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January 25, 2018

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Reduction in 2013 DRG Reimbursement Caused by Readmissions

November 8, 2012:

Kelly Canter, BA, RHIT, CCS, Manager, Clinical/Technical Editors

Medicare started reducing payments to hospitals in October based on readmission rates for heart failure (HF), acute myocardial infarction (AMI), and pneumonia (PN).

Initially, the readmission rates for these three conditions will be compared with previous rates. Hospitals with excessive readmission rates could see their base DRG payments (excluding indirect medical education, disproportionate share hospital, and outlier payments) reduced by as much as 1 percent in fiscal 2013, climbing to a maximum of 3 percent by 2015.

The measure focuses on readmissions of patients 65 years of age or older within 30 days for treatment of the same condition (i.e., principal diagnosis of one of the three problems above) that the patient was admitted with previously. Eventually, the program will be expanded to include four additional diagnoses or procedural statuses: chronic obstructive pulmonary disease (COPD), coronary artery bypass grafting (CABG), percutaneous transluminal coronary angioplasty (PTCA), or other vascular procedures. These seven problem areas constitute roughly 30 percent of Medicare and VA readmissions within 15 days of the initial discharge.

Focusing on readmissions requires measuring, managing, and improving outcomes and the efficiency of treatments. To lower the readmission rate, the provider must improve treatment during and after an inpatient encounter. Tying readmission to reimbursement will motivate hospitals to evaluate the care they give, invest in better interventions, better assess the readiness of patients to leave the hospital, and more carefully transition them to their post-acute status, as well as do a better job of reconciling medications and giving comprehensive discharge instructions and education.

It is important to note that these scores are publicly reported on the Hospital Compare web site as mandated by the Deficit Reduction Act (DRA) of 2005.


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