Tuesday, 21 July 2015 05:19

The Evolution of CMS Readmission Measures Sparks Movement toward Population Health Management in U.S. Hospitals

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While nearly everyone agrees that some readmissions are clinically necessary, the fact is that unplanned 30-day hospital readmissions for high-risk, complex clinical populations afflicted by conditions such as acute MI, heart failure, and pneumonia are not good for patients, nor good for our collective fiscal bottom line. Since 2012, the Centers for Medicare & Medicaid Services (CMS) has sanctioned hospitals economically for what they deem as excess 30-day readmissions (meaning more than expected, given a hospital’s risk-adjusted population), resulting in a significant reduction of Medicare revenue for approximately two-thirds of U.S. hospitals.  

Despite the fact that CMS has reported modest reductions in 30-day readmissions as a result of the measurement mandates from the Hospital Readmission Reduction Program, not everyone agrees on the manner in which “excess” readmissions are calculated for a given hospital. Sharp criticism points to the lack of risk adjustment for sociodemographic status (SDS) variables such as income, education, health literacy, culture, and other local and regional demographics, any of which may impact a successful care transition from hospital to home (and which hospitals have little to no direct control over). More research is needed to understand the impact of these variables, as well as the interventions that may reduce unnecessary 30-day readmissions. 

In response, the National Quality Forum (NQF) has initiated a two-year pilot program to examine the impact of risk-adjusting readmission metrics using socioeconomic and demographic variables. The pilot will not only examine the feasibility of securing the necessary data needed to risk-adjust for SDS variables, but also the impacts that such risk-adjustment might have on interpretation of the results. For example, safety-net hospitals, which provide care to larger numbers of Medicaid and dual-eligible patients, may have an increase in allowable 30-day readmissions as a result of SDS risk adjustment. The concern expressed by CMS and others is that this may lower the quality bar for some hospitals that provide care to the under-advantaged, thereby reducing the incentive for some hospitals to improve their strategies for care transitions.  

However, before this vital research can be completed, CMS is proposing yet another form of measurement related to post-discharge care transition. The proposed CMS Inpatient Prospective Payment System (IPPS) Rule for the 2016 fiscal year includes two new measures for acute-care hospitals. If passed in the final rule, scheduled for posting in August 2015, these measures will compute “excess days” for patients discharged following acute MI or heart failure. They not only count the number of days associated with a 30-day unplanned inpatient readmission event, but also include observation stay admissions and emergency department (ED) visits that occur within 30 days of discharge from an inpatient stay. ED visits (treat and release) will be counted as a half-day length of stay, and observation status readmissions will be rounded up to the nearest half day. 

While the proposed rule does not yet include financial sanctions for hospitals that exceed their number of “expected days,” there is little doubt that if it passes, these measures will evolve to either replace or expand the current 30-day unplanned readmission measures in the Hospital Readmission Reduction Program. Critics of these proposed measures suggest that they could impose a “double jeopardy” to hospitals that face financial penalties for excess readmissions, and now excess days, especially in the absence of risk-adjusted results that reflect the SDS status of their populations. 

This shift in measurement poses an enormous challenge to hospital care management teams. Most hospitals in the U.S. are already vigilant about decisions to admit to inpatient status and are utilizing the option to admit to lower-cost “observation status” for any hospitalization. However, these measures have the potential to further compress the providers’ options for patients returning to the hospital. Will hospitals feel pressured to “meet their numbers” by treating and releasing greater numbers of patients who come through the ED, rather than admitting them for closer observation?

If history is our teacher, we can look back on the effect of the two-midnight rule and the expansion of the Hospital Readmission Reduction Program for observation status admissions and ED visits. In the September 2014 Medicare Hospital Quality Chartbook, CMS concluded that “hospitals may be avoiding readmissions by placing more patients under observation stay status or keeping them in the ED.” 

The more optimistic perspective may be that this new measurement standard will contribute added incentive for hospitals and healthcare systems to implement more robust population health management (PHM) strategies to improve care transitions across their communities.

PHM interventions may consist of provider-centric and community-based strategies. Provider-centric interventions typically consist of aggressive care coordination, including post-discharge follow-up calls to patients, hospital and community case management services, disease management programs, medication reconciliation processes, and incentives to utilize provider-owned or managed post-acute care services. In addition, medical providers are incentivized to adopt standardized practice management protocols and pathways that show promise in reducing costs of services.   

An emerging trend in provider-based PHM strategies is the leveraging of community-based resources, not only for promotion of wellness and prevention, but also for care of the frail, elderly, and those with complex chronic diseases. Programs such as those of the American Heart, Lung, and Diabetes associations may be used to educate and support patients with chronic disease. Community and neighborhood health coalitions and faith-based organizations are leveraged to conduct wellness clinics and health promotion activities, as well as to provide care to homebound citizens in need of social support and assistance with activities of daily living.    

In addition, new partnerships are arising among hospital providers and other community assets, including partnerships with retail pharmacies, emergency medical services, schools, universities, and public and private transportation services, to name a few.

While hospitals can’t be expected to fix society, they can be a convening force within their communities to help drive understanding of the clinical, environmental and SDS determinants that impact health within the complexities of our healthcare system. The challenge will be to match the PHM interventions to the needs of the population, but there is no single strategy that will meet the needs of a diversely segmented population. A disease management program, for example, may be an effective intervention for a chronic disease population segment, but it will do little for a frail, elderly population or those with acute episodic needs.

Healthcare organizations require integrated health information systems and “big data” solutions in order to stratify the populations they are accountable for and strategically plan the rollout of interventions for their communities. They then will require longitudinal analytics to evaluate the effectiveness of their interventions. This may not be big news, but it certainly requires big strategy and leadership to execute. In the end, a balanced set of high-touch and high-tech innovations will be at the core of any tipping point we reach as the result of PHM interventions.   

So, how close are we to being able to implement effective PHM strategies in the U.S.? According to a recent poll of healthcare executives conducted by Midas+, a Xerox Company, only 15 percent of respondents reported that their organizations had a fully scaled PHM program in place today. An additional 30 percent reported that their programs were underway and would be ready within the next two years, and 48 percent reported that it would take another five to 10 years for their organizations to get there. Only a small minority of respondents reported that they wouldn’t get to the point of implementing PHM strategies or would likely become part of another healthcare system’s PHM strategy. 

The signal is clear that managing disease and promoting health within the traditional bricks and mortar of the hospital setting is only a small part of achieving greater gains in cost efficiency and quality of care. Mandated measurement and regulatory reporting by Medicare, as well as Medicaid and commercial payors, will continue to drive innovation in PHM strategies across the U.S.  

About the Author

Vicky Mahn-DiNicola is vice president of research and market insights at Midas+ Xerox, where she serves as a  speaker, author, and clinical consultant in the areas of healthcare analytics, quality improvement, regulatory reporting, and healthcare transformation. A certified Lean Six Sigma Black Belt, Ms. Mahn completed her undergraduate and post0graduate studies at the University of Arizona, where she continues to serve as an adjunct member of the faculty. 

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Vicky Mahn-DiNicola is Vice President of Research and Market Insights at Midas+ Xerox, where she serves as a speaker, author and clinical consultant in the areas of healthcare analytics, quality improvement, regulatory reporting and healthcare transformation. A Certified Lean Six Sigma Black Belt, Ms. Mahn completed her undergraduate and post graduate studies at the University of Arizona, where she continues to serve as Adjunct Faculty.