Earlier this week Rep. Jim Renacci (R-Ohio), together with a bipartisan group of 25 other House members introduced H.R. 4188, the Establishing Beneficiary Equity in the Hospital Readmission Program Act. Text of the bill is not available through the Library of Congress yet, but from what has been discussed publicly its purpose is to provide hospitals with financial relief from Section 3025 of the Affordable Care Act: Hospital Readmissions Reduction Program.
The hospital readmissions program has received a great deal of discussion, but with implementation beginning last year hospitals that exceeded the excess readmission ratio in their 2013 fiscal years are now seeing reductions in Medicare reimbursement of up to 1%. Unless those hospitals are able to improve that ratio the potential payment reduction could increase to 2% next year and 3% the year after. For an organization already struggling with tight margins a 3% reduction in revenue that represents approximately 20% of total revenue without any commensurate reduction in costs has serious clinical and operational ramifications.
Previous PolicyPub posts on Hospital Readmissions:
Not unsurprisingly, H.R. 4188 has already garnered rather broad industry support from the likes of hospitals and the trade associations representing them – i.e., anyone standing to benefit from more revenue as opposed to less.
As I understand it H.R. 4188 doesn’t provide blanket relief for hospitals affected by the readmissions program. Rather it is intended to recognize and adjust for the penalty impact of caring for patients who are financially unable to afford post-acute housing, services and care in a manner that would otherwise facilitate their ability to avoid a readmission. And the logic goes that if all those altruistic hospitals are unselfishly willing to open their doors to care for the poor, well then penalizing them for that willingness is grossly unfair.
But hold on. The readmissions reduction program wasn’t thought of, planned or designed in a vacuum. The challenges associated with securing and providing affordable post-acute housing, support services and care has been a widely recognized problem that predates Medicare and Medicaid. The purpose of the program is to provide incentives for hospitals to take a more active and holistic approach to managing patient care post-discharge – regardless of the patient’s wealth and income. No penalties – no incentives.
The program wasn’t designed to change the type of patient cared for – but the manner and scope of patient responsibility. What hospitals have argued in return is that they are being held accountable for a scope of services and care for which they have not historically been responsible (accountability without responsibility). CMS’s de facto response is pretty straight forward: then don’t accept Medicare anymore. If hospitals want to continue benefitting from taxpayer dollars, they will have to help find ways to reduce the costs of healthcare subsidized by those taxes – and not just the costs that manifest inside their walls (or more properly, their historical sphere of influence).
We are just now beginning to see the benefits of the readmissions program’s incentives manifested in efforts of hospitals across the country to integrate with post-acute/long-term care provider organizations. That has required their gaining a better understanding of PA/LTC patient care models, understanding the challenging dynamics of care transitioning and working with physicians to better appreciate the post-acute challenges they have wrestled with for generations.
So now that hospitals are finally taking notice of the potential cost and quality benefits of post-acute care integration we want to tell them “ah, never mind – it’s too hard?” Really?