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Reducing hospital readmissions is generating lots of confusion.  The rules are complicated.  In addition, some hospitals, facilities, and health care networks have adopted protocols, and have in place some level of procedures for reduction in hospital readmissions in advance of the requirements set forth in the Affordable Care Act (ACA).

In general, the Centers for Medicare & Medicaid Services (CMS) has worked on a number of projects that target reducing hospital readmissions.  See, for example,  A good bit of this kind of thinking is included in the ACA.

Reducing Readmissions under ACA

  • Under Medicare's Inpatient Prospective Payment System (IPPS), as included in the Affordable Care Act (ACA), there will be adjustments to payments made for excessive readmissions in acute care hospitals during fiscal years beginning on or after October 1, 2012.
  • A readmission is defined as: being admitted at the same or different hospital within a period prescribed by the Secretary (generally 30 days) for certain applicable conditions.
  • The Secretary is to target certain areas of excessive hospital readmission.  The list is to be developed in conjunction with the National Quality Forum. Measures must have appropriate exclusions for readmissions that are unrelated to the prior discharge (such as planned admissions or transfers to another hospital).

    In 2007, the Medicare Payment Advisory Commission (MedPac) identified seven conditions and procedures that accounted for almost 30 percent of potentially preventable readmissions: heart failure; chronic obstructive pulmonary disease; pneumonia; acute myocardial infarction; coronary artery bypass graft surgery; percutaneous transluminal coronary angioplasty; and other vascular procedures.

    Based on the work of MedPac, the ACA focuses initially on three conditions: Heart Attack (AMI), Heart Failure and Pneumonia.  In FY 2015, the policy expands to include COPD, CABG, PTCA and other vascular conditions, as identified by MedPAC in its June 2007 report.

  • For readmissions occurring during a fiscal year beginning on or after October 1, 2012 where the excess readmission ratio is exceeded with respect to payment for discharges from an applicable hospital (defined in §1395ww(q)(5)(C)), the Secretary shall make reductions in Diagnostic Related Group (DRG) payments.  The basic reduction amount is: 0.99 for fiscal year 2013; 0.98 for fiscal year 2014; or 0.97 for fiscal year 2015 and subsequent fiscal years.

See, §3025 of the Affordable Care Act, Pub. L. 111-148, (March 23, 2010), amending 42 USC §1395ww, by adding "(q) Hospital Readmissions Reduction Program" – 42 USC §1395ww(q) (Hospital readmissions reduction program).

Proposed regulations to implement §3025 are due on June 25, 2012. See CMS-1588-P, CMS' proposals relating to hospital readmissions begin at p. 1036.

See also the Center for Medicare Advocacy's Weekly Alert on paying for quality, at:

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