AHA blasts Hospital Readmissions Reduction Program for failing to consider socioeconomics, other issues

“Not all readmissions can or should be prevented; indeed, some are planned as part of sound clinical care,” AHA says.

Amid myriad regulatory battles, America’s hospital advocates are imploring the government and policy makers to consider revising one of the Affordable Care Act’s signature cost-control provisions: the Hospital Readmissions Reduction Program.

Five years after the ACA created the program, the policy is posing major hurdles and potentially unfair consequences for providers, the American Hospital Association argues in a new report.

In 2013, the first year of reimbursement cuts to hospitals with higher-than-expected 30-day readmissions for certain conditions, the national readmission rate fell to 17.5 percent, after hovering around 19 percent for years, according to the AHA.  But the complexity of readmissions — their varieties, causes and relation to factors outside of the hospital’s control — has left the AHA, clinicians and administrators across the country with concerns

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For one thing, “not all readmissions can or should be prevented; indeed, some are planned as part of sound clinical care,” the AHA notes.

For another, two aspects of the program — what it does include and what it doesn’t — is creating frustration and confusion. The program’s penalty formula includes readmissions unrelated to the patients’ initial admission, but its risk adjustment does not include key socioeconomic factors that research suggests has a significant impact on whether a Medicare beneficiary ends up back in the hospital.

In 2013, the maximum penalty was a 1 percent reduction in base operating payments for all Medicare fee-for-service discharges of patients with heart failure, pneumonia and acute heart attack. The maximum penalty increased to 2 percent in 2014 and 3 percent for 2015, with the conditions also expanding to chronic obstructive pulmonary disease and elective total hip/total knee arthroplasty. In 2017, readmissions related to patients who received coronary artery bypass grafting will also be penalized.

Ignoring socioeconomics

Although those readmissions are adjusted based on a patient’s clinical factors, including age, gender, comorbidities and frailty, it does not account for factors such as income and poverty levels within a hospital’s service area — even though patients in disadvantaged neighborhoods have already been linked to higher patient readmission rates.

Among the factors that do influence a senior’s health but aren’t included in risk adjustment are being eligible for Medicaid as well as Medicare, education level, income, housing, geography, primary language, health literacy or marriage status.

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An Annals of Internal Medicine study of readmission rates at more than 4,000 hospitals for patients with heart attack, heart failure and pneumonia found that nearly 60 percent of the variation in readmission rates was due to community attributes, including high unemployment, never-married residents, and fewer general practitioners per capita. For patients in the most disadvantaged neighborhoods, the study found, readmissions averaged at 27 percent, compared to the most affluent neighborhoods, where the average rehospitalization rate averaged 21 percent

“High-quality inpatient care and coordination with other care providers cannot change these individual and neighborhood characteristics,” the AHA said.

Urban academic teaching and safety-net hospitals tend to treat more low-income patients with higher socioeconomic risk factors, said Steven Lipstein, CEO of BJC HealthCare in St. Louis. The Hospital Readmissions Reduction Program, he said, “diverts money away from these hospitals and has the unintended consequence of worsening disparities between rich and poor.”

The AHA and others have been pushing for socioeconomic factors to be included in the program’s risk adjustment, including the National Quality Forum and the Medicare Payment Advisory Committee.

Multiplier effect

The Hospital Readmissions Reduction Program also has come along with a “multiplier effect” that makes the penalties greater than the revenue for readmissions, the AHA argues. In some cases, the penalty could be five times as much as the cost of the excess readmissions, the group said.

MedPAC has flagged this issue, too, expressing concern that the program leads to an inverse relationship between national readmission rates and hospital penalties. As readmission rates drop across the nation, the magnitude of the penalty may actually remain the same or grow, and over time hospitals achieving the goal of the program end up being penalized more.

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The formula “multiplies the per-admission payment by the number of all admissions for that condition, not merely the number of readmissions,” the AHA report said. “This allows Medicare to recoup a payment amount that is far greater than the payments made for the excess readmissions.”

One example the AHA laid out: A hospital may have had 100 heart failure patient discharges and 20 readmissions in 2013. The next year, that hospital may have only had 65 heart failure discharges, if their preventive care and condition management initiatives are  working, and 16 heart failure readmissions — but their readmission rate would have increased 25 percent, with concurrent penalties.

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The multiplier issue could be resolved if the program’s “legislative language were clarified so that the formula multiplies by the number of expected readmissions instead of the number of admissions,” the AHA said.

But the AHA wants CMS and lawmakers to consider broader changes that could fix the program, which can only happen by addressing key issues.

“What are the best methods to account for patients’ life circumstances and sociodemographic factors when calculating expected and actual readmission rates?” the AHA said.

“How can regulators anticipate and avoid unintended adverse consequences for patients and providers when imposing financial penalties for excess readmissions?”