State Variability

Every state but Maryland will have Medicare reimbursement at acute care hospitals impacted by PPACA. The variability is as follows.

Maryland

The Bay State has a unique reimbursement system. Rates are set for all payers regarding facility fee reimbursement (i.e. -DRG) by a single organization representing hospitals. In 2013, the state’s readmissions reimbursement strategy was in operation. Maryland consists of 49 hospitals in two categories—Total Patient Revenue (TPR) and Admission Readmission Reduction (ARR), which, in January 2014, became Geographic Population-based Reimbursement (GPR). TPR hospitals receive a lump sum payment to care for citizens in their defined geographic area. Because TPR hospitals are technically (and realistically) at risk for ALL care delivery, including ALL readmissions, there is no payment on 30-day readmissions to penalize. The ARR model paid hospitals more for initial admissions, in order to offset unpreventable readmission volume. This provided funds for hospitals to actively engage in readmissions reductions programs. This model rewarded hospitals that were able to reduce readmissions. Then in January of 2014, the ARR model was replaced with the GPR model, which is very similar to TPR. These hospitals are also now provided set funds to manage patients within a defined geographic region. The hospitals determine where to focus their spending. This has resulted in a significant interest in reducing readmissions, as well as reducing inpatient and ED utilization. Maryland’s model may well replace the current Fee for Service models across the rest of the country and is being watched extremely closely.

Maryland’s system also counts any Observation level of care patient that was in the hospital for more than 24 h eligible for the readmission volume if they end up coming back as a 30-day readmission.

States

In the rest of the country, 30-day readmissions are handled much differently. PPACA or “Obamacare” has established penalties for acute care hospitals based on readmission rates for a select number of diagnoses. Affected diagnoses have expanded and may do so again. Hospital metrics are weighted and then compared to national performance averages. Poor performance is penalized via a reduction of a percentage of their total Medicare reimbursements. This penalty was quickly ramped up from 1% of all pure Medicare reimbursement in 2013, to 2% in 2014, and 3% in 2015.

Commercial Insurers

Many commercial insurers now deny reimbursement for patients readmitted within 30 days with same or similar conditions. They will review the visits and may opt to combine them in one reimbursement, thus instituting a penalty of sorts. The actual process may vary from state to state, and insurer to insurer, and also vary according to acute care hospital contracts. The reason for this is that many times acute care hospitals and insurers will develop relationships that involve some degree of capitation for a particular population. In effect, this is the same as Maryland’s TPR model, but on a smaller scale.

Medicaid

Medicaid reimbursement systems vaiy widely from state to state. Different states therefore manage 30-day readmission reduction models in veiy different ways. In some states, there are reviews and denials for payment on patients readmitted within 30 days with same or similar conditions determined by reviewers for the state. The variance in how states handle Medicaid reimbursement for 30-day readmissions is so great that it should suffice to point out that in many places such readmissions are penalized via Medicare, but to varying degrees.

The question underlying all of this is, how can we reduce 30-day readmissions? The fact that hospitals across the country are asking this is itself a movement in the right direction regarding patient care and good management. But which approaches will be effective and sustainable? There are numerous models being evaluated currently, including Project BOOST, Project RED, the STARR Project and the Coleman model to name a few [24-27]. Each has unique attributes and specific goals. Different aspects of hospital care are the focus of reform, such as standardized discharge processes, early follow-up, accurate medication reconciliation, patient education, and improved communication between non-acute care providers (Nursing Homes, Homecare, and Rehab facilities).

Success varies, and has been attributed to the resolution or improvement of a number of key problems, including:

• (1) Patient non-compliance
• (2) Delayed follow-up appointments
• (3) Sub-optimal communication between caregivers (homec- are, nursing homes, etc.)
• (4) Lack of ED physician engagement
• (5) Non-standardized hospital discharge processes
• (6) Psychosocial issues related to everything from homelessness and transportation issues to medication acquisition

Many of these models demonstrate improvements, only to see them go back to baseline at the 60-day mark. Some even see increased readmissions at the 1-year mark. Clearly, reducing readmissions is neither simple nor easy. Another challenge is concern over costs when considering changes to infrastructure or process within a hospital system. Also, shifting patients to the outpatient world to avoid readmission penalties may carry its own costs and risks. No one seems to know which approach will be the best.

Yet, despite the variety of programs already running, they all have one or more primary components in common. Chief among these are standardization and communication. Below is a discussion of each of these, as well as other core components. Successful models will likely vary, according to the individual situations and needs of each hospital. But understanding these core components will be essential for success.

We have seen (and implemented) successful readmission reduction programs, particularly in the state of Maryland. The model below assumes that any patient can be at risk for a 30-day readmission, some more than others based on disease process, support systems and adequate access to healthcare in their community. We’ll look at five primary components of a readmission’s reduction program, beginning with the PCP.