How to survive cms's most recent 3% hospital readmissions penalties increase

How to Survive
CMS’s Most Recent
3% Hospital
Readmissions
Penalties Increase
— Bobbi Brown
VP of Financial Engagement

© 2014 Health Catalyst
www.healthcatalyst.com
CMS Readmissions Penalty
On October 1, 2014, the final
payment and policy changes
for hospital readmissions
from CMS went live.
Just weeks into the change,
thousands of hospitals across
the United States are feeling
the financial pressures of the
increased penalty.
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.

CMS Readmissions Penalty
Providers have already seen
a decrease in payments from
Medicare for health systems
with high readmissions rates.
CMS applies the penalty to
the base operating DRG
(diagnosis related group)
payment.

Patient Cohort Tracking
Health systems also now
must track two more 30-day
readmission rates:
• COPD
• THA/TKA
(Knee or Hip Arthroplasty)
These rates are in addition
to patient cohorts hospitals
already track: • Heart attack (AMI)
• Heart failure
• Pneumonia

CMS started the Hospital
Readmission Reduction
Program in 2012 with the
goal to improve healthcare.
CMS believed providers with
excess readmissions for
patients with high-risk
conditions, such as heart
failure or pneumonia, were
providing low quality care.
Why the Need to Levy Hospital
Readmissions Penalties?

CMS focused on improving
were pneumonia, heart failure,
and acute myocardial infarction.
The program saw the following
reimbursement withholding
trends:
• FY 2014 – 2% (same conditions)
• FY 2013 – 1%

With 2015 in full swing
providers are looking at a
maximum penalty of 3%.
The penalty impacts 75.8%
of hospitals across the
United States.
Note: The U.S. government
republished an updated ruling on
October 3, 2014.

The results of the program are positive to date. In fact,
CMS has estimated that hospital readmissions declined
by a total of 150,000 from January 2012 to December
2013, a significant improvement.

Public Concerns about Risk
Adjustments
Despite a public concern
regarding risk adjustments for
SES (socioeconomic status),
CMS isn’t adding any risk
adjustments because it
already monitors the impact
of SES on hospital results.
CMS data reveals that
patients with low SES are
actually capable of performing
well on the measures.

Future CMS Readmission Penalty
Measures
CMS has no plans to expand
the conditions in 2016.
However, data suggests the
reduction of the readmit rate
following coronary artery
bypass graft surgery (CABG)
is an important target for
future quality improvement
initiatives.
CMS will add CABG to
monitored conditions in 2017.

No single strategy will reduce
readmission rates. Hospitals
must embrace multiple
strategies and consistently
monitor results.
Six strategies are discussed
in this article:
Hospital Strategies Associated
with 30-Day Readmission Rates
for Patients with Heart Failure.
*
*July 2013 issue: Cardiovascular Quality and Outcomes
Reducing Readmission Rates

Partnering with 1 community physicians and physician groups
Reducing Readmission Rates
Six Strategies
2 Partnering with local hospitals
3 Having nurses responsible for medication reconciliation
4 Arranging for follow-up visits before discharge
5 Sending discharge summaries to primary care physician
6 Assigning staff to follow-up on test results after discharge

How One Large Health System
Achieved Reduced Readmissions
One large health system
used four key interventions
to lower their 30-day heart
failure readmission rates by
29 percent. They were able
to achieve these results by
using these evidence-based
interventions:
Medication reconciliation
Post-discharge appointments
Post-discharge phone calls
Teach back interventions

How One Large Health System
Achieved Reduced Readmissions
Eight months after implementing
the four evidence-based
interventions, the health system
experienced a:
• 29% reduction in 30-day HF readmissions
• 14% reduction in 90-day HF readmissions
• 120% increase in follow-up appointments
• 78% increase in pharmacist medication reconciliation
• 87% increase in follow-up phone calls
• 84% increase in teach-back interventions

3 Ways to Achieve Significant
Heart Failure Readmission Rates
In order for interventions to be
successful, strategies and tools
must be in place to collect and
analyze the pertinent data.
For the health system our
example three critical solutions
were implemented:
A data warehouse to provide a single source of truth
Engaged multidisciplinary teams driving improvements
Analytics to drill down into each episode of care

1: Data warehouse
The Health System chose a
late-binding data warehouse
to overcome the limitations of
a traditional data warehouse.
Due to the agile architecture
of the late-binding warehouse,
the system was able to fully
deploy their data warehouse
within just a few months.

2: Multidisciplinary teams
The health system knew they
needed to engage physicians
and build a culture of trust to
drive improved outcomes.
They organized a multi-disciplinary
team that included
physicians, nurses, quality,
analytics, IT, informaticists,
operations, and finance.

3: Analytics drill down
Using a sophisticated analytics
platform, clinicians had the
ability to drill down into each
episode of care and assess all
aspects of interventions.
The analytics platform
included an easy-to-use
visualization tool that didn’t
require complicated queries
for clinicians to get the
answers they needed.

Readmission Penalties—Here to Stay
The U.S. healthcare
system is in the midst of a
massive transformation to
improve patient care and
reduce costs.
Traditional EDW systems
are inadequate to meet
data demands needed to
reduce readmissions rates.
A late binding architecture
gives teams the right tools
for the job.

Readmission Penalties—Here to Stay
How did your hospital fare
when the readmissions
penalties increased to
three percent?
If you’re facing a financial
burden, do you have any
questions about how a
Late-Binding Data
Warehouse™ can help
you avoid future
penalties?

Link to original article for a more in-depth discussion.
How to Survive CMS’s Most Recent 3% Hospital Readmissions
Penalties Increase
More about this topic
The Best Way to Manage a Readmission Reduction Program
Bobbi Brown, VP of Financial Engagement
4 Ways to Reduce Penalties Under the HAC Reduction Program
Bobbi Brown, VP and Michael Barton, VP
Understanding Value-Based Reimbursement and How to Survive It
Bobbi Brown, VP Financial Engagement
The Key to Transitioning from Fee-for-Service to Value-Based Reimbursement
Bobbi Brown, VP and Jared Crapo, VP
6 Steps for Implementing Successful Performance Improvement Initiatives
Bobbi Brown, VP and Leslie Falk, VP

For more information:

Other Clinical Quality Improvement Resources
Bobbi Brown is Vice President of Financial Engagement for Health
Catalyst, a data warehousing and analytics company based in Salt Lake
City. Ms. Brown started her healthcare career at Intermountain Healthcare
supporting clinical integration efforts before moving to Sutter Health and,
later, Kaiser Permanente, where she served as Vice President of Financial
Planning and Performance. Ms. Brown holds an MBA from the Thunderbird School of
Global Management as well as a BA in Spanish and Education from Misericordia
University. She regularly writes and teaches on finance-related healthcare topics.
Click to read additional information at www.healthcatalyst.com

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