The Readmission Penalty Begins to Bite

By Nicolas Terry

As is well known ACA § 3025 (§1886(q) Social Security Act) established the Hospital Readmissions Reduction program. This is operationalized through deductions built into the Hospital IPPS (Inpatient Prospective Payment Systems) Rule which sets the Medicare reimbursement amounts, here. The excess readmissions ratio initially only applies to readmissions based on MI, Heart Failure, and Pneumonia. Initially the maximum deduction is 1% but that rises to 2% in October 2013 and 3% in October 2015.

A parallel program for Medicaid designed to reduce hospital-acquired infections was introduced in the 2005 Deficit Reduction Act, here. However, Lee and colleagues, here, found no change in infection rates. Nevertheless, the dollars associated with readmissions reduction may give that program greater traction.

Jordan Rau in the New York Times, here, notes that 307 hospitals are already facing the maximum reduction involving many millions of dollars. Not surprisingly some hospitals view the penalties as a distraction while others blame their patients for everything from their level of sickness and poverty to non-compliance. Overall, however, Rau’s article and Amy Boutwell’s recent post at Health Affairs, here, suggest that CMS is succeeding in getting the industry’s attention.

Bending the Cost Curve, Not Just Talking About It

By Nicolas Terry

When the 2012 history of health care is written, which date will have the largest entry, November 5 or 6? Of course, many (but not that many) provisions of the Affordable Care Act will live or die depending on how the election affects control of the White House and Senate. But, November 5 may end up having more significance because that is the date Massachusetts’s new health care spending legislation, here, takes effect.

Signed into law by Governor Patrick on August 6, 2012, the new law now has its own website, here, the promise of a a ton of data, here, and in Brandeis University economist Stuart Altman, here, a chair for its Health Policy Commission (HPC).

Thomas Lee, here, notes “the 349-page law that was just passed in Massachusetts created 25 new boards, task forces, and commissions, and 266 new appointees are going to be enlisted to monitor and enforce compliance with spending caps, oversee provider performance improvement plans, and certify Accountable Care Organizations (ACOs).”

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Meaningful Use Woes

By Nicolas Terry

Keen observers of the Administration’s “meaningful use” subsidy program for electronic medical records (EMRs) will not have been surprised by the reaction of stakeholders to last week’s publication of the “Stage 2” regulations, here. CQ HealthBeat’s John Reichard, here, contrasts the enthusiastic support of patient advocates with the American Hospital Association’s more curmudgeonly “We are disappointed that this rule sets an unrealistic date by which hospitals must achieve the initial meaningful use requirements to avoid penalties.” In a new piece, available here, I argue that the EMR adoption picture is considerably more nuanced that this binary would suggest and that there is reason to doubt the conventional wisdom that EMRs will solve many if not all of healthcare’s quality and efficiency woes. Rather, I take the position that the current generation of EMRs may not be capable of promoting major safety or quality gains because of problems with their usability, technological limitations that impede interoperability, and concerns about their safety.