RxRM Blog Series: Hospital Medicare Reimbursements at Risk

This blog post is part of an ongoing series on the RxRM initiative at PowerObjects—configuring Microsoft Dynamics CRM to address the highly specialized needs of healthcare organizations. This post features guest blogger Timothy Pratt, Ph.D., Solution Design Consultant for the Health and Life Sciences at PowerObjects.

Certain conditions have been identified as having a high rate of readmission shortly after discharge (i.e., within 30 days) from the hospital in Medicare patients. Around 19.6% of Medicare beneficiaries are readmitted within 30 days according to one widely cited researched report. The reasons for this are complex, but involve a) the previous Medicare payment structure which made such readmissions financially attractive to hospitals, b) inadequate community follow-up of recently discharged patients, and c) discharge before the patient is clinically ready and the nature of the disease itself. As the rules have been formulated under the Affordable Care Act the "Hospital Readmission Reduction Program" (HRRP) is described in a 1509-page document that essentially penalizes hospitals for readmissions of patients treated for three defined conditions within 30 days of discharge – heart attack (acute myocardial infarction (AMI)), heart failure (HF) and pneumonia (PN).

Financial penalties are levied for what CMS/HHS considers to be excessive readmission rates which are derived from a multi-dimensional formula. While the formula is complex and is in part derived from the hospital's prior three year performance and national averages for similar readmission rates, in essence hospitals could see reimbursements cut by 1-3% for all base operating DRG payments for these conditions for the next year. Further, it is expected that HHS will add other conditions beyond the 3 cited above to come into effect under the HRRP in October 2014. The secretary of HHS has indicated that COPD, CABG and PTCA and some vascular surgeries will be added to the program in October 2015.

The HRRP is a penalty-only oriented initiative; there are no "bonuses" to meet or exceed readmission reductions, merely penalties for not so doing. The ACA expressly prohibits and administrative or judicial review of readmission measures, DRG payments and the formulas used to calculate penalties, and thus HRRP can be viewed as "as is" with little or no prospect for change, i.e., "it's here to stay." The estimated impact to hospitals varies amongst industry observers. The CBO estimates HRRP will reduce payments to hospitals by $7.1 Billion during the period 2013-1019 with the impact to individual institutions yet to be quantified, but more than 60% of all institutions are expected to see some level of reimbursement reduction under IPPS.

Thinking About the Challenge

Despite the very real risk to institutions of seeing significant reimbursement reductions, few organizations have implemented programs or processes to reduce readmission rates. Of the limited number of IT solutions available, many focus on predictive analytics to attempt to identify "at-risk" patients. This approach is often employed when there is a perceived need to reduce the number of patients who must be engaged to a manageable number. Implicitly, some sort of personal intervention is planned, for example, a phone call to check on patient status, and in order to control costs, that intervention needs to be employed for only those "at-risk". The problem is, ALL these patients are at risk, by definition.

What is required is a mechanism by which all Medicare patients admitted for the targeted readmission reduction conditions to be automatically enrolled in a post-discharge recovery assurance program. Once enrolled, those patients (and, critically, their caregivers/family) need to automatically receive information on how to assure their incident-free recovery and be able to respond with key status indicators that in and of themselves will indicate if personal intervention is required. In essence, a system is required that can use technology for low-cost mass intervention, identify those patients who are at very high risk, and facilitate personal intervention when needed. Happily, PowerObjects' RxRM solutions can do exactly that.

The PowerObjects Discharge Readmission Evaluation and Management (DREAM) Solution

Using the power and flexibility of the Microsoft Dynamics CRM platform in conjunction with domain expertise and advice from our medical advisory board, PowerObjects has designed a specific low-cost, high impact solution to enhance target patient post-discharge recovery and reduce readmission rates. This helps institutions avoid debilitating DRG payment penalties. The DREAM solution does this by:

PowerObjects uses a variety of inherent Dynamics CRM functions, as well as proprietary PowerPack add-ons, to accomplish this:

PowerPack add-ons for Dynamics CRM like PowerShare enable "bundles" of information to be sent via email to patients and family/caregivers as well as provide feedback into the system as to receipt and opening of the documents. PowerWebTraffic automatically detects patient/caregiver access to disease specific micro-site the institution put in place and reports on pages visited, time spent on each page, downloads, etc. PowerSMS enables structured reminders with a high degree of "immediacy" to a variety of SMS/text enabled devices, while PowerSurvey enables condition-specific solicitation and receipt of key status indicator information for processing and escalation to personal intervention.

The above is a very succinct overview of the PowerObjects' RxRM DREAM solution. For a more in-depth personal discussion on the solution and how your institution can implement a low cost highly effective strategy to avoid payment reductions under HRRP, contact PowerObjects today. One of our in-house HealthCare solution design consultant professionals will be happy to help answer questions and discuss solutions.

1 "Rehospitalizations among Patients in the Medicare fee-For-Service Program" New England Journal of Medicine, Apr 2009, 360:14; 2.

2 ACA section 3025 added S 1886(q) in support of the HRRP to the Social Security Act to come into effect October 2012

3 See http://connect.curaspan.com/articles/new-final-hhs-rules-readmissions for a third party narrative assessment of the impact of the program, and http://www.cmms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-Program.html for an official CMS/HHS easy-to-read summary. A more comprehensive outline/discussion can be found at http://www.mondaq.com/unitedstates/x/183022/Healthcare/Hospital+Readmissions+Reduction+Program+May+Impact+PostAcute+Providers

4 http://cbo.gov/sites/default/files/cbofiles/ftpdocs/113xx/doc11379/amendreconprop.pdf

About Our Guest Blogger

For the past 25 years, Dr. Timothy Pratt has worked around the globe both as a clinician and technology solutions designer/advocate in the life sciences and healthcare industries enhancing patient care, profitability and productivity in areas including clinical trial operations, practice/market development, sales and systems integration. Leveraging post-graduate qualifications in cardiology, cardiac electrophysiology, critical care, psychiatry and business, Dr. Pratt has assisted organizations from small start-ups and clinics to Fortune 500 enterprises source and adopt technology solutions that dramatically improve outcomes for patients, practices, life science companies and hospital systems. A firm believer in automating processes to reduce costs and provide visibility into critical data, Pratt is known for his work as a long-time member of the Applied Clinical Trials Journal editorial advisory board and many publications and lectures regarding information technology use in the healthcare and life sciences space.

At PowerObjects, Dr. Pratt's role is to collaborate with healthcare organizations to drive the design and delivery of technology solutions that run the gamut from referral management, community outreach campaigns, clinical trial operations systems, chronic disease management, grant management, safety surveillance/monitoring and health maintenance/prevention programs.