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September 5, 2019

Hospitals are avoiding admitting Medicare patients to dodge financial penalties, study suggests

Daily Briefing

    A study published recently in BMJ reinforces concerns that hospitals are treating Medicare patients in EDs and observation areas instead of admitting them to the hospital to avoid readmissions penalties.

    Don't miss these 5 opportunities to reduce readmissions

    Are readmissions actually decreasing?

    CMS launched the Hospital Readmissions Reduction Program (HRRP) in FY 2013 in an effort to reduce the rate of hospital readmissions among Medicare patients. Originally, HRRP subjected hospitals to financial penalties if they had high readmissions rates for patients admitted for heart attacks, heart failure, or pneumonia within 30 days of discharge. The program has since been expanded to include readmissions for patients who have chronic lung disease, coronary artery bypass graft surgery, and hip or knee replacements.

    In response to pushback, CMS for FY 2019 implemented a new penalty determination methodology that does away with national readmissions standards, and instead compares hospitals' performance to that of other hospitals serving a similar population of low-income patients.

    In FY 2019, 82% of hospitals in the program received readmissions penalties.

    While research shows national readmission rates have fallen since the program took effect, some experts note that HRRP does not count ED visits or observation stays as readmissions, and question whether readmissions actually decreased or if hospitals are avoiding admitting Medicare patients.  

    Hospitals are treating patients in EDs, observation areas

    To determine whether readmissions actually decreased, Rishi Wadhera from Beth Israel Deaconess Medical Center and Harvard Medical School and colleagues examined more than three million hospital stays that occurred between January 2012 and October 2015. The examined data included readmissions as well as ED visits and observation stays that did not result in readmission.

    During the almost four-year period, the researchers found that the total number of 30-day return visits to the hospital—which included ED visits and observation stays—per 100,000 discharges increased by 23 visits per month.

    The increase was due to an increase in treat-and-discharge ED visits, which increased by 23 visits per 100,000 discharges per month, as well as an increase in observation stays, which increased by 22 visits per 100,000 discharges per month, the researchers found.

    By contrast, actual hospital readmissions, which require a patient be admitted to the hospital, decreased by 23 visits per month per 100,000 patient discharges.

    The results were similar among patients of differing demographics including men and women, according to the researchers. However, increases in observation stays were higher among non-white patients.


    The results reinforce what Wadhera and many other researchers already suspected, Reuters reports.

    In fact, Yue Li, from University of Rochester School of Medicine and Dentistry who was not involved in the study, said he was "not surprised at all by these results, which actually confirm what my colleagues and I found in an earlier study." Li said his team found "that hospitals may simply use ED and observation stay as a substitute for inpatient care to avoid CMS financial penalties, rather than improving the coordination of post-discharge care and addressing the real needs for better community support of recently discharged patients."

    Wadhera added that he and his colleagues "have noticed that patients who come back to the hospital shortly after discharge are increasingly being treated in the [ED] or as observation stays." He said, "[M]any of our colleagues across the country have also conveyed that they are being nudged to provide care in these settings, to make hospitals' readmission rates look lower."

    This could mean that while the goal of "HRRP is to push hospitals to improve discharge planning and care transitions to reduce the likelihood of returning to the hospital, mounting evidence suggests the program has had unintended effects," Wadhera said.

    For instance, Li described the new findings on higher increases in observation stays among non-white patients "troubling."

    However, the actual consequences of the effects of what the researchers observed are still not clear, according to Wadhera, who said that researchers have yet to determine "whether greater use of [EDs] to treat patients, instead of an inpatient stay, has enhanced or worsened patients' care quality and experience" (Boggs, Reuters, 8/22).

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