cms’ hospital readmission reduction program: what does it mean for your hospital?

February 1, 2013

Prepared for Alabama Hospital Association Meeting

CMS’ Hospital Readmission Reduction Program:

What does it mean for your hospital?

Alabama Hospital Association Meeting

February 1, 2013

February 1, 2013


February 1, 2013


• Medicare annual spend

– 2010: $525B

– 2020: $922B

• Medicaid annual spend

– 2010: $401B ($271B federal/$130B state)

– 2020: $908B ($561B federal/$347B state)

• Total annual spend

– 2010: $2.64 trillion; 17.6% of GDP; $8,327 per capita

– 2020: $4.64 trillion; 19.8 % of GDP; $13,708 per capita

It’s All About Money

February 1, 2013


• Providers incentivized by fee-for-service reimbursement

– Sick care v. health care

– We don’t know what works, so we do it all

• Over-regulation in a futile attempt to prevent over-utilization and control costs

• Health care as piece work

• Data blind

How We Got Into This Mess

February 1, 2013


Bundled Payments

Partial Capitation

Global Payment

Fee for Service

Shared Savings

Reactive Focused Predictive

Visitor

Symptomatic

Acute Needs

Services & Supplies

Unit Based

No Financial Risk

Patient

Episode

Most Common Conditions

Packaged Treatments

Efficiency Based

Partial Financial Risk

Person

Overall Health

Community Health Characteristics

Manage Well Being

Outcome Based

Full Financial Risk

Evolution of Reimbursement

February 1, 2013


Two Intertwined Goals

Goals

Make better health insurance coverage more available and affordable for legal residents

Reform the health care delivery and payment

system to provide better care in a more cost-efficient

manner

February 1, 2013


The Future is Now

• Pay for volume• No quality

measured

Fee For Service

• Quality per click

• Process improvement

Value- Based Payment • Quality

outcomes of episodes

• Whole system improvement

Care Coordination

THEN NOW FUTURE

February 1, 2013


The Real Change Drivers

The building blocks of trust are common purpose and agreed-upon ground rules

Successful integration will require high degrees of trust among providers

Demand for quantified quality will drive clinical integration

Payment will be based on quantified quality

Quality will be quantifiable

Data is king; HIT/HIE non-negotiable

February 1, 2013


Link Payment to Quality

Hospital value-based purchasing

Readmission reduction program

Physician value-based purchasing

Physician quality

incentives

February 1, 2013


• The Affordable Care Act established the basis for the Hospital Readmissions Program.

– CMS reduced payments to IPPS hospitals with excess readmissions beginning October 1, 2012

– 30 Day Readmission Measures:

• Acute Myocardial Infarction (AMI)

• Heart Failure (HF)

• Pneumonia (PN)

ReadmissionReduction Program

February 1, 2013


• Readmission reductions are based on three years worth of data

– FY 2013 provider adjustment is based on readmission data collected from July 1, 2008 through June 30, 2011

– Minimum 25 cases to calculate readmission rate

– CMS expects the readmission reduction program to be base on a rolling three years of readmissions data

– Providers have a 30-day preview period to review their readmission rates

– CMS posts readmission measures results on Hospital Compare http://www.medicare.gov/hospitalcompare/

ReadmissionReduction Program

http://www.medicare.gov/hospitalcompare/

February 1, 2013


• Maximum excessive readmission adjustments are applied to a provider’s Medicare base rate:

– FY 2013 - 1% reduction



• Readmission results are public information, therefore, hospitals face negative community response for excessive readmission rates

Readmission Reduction Adjustments

Source: Readmission Adjustment factors are based on excess readmission ratios from the performance period of July 1, 2008 to June 30, 2011, as finalized in the FY 2013 IPPS/LTCH PPS Final Rule.

February 1, 2013


What does it mean for Alabama hospitals?

($3,903,338)

Readmission Reduction Adjustments

Source: Readmission Adjustment factors are based on excess readmission ratios from the performance period of July 1, 2008 to June 30, 2011, as finalized in the FY 2013 IPPS/LTCH PPS Final Rule.

February 1, 2013


Quality Counts…But can you prove it?

1. AMI-2 Aspirin Prescribed at Discharge2. AMI-7 a Fibrinolytic Therapy Received Within 30

Minutes of Hospital Arrival3. AMI-8a Primary PCI Received Within 90 Minutes

of Hospital Arrival4. HF-1 Discharge Instructions5. HF-2 Evaluation of LVS Function6. HF-3 ACEI or ARB for LVSD7. PN-2 Pneumococcal Vaccination8. PN-3b Blood Cultures Performed in the

Emergency Department Prior to Initial Antibiotic Received in Hospital

9. PN-6 Initial Antibiotic Selection for CAP in Immunocompetent Patient

10. PN-7 Influenza Vaccination11. SCIP-Inf-1 Prophylactic Antibiotic Received

Within One Hour Prior to Surgical Incision12. SCIP-Inf-2 Prophylactic Antibiotic Selection for

Surgical Patients13. SCIP-Inf-3 Prophylactic Antibiotics Discontinued

Within 24 Hours After Surgery End Time14. SCIP-Inf-4 Cardiac Surgery Patients with

Controlled 6AM Postoperative Serum Glucose15. SCIP-Card-2 Surgery Patients on a Beta Blocker

Prior to Arrival That Received a Beta Blocker During the Perioperative Period

16. SCIP-VTE-2 Surgery Patients with Recommended Venous Thromboembolism Prophylaxis Ordered

17. SCIP-VTE-2 Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis Within 24 Hours Prior to Surgery to 24 Hrs After Surgery

ClinicalProcess ofCareMeasures70%

HCAHPS30%

Source: CMS Special Open Door Forum: VBP 2/10/2011

February 1, 2013


– Communication with doctors

– Communication with nurses

– Pain management

– Cleanliness and quietness of hospital environment

– Responsiveness of hospital staff

– Communication about medicine

– Discharge information

– Overall rating of hospital

HCAHPS Composite Scores

February 1, 2013


“While the association between performance HCAHPS and readmission is clear, it’s not causal. Improving HCAHPS performance will not by itself

lower readmission rates.

Rather, the organizational culture, management and systems that enable a hospital to perform well on HCAHPS will also facilitate better performance on

readmissions and other outcomes.”

Press Ganey Performance Insights 2012

February 1, 2013


Patients CAPABLE of managing their own care

CommunicationAlignmentPartnersAccessBarriersLearning Evaluation

Readmission Reduction Goal

February 1, 2013


February 1, 2013


FFS Payment for Transitional Care Management

• New Medicare payment for post-discharge transitional care management

• Key elements

– Contact within 2 days of discharge

– Face-to-face visit within 7 (or 14) days

– Non-face-to-face care management services over 30-day period

February 1, 2013


What does it mean to Alabama hospitals?

+ $23,675,699

Transitional Care Management

Source: Estimated reimbursement is based on the assumption that CMS expects 92% of TCM codes will be billed as non-facility. 2013 Fee schedule amounts are derived from the MAC website. Medicare discharges source 2011 MEDPAR.

February 1, 2013


Questions?

February 1, 2013


Contact Information

Denise Hall, RN, BSN Principal

[email protected]

Kristen Lilly, MHA, RHIA, CPHQ

Manager

[email protected]

Thank you for allowing us to share our thoughts and expertise with you.

Pershing Yoakley & Associates, P.C.

(800) 270-9629

www.pyapc.com

cms’ hospital readmission reduction program: what does it mean for your hospital?

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