Readmission Penalties and Surgery

The Medicare hospital readmissions penalty program has been blamed for and credited with many outcomes, good and bad.  A study in Health Affairs examines the impact of the extension of the program to certain surgeries.   (HA Article)   Originally the program applied to certain medical diagnoses, like pneumonia and heart attack, but in 2010 the intention to extend it to surgical procedures, like joint replacements, was announced and those readmission penalties went into effect in 2013.  The authors looked at whether surgery readmissions were already declining as a spillover effect of the medical readmissions penalties and at whether there were effects on coding of patient severity, lengths of stay, episode spending or use of other services.  Because joint replacement was the initial surgery condition targeted for readmission reductions, the researchers focussed on those procedures.  The study period was from 2008 to 2016, allowing examination of readmission trends before and after the penalty program.

On average 40.5% of patients were discharged to a facility like a nursing home, but this percentage dropped over the study period from 46.5% to 28.5%.  Discharges to home health agencies increased significantly.  Over the study period, risk-adjusted readmission rates for hip replacement declined from 8.2% to 5.9% and for knee replacement from 7.3% to 5.6%.  Total episode payments also declined and average length of stay declined from 3.5 to 2.7 days, while use of observation stays increased.  Some of these effects may be due to other efforts, like bundled payments and to increased skill of surgeons in performing the procedures as volume grew and there were innovations like smaller incisions.  Readmission rates for these surgical procedures were declining before the penalty program, but the rate of decrease grew after announcement of the program for medical conditions and maintained that level when the surgical conditions were added.  It appeared that the medical condition readmission penalties had a spillover effect on the surgeries and that the actual penalty program for surgical conditions did not create further reductions, in fact the readmission rate reduction trend returned to that existing before the readmission penalty program began.  There did not appear to be any effect on coding of patient severity, which is consistent with the decline in spending.  Overall the program seems to have been successful, but may be reaching its limits.  Some readmissions are likely inevitable.  Adding more conditions may not change the rate, since it appears that the initial program already had significant spillover impacts.  In addition, CMS has not fully addressed concerns about whether the program adequately accounts for socio-economic factors.