On Oct. 1, 2012, the Centers for Medicare & Medicaid Services began penalizing hospitals for what it determined to be excessive avoidable readmissions. The Affordable Care Act created the Hospital Readmissions Reduction Program in March 2010 to reduce preventable readmissions and decrease Medicare's expenditures.

The penalties are grounded in the belief that clinicians should (1) ensure that patients and families are educated about their care when they leave the hospital; and (2) improve transition of care. But hospitals are also held accountable for working with patients and community providers to improve patient care after patients have left the hospital.

The Hospital Readmissions Reduction Program does not apply to all conditions, but focuses on specific disease conditions cited in the 2007 "Report to Congress: Promoting Better Efficiency in Medicare." The Medicare Payment Advisory Commission, or MedPAC, identified seven conditions and procedures that accounted for 30 percent of potentially preventable readmissions: heart failure, chronic obstructive pulmonary disease, pneumonia, acute myocardial infarction, coronary artery bypass graft surgery, percutaneous transluminal coronary angioplasty and other vascular procedures.

CMS decided that in the first year of the program, the readmission penalties would apply only to patients discharged with a primary diagnosis code for acute myocardial infarction, congestive heart failure and pneumonia. CMS has the authority to expand the readmissions program to include COPD, CABG, PTCA and other vascular procedures beginning in 2015. Hospitals should note that the MedPAC report discussed only 30 percent of potentially preventable readmissions, thereby creating the possibility of addressing the other 70 percent in the future.

We advise hospitals to recognize the long-term implications of the readmissions reduction program. We also recommend that hospitals implement a multidisciplinary team to address readmissions prevention as an ongoing, continual process.

Determining Hospital Penalties

Not all readmissions are included. CMS excludes:

  • patients who expire in the hospital;
  • patients who are not enrolled in Medicare FFS 30-day post-discharge;
  • patients who leave against medical advice;
  • planned readmissions and transfers to other facilities;
  • patients younger than age 65.

Reducing Preventable Readmissions

Because the federal readmissions reduction program will expand, we recommend that hospitals develop a readmissions reduction process. When hospitals view readmissions reduction as a process, managing prevention becomes an ongoing effort, not a short-term project that ends after results improve.
To reduce readmissions, hospitals should create a multidisciplinary team. The team should include individuals who are committed to reducing readmissions and should represent different stakeholders who can influence readmissions. Participants might include nonhospital employees such as nursing home and family representatives. Although the team should have a leader, the leader should not be solely responsible for the results; each team member should have mutual accountability for the effort's success.

The process team should be charged with clear goals. These include defining a plan for implementing change, reducing readmissions and monitoring performance. Because the federal program currently focuses only on patients admitted with heart failure, acute myocardial infarction and pneumonia, these should be the initial target conditions. However, the probable expansion of the program into other clinical areas should motivate hospitals to begin work on other conditions after achieving success with the initial three conditions.

  After the work group is established, the team might use several strategies to achieve its goals:

  • develop a better understanding of the problem;
  • identify patients at risk for readmission;
  • prepare standardized discharge education tools;
  • place follow-up discharge phone calls;
  • coordinate care with community home care, physician groups, nursing homes and other community hospitals.

Have you evaluated what readmissions will cost your organization? Have you implemented any plans to address readmissions? The time to do so is now, as the readmissions penalty is not going away. Organizations that have not successfully reduced readmissions by October 2013 should expect more financial pain along with an expansion of the program as it enters its second year.

Part 2 of this article (May 2, 2013) will help you understand the financial penalty and identify your high-risk patients. It also will provide recommendations for reducing readmissions and easing the pain.

Terri Marshall, R.N., M.S., C.C.M., is a senior consultant with Compass Clinical Consulting in Cincinnati.