Realizing Readmissions Goals

Provider organizations are redesigning care models to improve patient outcomes and reduce payer penalties.

This article first appeared in the September 2014 issue of HealthLeaders magazine.

Roughly one in five Medicare patients is readmitted to a hospital less than a month after discharge, with a total price tag reaching well into the billions. Hospital leaders are embracing the need to reduce readmissions, as much to improve the quality of care as to reduce federal penalties.

In an effort to cut costs and improve quality, the Centers for Medicare & Medicaid Services launched its Hospital Readmissions Reductions Program in October 2012 to penalize hospitals by up to 1% of their total Medicare reimbursement for excessive 30-day readmission rates for patients with heart attack, heart failure, and pneumonia. And that was just the beginning. In FY 2015, CMS will expand the program by increasing the maximum penalty to 3% and adding chronic obstructive pulmonary disease and total hip and knee replacements to the list of medical conditions included in the calculation.

As CMS continues to roll out payment structures that reward value over volume, many healthcare leaders are rethinking their traditional care delivery models and searching for strategies to improve quality and reduce readmissions. These efforts tie strongly into strategies for population health management and expanding across the care continuum. But the return on investment can be elusive.