30-Day Readmissions Rule Under Two-Pronged Attack

Cheryl Clark, for HealthLeaders Media , March 29, 2012

The bottom line, they said, is that "readmissions may be a poor marker of hospital performance."

The second article, by Robert Berenson, MD, of the Urban Institute; Ronald Paulus, MD, of the Mission Health System, Asheville; and Noah Kalman of Duke University in Durham, makes a business case against the penalty.

In their article, "Medicare's Readmissions-Reduction Program—A Positive Alternative," the authors suggest that hospitals, notwithstanding financial penalties for hosp excessive readmissions, "have no economic incentive" under the DRG approach to change unless they are at full capacity. They give two reasons.

  1. They say the penalty "may be too weak to overcome the substantial counterincentives inherent in the DRG-based payments," which still pay hospitals in the fee-for-service system to care for readmitted patients. The actual reduction in spending avoided by the fines is only .2% of anticipated Medicare payments for 2013, because for most hospitals with average or better readmission rates, payment won't change
  2. They contend that he direct costs of a readmission prevention program—estimated to average $100 to $200 per discharge—may decrease hospitalizations for other diagnoses not targeted by the readmissions prevention rule.
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