Starting in 2013, the Affordable Care Act will financially penalize hospitals that readmit Medicare patients within 30 days of discharge

Medicare will soon begin penalizing hospitals for readmitting patients within 30 days of their discharge, and New Jersey hospitals are bracing for what could be thousands of dollars in lost revenue. As they have worked over the past few years to get a grip on this issue, hospitals have come to realize that it takes an entire community to reduce readmissions.

For that reason they are increasingly joining forces with nursing homes, home healthcare providers, and physicians to figure out why some patients wind up back in the hospital within a few days or weeks of being discharged.

Hospitals with readmission rates deemed excessive by Medicare for heart failure, heart attack, and pneumonia will see their Medicare reimbursements reduced in fiscal 2013, which starts October 1, with the penalty capped at 1 percent of their annual Medicare revenue. The cap rises to 2 percent in 2014 and 3 percent in 2015.

Readmissions penalties are being imposed under the 2010 Affordable Care Act, and New Jersey hospitals have been working for several years to reduce their 30-day admissions rates -- that is, a readmission within 30 days after a patient leaves the hospital -- in the hope of easing the financial pinch, or avoiding it altogether.

A “readmissions collaborative,” convened by the New Jersey Hospitals Association and now in its third year, brings hospitals, nursing homes, home healthcare, and hospice providers together to seek ways to reduce avoidable readmissions. Theresa Edelstein, vice president, post-acute care policy at the NJHA, said there is now “a laser-like focus by all hospitals” on reducing readmissions.

Edelstein said the Centers for Medicare and Medicaid Services has signaled that while hospitals may be the first providers to face payment reductions for readmissions, they won’t be the last: nursing homes and other providers eventually expect similar sanctions. “CMS has made it very clear that this is an issue that crosses [healthcare] settings and needs to be tackled collaboratively and cooperatively by all the providers.”

Paul Langevin is president of the nursing home association, the Health Care Association of New Jersey, whose members are working with hospitals to reduce excessive readmissions from nursing homes to hospitals. Langevin said hospitals frequently discharge Medicare patients to nursing homes “and they want to discharge patients to nursing homes where they know the resources and skill sets are there so they can take care of people and not just panic on a Friday afternoon and call the hospital and say, ‘I’m sorry, I have to send Mrs. Jones back.”

Langevin said the nursing home should be able to provide the care the patient needs, and should not in most cases need to send patients to acute care hospitals. The idea is to stabilize the patient where they are living, whether in their home or a nursing home, and keep them healthy enough so that a stay in an acute care hospital can be avoided. “Every time you transfer an elderly, frail, confused patient to a different venue it upsets them tremendously, and it is not good quality care to be bouncing to and from the hospital,” Langevin said.

Working alongside the NJHA on readmissions issues is the nonprofit Healthcare Quality Strategies Inc. of East Brunswick, which receives contracts from the CMS to spearhead healthcare quality initiatives in New Jersey. Said Dr. Andrew Miller, medical director “The key thing is that if you want to prevent avoidable readmissions, it’s not just a hospital issue, it is a whole community issue.”

Miller said all providers in the community -- hospitals, nursing homes, home health agencies, physicians, hospice, dialysis, behavioral health, and county offices on aging -- “have to be involved if you are really going to have an impact on reducing readmissions rates.” Since August 2011 HQSI has been working in three regions to reduce readmissions: the greater Trenton area; Cape May and Atlantic counties, and Cumberland County, and should have some results in three or four months.

Figures compiled by HQSI from Medicare claims show that moving the needle on readmissions is a challenge: New Jersey’s overall readmission rate declined slightly to 21.05 percent in the third quarter of 2011, compared with 21.39 percent in the third quarter of 2009. There is wide regional variation on readmission rates, from 15.8 percent in Hunterdon to 25 percent in Hudson County, and Miller said he is optimistic that “it will be possible to get these rates down lower.”

At this point, there is no available estimate of how many of New Jersey’s 72 acute care hospitals will be penalized, or how much revenue they might lose. Hiten Patel, managing director, research and insights, for the healthcare consulting firm The Advisory Board Company, explained that when judging whether a particular hospital’s 30-day readmission rate is excessive, CMS first does a risk adjustment designed to avoid unfairly penalizing hospitals.

“CMS will look back one year at what other diseases or conditions the patient has, so if you are a hospital that sees sicker patients, [CMS] accounts for that,” Patel said. An Advisory Board analysis estimates that less than 1 percent of U.S. hospitals will have a penalty of $1 million or more; about a quarter of the hospitals will see no penalty, and 50 percent of U.S. hospitals will see penalties ranging from $1 to $100,000. “We have been trying to let people know that this is not a doomsday scenario for 2013, because the math comes out to be fairly small in the first year,” Patel said. But he added it is not surprising that hospitals are worried, since the penalties rise in subsequent years, and clamping down on readmissions rates has proven to be a problem that can’t be remedied quickly.

Reducing readmissions is a major initiative of the Robert Wood Johnson Foundation, which last awarded grants to nine hospitals and healthcare providers in New Jersey for pilots exploring the effectiveness of various strategies for reducing readmissions. One of those pilots, at Robert Wood Johnson University hospital in Hamilton, has a coach visit newly discharged patients at home, to make sure medication instructions are understood and followed.

University Hospital in Newark, the teaching hospital of the University of Medicine and Dentistry of New Jersey-New Jersey Medical School, received grants from the RWJF and the Healthcare Foundation of New Jersey for a pilot program that uses intensive case management to try to reduce readmissions of patients with multiple chronic conditions. A partnership with the Visiting Nurse Association Health Group in Newark, the pilot uses a four-tiered approach that involves home health aides, registered nurses, advanced practice nurses, and physicians.

Dr. Melissa Scollan-Koliopoulos, assistant professor of medicine at New Jersey Medical School, said the majority of the patients enrolled in the pilot are low-income Newark residents, many of whom are uninsured and don’t have a regular primary care physician. The pilot began recruiting patients last October; it is now working with 105 patients and expects to have between 300 and 500 over the next two years.

“We see patients coming into the hospital with complex medical conditions who have not seen a physician in many years,” Scollan-Koliopoulos said. “The first thing we do is get at the root cause of why they were not able to establish a relationship with a primary care physician. We have to find a physician who can see them within 48 and 72 hours after they are discharged from the hospital” which is when most medication problems surface. If patients don’t fill a prescription because it’s too expensive; her team will go back and find an affordable substitute.

Since the pilot began, “We’ve had 28 calls for medication-related issues and we’ve been able to prevent an emergency room visit in 17 of them.” Scollan-Koliopoulos said the visiting nurse sees the patients every day while they are in the hospital “so they will trust [the nurse] enough to call if they have problems when they get home.”

Leigh Bailey is corporate director of case management at Jersey City Medical Center, which two years ago joined a national readmissions collaborative that exchanges best practices among healthcare providers. She said the critical first step is an “enhanced assessment” of each readmission case “to really get at the root cause of why patients are being readmitted. We keep asking ‘Why? What happened after the hospitalization? What went wrong.’?” For example, heart failure patients have to weigh themselves each day, since weight gain is sign their condition is worsening.

“We found out that patients didn’t have scales, and they really didn’t understand the significance of weight gain. So we did fundraising and purchased scales" with large, bold numbers that are easy for the elderly to read.

And her team wrote an easy-reading booklet that explains heart failure, with instructions on how to shop for low sodium foods to prevent fluid retention. Medication compliance is a major problem: “We have patients being sent home with eight or nine prescriptions, and making sure they take them at the right time is extremely difficult.” These efforts are having an impact: Bailey said the hospital has been able to cut its heart failure readmission to 22 percent, compared with 32 percent several years ago.

David Knowlton, president of the New Jersey Health Care Quality Institute, said the key to lowering readmission rates is to improve discharge planning, which he called “the orphan sister of healthcare. We’re not sending patients back with customized information on what to do after they leave the hospital, and therefore they take the wrong pill, they take it at the wrong time, they don’t know how to change the dressing, and they end up back in the ER. The decision (by the hospital) to discharge is a decision that says the patient is capable of self care. That is what it comes down to, and we don’t do it well.”

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