The Medicare Payment Advisory Commission (MedPAC) has found that hospitals with a large portion of low-income patients also have higher readmission rates, and, therefore, higher penalties under Medicare's hospital readmissions reduction program. That imbalance was one of the reasons that MedPAC, in its annual June report to Congress, has recommended that Medicare modify its readmissions reduction policy.
The report details topics and recommendations the commission has explored during the year. It was released last Friday.
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"While it may be more difficult to reduce readmission rates or poorer patients, it is possible to bring rates toward the national average," the report said, using as an example the 14 percent of hospitals with the highest share of low-income patients that did not face penalties in 2013.
MedPAC suggested solutions, including evaluating hospitals with a high share of low-income patients in relation to their peers in order to compute penalties.
"For hospitals to have an effective financial incentive to reduce readmissions, the penalty for not meeting reduction targets would have to be greater than the incremental cost of reducing readmissions and the lost marginal profit from those readmissions," the report said.
Any modifications to the current readmission policy need to make sure that the penalty is large enough to persuade hospitals to spend funds to improve the quality of care in ways that also reduce the hospitals' readmissions revenues, the report said.
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Last October, Medicare started its program to penalize hospitals that have higher rates than expected of patients being readmitted to the hospital within 30 days of discharge for three conditions: heart attack, heart failure and pneumonia.
The advisory group found that hospital readmissions have declined steadily but slightly from 2006 to 2011 to 12.3 percent for potentially preventable readmissions for all causes. The Centers for Medicare &
Among the other topics examined in the report was a discussion of possible ways to redesign the Medicare benefit using a concept called competitively determined plan contributions. Seniors could receive care through either a private plan or traditional fee-for-service (FFS), but the premium paid by the beneficiary might vary depending on the coverage options they chose, according to a MedPAC news release announcing the report. The amount that the federal government would pay for care would be determined through a competitive process.
The advisory group also wants to reduce Medicare payment differences that are only based on the sites of care. MedPAC has previously recommended reducing the rate Medicare pays for basic office visits from the payment rate in the outpatient setting to the physician office rate. Using similar criteria, Medicare may be able to narrow payment differences across settings for other services, the release said.
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