High readmission rates put Medicare revenue at risk

Crains Chicago Business reports:

“More than two dozen Illinois hospitals face Medicare cuts totaling as much as $19 million next year under the new federal health care law because too many of their patients are being readmitted for heart attacks and other ailments. Starting in October, Medicare, the federal program for the elderly and disabled, will use readmission data from 2008 to 2011 on heart attacks, heart failure and pneumonia to determine whether hospitals are readmitting more patients than they should. Those that do will see payment cuts of up to 1 percent of Medicare inpatient reimbursements for the 2013 fiscal year. That will rise to 3 percent by 2015. See how Chicago-area hospitals’ readmissions data stack up The federal Hospital Readmission Reduction Program aims to improve quality and control costs by pushing hospitals to better coordinate care and keep closer tabs on patients after they are discharged. The program, mandated by the Affordable Care Act of 2010, adds a degree of uncertainty for hospitals as payments shift from a fee-for-service model to one based on medical outcomes. Already beset by shrinking reimbursements from private insurers and looming cuts to Medicaid, the federal-state program for the poor, Illinois hospitals could see already-thin margins squeezed even tighter by reductions in Medicare funding and by the costs to implement readmission-reduction strategies. “The compliance costs with this program and others are substantial, and it’s going to be difficult for smaller hospitals and systems to change their processes to address care in a way that is going to matter,” says Joseph Van Leer, a Chicago-based lawyer in the health care practice at Polsinelli Shugart P.C. Medicare last year published readmission data spanning 2007 to 2010 showing that 27 Illinois hospitals were worse than the national average on at least one of the three measures. Eighteen were worse on one measure, while seven were worse on two. Two others, Our Lady of Resurrection Hospital in Chicago and Franciscan St. James Hospital in Olympia Fields, were among the seven nationwide worse on all three.Northwestern Memorial Hospital, in Chicago’s Streeterville neighborhood, was worse than the national readmission rate for heart failure and pneumonia. In the Chicago area’s biggest system by revenue, Advocate Health Care, three hospitals had higher-than-acceptable readmission rates: Christ Medical Center in Oak Lawn, which was worse for heart attacks and pneumonia, and Lutheran General and Trinity Hospital, which were worse for heart failure. The Center for Medicare and Medicaid Services estimates it pays $17 billion a year for preventable readmissions. Almost a fifth of admissions result in readmissions within 30 days, according to the Medicare Payment Advisory Commission, an independent agency that advises Congress. Hospitals argue that Medicare’s calculation doesn’t adjust for patient risk factors like living situation, language ability and socioeconomic status that are out of hospitals’ control and correlate with high readmissions. Also, they say, the program unfairly counts readmissions unrelated to the original ailment and planned readmissions that are part of patient care. “Anything that represents good care should be excluded from the measure,” says Nancy Foster, the American Hospital Association’s vice president of quality and patient safety policy.”