for unnecessary hospital readmissions have not been significant enough in most cases to justify such research.

CMS will reduce a hospital's diagnosis-related group (DRG) payments when the hospital's readmission ratio is exceeded, with respect to payment for discharges from the hospital. The financial penalty amounted to a reduction to 0.99 in FY 2013, 0.98 in FY 2014, and 0.97 in FY 2015 (CMA 2014). As of the time of writing, CMS has not indicated that it will further reduce hospitals’ DRG payments beyond the 0.97 reduction. However, it is widely speculated that CMS will either continue to reduce hospitals’ DRG payments on the basis of excessive readmissions or expand the penalty to additional disease-specific categories after FY 2015. See Exhibit 1.2 for statistics on the financial impact of hospital readmissions.

Because the hospital community has not made significant strides or efforts to address the readmission problem, CMS will likely continue to seek ways to penalize hospitals for admitting patients who could be cared for at lower levels of care, even beyond the six programs in the ACA that incentivize hospitals and health systems to coordinate care.

WHAT CAUSES HOSPITAL READMISSIONS?

According to a study by the Dartmouth Institute, patients are readmitted to the hospital for five primary reasons (Khan 2013):

Patients may not fully understand what is wrong with them.

Patients may be confused over which medications to take and when to take them.

Hospitals do not provide the patient or doctors with important information or test results.

Patients do not schedule a follow-up appointment with their doctor.

Family members lack the proper knowledge to provide adequate care.

Research indicates that readmissions for these primary reasons are likely avoidable across facilities nationwide. Breakdowns in communication, lack of formal structure for discharge planning, and a lack of emphasis on coordinating care between levels of care have led to readmission rates that are costly because they are unnecessary and preventable (Abrams and Levy 2013).

In addition to a reimbursement model that has incentivized physicians, hospitals, and all levels of post-acute care to admit patients and use services, socioeconomic factors are often a greater driver of readmissions to the hospital than clinical issues are. In particular, for senior citizens who may live alone, lack of food in the refrigerator, insufficient financial resources to fill prescriptions, inadequate understanding of the medication regimen, or unavailability of transportation to the pharmacy, grocery store, or doctor's appointment often lead to unnecessary hospital readmissions. More important, patient literacy and self-management are the most critical factors in preventing unnecessary hospital admissions. This book will provide a series of tactics to address each of those critical factors, whether clinically or socially based.

ALL-CAUSE READMISSIONS

Many facilities nationwide have implemented disease-specific readmission prevention programs, and many of these programs have been successful in preventing unnecessary hospital readmissions. That said, this book focuses almost exclusively on tactics that providers at all levels of care can implement to prevent all-cause readmissions.

A number of best-practice case studies are provided at the end of this book to showcase many of these all-cause tactics and programs. A few of the case studies highlight disease-specific programs for readers interested in a more linear approach to the problem.

One of the reasons this book focuses on all-cause readmissions is that few health systems and hospitals have the resources to implement multiple disease-specific programs. Many hospitals have attempted to implement multiple programs only to find that the different approaches and tactics proved confusing to many of the caretakers, and thus none of the individual programs was sustainable.

As noted, starting in FY 2015 hospitals are being penalized for readmissions in five disease-specific categories. Hospitals are also now evaluated on their all-cause readmission rate for Medicare fee-for-service patients. Although hospitals’ all-cause readmission rates were not initially included in the penalty program, all-cause readmissions are included in the inpatient quality-reporting program. Hospitals are not financially penalized for each disease-specific readmission but rather for an accumulation of readmissions in each of the five disease-specific categories. Therefore, by taking a facility-wide and organization-wide approach to the problem, hospitals and health systems should be able to implement effective comprehensive readmission prevention programs.

THE READMISSION PROBLEM

To simplify readmissions, the Medicare fee-for-service model incentivized facilities to admit patients. Medicare fee-for-service also incentivized physicians to admit patients to the hospital, skilled-nursing facilities, long-term acute care hospitals, acute rehabilitation hospitals, and home health agencies by reimbursing them each time they admitted a patient to one of these levels of care. Often, physicians could be reimbursed every day while caring for such patients. Likewise, hospitals were incentivized to admit patients to all levels of care. Quite simply, no system of checks and balances was in place under the fee-for-service model. I call this era the fee-for-service free-for-all.

Although this era was a lucrative time for many hospitals, facilities, physicians, and home health agencies, it ultimately put the federal government in a compromising position as funds for healthcare ran dry. The ACA, though far from perfect, was a historic attempt to change the way care is delivered in the United States. Clearly, the desired model is a coordinated care model that leaves the fee-for-service free-for-all in the past. The model is designed to reimburse physicians and providers for care based on value and quality rather than for episodic care whenever a patient needs to be hospitalized. In 2003, such a model would have incentivized caretakers at all levels to collaborate to improve outcomes instead of viewing and treating all patients, my grandmother included, as commodities.

READMISSION TRENDS 2010 TO 2013

According to CMS, 2,217 hospitals were penalized an estimated $280 million in the initial year of the penalty program, increasing slightly to 2,225 hospitals in the program's second year (Rau 2013). After readmission rates held steady above 19 percent for several years, at the end of 2012 the Obama administration reported that hospital readmission rates had fallen to 17.2 percent. This news was encouraging because it amounted to 70,000 fewer unnecessary readmissions in the first year of the program and 130,000 fewer in the second year (Daly 2013). Furthermore, the reduction was a welcome development because readmission rates had largely held steady since the penalty was announced in 2010.

An interesting side note is that rural and critical access hospitals showed the largest readmission improvements in these initial measurement years. According to a study of 450 hospitals by the Premier Healthcare Alliance, rural hospitals showed an 11.2 percent drop in readmissions compared with a 10.2 percent reduction among other hospital groups (Daly 2013).

TACTICAL APPROACHES TO THE READMISSION PROBLEM

Though this chapter contains a great deal of statistics and data, this information is necessary to help you determine how to approach the readmission problem in your facility. The rest of this book will be light on data and quantification and more focused on tactical approaches to preventing unnecessary readmissions.

Again, as you read this book, I encourage you to grab a marker, highlight each tactical approach that might work in your organization, and add it to a list you can review when you have finished reading. Now that you know how the problem came to be, the fun part is determining how to address it and return to providing value-based care and preventing unnecessary readmissions. Enjoy!

REFERENCES

Abrams, M., and M. Levy. 2013. Diagnosing and Treating Readmissions. Hospital and Health Networks Daily. Published January. www.hhnmag.com/display/HHN-news-article.dhtml?dcrPath=/templatedata/HF_Common/NewsArticle/data/HHN/Daily/2013/Jan/abrams012913-1580005365.

Center for Medicare Advocacy (CMA). 2014. Reducing Rehospitalizations…the Right Way. Accessed August 27. www.medicareadvocacy.org/reducing-rehospitalizations%e2%80%a6-the-right-way/.

Centers for Medicare & Medicaid Services (CMS). 2014. National Medicare Readmission Findings: Recent Data and Trends. Accessed December 18. www.academyhealth.org/files/2012/sunday/brennan.pdf.

Daly, R. 2013. Reform Is Curbing Readmissions, CMS Says. Modern Healthcare. Published February 28. www.modernhealthcare.com/article/20130228/NEWS/302289969.

Elixhauser, A., D. H. Au, and J. Podulka. 2011. Readmissions for Chronic Obstructive Pulmonary Disease, 2008. Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Statistical Brief #121. Published September. www.hcup-us.ahrq.gov/reports/statbriefs/sb121.pdf.

Federal Register. 2013. Part II—Department of Health and Human Services. 42 CFR Parts 412, 413, 414. Published August 19. www.gpo.gov/fdsys/pkg/FR-2013-08-19/pdf/2013-18956.pdf.

Khan, F. 2013. Reducing Hospital Readmissions Rates: How to Avoid Upcoming Penalties and Maintain Patient Wellness. Becker's Hospital Review. Published December 17. www.beckershospitalreview.com/quality/reducing-hospital-readmissions-rates-how-to-avoid-upcoming-penalties-and-maintain-patient-wellness.html.

Patient Protection and Affordable Care Act (ACA). 2010. Pub. L. No. 111-148, 125 Stat. 119. www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf.

Qasim, M., and R. M. Andrews. 2012. Post-surgical Readmissions Among Patients Living in the Poorest Communities, 2009. Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Statistical Brief #142. Published September. www.hcup-us.ahrq.gov/reports/statbriefs/sb142.pdf.

Rau, J. 2013. Rehospitalization Rates Fell in First Year of Medicare Penalties. Kaiser Health News. Published December 9. http://capsules.kaiserhealthnews.org/index.php/2013/12/rehospitalization-rates-fell-in-first-year-of-medicare-penalties/.

Rizzo, E. 2013. 6 Stats on the Cost of Readmissions for CMS-Tracked Conditions. Becker's Hospital Review. Published December 12. www.beckershospitalreview.com/quality/6-stats-on-the-cost-of-readmission-for-cms-tracked-conditions.html.

CHAPTER 2

Moving Beyond the Gold Standard

As we work together to prevent readmissions, one of the biggest challenges is the traditional perspective of hospital C-suite executives. For more than 30 years, talented, experienced hospital leaders have understandably been focused on doing one thing and one thing only: putting heads in beds.

THE PUTTING HEADS IN BEDS MIND-SET

Most seasoned hospital and health system executives have spent their career focused on two primary tactics to drive volume and ensure a consistent inpatient census: (1) marketing to high-volume physicians to capture market share and (2) building inpatient specialty programs to drive inpatient volume. Other traditional tactics to drive acute care volume include contracting with key managed care partners and aligning with post-acute care providers to ensure that yours is the facility of choice when patients need acute care. The reality is that hospitals still only get paid when a head is in a bed. Creative risk arrangements, accountable care organizations (ACOs), and bundled-payment initiative programs exist, but no one is getting rich from Medicare Shared Savings Plan ACO bonuses. In fact, it remains challenging to turn a profit in the hospital environment (even in an ACO program).

After so many years of putting all their energy toward driving inpatient census to build revenue, these seasoned executives are not likely to make proactive moves to prevent readmissions. They do not perceive the readmission penalty as a significant threat. Furthermore, implementing tactics to prevent readmissions is contrary to every tactic they have ever used to ensure success and profitability in the past. I once heard a seasoned healthcare executive state, Even in an era where we are reimbursed based on value, inpatient census remains the ‘gold standard’ for hospital revenue. The gold standard. That's it, I thought. The gold standard is the obstacle the rest of the healthcare continuum faces when discussing the readmission issue with seasoned hospital executives.

In 2013, as I began to do research for this book, my goal was to learn as much as I could about care coordination and readmissions prevention and to identify all of the existing solutions. One thing I heard from the vendors and solution providers who were marketing to hospitals to prevent readmissions was the resistance they experienced from C-suite executives. Why? Well, because of the gold standard, of course. A seasoned C-suite executive will gladly listen to proposals that will bring value and increased revenue to his organization, but proposals that only reduce costs are much tougher to sell. Changing this mind-set is a goal of this book.

THE PROBLEM OF OBSERVATION DAYS

A bigger issue for current health system executives is how to manage and handle the growing problem of observation census. Observation status is a term hospitals use when an emergency department physician is not able to justify an inpatient admission but is not comfortable discharging the patient home. The patient is often placed in a holding bed—that is, a hospital bed outside the emergency department—and observed for several hours to determine the need and justification for inpatient admission. The federal government reimburses for observation at outpatient rates, which are about 80 to 90 percent lower than inpatient reimbursement. The hospital's costs for caring for observation patients is similar to their costs for caring for inpatients, however, so observation status wreaks financial havoc on hospital cost-management efforts.

The single most critical issue for hospitals in 2013 was the Medicare Recovery Audit Program, and the end result of those audits was a significant increase in observation days. Although the Recovery Audit Program was put on hold in 2014, it did not go away entirely. The federal government used these audits to take back billions of Medicare dollars from hospitals for patients whose charts lacked adequate documentation to justify an acute care stay. In addition, 2013 brought a trend of managed care organizations attempting to stage patients on hospital observation units as a means of reducing expenses.

Although 2013 brought a welcome decrease in unnecessary hospital readmissions nationwide (Daly 2013), the increase in observation days suggests that putting patients on observation units is one way hospitals are approaching the readmission issue. Several studies have illustrated that the increase in observation days was nearly equivalent to the decrease in readmitted patient days (Carlson 2013).

Observation days and the accompanying reimbursement issues pertaining to observation status are a problem that will not be solved in the near future. Although hospitals and health systems can use observation units as a tactic to help reduce readmissions, it is one of the most costly tactics to avoid the readmission penalty. Chapter 5, Prevention Planning Phase Three: The Patient Returns to the Emergency Department, provides greater detail on when observation units can be an appropriate solution to prevent readmissions.

COLLECTING READMISSION DATA

The other issue hospitals have been slow to address is the need to collect readmission data on their own hospital. Most hospitals know little about their readmission rate, let alone what is driving it. Although some hospitals have made readmission prevention a priority, they remain in the minority. The time has come for the healthcare community to change that and develop effective systems to prevent unnecessary hospital admissions.

Hospitals can access significant detail on their hospital-specific readmission rates with little effort. The Centers for Medicare & Medicaid Services (CMS) requires quality improvement organizations to distribute regular readmission reports, and these reports are not only specific to the five diagnosis categories in the readmission penalty but also go into great detail to show how each hospital is affected by readmissions from skilled-nursing facilities (SNFs), home health agencies, and other post-acute care entities. Other sources that provide readmission data include Medicare Compare (www.medicare.gov), Kaiser Health News (www.kaiserhealthnews.com), No Place Like Home (www.noplacelikehomeaz.org), the National Readmission Prevention Collaborative (www.nationalreadmissionprevention.com), the CMS-distributed Program for Evaluating Payment Patterns Electronic Reports (PEPPERs), and acute care facility–based programs such as