Avoiding hospital inpatient use would generally be acknowledged to be a good thing, as it is expensive and further health problems can arise during the course of treatment at a hospital. And it generally should be viewed as problematic for a patient who has recently left a hospital to be readmitted shortly after discharge, particularly for the same diagnosis. Because the rate of hospital readmissions has been viewed as too high and an indicator of poor quality, and because hospitals can actually make money if there are readmissions, a number of academics and policymakers advocated programs to reduce inappropriate readmissions. The most noted program to have actually been put in place in the CMS Medicare readmissions penalties, under which CMS determines what a hospital’s rate of readmissions “should” have been (currently in regard to three common admissions diagnoses, but with a proposed expansion) and then penalizes excessive readmissions by reducing payments for all hospitalizations, by as much as 3% beginning in 2015. The major problem which we have had with this approach is that it does not in any way scrutinize actual readmissions to determine appropriateness, which seems the only fair way to ensure that only truly avoidable ones are penalized.
A new report by KNG Health Consulting for the Academy Health organization details a serious negative consequence from the program for hospitals which tend to serve lower income patients.(Academy Health Report) The authors looked at the number of dual eligibles–patients covered by both Medicare and Medicaid–served by a hospital to see if that affected readmission rates. Dual eligibles are generally very poor and have significantly more health problems than the general Medicare population. They also have readmission rates 10-20% higher than those for non-dual eligible beneficiaries. Although CMS purports to in some manner adjust for patient population factors, the analysis in this report finds that these hospitals serving larger number of dual eligibles are likely enduring readmissions beyond their control and beyond what the CMS formula says is acceptable. Reducing revenues to these often already financially strapped hospitals only makes it harder for them to deliver quality care. We have repeatedly said, and this report only reinforces our view, that the CMS readmissions program is very poorly designed and there is no reason not to have a program based on actual examination of readmissions to determine appropriateness and then don’t pay for any inappropriate ones.