ACA-linked readmission rate improvements misleading

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Hospital readmission rates began to improve upon implementation of the Affordable Care Act's Hospital Readmissions Reduction Program, but a new JAMA Network Open analysis has found that the readmission gains due to the HRRP were smaller than originally reported.

The HRRP gives the federal government the authority to levy fines against hospitals with higher-than-expected readmission rates, but according to JAMA, the readmission reductions may be due mostly to changes in how patient visits were being classified.

Other Medicare policies, the research showed, resulted in a number of inpatient admissions being reclassified as observation stays, which were often "clinically indistinguishable" from short inpatient admissions, said researchers. 

In the end they accounted for less than 5% of hospitalizations for conditions explicitly outlined in the HRRP, but the reclassifications still accounted for more than half the readmission decline.

WHAT'S THE IMPACT?

Certain Medicare policies overlapped the implementation of the HRRP, including the Recovery Audit Contractor program, which led to payment denials for short inpatient admissions, and the Two-Midnight Rule, which advised that inpatient admission was generally inappropriate for hospitalizations crossing fewer than two midnights.

These expanded the use of observation by hospitals and resulted in many inpatient admissions being reclassified as observation stays, authors wrote. Because of that, observation stays increased sharply in the run-up to the ACA and continued to increase through the period of HRRP implementation, such that about 18% of Medicare beneficiaries now complete their hospital treatment in observation.

Observation stays are not counted as index hospitalizations or readmissions in the calculation of readmission rates. Because HRRP evaluations rely on longitudinal study designs, the increased use of observation stays over time likely leads to an overestimation of HRRP outcomes, the analysis found.

Readmissions for target conditions decreased at a faster rate in the period after the announcement of the HRRP, but returned to baseline in the post-penalty period. Accounting for observation stays found these same trends. Under both scenarios, trends in readmissions also decreased for nontarget conditions, although less than for target conditions.

Under the base scenario – without observation stays – the combined readmission rate for target conditions decreased progressively from a mean of 22.14% in the baseline period to 20.65% in the post-HRRP penalty period. For nontarget conditions, the readmission rate decreased from a mean of 18.24% to 17.11%.

In the expanded scenario accounting for observation stays, the absolute reduction in readmission rate for target conditions was more than halved, decreasing from 23.32% in the baseline period to 22.66% in the post-HRRP penalty period. And nontarget conditions showed a slightly larger absolute decrease from a rate of 18.58% to 17.82%.

Researchers wrote that ignoring the growth of observation stays creates a measurement problem for estimating the potential outcomes linked to the HRRP. 

"Readmissions associated with these index events – nearly one in five hospitalizations in the Medicare population – have fallen out of the calculation of readmission rates over time in a nonrandom way, introducing bias in longitudinal assessments of the HRRP to date, as well as misclassifying the true performance of hospitals," authors wrote.

They added that, if shifts in observation stay practices aren't accounted for in readmissions algorithms, an increasingly large share of hospital care will be invisible to quality metrics.

HRRP-exempt hospitals had greater decreases in readmissions over time, compared with HRRP-exposed hospitals, they wrote.

"Observed decreases in readmissions reflect secular trends arising from a complex set of factors, including advances in clinical care delivery that reduce the need for inpatient admission, greater use of home healthcare, better diagnostic tests, and more observation stays," according to the authors.

THE LARGER TREND

Researchers in Health Affairs, writing in 2019, found that HRRP carries large penalties – up to 3% of what a hospital earns for certain Medicare patients. It also expanded to include more conditions, including heart bypass surgery and more types of pneumonia, including those with sepsis.

But they said adding more conditions to the program is not likely to result in much more readmission prevention or cost savings.

In the end, some readmissions are inevitable, they said, and trying to drive rates lower through penalties may mean some patients who should have been readmitted won't be.

Instead, the authors suggest that more use of bundled payments – where Medicare sets a defined amount of money it will pay for the episode of care surrounding a surgical patient's operation – could produce better results. This is because bundled payments ensure hospitals focus on costs and complications around the entire episode of care, not just one metric like readmissions.

Another Health Affairs analysis, also published in 2019, suggested an overall decline in hospital admissions may have driven the observed drop in readmissions attributed to the HRRP. What looked like achievements of the program may have been a byproduct of factors driving a broader decrease in hospitalizations across the board.

That study maintained that a substantial decrease in admissions – a 13% decline from 2009 to 2014 – is likely the result of multiple factors unrelated to the HRRP, including medical innovations that allow for more conditions to be treated in an outpatient setting, an ongoing decline in available hospital beds in the U.S., and regulatory measures to crack down on unnecessary short hospital stays.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com