The Affordable Care Act (ACA) has introduced several new financial incentives and penalties in order to optimize the overall healthcare system performance. Policy makers are constantly searching for new ways to enhance the quality of patient care and reduce total health insurance spending. Reducing hospital readmissions is one such major initiative launched by the Centers for Medicare and Medicaid Services (CMS) to improve the healthcare quality in the United States. Hospital readmission is defined as a patient being readmitted within the initial 30 days of hospital stay.
In fact, avoidable readmissions are one of the main problems facing the US healthcare domain. Reports suggest that about one out of five elderly patients is readmitted to the medical center within 30 days of discharge. It is estimated that this costs about $15 billion per year and is causing more than double the cost of providing care to a patient.
In order to increase transparency of care, the Hospital Readmissions Reduction Program (HRRP) was established in the ACA that provides financial incentives to healthcare facilities to lower readmission rates. As part of this program, medical facilities with excess 30-day readmissions for patients with certain health conditions such as pneumonia, myocardial infarction and heart failure will be penalized.
Medicare Readmission Penalty Increased by 3 %
Healthcare facilities have recently begun ensuring that their patients don’t return soon after they are being discharged. Medicare penalties have been significantly increased and reached an all time high with its third round of fines imposed on establishments that have recorded a high rate of patient readmission.
As per the latest Federal records released, Medicare is fining about 2,610 hospitals for having patients return to the facility for taking additional or repeat treatment within one month of being discharged. This is the third year the industry faces these fines that were created as part of the HRRP established by the ACA. The potential penalties for this year are estimated to be the highest, up to 3% of Medicare bills.
In the year 2013, approximately 18% of patients with health benefit plans who had been hospitalized were readmitted within a month. Even though the re-hospitalization rate has dropped (when compared to 2012) about 1 in 5 patients with health insurance coverage returned within 30 days thereby costing tax payers an extra $26 billion. Below mentioned are some of the main details of the new Medicare penalties –
- About three-quarters of health centers that come under the HRRP are being fined. This may result in lower payment (from October 1 through next September 30) for every patient stay – not just for those persons who are readmitted. Medicare estimates that the fines will total about $428 million over the course of the year.
- About 1,400 facilities are exempted from these fines and this may include cancer hospitals, critical care facilities and other facilities offering psychiatry or rehabilitation services.
- Half of the clinics in 29 states including California, Florida, Georgia, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Tennessee and Texas, as well as the District of Columbia will be losing money.
- About 39 hospitals including specialty surgical units, community centers and Pennsylvania hospital (a major teaching facility) will benefit from lowered payments by 3%.
- Another 496 hospitals will lose 1 percent or more of their payments.
When compared to last year, heavy penalties were charged against 433 more hospitals this year. An average fine of 0.63 percent (from 0.38 percent last year) was recorded.
Another prominent reason for increased fines is that Medicare is tracking more conditions. Apart from health conditions such as pneumonia, myocardial infarction and heart failure, this year patients readmitted with elective hip and knee replacements and lung ailments such as chronic bronchitis are also analyzed. Hence, those facilities that have never faced fines before may have to pay it.
How Can Penalties Reduce Patient Readmission?
The penalties imposed by the federal government highlights the need for medical facilities to pay adequate attention to their patients and stay updated about their health status even after they are discharged. The initiative behind fines is that healthcare facilities will be motivated to provide adequate treatment to the patients to a point of wellness wherein they will have lower chance of returning for treatment.
Instead of giving perfunctory discharge plans such as paper typed instructions to patients, many facilities are taking up more active efforts that include conducting a detailed discussion with patients regarding discharge plans. This has proved to be an effective way to reduce the number of patients who return to the medical centre in less than a month. In addition, staffs are making sincere attempts to ensure whether the patient receives support from other doctors’ services outside, whether prescriptions are adhered to and whether recoveries are monitored closely. The officials in the healthcare domain assert that the threat of costly fines is certainly a good motivation for healthcare facilities to continue providing better quality services.
Holding a CPC certification from the American Academy of Professional Coders (AAPC), Natalie is a seasoned professional actively managing medical billing, medical coding, verification, and authorization services at OSI.