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Sept. 15 — Medicare is penalizing hospitals for excessive readmissions based on the patients they serve rather than the quality of care they deliver, according to a study that calls into question the fundamentals behind Medicare's readmissions reduction program.
According to the Sept. 14 study in the Journal of the American Medical Association, patient characteristics such as socioeconomic factors drive readmissions much more than quality of care. “The higher prevalence of clinical and social predictors of readmission among patients admitted to hospitals with higher readmission rates is likely driven by factors largely outside of a hospital’s influence,” the study found.
More detailed risk adjustment by the Centers for Medicare & Medicaid Services could help mitigate this risk of exacerbating disparities, the study concluded. The paper's lead authors are affiliated with Harvard Medical School, Brigham and Women's Hospital, and Massachusetts General Hospital, Boston.
Medicare's Hospital Readmissions Reduction Program penalizes hospitals that have higher-than-expected 30-day readmission rates for Medicare patients by reducing annual reimbursements by as much as 3 percent. In 2014, the second year of the program, over 2,600 hospitals were fined a total of $428 million for excess readmissions, the study said.
The results were applauded by the hospital industry, which has been calling for a change to the program since it began. Nancy Foster, vice president of quality and patient safety policy for the American Hospital Association, told Bloomberg BNA Sept. 15 the CMS designed the readmissions reduction program based on the assumption that hospitals were in control of all the factors that could prevent readmission.
While that's true to a certain extent, Foster said there are numerous other factors the agency hasn't taken into consideration, including a patient's socioeconomic status and comorbidities, a reference to the existence of two or more chronic diseases or conditions in a patient. The only way to make the program fair would be to adjust for those measures, she said.
The CMS currently only adjusts only for patients’ age, sex, discharge diagnosis, and diagnoses present in claims during the 12 months prior to admission, Foster said. This limited adjustment means hospitals that serve the poorest, sickest patients (such as disproportionate share hospitals and academic medical centers) may be penalized the most, she said.
The National Quality Forum, a standard-setting organization, in April began a two-year trial program of a temporary policy change that would allow risk-adjustment of performance measures for socioeconomic and other demographic factors. At the conclusion of the trial, the NQF said it will determine whether to make this policy change permanent. The federal government and many private sector entities use NQF-endorsed measures.
Previous NQF policy prohibited the consideration of socioeconomic status (SES) or other demographic factors in risk-adjusting performance measures out of concern that doing so might conceal disparities in care and result in lower standards of provider performance. The CMS contracted with NQF to examine this policy and the broader issue of risk adjusting measures for SES.
In 2014, a draft expert report recommended that the quality forum needs to adjust its measures to better account for the socioeconomic differences in patient populations.
The CMS in 2014 disagreed with the finding, arguing the recommendations were premature and weren't evidence-based. “Changing the criteria for NQF endorsement will have a sweeping impact and should be based only on the strongest of evidence,” the agency wrote. The CMS said it doesn't currently adjust outcome measures for patients' socioeconomic status because doing so could establish a different standard of care for providers and might actually mask disparities in the quality of care provided. The agency said it was concerned that providers would end up being rewarded for lesser quality of care delivered to minority or low-income patients.
The JAMA study noted arguments against additional adjustments contend that adjusting for some risk factors—such as race/ethnicity or income—would hold hospitals serving more disadvantaged patients to a lower standard of quality or obscure the poorer quality they might provide.
“Appropriate case mix adjustment for more clinical and social factors, however, should not raise these concerns because it would only help to isolate the portion of between-hospital variation in readmissions that is due to differences in hospital quality,” the authors wrote. “After adjustment for income, for example, hypothetically poorer quality provided by a hospital disproportionately serving low-income patients would still be evident.”
According to the study, hospitals serving healthier, more socially advantaged patients may not have to devote any resources to achieving a penalty-free readmission rate, whereas hospitals serving sicker, more socially disadvantaged patients may have to devote considerable resources to avoid a penalty.
“By selectively increasing costs or lowering revenue for hospitals serving patients at greater risk of readmission, the HRRP therefore threatens to deplete hospital resources available to improve overall quality for populations at high risk of poor outcomes,” the study found.
The JAMA study called for legislation to address the problem.
The hospital industry trade group has endorsed legislation to improve the fairness of the readmission program, ensuring hospital performance is compared equally. The Establishing Beneficiary Equity in the Hospital Readmission Program Act (S. 688/H.R. 1343) was introduced in the House and Senate in March. Reps. James Renacci (R-Ohio) and Eliot Engel (D-N.Y.) introduced the bill in the House. Sens. Rob Portman (R-Ohio) and Joe Manchin III (D-W.Va.) introduced the bill in the Senate.
Under the legislation, the CMS would have to account for patient socioeconomic status when calculating the risk-adjusted readmissions penalties. The bills have yet to advance. The readmissions reduction program penalizes hospitals every fiscal year, AHA's Foster said, so hospitals that will get hit with a penalty Oct. 1 are already aware.
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