Transition of Care: Readmissions Reduction Program

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CMS HRRP stands for the Hospital Readmissions Reduction Program established by the Affordable Care Act in 2012 to address the problem of the increased proportion of avoidable readmissions. Addressing the problem of a high percentage of preventable readmissions was required to reduce additional spending on the Medicare program. The HRRP encourages hospitals to increase the quality of care and discharge plans to reduce the number of avoidable readmissions. Therefore, the Centers for Medicare and Medicaid Services (CMS) was assigned to monitor and report readmission rates.

First, CMS annually collects hospital readmission data and regularly introduces new policies based on the collected information. Next, there are six conditions in total which are included in the risk-standardized unplanned 30-day readmission rates in HRRP (CMS, 2021). The conditions include acute myocardial infarction, chronic obstructive pulmonary disease, heart failure, pneumonia, coronary artery bypass graft surgery, and elective primary total hip arthroplasty or total knee arthroplasty (CMS, 2021). CMS calculates the excess readmission ratio (ERR) across the six conditions to determine which one will contribute to payment reduction. The payment reduction percentage presents a sum of measured contributions but is no higher than the 3% cap (CMS, 2020). However, according to NEJM Catalyst (2018), the 3% maximum penalty was applied to only a small percentage (1,8%) of hospitals. The penalty rate is then applied to compensate for all Medicare admissions in the hospital for the next year.

In general, there are many factors that can lead to patients’ readmission. Hospital-sourced factors that may lead to readmission include poor quality of care, lack of adequate communication with the patients, insufficient coordination of care and early patients’ discharges. On the other hand, readmissions can be caused by a lack of follow-up care from patients’ caregivers and a low level of patient engagement due to language barriers. Reducing the readmission rates is important for effective management of hospital resources and maintaining the patients’ length of stay. Thus, readmission negatively affects hospitals’ financial performance. Therefore, the introduction of HRRP is significant for encouraging hospitals to increase the quality of care and improve their financial stability.