Tuesday, June 11, 2013

Physicians... the Solution to the Hospital Readmissions Crisis

By Scott Hultstrand, General Counsel

CMS and its health policy experts continue to struggle with hospital readmissions because they really don’t know what is causing them.  Even though they may not understand the root cause of what could be called the “readmission crisis”, CMS has moved quickly to set up new reimbursement schemes to lessen hospital readmissions.  Hospitals are currently penalized up to 1% of their Medicare reimbursement for its readmission rates for several disease states (heart failure, heart attack, and pneumonia), with the penalties going up each year and additional disease states being added to the mix over time.  Physicians who are employed by or contract with hospitals to provide medical services can expect to see their reimbursement tied to readmissions eventually, too. 

Coinciding with new reimbursement penalties for readmissions has been a marked reduction in readmissions nationwide, with CMS publishing last month a study indicating a reduction in 2012 of 70,000 readmissions, representing a decline to an 18.4% readmission rate for Medicare beneficiaries from 19% in each of the previous five years (click here to read the study).  While CMS celebrated this reduction, even they admit they don’t know why it happened, with the study concluding: “The reasons behind the apparent reduction are not yet clear and merit further investigation.” 

One hypothesis for the reduction in readmissions making news today is that hospitals have figured out that to avoid readmissions they need to treat patients on “observational status” or provide treatment in the ER instead of admitting the patients.  This currently anecdotal phenomenon of purposely avoiding readmissions was reported on in Modern Healthcare (click here to read the story).  The approach of treating patients in outpatient observational settings or the ER has significant policy implications, ranging from the problem of requiring patients to pay more out-of-pocket since the outpatient treatment would trigger Medicare Part B instead of Part A (in fact, there is a lawsuit on this very issue in Connecticut), to whether “observational status” is the best treatment for many patients who arguably should be immediately admitted.

This quandary is explored in an article in this month’s Health Affairs, which concludes that much of a hospital’s improvement or failure in readmissions is attributable not to quality performance but rather regression to the mean.  In other words, any movement in readmissions (up or down) in a hospital that is either doing really well or really poorly is likely to be influenced by “how high or low [the hospital] was to start” (p. 1087, June Health Affairs) rather than changes in the care it is providing.  Just how much influence statistical noise like regression to the mean should have on readmission policy is still a question that needs to be answered. 

These are important policy discussions to have, particularly since current research has not been able to determine much connection between the level of quality of care that is being provided at a hospital and its readmission rates.  Ironically, the Health Affairs article suggested that, if anything, hospitals with higher quality (at least in terms of mortality) have higher readmissions because they keep more patients alive.  More living patients means more readmissions as compared to a hospital with higher mortality rates, whose patients are dying instead of being readmitted (p. 1087, June Health Affairs).  This same study also found that there was little or no correlation between readmissions and other hospital quality indicators like volume, process-measure performance, and teaching status.

The bottom line is this…no one seems to really know why readmissions are happening and why they aren’t.  At the same time, everyone tends to agree that readmissions need to be reduced.  Of course, no one wants Medicare recipients to be on a revolving door in and out of the hospital every two weeks.  And again, this new reimbursement penalty will soon be trickling down to the physicians who work in hospitals, whether employed or independent. 

A Solution
This is where physicians need to step in.  If anyone knows, physicians know why each of their patients on an individual basis are readmitted to the hospital.  Why?  It’s obvious.  Physicians actually know their patients and what led to the readmission.  It could be a issue with care coordination, it could be patient non-compliance with medication, it could be just the nature of the disease and its effect on the patient … it could be any number of things.  But these are things that researchers looking at numbers but not on the front lines of care will be hard pressed to find.  So what should physicians do?  To start, we need to start talking with each other about how to get the individualized information that physicians all have and funnel that broad base of information into a collective source of actionable data that could be used to set policy.  Rather than shooting in the dark to set reimbursement policy that will likely have unintended consequences, let’s as the physician community assert ourselves and tell the policymakers why readmissions are really happening.  And during that conversation, let’s shift the reimbursement policy discussion to ideas that fairly pay physicians and avoid the guessing game that has influenced so much of today’s reimbursement.

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