Using a New Medicare Regulatory Change to Drive Referrals
Hospitals will no longer be reimbursed for Medicare patients with heart failure, pneumonia, or heart attack who are readmitted within 30 days of discharge for the same diagnosis. Because this proposed regulatory change is scheduled to take effect in 2010, now is the time for you to show service area hospitals how your agency can be an integral part of the solution to reducing these readmission rates. Here we discuss how this new Medicare ruling presents a great opportunity for agencies to grow their home health referrals.
Study Shows Scope of the Readmission Problem
A study recently reported in The New England Journal of Medicine – Rehospitalizations among Patients in the Medicare Fee-for-Service Program – shows the extent of the prevalence and cost of hospital readmissions. In this study, approximately 11.9 million Medicare claims records between 2003 and 2004 were analyzed for hospital readmission patterns. The following are some of the major demographic findings:
- Nearly 20% of Medicare patients were readmitted to the hospital in less than 1 month after discharge.
- Patients with heart failure and pneumonia accounted for the most readmissions.
- Approximately half of non-surgery patients who were rehospitalized within 1 month had not seen a doctor between hospital stays.
- The unplanned rehospitalizations accounted for $17.4 billion of the total $102.6 billion that Medicare paid hospitals in 2004.
CMS Proposes Regulatory Change as Incentive to Reduce Readmissions
The Centers for Medicare and Medicaid Services (CMS) has concluded that hospital readmissions 1 month or less after discharge – especially those associated with heart failure, pneumonia, or heart attack – are a costly problem. Subsequently, the proposed regulatory change of not reimbursing hospitals for readmissions of these diagnostic related groups (DRGs) is designed as an incentive to help reduce avoidable readmissions. In addition, the CMS has listed a number of evidence-based interventions in the proposed rule including:
- discharge to a proper setting of care
- timely follow-up visits with physicians
- clear discharge and medication management instructions.
Position Your Agency as a “Readmission Insurance Policy” with the Help of Healthcare Market Resources
It can be deduced that hospital patients discharged to “self-care” or “community-care” are the most vulnerable for readmission, as they are less likely to be medically supervised during this crucial period. Home health agencies can work together with hospitals to help reduce the number of patients discharged with these DRGs to self-care. So as hospitals look for ways to decrease readmissions of these patient groups, it’s important that your agency gets in there and becomes part of the solution.
Healthcare Market Resources can help position your agency as a “readmission insurance policy.” We do this by providing you with the key information hospital administrators need to minimize the risk of readmission. This information helps them determine the optimum percentage of patients who should be discharged to home care versus self-care. Our Medicare Hospital Discharges by DRG Report, for example, includes the following statistics, which are identified by facility:
- the number of patients who are discharged with the three DRG sets in the proposed regulatory change: heart failure, pneumonia, or heart attack
- how many of these patients are discharged to home care or self-care.
In addition, our reports also include the “best practices” for nationwide hospital discharge, against which local hospital performances can be benchmarked. After studying more than 3,000 acute care hospitals nationwide, we identified the top 10% (the “best performers”) to determine the best-practices statistics.
Here’s an example of how you can use the best-practices information in our reports. For instance, you may find that of the patients with a certain DRG at a local hospital:
- 40% are either discharged to a nursing home or die
- 45% are discharged to self-care
- 15% are discharged to home care.
Our best-practices numbers, however, may indicate that the following is the best-case scenario for those being discharged to either self-care or home care:
- 30% discharged to self-care
- 30% discharged to home care.
With this information, hospital administrators can set a goal for increasing the patients referred to home care by 15 percentage points to help minimize the readmission risk.
The best type of selling is consultative selling, and this is a perfect opportunity to be that high-value consultant vendor. If you are able to help the hospital solve this issue, you’ll likely see more business while also deepening your relationship with and loyalty from those clients.
For more information about how Healthcare Market Resources can help your agency position itself as a “readmission insurance policy” for hospitals, click here or give us a call at 215-657-7373 today.