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A bill that deals with unfair HRRP penalties

March 21, 2014

The AHA and hospital leaders last week hailed the introduction of a House bill that would revise the Hospital Readmissions Reduction Program (HRRP) to adjust for certain socioeconomic and health factors that increase the risk of a patient’s readmission.

Rep. Jim Renacci, R-Ohio, March 11 introduced the bipartisan Establishing Beneficiary Equity in the Hospital Readmission Program Act, H.R. 4188.

The bill responds to concerns raised by hospitals and policymakers that HRRP disproportionately penalizes hospitals that treat the nation’s most vulnerable population.

The Medicare Payment Advisory Commission (MedPAC) last year recommended adjusting the HRPP for socioeconomic factors. And just this week, a multi-stakeholder committee, convened by the National Quality Forum, released a draft report recommending that socioeconomic factors be taken into account when outcome measures, such as readmissions, are used in pay-for-performance programs (see page 8).

The HRRP was created to reduce acute care hospital readmissions by requiring the Centers for Medicare & Medicaid Services (CMS) to penalize hospitals for “excess” readmissions based on the last three years of a hospital’s readmission data when compared to the national average.

H.R. 4188 would require the Department of Health and Human Services (HHS), beginning in 2015, to adjust the readmission penalty based on a hospital’s share of dual eligible patients – that is low-income seniors – and young people with a disability that are eligible for both Medicare and Medicaid. This adjustment would ensure that hospitals treating large numbers of the poor are not unfairly penalized for treating the nation’s most vulnerable patients.

The bill would require CMS to exclude certain categories of patients – like transplant, end-stage renal disease, burns, trauma, psychosis or substance abuse – for whom frequent hospitalizations are often clinically necessary. It also would require CMS to consider using billing codes to exclude readmissions related to a patient’s refusal to comply with recommended medical treatment. And it calls on MedPAC to study whether the program’s 30-day readmission threshold is appropriate.

Passage of the legislation is a key part of the AHA’s legislative agenda. “The bill would provide welcome relief to hospitals that are unfairly penalized by readmission penalties because they care for large numbers of poor patients, often with very complicated and multiple medical problems,” said AHA Executive Vice President Rick Pollack. “It helps ensure that hospital performance improvement efforts are focused on readmissions that are preventable.”

The AHA sent its members a March 12 Action Alert with details on the bill. AHA members can access the Alert by clicking on: http://tinyurl.com/mp6sj6z.

In introducing the bill, Renacci faulted HRRP for “inadvertently taking resources from safety-net and teaching hospitals that could be better spent on helping patients avoid rehospitalizations.”

In fiscal year (FY) 2013, CMS began fining hospitals up to 1% of the Medicare reimbursements they were due from the federal government if they were deemed to have an excessive readmission rate. In FY 2014, maximum fines rise to 2%, before topping out at a 3% maximum beginning in 2015.

In a statement expressing support for H.R. 4188, MetroHealth President and CEO, Akram Boutros, M.D., said half of his Cleveland, OH-based health system’s patients are dually eligible for Medicare and Medicaid. Passage of the bill “would ensure we are not unfairly penalized for stepping forward and serving these complex and vulnerable patients,” he said.

Thomas Zenty III, CEO of Cleveland’s University Hospitals (UH), noted that hospitals, like UH, strive to “reduce readmission rates and improve outcome quality, but not every readmission is preventable.” He said H.R. 4188 “recognizes that reality … and ensures CMS’ policy is grounded in data and facts.”