Medicare Hospital Readmissions: Issues, Policy Options and PPACA

Reductions in hospital readmissions (also referred to as rehospitalizations) have been identified by Congress and President Obama as a source for reducing Medicare spending. The Medicare Payment Advisory Commission (MedPAC) reported that in 2005, 17.6% of hospital admissions resulted in readmissions within 30 days of discharge, 11.3% within 15 days, and 6.2% within 7 days. In addition, variation in readmission rates by hospital and geographic region suggests that some hospitals and geographic areas are better than others at containing readmission rates. People who are readmitted to the hospital tend, among other things, to be older and have multiple chronic illnesses. Yet much is unknown about which patient characteristics result in a higher probability of a hospital readmission. Some policy researchers and health care practitioners assert that the relatively high readmission rates for patients with chronic illness and others may be due to various factors, such as (1) an inadequate relay of information by hospital discharge planners to patients, caregivers, and post-acute care providers; (2) poor patient compliance with care instructions; (3) inadequate follow-up care from post-acute and long-term care providers; (4) variation in hospital bed supply; (5) insufficient reliance on family caregivers; (6) the deterioration of a patient's clinical condition; and (7) medical errors. Although readmitting a patient to a hospital may be appropriate in some cases, some policy makers and researchers agree that reducing readmission rates could help contain Medicare costs and improve the quality of patient care. Although several entities have attempted to define just how many readmissions might be prevented, no consensus exists on how to distinguish among those readmissions that might be avoided and those that might not. Different approaches result in different potentially preventable readmission (PPR) rates. The legislation contains a number of provisions that make changes to Medicare. Among these are provisions intended to reduce preventable hospital readmissions by reducing Medicare payments to certain hospitals with relatively high preventable readmissions rates. Other provisions include demonstrations and pilots that test reforms to the Medicare payment system for hospitals and other providers. And still others test improvements to patient care for people with chronic illnesses during the initial hospital stay, as patients transition out of the hospital, and while patients reside in home, community-based, Medicare post-acute care, and long-term care settings. Some service delivery and financing reform strategies have the potential to improve the quality of care delivered to Medicare beneficiaries with chronic conditions, and may …