November 17. 2012 11:28PM

Medicare targets readmission costs

New Hampshire Union Leader

Penalties by hospital

Catholic Medical Center, Manchester — 0.00%
Cheshire Medical Center, Keene — 0.04%
Concord Hospital — 0.05%
Elliot Hospital, Manchester — 0.01%
Exeter Hospital — 0.00%
Frisbie Memorial Hospital, Rochester — 0.00%
Lakes Region General Hospital, Laconia — 0.00%
Mary Hitchcock Memorial Hospital, Lebanon — 0.00%
Parkland Medical Center, Derry — 0.20%
Portsmouth Regional Hospital — 0.18%
Southern N.H. Medical Center, Nashua — 0.15%
St. Joseph Hospital, Nashua — 0.17%
Wentworth-Douglass Hospital, Dover — 0.23%
- Source: Center for Medicare and Medicaid Services

In a soft, soothing voice, nurse Louise takes a recently discharged hospital patient through all the steps needed to understand a medication chart, explaining the purpose of each colored column and the important things to remember.

"Here is the name of the medication," she says, pointing to the appropriate column. "I would like to point out that sometimes a medication has more than one name."

Patients seem to like her style. "She kept asking if I was tired, if I wanted to take a break. She cared about me, you know," wrote one in her evaluation.

Louise isn't a real nurse. She is an animated character on a computer screen - a Virtual Patient Advocate created as part of the Boston University School of Medicine RED program, which stands for "re-engineered discharge."

Changing the way patients are discharged with the help of virtual nurses and real discharge advocates is just one of many approaches hospitals are taking to reduce avoidable readmissions, one of the biggest cost drags on the health care system.

The Medicare program is using its huge financial clout to reduce readmissions by penalizing hospitals with readmission rates that exceed certain benchmarks, adjusted for patient demographics and other factors. Hospitals stand to lose as much as 0.1 percent of their Medicare payments, although no hospital in New Hampshire is even close to that level of penalty.

Five of the 13 New Hampshire hospitals that are large enough to be subject to the penalties were not penalized at all - Catholic Medical Center in Manchester, Exeter Hospital, Frisbie Memorial in Rochester, Lakes Region in Laconia and Mary Hitchcock in Lebanon.

The heaviest penalty in the state was levied on Wentworth-Douglass Hospital in Dover, which stands to lose almost one quarter of one percent, with a penalty of .23. That may not sound like a lot, but when you consider the millions of dollars in Medicare payments, it adds up.

Wentworth-Douglass is participating in the Project RED program and has appointed a discharge advocate nurse, Kim Chapman, who will be reporting on the Dover hospital's efforts at a national conference in December, according to Anne Diefendorf, vice president for quality and patient safety at the New Hampshire Hospital Association.

Diefendorf said the focus Medicare has brought to reducing readmissions is a good thing for hospitals and patients, but cautioned against reading too much into the penalties, which are based on return rates for Medicare heart failure, heart attack and pneumonia patients readmitted within 30 days during a three-year period from July 1, 2008, to June 30, 2011.

"Those numbers come from a subset of readmissions, and it's old data," she said. "So all of the activity around this issue, all of the work that people are doing now, is not reflected in that data."

Effect on N.H. hospitals

The value of the metrics Medicare used to impose the penalties can be debated, but the financial effect can't be denied, as the federal government begins to use the fiscal muscle of the Medicare and Medicaid programs to move the health care system away from fee-for-service and toward rewards for outcomes.

The readmission penalty program, authorized by the 2010 health care law, is just one piece of that puzzle, but an important one. Readmissions were historically viewed as a plus for a hospital's bottom line, as additional patient traffic generated additional revenue. The penalty program flips that proposition on its head.

The New Hampshire Hospital Association estimates that the effect on the eight hospitals that were penalized will add up to about $300,000 in lost Medicare revenue in the year ahead.

More than 2,000 hospitals across the country began to see the impact of the penalties as they took effect with October billings. Over the next year, the hospitals will forfeit more than $280 million in Medicare funds

St. Joseph Hospital in Nashua, hit with a 0.17 percent penalty, stands to lose a little less than $40,000, according to Beverly Robinson, vice president for quality and regulatory services. "It's not as significant as we thought," she said. "But when you're in the business of trying to do the best you can, you hate to hear we're getting any penalty."

At the other end of the spectrum is the UMass Memorial Medical Center and its affiliates, which stand to lose $1.5 million in Medicare revenue across its network with a 0.95 percent penalty. In all, 10 Massachusetts hospitals were hit with the maximum 1 percent penalty, including Boston University School of Medicine, which is pioneering the RED program.

"The metric isn't perfect; none of them are," said Donna Fitts, vice president for quality and risk management at Portsmouth Regional Hospital, penalized at 0.18 percent. "But the reassuring thing when I look at these data is how well the state of New Hampshire performs overall. No hospital sustained the highest penalty of 1 percent, nothing even close."

Heavy-handed penalty?

Some hospital executives argue that the penalties are heavy-handed, but none contests the need to reduce readmissions. According to the Kaiser Foundation for Health, nearly one in five Medicare patients returns to the hospital within a month of discharge. Those 2 million patients readmitted within 30 days of release cost Medicare $17.5 billion in additional hospital bills.

Not all of that $17.5 billion can be saved. Some readmissions are unavoidable. If a Medicare patient is discharged after treatment for a heart attack, then has a gall-bladder problem within 30 days, that counts as a readmission and can't be controlled.

What can be controlled, says Diefendorf, are readmissions that can be traced to a lack of follow-up communication or support, or to patient harm, such as medication error, infection, rash or blood clots. Every hospital in New Hampshire, regardless of size, is participating in a national program funded by the Centers for Medicare and Medicaid (CMS), called "Partnership for Patient," targeting those controllable factors.

Its goal is to reduce readmissions by 20 percent overall and to reduce patient harm by 40 percent. "Every single hospital in New Hampshire is committed to this program," Diefendorf said. "We're the only state in the country that has 100 percent commitment."

Of the 32 states with hospitals participating, New Hampshire was rated fourth by CMS in terms of its level of activity and the quality of data. Even the smaller hospitals not subject to the Medicare penalty, such as Monadnock Community Hospital in Peterborough and Upper Connecticut Valley Hospital in Colebrook, are involved, she said. The program has two main components - sharing best practices and gathering data to help create better benchmarks in the future.

So far there have been four workshops in New Hampshire and three nationally that have been attended by New Hampshire representatives. "It's spreading the positive energy for people in these organizations to go back with newfound knowledge," Diefendorf said.

All sizes and approaches

The four hospitals presenting information at the New Hampshire workshops represented all sizes and a variety of approaches to the problem. The smaller hospitals, including Littleton Regional Hospital and Weeks Medical Center in Lancaster, with their relatively small patient count, are trying to scrutinize every readmission to see whether it could have been avoided, and if so, how.

Wentworth-Douglass gave a presentation on its discharge advocate and Project RED, while Catholic Medical Center focused on community outreach, which is the approach many of the larger hospitals in the state are taking.

Many of the readmissions for Medicare patients come from nursing homes or rehabilitation centers, so working with them is seen as critical.

At Portsmouth Regional Hospital, for example, the director of case management meets regularly with staff from nursing homes, visiting nurses associations, rehabilitation centers, home health agencies and ambulance services to coordinate communication and set up procedures.

"There really is no one endeavor that will fix this issue," Fitts said. "It's really going to take a collective effort across communities to find the right services to help support people in their homes, make sure that we've got good communication going on, and have mechanisms in place to intervene early to avoid the declines that result in readmissions."

There is some urgency surrounding the need for improvement, since the maximum penalty goes up from 1 percent to 2 percent next year, and 3 percent the year after. But it's not so much about the money for New Hampshire hospitals as it is about continuing the march away from fee-for-service and toward payment based on quality.

"The financial effect is fairly nominal," said Greg Baxter, chief medical officer at Elliot Hospital in Manchester, which was penalized 0.01 percent. "The dollar impact is less impressive than the call to action to meet or exceed an increasing level of performance."

- - - - - - - -

Dave Solomon may be reached at