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CME / ABIM MOC / CE

Can Financial Penalties Reduce Hospital Readmission Rates?

  • Authors: News Author: Diana Swift
    CME Author: Laurie Barclay, MD
  • CME / ABIM MOC / CE Released: 2/10/2017
  • THIS ACTIVITY HAS EXPIRED
  • Valid for credit through: 2/10/2018
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Target Audience and Goal Statement

This article is intended for primary care clinicians, hospitalists, nurses, public health officials, and other members of the healthcare team caring for patients needing hospitalization.

The goal of this activity is to provide medical news to primary care clinicians and other healthcare professionals in order to enhance patient care.

Upon completion of this activity, participants will be able to:

  1. Discuss trends in readmission rates for hospitals subject to penalties vs nonpenalized hospitals after announcement of the Hospital Readmission Reduction Program (HRRP), based on a retrospective cohort study
  2. Discuss trends in hospital readmission rates for target and nontarget conditions after announcement of HRRP, stratified by hospital penalty status


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Medscape, LLC, encourages Authors to identify investigational products or off-label uses of products regulated by the US Food and Drug Administration, at first mention and where appropriate in the content.


Author(s)

  • Diana Swift

    Freelance writer, Medscape

    Disclosures

    Disclosure: Diana Swift has disclosed no relevant financial relationships.

Editor(s)

  • Robert Morris, PharmD

    Associate CME Clinical Director, Medscape, LLC

    Disclosures

    Disclosure: Robert Morris, PharmD, has disclosed no relevant financial relationships.

CME Author(s)

  • Laurie Barclay, MD

    Freelance writer and reviewer, Medscape, LLC

    Disclosures

    Disclosure: Laurie Barclay, MD, has disclosed the following relevant financial relationships:
    Owns stock, stock options, or bonds from: Pfizer

CME Reviewer/Nurse Planner

  • Amy Bernard, MS, BSN, RN-BC

    Lead Nurse Planner, Medscape, LLC

    Disclosures

    Disclosure: Amy Bernard, MS, BSN, RN-BC, has disclosed no relevant financial relationships.


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CME / ABIM MOC / CE

Can Financial Penalties Reduce Hospital Readmission Rates?

Authors: News Author: Diana Swift CME Author: Laurie Barclay, MDFaculty and Disclosures
THIS ACTIVITY HAS EXPIRED

CME / ABIM MOC / CE Released: 2/10/2017

Valid for credit through: 2/10/2018

processing....

Clinical Context

The Hospital Readmission Reduction Program (HRRP) penalizes hospitals for excess readmissions for acute myocardial infarction (AMI), heart failure, and pneumonia. After announcement of HRRP, readmission rates decreased, and thousands of hospitals paid penalties now totaling nearly $1 billion.

However, it was previously unknown whether overall trends in readmission rates, and trends for target and nontarget conditions, differed based on whether a hospital was subject to penalties imposed by HRRP. The goal of this retrospective cohort study by Desai and colleagues was to compare trends in readmission rates for target vs nontarget conditions, stratified by hospital penalty status.

Study Synopsis and Perspective

Penalties imposed under the Affordable Care Act's HRRP are associated with lower readmission rates at penalized hospitals vs nonpenalized hospitals, according to a study of hospitalizations among Medicare beneficiaries published in the December 27, 2016, issue of JAMA.[1]

In addition, the researchers found that reductions in readmissions were greater at penalized institutions for 3 targeted conditions than for nontargeted conditions.

Announced in March 2010, the HRRP mandated reduced reimbursement as of October 2012 for hospitals with high readmission rates for AMI, congestive heart failure, and pneumonia in fee-for-service Medicare recipients. So far, almost $1 billion in penalties have been imposed on thousands of US hospitals, according to an analysis by the Kaiser Family Foundation.[2]

In the current study, Nihar R. Desai, MD, MPH, assistant professor of medicine in the cardiovascular medicine section at Yale School of Medicine in New Haven, Connecticut, and colleagues looked at beneficiaries older than 64 years who had been discharged between January 1, 2008, and June 30, 2015, from 2214 HRRP-penalized hospitals and 1238 nonpenalized hospitals. Penalized institutions tended to be larger and to be teaching hospitals with more Medicaid patients.

The study included 48,137,102 hospitalizations of 20,351,161 Medicare recipients. Between January 2008 and March 2010, when HRRP was announced, readmission rates tended to be stable across US hospitals, but afterward, they differed notably by penalty status.

In January 2008, for example, the mean readmission rates at penalized institutions were 21.9% for AMI, 27.5% for heart failure, 20.1% for pneumonia, and 18.4% for nontarget conditions. At their nonpenalized counterparts, the corresponding rates were 18.7%, 24.2%, 17.4%, and 15.7%, respectively.

After the program's announcement in March 2010, however, rehospitalization rates for target and nontarget conditions declined significantly faster at hospitals later subject to financial penalties vs those at nonpenalized hospitals.

For AMI discharges at penalty institutions, the authors found an additional decrease of -1.24 (95% confidence interval [CI], -1.84 to -0.65) percentage points per year vs nonpenalty discharges. For heart failure, the decrease was -1.25 (95% CI, -1.64 to -0.86), and for pneumonia, the decline was -1.37 (95% CI, -1.80 to -0.95).

For nontarget conditions, there was an additional decrease of -0.27 (95% CI, -0.38 to -0.17; P <.001 for all).

Moreover, at penalized hospitals, annual readmission rates for target conditions declined significantly faster compared with the decline in readmissions for nontarget conditions. In AMI, for example, there was an additional decline of -0.49 (95% CI, -0.81 to -0.16) percentage points per year vs nontarget conditions (P =.004). The additional decline for heart failure was -0.90 (95% CI, -1.18 to -0.62; P <.001), and for pneumonia, it was -0.57 (95% CI, -0.92 to -0.23; P <.001).

This finding "suggests that these hospitals specifically focused efforts to improve readmission outcomes for patients admitted for these target conditions," the authors write.

Among nonpenalized hospitals, readmissions for target conditions declined comparably or even more slowly vs nontarget conditions, with AMI rehospitalizations actually showing an additional increase of 0.48 (95% CI, 0.01 - 0.95) percentage points per year (P =.05).

Changes in rehospitalization rates for heart failure and pneumonia were 0.08 (95% CI, -0.30 to 0.46; P =.67) and 0.53 (95% CI, 0.13-0.93; P =.01) compared with nontarget conditions.

Dr Desai and coauthors state that in hospitals not subject to reduced reimbursement, "broader, system-wide readmission reduction strategies were more likely to have been used as opposed to strategies focusing solely on the target conditions."

After initial announcement of the program, readmission rates for nontarget conditions showed a modest but statistically significant decline at hospitals of either status: for penalty hospitals, the decrease was -0.81 percentage points per year (95% CI, -1.23 to -0.39); for nonpenalty hospitals, it was -0.54 (95% CI, -0.85 to -0.23; P <.001).

After implementation in October 2012, the rate of change flattened, with the greatest change seen in penalty hospitals.

"These findings may have implications for future policy programs aimed at reducing readmissions and may provide insight into the effect of external incentives," the authors write.

"This analysis may help elucidate the mechanism by which financial penalties in the HRRP were effective," they continue.

Further, they note their results are in line with a study published earlier this year in which 66% of hospital leaders surveyed thought the HRRP had a "major impact" on system efforts to reduce readmission rates.[3]

"As additional longitudinal data become available, analyses of the effects of changing financial penalties over time to further define the association of the HRRP on readmission rates should be undertaken," Dr Desai and colleagues write.

The authors received funding from the Agency for Healthcare Research and Quality, the National Institute on Aging, the American Federation for Aging Research, and the Yale Claude D. Pepper Older Americans Independence Center. Three coauthors have disclosed relevant financial relationships with the private sector.

JAMA. 2016;316:2647-2656.

Study Highlights

  • The study cohort included 20,351,161 Medicare fee-for-service beneficiaries older than 64 years discharged between January 1, 2008, and June 30, 2015, from 2214 penalty hospitals and 1283 nonpenalty hospitals (total, 48,137,102 hospitalizations).
  • Trends in readmission rates by condition and penalty status were compared with the use of difference-interrupted time-series models.
  • The primary study outcome was 30-day risk-adjusted, all-cause unplanned readmission rates for target and nontarget conditions.
  • At hospitals that later were subject to financial penalties under HRRP, mean readmission rates in January 2008 were 21.9% for AMI, 27.5% for heart failure, 20.1% for pneumonia, and 18.4% for nontarget conditions.
  • At hospitals not subject to penalties, these rates were 18.7%, 24.2%, 17.4%, and 15.7%, respectively.
  • Except for AMI at nonpenalty hospitals, readmission rates were stable across hospitals between January 2008 and March 2010, before the announcement of HRRP.
  • Readmission rates for target and nontarget conditions decreased significantly faster for patients at penalized vs nonpenalized hospitals after HRRP announcement in March 2010.
  • Penalized vs nonpenalized hospitals had an additional decrease of -1.24 (95% CI, -1.84 to -0.65) percentage points per year for AMI, -1.25 (95% CI, -1.64 to -0.86) for heart failure, -1.37 (95% CI, -1.80 to -0.95) for pneumonia, and -0.27 (95% CI, -0.38 to -0.17) for nontarget conditions (P <.001 for all).
  • Among penalty hospitals, decrease in readmission rates was significantly faster for target vs nontarget conditions.
  • Compared with nontarget conditions, there was an additional decline of -0.49 (95% CI, -0.81 to -0.16) percentage points per year for AMI (P =.004); -0.90 (95% CI, -1.18 to -0.62) for heart failure (P <.001); and -0.57 (95% CI, -0.92 to -0.23; P <.001) for pneumonia.
  • Among nonpenalty hospitals, however, readmissions for target vs nontarget conditions decreased similarly or more slowly, with additional increases of 0.48 percentage points per year for AMI (95% CI, 0.01-0.95; P =.05); 0.08 percentage points for heart failure (95% CI, -0.30 to 0.46; P =.67); and 0.53 percentage points for pneumonia (95% CI, 0.13-0.93; P =.01).
  • After HRRP implementation in October 2012, the rate of change for readmission rates plateaued across all hospitals, except for pneumonia at nonpenalty hospitals.
  • Hospitals subject to financial penalty yielded the greatest relative change.
  • On the basis of these findings, the investigators concluded that Medicare fee-for-service patients at hospitals penalized vs not penalized by HRRP had greater reductions in readmission rates. Also, changes were greater for target vs nontarget conditions for patients at penalized but not at nonpenalized hospitals.
  • Announcement of the policy was associated with improvement as some hospitals learned that they were likely to face financial penalties, and low-performing hospitals may have proactively responded to the threat of penalties.
  • Plateauing of the rate of change for 30-day readmission rates for all conditions since October 2012 may indicate that after initial reductions in readmissions with modest investment and interventions, additional reductions in readmissions may be less feasible or may require larger-scale investment with smaller marginal benefit.
  • Penalized hospitals may have specifically focused efforts to improve readmission outcomes for patients admitted for target conditions, whereas nonpenalized hospitals may have used broader, system-wide interventions to lower readmissions.
  • Study limitations include those inherent in the interrupted time series, effects of regression to the mean, and inability to determine specific mechanisms for observed differential improvements.

Clinical Implications

  • Medicare fee-for-service patients at hospitals receiving financial penalties vs hospitals not penalized by HRRP had greater reductions in readmission rates, based on a retrospective cohort study.
  • Changes in hospital readmission rates were greater for target vs nontarget conditions for patients at penalized hospitals but not for patients at nonpenalized hospitals.
  • Implications for the Healthcare Team: Healthcare providers should keep in mind that further research is needed to determine specific mechanisms for observed differential improvements in readmission rates for hospitals subject to financial penalties.

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