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NEJM study finds incentives not working for reducing hospital-acquired infections

Posted on October 15, 2012 | No Comments

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Implementation Briefs
Key Developments

Last week, the New England Journal of Medicine (NEJM) released a study entitled, “Effect of Nonpayment for Preventable Infections in U.S. Hospitals.” The NEJM study examines the impact of Affordable Care Act (ACA) provisions to reduce Medicare and Medicaid reimbursement rates for hospitals that report certain preventable infections. The findings of the study indicate that the Centers for Medicare & Medicaid Services’ (CMS’s) policy of withholding funds from hospitals that report such infections does not help to lower these infection rates. In the discussion of their work, the study authors recommend that policymakers consider replacing the current system with a model that will encourage behavior that will lower rates of infection.

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In a new analysis by the Medicare Payment Advisory Commission (MedPAC), hospital readmissions for Medicare beneficiaries dipped .7% between 2009 and 2011. This is good news for hospitals which will face readmissions penalties beginning October 1. Starting on October 1, Medicare will lower reimbursement rates for thsoe hospitals that fail to reduce hospital readmission rates related to pneumonia, heart failure, and heart attack. The government's overarching goal is to reduce readmissions by 20%, which would save the federal government more than $2.5 million per year.
According to a white paper released by CSC, a significant portion of hospital readmissions can be prevented through comprehensive discharge planning and patient support. The report, entitled "Preventing Hospital Readmissions: The First Test Case for Continuity of Care" notes that preventing readmissions can prove challenging, as many of the precipitating causes for readmission are outside of the direct control of the hospital. However, the brief concludes that appropriate discharge planning paired with adequate post-discharge patient care and support can reduce readmissions for high-risk hospitals. The challenge, according to the paper, will be to coordinate, as opposed to duplicate, care and support.
In a Commonwealth Fund-supported report recently published in the New England Journal of Medicine, researchers found that U.S. regions where discharged hospital patients are readmitted at comparatively high rates are often the same regions where overall hospitalization rates are high. This relationship indicates broad, systemic problems within the U.S. health care system. The study, conducted by Arnold Epstein, M.D., Ashish Jha, M.D., and John Orav, Ph.D., examined rehospitalization rates across the country for Medicare patients with congestive heart failure and pneumonia, while also looking at how other variables, such as overall hospitalization rates, differences in patients' coexisting conditions, quality of discharge planning, and the number of hospital beds and physicians, affected readmissions. Of all the potential causes for regional differences in readmission rates, overall hospital admission rates played the biggest role, accounting for 16 percent to 24 percent of the variation in cases of congestive heart failure and 11 percent to 20 percent for pneumonia cases. No other factor accounted for more than 6 percent of the variation.
Hospitals in the United States readmit an average of 20% of Medicare patients within thirty days of their initial discharge. These readmissions cost the Medicare program an estimated 12 billion dollars each year and may be an indicator of poor quality of care where the readmission was potentially preventable. In its June 2007 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) classified many hospital readmissions as potentially preventable. Based on these recommendations, Congress included the Hospital Readmissions Reduction Program (HRRP or Program) in the Affordable Care Act. CMS issued the final rule implementing the HRRP on August 18, 2011, although CMS will continue to clarify additional details of the program through future rulemaking.
Historically, the Medicare program has passively purchased health care services for Medicare beneficiaries. Hospitals and other providers delivered services to Medicare beneficiaries and the Medicare program paid for the services without any indication of the quality or value of the care delivered. However, as costs have continued to escalate at an explosive pace without discernible improvements in the quality of care delivered, Congress and Medicare administrators have re-evaluated this passive payment methodology. Premised on the belief that the Medicare program must transition to be an active purchaser of high quality, cost-effective care, value-based purchasing uses financial incentives to both incentivize improved quality of care delivery and reduction of costs.
This implementation brief examines the addition of Section 501(r) to the Internal Revenue Code under the Affordable Care Act (ACA), which sets out new requirements for not-for-profit, tax-exempt hospitals.
The Centers for Medicare and Medicaid Services (CMS) have issued the long-awaited final rule on the Medicare Hospital Value-Based Purchasing Program. The final rule reduces the number of quality measures tied to $850 million in Medicare hospital payments to 12 overall performance measures, down from the 17 measures put forth in the previous proposed rule. For more information on Medicare Value Based Purchasing Programs, click here.
The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that prohibits States from receiving Medicaid funding for any medical care related to a health care-acquired conditions (HCAC). The proposed rule, which implements Section 2702 of the Affordable Care Act (ACA), also authorizes States to identify additional "provider-preventable" conditions and will take effect on July 1, 2011.
CMS has issued a proposed rule on a value-based purchasing program for hospitals. The program was recently authorized by the Affordable Care Act, and will provide incentive payments to to hospitals who meet or exceed certain performance standards.
CMS issued a final rule on the Medicare Outpatient Prospective Payment System (OPPS) for hospitals. The rule aligns Medicare payments with new provisions in the Affordable Care Act and describes factors used to determine payment rates for Medicare hospital outpatient services.