CMS Hospital Readmission Reduction Program & Readmission Measures Discussion


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CMS Hospital Readmission Reduction Program

In October 2012, CMS began reducing Medicare payments for Inpatient Prospective Payment System hospitals with excess readmissions. Excess readmissions are measured by a ratio, by dividing a hospital’s number of “predicted” 30-day readmissions for heart attack, heart failure, pneumonia, hip/knee replacement, and COPD by the number that would be “expected,” based on an average hospital with similar patients. A ratio greater than 1 indicates excess readmissions.

CMS Readmission Measures (Links to an external site.)

In the FY 2012 IPPS final rule, CMS finalized the following policies with regard to the readmission measures under the Hospital Readmissions Reduction Program:

  • Defined readmission as an admission to a subsection(d) hospital within 30 days of a discharge from the same or another subsection(d) hospital;
  • Adopted readmission measures for the applicable conditions of Acute Myocardial Infarction (AMI), Heart Failure (HF) and Pneumonia (PN);
  • Established a methodology to calculate the excess readmission ratio for each applicable condition, which is used, in part, to calculate the readmission payment adjustment. . A hospital’s excess readmission ratio for AMI, HF and PN is a measure of a hospital’s readmission performance compared to the national average for the hospital’s set of patients with that applicable condition.
  • Established a policy of using the risk adjustment methodology endorsed by the National Quality Forum (NQF) for the readmissions measures for AMI, HF and PN to calculate the excess readmission ratios, which includes adjustment for factors that are clinically relevant including patient demographic characteristics, comorbidities, and patient frailty.
  • Established an applicable period of three years of discharge data and the use of a minimum of 25 cases to calculate a hospital’s excess readmission ratio of each applicable condition.

In the FY 2014 IPPS final rule, CMS adopted the application of an algorithm to account for planned readmissions to the readmissions measures for AMI, HF and PN. In addition, CMS finalized the expansion of the applicable conditions for FY 2015 to include: (1) patients admitted for an acute exacerbation of chronic obstructive pulmonary disease (COPD); and (2) patients admitted for elective total hip arthroplasty (THA) and total knee arthroplasty (TKA).

Discuss the following:

  1. What is the purpose of the CMS Readmission Reduction Program?
  2. Discuss pros and cons of this program.

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