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CMS Pilot Sweats the Details of Cutting Hospital Readmissions

By John Reichard, CQ HealthBeat Editor

April 14, 2009 -- On a day when President Obama emphasized that rebuilding the nation's economic foundation depends in large measure on lowering health costs, a pilot program announced by the Centers for Medicare and Medicaid Services served as a reminder of how new forms of local cooperation will be required to reach that goal.

Aimed at retooling health care to prevent avoidable and costly readmissions to the hospital, the pilot, known as the Care Transitions Project, "is a new approach for CMS," said Barry M. Straube, the agency's chief medical officer. "Rather than focusing on one global problem and trying to apply a one-size-fits-all solution across the country, Care Transitions experts will look in their own backyards to learn why hospital re-admissions occur locally," Straube said. "Based on this community-level knowledge, Care Transitions teams will design customized solutions that address the underlying local drivers of re-admissions," he said.

The project will run through the summer of 2011 in 14 communities around the country and perhaps yield new tactics for preventing declines in health status leading to readmissions, which if they reach certain levels could lead to Medicare payment reductions under a plan outlined by Obama in his budget proposal.

Eliminating avoidable readmissions involves "focusing on how all of the members of an area's health care team can better work together in the best interests of their shared patient population," said CMS Acting Administrator Charlene Frizzera in a news release Monday. "By promoting seamless transitions from the hospital to home, skilled nursing care, or home health care, this community-wide approach seeks not only to reduce hospital readmissions but to yield sustainable and replicable strategies that achieve high-value health care for Medicare beneficiaries," Frizzera added.

The savings that can be generated are substantial, though only one small piece of the puzzle about how entitlement spending growth can be brought down to sustainable levels. "Our data show that nearly one in five patients who leave the hospital today will be re-admitted within the next month, and that more than three-quarters of these re-admissions are potentially preventable," said Frizzera.

In a blog Monday on the Office of Management and Budget Web site, White House Budget Director Peter R. Orszag cited hospital readmissions as one example of an "aggressive" Obama strategy to start "changing the game" in health care. In his budget proposal, Obama called for "bundled" payments covering not just care provided by the hospital but also by providers following discharge to spur cooperation that ensures patients receive proper treatment once they switch from one health care site to another.

Analysts say that among the problems that occur is failure to properly communicate to the patient which medications they should keep taking, which ones they should stop, and what new drugs to take; and the importance of making a doctor's appointment after discharge to keep tabs on the patient's condition. Orszag noted data from a recent New England Journal of Medicine study suggesting what he called an "alarming lack of physician follow up visits," with about half of patients re-admitted within 30 days having no bill for an outpatient visit between the time they were discharged and the time they were re-admitted.

The Obama budget proposal says that "hospitals with high rates of readmission will be paid less if patients are re-admitted to the hospital" within 30 days. "This combination of incentives and penalties should lead to better care after a hospital stay and result in fewer readmissions—saving roughly $36 billion of wasted money over 10 years."

CMS spokesman Peter Ashkenaz said the pilot recognizes that hospital readmission rates "are a problem of the entire community of providers, not just the acute care hospital. Medical evidence shows that the patient's success after discharge is a function of how well the entire care team communicates and engages the patient. This can include a home health agency, a nursing home, a primary care physician, a pharmacist, or anyone else in the community."

The pilot program was on the drawing board for many months before Obama took office. It involves having "quality improvement organizations"—entities that contract with Medicare to improve care—work with local providers to retool the way they deliver care.

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