Understanding the

Readmissions Reduction Program

Kimberly Rask, MD PhDMedical DirectorAlliant | GMCF

cover

Coordinated Federal Focus on Quality

► National Quality Strategy

► DHHS Action Plan

► Partnership for Patients

► CMS Quality Improvement Organizations (QIO) program priorities

Two Goals1. Decrease by 40% preventable hospital-acquired

conditions (HACs) by 2013 60,000 lives saved, 1.8 million fewer injuries to patients and $20 billion in health care costs avoided

2. Reduce 30-day hospital readmissions by 20% by 2013 1.6 million fewer readmissions and $15 billion in health care costs avoided

Partnership for Patients

National Campaign to Align

Priorities and Resources

Impact of reporting on bottom-line

Program Data Financial impact

Annual Payment Update Inpatient Quality Reporting- core measures

2%

Outpatient Quality Reporting- core measures

2%

Value Based Purchasing Patient satisfaction, core measures, mortality, cost, infections

1% withhold; can lose the 1%, get some back or even receive > 1% for excellent performance

Readmissions Reduction Program

Excess readmission rate

Up to 1% in 2012-13Up to 2% in 2013-14Up to 3% after 2014

Preventable health care acquired conditions (HACs)

No payment for discharge unless condition is noted on admission

Quality Reporting

Hospital Readmissions Reduction Program

► Authorized under Section 3025 of the 2010 Affordable Care Act

► Reduce IPPS payments to hospitals for excess readmissions after October 1, 2012

► 2 years of rule-making

CMS implementation

► Selected 3 conditions

– Acute Myocardial Infarction (AMI)

– Heart Failure (HF)

– Pneumonia (PN)

► Calculated “Excess Readmission Ratios” using the National Quality Forum (NQF)-endorsed 30-day risk-standardized readmission methodology

► Set a 3-year rolling time period for measurement with a minimum of 25 discharges

► For October 1, 2012 penalty determination, the measurement period was July 2008 to June 2011

Excess Readmission Ratio

► The ratio comparesActual number of risk-adjusted readmissions from Hospital XX

to the

Expected number of risk-adjusted admissions from Hospital XX based upon the national averages for similar patients

► Ratio > 1 means more than expected readmissions

< 1 means fewer than expected readmissions

Risk adjustment

The number of readmissions IS adjusted for► Age► Gender► Coexisting diseases based upon 1-year review of all

inpatient and outpatient Medicare claims for that patient

The number of readmissions is NOT adjusted for►Poverty level in surrounding community►Proportion of uninsured patients►Racial/ethnic mix of patients

“many safety-net providers and teaching hospitals do as well or better on the measures than hospitals without substantial

numbers of patients of low socioeconomic status”

Review and public reporting

30-day review and correction period (June 2012)► Will only recalculate if errors result from CMS calculation or

programming error

► Cannot submit additional claims

Posted on Hospital Compare in October 2012► Performance categories will not be reported

► Excess Readmission Ratios (<1, 1, >1) for individual hospitals will be reported along with the numerator and denominator

► The compare feature will not be available

► Hospitals will not be able to suppress

Triggering the penalty

An Excess Readmission Ratio of >1 for any of the 3 measures (AMI, HF, PN) triggers a penalty

Size of penalty is intended to reflect the relative cost of excess readmissions from Hospital XX► Claims data used to calculate aggregate Medicare payments for those 3

conditions and total Medicare payments for all cases at Hospital XX

► Calculated over same time period as the readmission ratio

► Calculate percentage of Hospital XX’s total Medicare payments that result from excess readmissions for the 3 conditions

► Final penalty is that raw % or 1%, which ever is smaller

Applying the penalty

► Penalty is applied to the base-DRG payment for all fee-for-service Medicare discharges during the Fiscal Year (FY)– Wage-adjusted DRG payment amount including transfer adjustment

plus new technology payment if applicable

– Add-on payments not reduced (IME, DSH, outlier, low volume)

► Not revenue neutral, no bonus for excellent performance► For FY 2013, maximum penalty is 1%

– Impacting over 2000 hospitals nationally

– Expected to cost hospitals $280 million or 0.3% of the total Medicare revenue to hospitals

► Excess Standardized Readmission Ratio (SRR) will be public

Readmission Rates

Similar but not identical to IQR public reporting

Similarities► Same NQF-endorsed 3 risk adjusted

condition-specific measures► Same data source► Same types of discharges and exclusions

Differences► How the measures are displayed and

reported► SRR calculated on a subset of readmissions

What’s Next?

FY 2014 (anticipated)► Look back period = July 2009-June 2012► Maximum penalty of 2 %

FY 2015 (anticipated)► Look back period = July 2010-June 2013► Maximum penalty of 3 %

Ratio compares own hospital performance to national rates

Driving Improvement

► CMS contracts with QIOs to improve health and health care for Medicare beneficiaries

► Largest federal network dedicated to improving health quality at the community level

► QIOs based in all 50 states

BETTER CARE

AFFORDABLECARE

BETTER HEALTH FOR POPULATIONS

Joint Letter of Cooperation

QIO Support for Quality Reporting

Quality Reporting and Improvement► Hospital Inpatient Quality Reporting Program► Hospital Outpatient Quality Reporting Program► Promote and support hospitals with feedback, technical

assistance, training

Diana Smith, Technical Advisor

Diana.Smith@gmcf.org

QIO support for reducing readmissions

► Community coalition formation ► Community-specific Root Cause

Analysis► Intervention selection and

implementation► Application for a Formal Care

Transitions Programwww.GeorgiaDoYourPART.org

This material was prepared by Alliant | GMCF, the Medicare Quality Improvement Organization for Georgia, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. 10SOW-GA-ICPC-12-100