Centers for Medicare and Medicaid Services (CMS) and other insurers in the area are asking hospitals to decrease their readmission rates either through incentive programs or through penalties. Payors review patient readmissions within 7, 14, 30 days following the initial hospital admission. Payors may also review returns to the emergency department in the same time frame.

The Affordable Care Act (ACA) requires that CMS penalize hospitals for “excessive” readmissions beginning October 1, 2012. The penalty started at maximum of 1 percent of the hospital’s base DRG payment in FY 2013 and will reach a maximum of 3 percent of the hospital’s base DRG payment in FY 2017 and stays at that percentage until the law changes. Hospitals are at risk for the maximum penalty but depending on their readmission rate may have a lesser percentage taken or no penalty at all.

Currently, CMS penalizes the hospitals that are above the “expected readmission rate” for heart attack, heart failure, pneumonic, chronic obstructive pulmonary disease, coronary bypass graft, and elective first time total hip or/and total knee replacement. CMS will also review patients readmitted following coronary artery bypass graft. Currently, these are “all cause readmissions,” meaning that any readmission counts towards the penalty. An “all cause readmission” example would be if the patient admitted to the hospital for pneumonia, discharged and then is readmitted within 30 days as a result of a traffic accident, that readmission would count towards the hospital readmission rate. CMS has added a way to account for planned readmissions (i.e.: a patient who has reoccurring treatment for a condition on multiple saged surgeries).

Hospitals have begun working with their patients and other community healthcare providers, such as pharmacies, home care providers and nursing homes as well as more closely with physicians to try to understand the reasons for readmissions. As they have identified reasons for readmissions, such as problems with medication management, they have put processes and resources in place to increase communication among health care providers and with the patient, in an attempt to reduce readmissions.