ACA’s Readmissions Program Could Be Penalizing Certain Hospitals
An Affordable Care Act program that cuts hospitals' Medicare payments if their readmissions rates exceed a certain threshold could be disproportionately penalizing facilities that treat more low-income patients, according to a new study, the Washington Post's "Federal Eye" reports (Sun, "Federal Eye," Washington Post, 9/14).
CMS launched its Hospital Readmissions Reduction Program in October 2012. In the program's first year, CMS withheld up to 1% of regular reimbursements for hospitals with high patient readmissions within 30 days of discharge because of three medical conditions:
- Heart attack;
- Heart failure; and
The penalty increased to a maximum of 2% in 2013. For fiscal year 2015, CMS added chronic lung problems and some hip or knee replacements to the list of conditions from which reimbursements were calculated and increased the penalty to 3% (California Healthline, 8/4).
Some hospital groups have said the program is unfair because some factors, like patients' income status, can affect readmission rates in ways beyond the hospitals' control (California Healthline, 8/4). However, CMS has warned that adjusting for socioeconomic status could hold hospitals that serve low-income patients to lower standards of care.
The program currently adjusts for factors such as:
- Recent diagnoses; and
- Sex (The Hill, 9/14).
For the study, published in JAMA Internal Medicine, Harvard University researchers examined Medicare claims data from a nationally representative survey ("Federal Eye," Washington Post, 9/14).
In addition to examining the factors Medicare already accounts for, the researchers looked at 29 other characteristics that could be controlled, such as:
- Patients' education levels;
- Whether patients suffered from depression;
- Whether patients smoked; and
- Whether patients were working (Kliff, Vox, 9/14).
The researchers determined that almost 24 variables account for nearly half the difference in readmission rates between the best- and worst-performing hospitals, including patients':
- Abilities to bathe, dress and feed themselves;
- Education levels; and
According to senior study co-author Michael McWilliams, an associate professor of health care policy and medicine at Harvard Medical School, hospitals with the highest readmissions rates had patients with:
- Less education;
- Less mobility;
- Lower assets;
- Lower incomes;
- More chronic conditions; and
- More difficulty with daily activities.
The study found that compared with the top-performing hospitals, the worst-performing hospitals had 50% more patients with less than a high school degree.
According to "Federal Eye," education is a critical factor because many patients who are likely to be readmitted to the hospital often have multiple chronic illnesses. McWilliams noted that managing various illnesses requires "a significant amount of health literacy" ("Federal Eye," Washington Post, 9/14).
If all 29 factors were accounted for, the difference in readmissions performance between the best and worst hospitals would be reduced by 48%, the researchers found (Vox, 9/14). They concluded, "Hospitals with high readmission rates may be penalized to a large extent based on the patients they serve" (The Hill, 9/14).
According to Vox, the researchers did not suggest terminating the readmissions program, nor did they believe that Medicare would be able to account for all 29 patient factors they included in their analysis. However, the researchers suggested that Medicare use current data and include certain factors, such as whether a patient also has Medicaid coverage, to determine readmissions penalties.
CMS CMO Patrick Conway said in a statement that the agency "will continue to work with all stakeholders to seek feasible ways to encourage hospitals to reduce hospital readmissions while addressing any unintended consequences, particularly for those hospitals serving dual-eligible and low-income beneficiaries" ("Federal Eye," Washington Post, 9/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.