A few months ago I wrote an article entitled Unplanned Readmissions: Are They Quality Measures or Utilization Measures? It explained the Hospital Readmissions Reduction Program (HRRP) that began in October 2012 as part of the Affordable Care Act (ACA). That article explained the program and its results over the past 5 years. However, more and more healthcare leaders and organizations are beginning to question whether HRRP is a valuable program or whether it is time to move on to something that focuses on quality of care and clinical outcomes, rather than cost savings. This article will address those issues. (In this article “readmissions” mean unplanned or preventable readmissions).

1. UNPLANNED
READMISSIONS 2
Has the Hospital Readmissions
Reduction Program (HRRP) Been
Successful?
P A T S T R I C K E R , R N , M E D

2. READMISSIONS
A few months ago I wrote an article
entitled Unplanned Readmissions: Are They
Quality Measures or Utilization Measures?
It explained the Hospital Readmissions
Reduction Program (HRRP) that began in
October 2012 as part of the Affordable
Care Act (ACA). That article explained the
program and its results over the past 5
years. However, more and more healthcare
leaders and organizations are beginning to
question whether HRRP is a valuable
program or whether it is time to move on
to something that focuses on quality of
care and clinical outcomes, rather than
cost savings. This article will address those
issues. (In this article “readmissions” mean
unplanned or preventable readmissions).

3. RECAP
In case you did not read the previous article, let me start by
providing a short review of HRRP and its results to date. HRRP
was created to reduce the number of “excess readmissions” in
hospitals that receive payment from the Centers for Medicare
and Medicaid Services (CMS) using the Inpatient Prospective
Payment System (IPPS). The IPPS payments are based on a
diagnosis-related group (DRG) that covers the inpatient stay,
as well as outpatient diagnostic and admission-related
outpatient non-diagnostic services provided by the institution
on the date of the patient’s admission or within 3 days
immediately preceding the admission date. However, they do
not include post-discharge care or interventions, so IPPS
hospitals had no financial incentive to reduce the incidence of
readmissions. Prior to 2012 nearly 20% of all Medicare
discharges had a readmission within 30 days, costing
taxpayers $15 billion a year. It was estimated that 12% of
readmissions were potentially avoidable, so preventing even
10% of those would save Medicare $1.5 billion annually. These
costs focused attention on the need to reduce readmissions,
resulting in the reduction of readmissions becoming a national
priority. As a result, the ACA required CMS to reduce
readmission rates and CMS developed HRRP in a way that
incentivized hospitals to become part of the process, by
offering them direct financial incentives for reducing their
“excess readmissions”.

4. Although HRRP was called an incentive program
when it was implemented, it has not been seen as a
positive incentive program. Instead, it is seen as a
negative penalty program, because hospitals are
not rewarded for reducing their readmissions, but
are penalized if they have higher than expected
readmission rates. About 80% of the hospitals have
received penalties (1-3% deducted from their CMS
payments). These penalties then become CMS’
“cost savings”.
HRRP

5. Source: Readmissions, Observation, and the Hospital Readmissions Reduction Program
Over the past 5 years, the program has shown cost savings, but it has not shown the savings
predicted. The total cost savings (penalties) over the past 5 years amounted to $1,893,000 billion.
While this is a sizable amount, it is much less than the $7.5 billion ($1.5 billion each year) that was
predicted when the program was created. However, from October 2007 to May 2015 it has reduced
the risk-adjusted readmission rates on the targeted conditions by 3.7% (from 21.5% to 17.8%).
Because of the focus placed on reducing the targeted readmission rates, the rates for non-targeted
conditions have also declined during this time period by 2.2% (from 15.3% to 13.1%). The most rapid
decline actually occurred between 2010, when the ACA was passed, and 2012 when HRRP began.
This shows that the discussion and focus on the issue had a broad affect, creating reductions in
readmissions even before major program initiatives were begun.

6. PROGRAMS
While proponents argue that this program has
been very successful, critics feel that it should be
doing more. It has provided savings, but it did
not come close to meeting the expectations.
Critics are advocating that we take what has
been learned and devote the time, money, and
resources needed to develop positive, incentive
programs that focus on achieving improved
clinical quality and patient outcomes. They feel
HRRP is a good foundation for a cost savings
program, but cost cannot (and should not) be
our main driving force. Improving the quality of
patient care is essential and should always be
the ultimate goal. It is now time to re-focus and
move on to improve the quality of care.
So what have we learned from HRRP that we can
use to improve the current program and develop
future programs?

7. SOME CRITICS
Some critics feel that a detailed analysis of
patient charts is needed to truly identify and
analyze preventable readmissions. They feel
CMS’ program only looks as high level
administrative data, which cannot get to the root
cause of unintended consequences or quality
issues. Two such studies were conducted
comparing hospital readmission rates with
mortality rates. They both found small, but
significant, associations between readmissions
and mortality, although they came from opposite
perspectives. One found increased readmissions
were associated with increased mortality, while
the other found decreased readmissions were
associated with decreased mortality.

8. A study conducted at The Johns Hopkins Hospital examined nearly 4,500 acute-care
hospitals’ readmission records and compared them with the hospitals' mortality rates
in six areas used by CMS: heart attack, pneumonia, heart failure, stroke, chronic
obstructive pulmonary disease, and coronary artery bypass. The study found a small,
but significant, association between increased mortality rates and increased
readmissions. The study stressed that the data showed that readmissions have no
role in quality measure assessments and should not be a Five-Star Rating.
Readmissions, just like length of stay, should be considered a utilization measure, not
a quality measure.
Another study conducted by Yale New Haven Health researchers looked at over
6,000,000 hospitalizations to see if readmissions had any unintended consequences
of increasing post-discharge mortality. Their data showed similar results, but from a
different perspective. They found that reductions in readmission rates were weakly,
but significantly, correlated with reductions in hospital mortality rates after
discharge.
While these two studies concluded that this level of detailed analysis of patient
records is needed to identify these root causes, it is very difficult to imagine that this
would be possible in a system as large as the national Medicare program. However, it
seems logical that some detailed analytics are needed and should be part of the
program.
Studies

9. PROS
HRRP has saved almost $2 billion ($1,893,000 billion) over the
past 5 years.
Hospitals and care providers across all areas of the
healthcare spectrum have been very engaged in the process.
HRRP identified and reinforced the need for and importance
of transition of care in the patient discharge process. This
includes increased collaboration and communication among
the healthcare team members and making sure the patient
and caregivers are involved and understand their
expectations.
Numerous care programs, goals, strategies, best practices,
and innovative approaches have been developed and shared
throughout the industry.
Data seems to show that most readmissions are not due to
defects in care by the provider or hospital or by things that
should have been done by the provider or hospital. They are
more commonly due to the patient’s illness, their quality of
outpatient care, and/or their engagement and follow-though.
Focusing on the causes for readmissions helps identify
specific care defects that could lead to readmissions and
allows an opportunity to develop interventions to manage
these defects before they create a readmission.
The program has moved from process measures to patient-
centric outcome measures with focus on the patient,
caregivers, family, and payers. This provides better overall
performance and avoids a “one-size-fits-all” solution.
HRRP has provided a good foundation and bridge to build
other programs focused on quality and patient outcomes, as
well as cost savings.

10. CONS
There is a potential to disproportionately penalize hospitals
that care for vulnerable populations.
We need to be aware of the potential to reduce necessary
readmissions, which could cause untoward negative
outcomes and increase mortality.
There is a potential for unintended consequences of
readmission, if the strategies and processes are not well
thought through.
Using Observation (“Clinical Decision”) Units can lead to
inappropriate patient selection, prolonged observation time,
and increased out-of-pocket expenses for the patient, if they
then need admission to a skilled nursing facility.
Patients experience stress and vulnerability during the
hospital stay, which can cause acquired post-hospital
syndrome. Focus needs to be placed on this, the same as it is
on transition of care.

11. Recomendations
12% of readmissions are clearly preventable. Root cause analysis should be done on
those readmissions to identify specific care defects and develop interventions that will
help prevent these defects from causing future readmissions. This level of analysis needs
to be done using patients’ charts, not high level administrative data, as is being done
currently.
Episodes of care should be looked at as part of the continuum of care, rather than
considering discharge as the end of an episode. Transition of care processes and
continued follow through are essential.
Continuity of care consists of and must focus on inpatient care, transition of care, and
early outpatient follow-up.
The data from two studies showed a small, but significant, association between
readmissions and mortality rates. One study concluded that readmissions have no role in
quality measure assessments. Readmissions, just like length of stay, should be
considered a utilization measure, not a quality measure.
HRRP should move from a limited number of specific targeted conditions to “all causes”
for readmissions. This will allow further reductions for all other conditions and situations,
including co-morbid, psychiatric, social, and environmental conditions.
Medicare should continue to move to an outcome-based payment model, like those being
developed in the Accountable Care Organizations (ACOs). Its goal is to move 90% of all
fee-for-service payments to value-based programs or the bundled-payment initiatives by
2018.

12. Recomendations
The program needs to risk-adjust for socio-economic issues, however they need to be
careful not to go so far as to mask disparities in care or penalize hospitals that care for
these patients.
Transitions of care and hospice services have been proven to be effective in reducing the
needs for readmission.
Different time frames or scored rankings should be considered rather than using a strict
30 day time frame. Readmissions occurring within the first week after discharge may be
more significant and are likely to be because of poor care coordination or inaccurate
assessment of discharge needs. Those occurring later in the 30 day period are more likely
to occur because of the severity of the patient’s illness.
Necessary and unnecessary readmissions should be looked at separately and in
aggregate reports to identify potential preventable events.
Technological tools should be increased to provide more clinical detail, which will lead to
more targeted assessments of readmissions and better risk-adjustments.
Successful programs, goals, strategies, best practices, and innovative approaches should
continue to be shared within the healthcare community.
Targeted processes and effective patient-centric interventions need to be developed to
improve care and patient outcomes.
Financial incentives need to be realigned to better reward providers.
HRRP is a start. It validates the process is necessary and should be ongoing.

13. As you can see, reducing readmission rates is not a
simple issue. HRRP has produced good results over
the past 5 years and cost savings programs are
definitely important, since our healthcare spending
is extremely high. However, improving the quality
of care and patient outcomes are just as critical
and essential.
The focus going forward should be on rewarding
organizations for improving quality and achieving
optimal patient outcomes, rather than focusing on
financial programs with penalties that also might
provide some level of positive clinical outcomes.
It is extremely difficult to effect change in
something as large as the Medicare system, yet
HRRP has made significant advances over the past
7 years since it was created. It has proved to be a
necessary complement to the IPPS-DRG system, but
its goal now is to be a bridge to get from fee-for-
service payments to value-based or bundled
payment initiatives being developed in
Accountable Care Organizations. We are ready for
the next steps in this journey.

14. THANK YOU
for your time!
F O R M O R E V I S I T U S A T :
W W W . T C S H E A L T H C A R E . C O M