Leaders in Pharmaceutical Business Intelligence (LPBI) Group

Reporter: Alan F. Kaul, PharmD. MS. MBA, FCCP

As a part of the Accountable Care Act (ACA) added to the Social Security Act, CMS under the Hospital Readmissions Reduction Program (HRRP) is required to reduce payments to Inpatient Prospective Payment System (IPPS) hospitals reporting excess readmissions commencing with discharges on October 1, 2012.

In the FY2012 IPPS final rule, readmission measures for Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN) and the calculated excess readmission ratio will be used, in part, to calculate the readmission payment adjustment under the HRRP. CMS using risk adjustment endorsed by the National Quality Forum (NQF) and adjustments for clinically relevant factors such as patient comorbidity, frailty, and demographics will use a national dataset to compare to each hospital’s set of patients. CMS will look-back at three years worth of each hospital’s discharges and a minimum of 25 cases to calculate a hospital’s excess readmission rate for each condition. Beginning FY 2013, each excess readmission ratio will look at discharges occurring from July 1, 2008 through June 30, 2011.

In its FY2013 proposed rules making cycle, CMS proposed to continue the process and which hospitals will be subject to the HRRP, the methodologies used in its calculations, and a process for hospitals to review the information and submit proposed corrections before the information is publically released.

While CMS moves forward with its HRRP, hospitals readiness for population-base accountable care is questionable. A national survey of all hospitals was undertaken in 2011 to assess the current state of hospital readiness in the development of Accountable Care Organizations (ACOs). There were 1,672 responses to the survey or a 34% response rate. Several major themes were identified such as:

1. Only a small percentage of hospitals (3%) participate in ACOs and only 10% were preparing to do so.
2. Hospitals expect their revenue sources fro risk-based financial reimbursement to double from 9% to 18% over the next two years.
3. Most hospitals were engaged in numerous care co-ordination methods, though there was variation in specific practices.
4. There are several perceived barriers between hospitals preparing to participate an ACO and hospitals participating in ACOs. Of note, the greatest challenges of those hospitals participating in ACOS were perceived to be reducing clinical variation and reducing costs. Those planning participation, the greatest challenge was perceived to be increasing the size of the covered patient population.
5. ACO hospitals are significantly more involved in population health management services including coordination across the continuum of care.
6. There are significant gaps in care coordination functionalities. For example, there is a low-use of risk stratification and other care coordination activities. As an example, only 38% of hospitals participating in ACOs, 33% planning their participating, and 24% of hospitals not exploring an ACO model assign case managers to patients at risk for hospital readmission for out-patient follow-up. Less than 25% of hospitals in each group have nurse case managers who work with patients with chronic diseases. Similarly, 23%, 21%, and 11% respectively of those hospitals participating, planning participation, or with no plans to participate in an ACO have a post-hospital discharge continuity of care program with scaled intensiveness. Approximately one-third of hospitals participating in or preparing to participate in an ACO have no chronic-care registry. About 20% have a registry for one condition and 40% for two conditions.
7. ACOs are striving to improve the quality of their services by using valid performance measures and making results available to the public and participating providers.

Sources:

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program.html

Hospital Readiness for Population-based Accountable Care. Health Research and Educational Trust, Chicago:April 2012. Accessed at http://www.hope.org

Accessible at: http://www.hpoe.org/accointable-care