CMS Targets Hospital Readmissions as a Probable Marker for Poor Quality of Care, Wasted Revenues and Resources

By Nina Youngstrom

CMS is targeting readmissions to the hospital within 30 days of discharge as a probable marker for both poor quality of care and money going down the drain. While CMS weighs Medicare reimbursement cuts for readmissions, it also is investing in strategies to lower readmission rates. One CMS-funded study by the Medicare quality improvement organization (QIO) for Colorado found that coaching patients during and after their hospital stays can reduce readmissions by as much as 50%. And now CMS is funding as many as 18 QIO projects aimed at reducing readmissions in communities around the country.

"This is not primarily about people being rehospitalized because of mistakes made in the hospital," says Stephen Jencks, M.D., a former senior clinical adviser to CMS. "This is about making transitions effectively (to physicians, community resources or post-acute care). This is about taking care of people with ongoing problems or chronic illnesses and frailty. When the transition is not done well, evidence suggests they wind up back in the hospital."

Almost 18% of Medicare patients are readmitted within 30 days of discharge, CMS said in the proposed inpatient prospective payment system (IPPS) rule for fiscal year 2009. Thirteen percent of the readmissions — $12 billion worth — were "potentially avoidable," the IPPS rule states. That's just the money part. Readmissions, CMS added, may be linked to poor quality of care.

CMS is seeking public comment on three proposals to take the financial reward out of readmissions: (1) direct adjustments to DRG payments for preventable readmissions, (2) adjustments to DRG payments through a performance-based payment methodology, and (3) public reporting of readmission rates, according to the IPPS rule.

Readmissions have already hit the Medicare program-integrity radar screen. For one thing, readmissions within 30 days recently were added to the list of Hospital Payment Monitoring Program (HPMP) risk areas. HPMP is CMS's main vehicle to reduce inpatient payment errors, but it's ending July 31 after nine years. However, CMS's other program-integrity contractors, including recovery audit contractors and zone program-integrity contractors, will continue hospital post-payment audits.

"Focusing on readmissions is a great way to tackle inappropriate use of hospital stays," maintains Jane Brock, M.D., medical officer for the Colorado Foundation for Medical Care, the QIO that did the study for CMS on reducing readmissions. She says readmissions are "the intersection of three things we care about: cost, quality and patient safety."

There are multiple reasons for readmissions. The way the system works, providers are paid for providing separate services, so care is often fragmented. Hospitals pay discharge planners, and home health agencies pay intake coordinators, "but no one makes sure the patient got from Point A to Point B," Brock says.

Also, a lot of patients aren't seen by physicians promptly after discharge, says Jencks, who is now a Baltimore-based consultant. The discharge planner may not make it clear to patients that they need to be seen right away (depending on their condition), and "many doctors' offices are not run in a very patient-friendly way," he says.

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