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Results of CMS’ readmissions program has hospitals, experts questioning its purpose

21 Aug 2017 3:30 PM | AIMHI Admin (Administrator)

The benefits coming from the CMS’ Hospital Readmissions Reduction Program have slowed enough that some industry experts and hospital leaders say it may be time to retire the program.

The program was mandated by the Affordable Care Act as part of a larger effort to curb health costs—readmissions make up about $41 billion in healthcare spending—and to motivate providers to improve outcomes.

By and large, the program seemed to work. The CMS’ spending on readmissions fell $9 billion by 2014 and readmission rates for Medicare beneficiaries suffering congestive heart failure averaged 22% from 2011 to 2014, down from 24.5% from 2005 to 2008, according to a Kaiser Family Foundation analysis of CMS data. But there has been a standstill on progress. From 2013 to mid-2016, readmissions have only dropped by 0.1% on average. Moreover, since the CMS began to dock U.S. hospitals for their readmission rates, a majority have consistently fallen victim to the penalty.

The minuscule movement now plaguing the program might mean it’s time for the CMS to move on, said Dr. Thomas Balcezak, chief medical officer of Yale New Haven (Conn.) Hospital, a safety-net academic medical center. The hospital received a 1.91% penalty this fiscal year and will be hit with a 1.7% penalty next year.

In 2013, the first year the reduction program issued penalties, 2,217 hospitals were hit with Medicare cuts. In its most recent round, the CMS expects 2,573 hospitals will get a penalty in the upcoming fiscal year. Each year, about 75% of the roughly 3,200 affected hospitals see up to 3% of their Medicare payments reduced because patients return 30 days after discharge. The CMS excludes psychiatric, critical-access and children’s hospitals as well as hospitals in Maryland because of its unique all-payer rate-setting system.

The CMS did not respond to requests for comment.

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