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Healing Medicare Hospital Recidivism: Causes and Cures
Published online by Cambridge University Press: 06 January 2021
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The role of Medicare in our national market for acute care hospital services is that of a power buyer. Medicare beneficiaries in 2008 included some 45.2 million people. Total benefits paid in 2008 were $462 billion, including 29% of all hospital spending. Medicare's dominance in the buyer's market for acute care hospital beds renders the program particularly wellsuited to scrutinize the role of acute care hospital services in producing effective and efficient outcomes for Medicare beneficiaries. “[I]f there are to be far-reaching changes in the way medicine is practiced in this country, Medicare will have to drive them.” It is a historical irony that a program, a scaled-down version of national health insurance, could have grown to this power buyer status; but the history of Medicare is full of ironies—the greatest of which may prove to be that Medicare reforms now sit at the very center of the funding mechanisms for the 2010 Patient Protection and Affordable Care Act (PPACA).
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References
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8 Preventable acute care readmissions for Medicare beneficiaries are the symptom of the disease: the failure to integrate Part A and Part B care. This paper addresses the symptom, the disease, and possible cures.
9 Tax Equity and Fiscal Responsibility Act of 1982, 42 U.S.C. § 1395ww (2006).
10 Although there is some dispute over whether readmission rates are a better measure of quality or of outcome, there is ample reason to consider them as both.
11 Political necessity may play some role in Medicare's one size fits all design as a social insurance program.
12 Hospital readmissions are sometimes called “bounce backs” or “frequent flyers”.
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70 Id. (citing a survey of physicians in the Bronx and Manhattan).
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109 42 U.S.C. § 1395y(a)(1)(A) (2006).
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112 Tax Equity and Fiscal Responsibility Act of 1982, 42 U.S.C. § 1395ww (2006).
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116 Discharge Planning, 42 C.F.R. § 482.43 (2006).
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120 42 C.F.R. § 412.42(c)(3) (2006).
121 CMS advises its Medicare Advantage partners to explain the term “medically necessary” to Medicare beneficiaries as follows:
Medically Necessary means services or supplies that: are proper and needed for the diagnosis or treatment of a medical condition, are provided for the diagnosis, direct care, and treatment of a medical condition, meet the standards of good medical practice in the local area, and are not mainly for the convenience of a member or doctor.
CMS, Medicare Advantage Compliance Training 151 (2009), http://www.iceforhealth.org/podcast/20080407_Resources.pdf.
122 42 C.F.R. § 422.620(d) (2006).
123 Quality Improvement Organizations, most often third party vendors, represent the first line of appeal for Medicare beneficiaries appealing hospital discharge decisions and denials of Medicare funded services. 42 C.F.R. § 412.42(c)(2)-(4) (2006).
124 42 C.F.R. § 413.13(a) (2009) (defining customary charges as “the regular rates that providers charge both beneficiaries and other paying patients”).
125 Different, longer time limits may apply if the beneficiary is no longer in acute care. 42 C.F.R. § 405.1205 (c)(2) (2007).
126 Testimony on Medicare Appeals Processes: Hearing Before the Subcomm. on Health of the H. Comm. on Ways & Means, 105th Cong. (1998) (statement of Michael M. Hash, Deputy Administrator, Health Care Financing Administration, U.S. Department of Health and Human Services), http://www.hhs.gov/asl/testify/t980423a.html.
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129 See, e.g., N.J. Admin. Code § 8:43G-2.12 (2008); N.M. Code R. § 7.7.2.18K (2004).
130 The Joint Comm’n, Helping You Choose the Hospital for You 2 (2010), http://www.jointcommission.org/assets/1/18/HYC_Hospital.pdf.
131 Id. at 1.
132 NCQA is a private, non-profit organization that accredits health plans. About NCQA, Nat’l Comm. for Quality Assurance, http://www.ncqa.org/tabid/675/Default.aspx (last visited Jan. 26, 2011).
133 News Release, Nat’l Comm. for Quality Assurance, New NCQA Standards Promote Wellness, Preventions; 56 Health Plans Schedule Surveys (Aug. 1, 2005), http://www.ncqa.org/tabid/273/Default.aspx.
134 Both CMS and the Agency for Health Care Research and Quality located in HHS (AHRQ) are developing measures to target avoidable hospitalizations, and not just avoidable readmissions. See generally Debra J. Lipson & Samuel Simon, Mathematica Policy Research, Quality's New Frontier: Reducing Hospitalizations and Improving Transitions in Long-Term Care 4 (2010), http://www.mathematicampr.com/publications/pdfs/health/LTQA_brief.pdf.
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143 Reed Ableson, Hospitals Pay for Cutting Costly Readmissions, N.Y. Times, May 9, 2009, at B1.
144 Id.
145 Id.
146 Boston Medical Center Hospital was created in 1996 by the merger of Boston City Hospital and Boston University Medical Center Hospital. It has the largest twenty-four-hour Level I trauma center in New England and an emergency department with more than 132,000 visits in 2010. Facts, Boston Med. Ctr., http://www.bmc.org/Documents/BMC-Facts-2010.pdf (last updated Nov. 15, 2010).
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153 See Paul Heaton & Eric Helland, Does Treatment Respond to Reimbursement Rates? Evidence from Trauma Care 2-4 (RAND Inst. for Civil Justice Working Paper Series, Document No. WR-648-ICJ, 2009), http://www.rand.org/pubs/working_papers/2009/RAND_WR648.pdf.
154 See Robert Pear, Long-Term Fix is Elusive in Medicare Payments, N.Y. Times, July 13, 2008, at A18 (quoting Gail R. Wilensky, Administrator for CMS under George H.W. Bush, describing Medicare's physician payment system as “hands down the most broken part of Medicare”).
155 See CMS, QIO Fact Sheet: Medicare QIOs and Care Transitions (2009), http://caretransitions.tmf.org/CareTransitionsOverview/tabid/1130/Default.aspx (click “Medicare Fact Sheet”) (last visited Feb. 6, 2010) http://caretransitions.tmf.org/CareTransitionsOverview/tabid/1130/Default.aspx.
156 “The following QIOs serve as Care Transitions leaders throughout the country: Quality Partners of Rhode Island; IPRO Inc. (in New York); Quality Insights of Pennsylvania; Healthcare Quality Strategies Inc. (in New Jersey); Georgia Medical Care Foundation Inc.; FMQAI (in Florida); AQAF (in Alabama); Health Care Excel (in Indiana); MPRO (in Michigan); CIMRO of Nebraska; Louisiana Health Care Review; Colorado Foundation for Medical Care; TMF Health Quality Institute (in Texas); and Qualis Health (in Washington).” Press Release, CMS, Medicare Announces Sites for Pilot Program to Improve Quality as Patients Move Across Care Settings (Apr. 13, 2009), http://www.cms.gov/apps/media/press_releases.asp (search keyword: medicare announces sites).
157 See CMS, QIO Fact Sheet, supra note 155, http://caretransitions.tmf.org/CareTransitionsOverview/tabid/1130/Default.aspx.
158 See A. Boutwell et al., Inst. for Healthcare Improvement, State Action on Avoidable Rehospitalizations (STAAR) Initiative: Applying Early Evidence and Experience in Front-Line Process Improvements to Develop a State-Based Strategy 44 (2009), http://ah.cms-plus.com/files/STAAR_State_Based_Strategy.pdf.
159 Nugent, William C., Editorial, In Health Care, Geography is Destiny, 120 J. Thoracic & Cardiovascular Surgery 976 (2000).CrossRefGoogle ScholarPubMed
160 See U.S. Gov't Accountability Office, GAO-09-802, Rep. to the Chairman, Subcomm. on Health, Comm. on Ways & Means, H.R., Medicare: Per Capita Method Can Be Used to Profile Physicians and Provide Feedback on Resource Use 9-20 (2009), http://www.gao.gov/new.items/d09802.pdf.
161 See Medicare Payment Advisory Comm’n, Report to the Congress: Reforming the Delivery System 82 (2008), http://www.medpac.gov/documents/jun08_entirereport.pdf.
162 Id. at 84.
163 See, e.g., Lisa M. Schwartz et al., How Do Elderly Patients Decide Where to Go for Major Surgery?: Telephone Interview Survey, Brit. Med. J., Sept. 28, 2005, at 1, http://www.bmj.com/content/331/7520/821.full.pdf (Only ten percent of responding Medicare beneficiaries “seriously considered” going to another hospital for elective surgery, and only eleven percent sought information to compare hospitals.); Wilson, Chad T. et al., Choosing Where to Have Major Surgery: Who Makes the Decision?, 142 Archives Surgery 242, 242 (2007)CrossRefGoogle ScholarPubMed (“Thirty-one percent of [Medicare] patients said their physician was the main decision maker about where the patient would have [elective] surgery.”).
164 See Hanys Quality Inst., Understanding Publicly Reported Hospital Quality Measures: Initial Steps Toward Alignment, Standardization, and Value 7 (2007), http://www.hanys.org/publications/upload/hanys_quality_report_card.pdf.
165 See Michael Trisolini et al., Medicare Physician Group Practices: Innovations in Quality and Efficiency 27 (2006), http://www.commonwealthfund.org/usr_doc/971_Trisolini_Medicare_physician_group_practices_i.pdf.
166 See Murray, Mark et al., Improving Timely Access to Primary Care: Case Studies of the Advanced Access Model, 289 JAMA 1042, 1045 (2003)CrossRefGoogle ScholarPubMed; Murray, Mark & Berwick, Donald M., Reply to Letter to the Editor, Advanced-Access Scheduling in Primary Care, 290 JAMA 332, 333 (2003).CrossRefGoogle Scholar
167 See Mass. Med. Soc’y, Physician Workforce Study 102 (2008) (In Massachusetts, patient wait times for a primary care office visit average eighteen days for an existing patient and twenty-nine days for a new patient.), http://www.massmed.org/AM/Template.cfm?Section=Home6&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=23166.
168 See New England Health Care Inst., Remaking Primary Care: From Crisis to Opportunity 3, 5 (2009), http://www.nehi.net/publications/40/remaking_primary_care_from_crisis_to_opportunity.
169 See Newton, Manya F. et al., Uninsured Adults Presenting to US Emergency Departments, 300 JAMA 1914, 1920 (2008).Google ScholarPubMed
170 See Joanne Kenen, Revolving-Door Patients Illustrate Health System Flaws, Kaiser Health News, June 30, 2009, http://www.kaiserhealthnews.org/Stories/2009/June/30/frequent.aspx(describing patient monitoring and education programs that address readmissions). Acute care providers are increasingly disclosing hospital risks to patients as part of their 360-degree attempt to avoid never events. See, e.g., Allen Technologies, Inc., Knocking Down Never Events: Empowering and Educating Our Patients (2010), http://www.allentek.com/whitepapers/NeverEvent.pdf.
171 See Coleman, Eric A. et al., Reducing Emergency Visits in Older Adults With Chronic Illness: A Randomized, Controlled Trial of Group Visits, 4 Effective Clinical Practice 49, 54-56 (2001).Google ScholarPubMed
172 See Randall Brown, The Promise of Care Coordination: Models that Decrease Hospitalizations and Improve Outcomes for Medicare Beneficiaries with Chronic Illnesses 4-5 (2009), http://www.socialworkleadership.org/nsw/Brown_Executive_Summary.pdf.
173 See id. at 3.
174 See Shigaki, Cheryl L. et al., Nurse Partners in Chronic Illness Care: Patients’ Perceptions and Their Implications for Nursing Leadership, 34 Nursing Admin. Q. 130 (2010)CrossRefGoogle ScholarPubMed (In a primary care setting, patients with chronic conditions appreciate their nurses’ role in care management.).
175 Brown, supra note 172, at 3.
176 Health care provider angst over professional responsibility concerns raised by early hospital discharge is longstanding but unresolved. Boyle, Philip J., Is Business Incompatible with Health Care?, 27 J. Chiropractic 24, 29-30 (1990)Google Scholar; cf. Wickline v. California, 192 Cal.App.3d 1630, 1635-42 (1986) (incorporating premature Medicaid hospital discharge concerns into claims against the health care payor).
177 As part of the ongoing implementation of section 5001(c) of the Deficit Reduction Act of 2005, CMS has addressed the prevalence of certain hospital-acquired conditions through a reimbursement disincentive structure built into the Inpatient Prospective Payment System final rules for fiscal years 2008 and 2009. The HACs covered under the fiscal year 2009 provision include the following: object left in patient during surgery, air embolism, blood incompatibility, catheter-associated urinary tract infection, pressure ulcers, vascular-catheterassociated infection, surgical site infection (specifically mediastinitis after coronary artery bypass graft surgery), hospital-acquired injury due to external causes (fractures, dislocations, intracranial injury, crushing injury, burns, and other unspecified effects), surgical site infections following certain orthopedic procedures and bariatric surgery for obesity, manifestations of poor blood sugar control, such as diabetic ketoacidosis and hypoglycemic coma, and deep vein thrombosis or pulmonary embolism associated with total knee and hip replacement procedures. The list of HACs found above includes seven never events which will not be reimbursed. Never events comprising falls, burns, and electric shock are grouped as one HAC. Preventable Hospital-Acquired Conditions (HACs), 73 Fed. Reg. 48,471, 48,471-74 (Aug. 19, 2008).
178 As of January 2009, CMS further clarified the limits of Medicare reimbursement for services related to never events. See CMS, pub. no. 100-02, Medicare Benefit Policy Manual, ch. 1 §§ 10, 180 (2010), http://www.cms.gov/Manuals/IOM/ (click publication #100-02); id. ch. 16 § 120.
179 See Nat’l Quality Forum, Serious Reportable Events in Healthcare 2006 Update (2007), http://www.qualityforum.org/Publications/2007/03/Serious_Reportable_Events_in_Healthcare–2006_Update.aspx.
180 Not-for-profit hospitals are exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code. The IRS's Hospital Compliance Project, begun in 2006 to study not-for-profit hospitals and community benefit, has collected some of the most comprehensive data on not-for-profit hospitals’ activities, governance, expenditures, and executive compensation practices. This project elaborates on the data on not-for-profit hospitals ordinarily filed with the IRS on Form 990, Schedule H, each year. IRS, IRS Exempt Organizations Hospital Compliance Project Final Report 147-151 (2009), http://www.irs.gov/charities/charitable/article/0,,id=203109,00.html.
181 See Ben Furnas & Peter Harbage, The Cost Shift from the Uninsured, Ctr. for Am. Progress Action Fund (Mar. 24, 2009), http://www.americanprogressaction.org/issues/2009/03/pdf/cost_shift.pdf; Whitman, Glen, Hazards of the Individual Health Care Mandate, 29 Cato Pol’y Rep., Sept.-Oct. 2007, at 1, 1, http://www.cato.org/pubs/policy_report/v29n5/cpr29n5.pdf.Google Scholar
182 CMS has decided to dedicate fiscal year 2010 to an evaluation of the HAC program's impact. CMS, Medicare Adds Quality Measures for Reporting by Acute Care Hospitals for Inpatient Stays in FY 2010 (July 31, 2009), http://www.cms.gov/apps/media/fact_sheets.asp (search keyword: quality measures).
183 Mary Agnes Carey, Ways to Change How Medicare Pays for Hospital Care, The Commonwealth Fund (Nov. 26, 2007), http://www.commonwealthfund.org/Content/Newsletters/Washington-Health-Policy-in-Review/2007/Dec/Washington-Health-Policy-Week-in-Review---December-3--2007/Ways-to-Change-How-Medicare-Pays-for-Hospital-Care.aspx.
184 Id.
185 Adam Singer et al., The Phoenix Group, Hospitalists Meeting the Challenge of Patient Satisfaction 2 (2008), http://www.phoenixgroupwhitepaper.com/docs/Hospitalists-Meeting-Challenge100108.pdf.
186 Id. at 3.
187 Cross-health system data on the effectiveness of hospitalists in reducing acute care hospital recidivism is scant. The Phoenix Group, a trade association of hospitalists in the United States, offers one of the few voices on health care policy from the perspective of a hospitalist. Phoenix Group estimates a full 30% of hospitalists in the United States are affiliated with their organization. Id. at 1.
188 Lee, Thomas H., Pay for Performance, Version 2.0?, 357 New Eng. J. Med. 531, 531 (2007).CrossRefGoogle ScholarPubMed
189 Id.
190 de Brantes, François, et al., Should Health Care Come with a Warranty?, 28 Health Aff. w678, w680 (2009), http://content.healthaffairs.org/cgi/content/abstract/28/4/w678CrossRefGoogle ScholarPubMed; Paulus, Ronald A. et al., Continuous Innovation in Health Care: Implications of the Geisinger Experience, 27 Health Aff. 1235, 1242 (2008).CrossRefGoogle ScholarPubMed
191 de Brantes, François et al., Building a Bridge from Fragmentation to Accountability— The Prometheus Payment Model, 361 New Eng. J. Med. 1033, 1033 (2009).CrossRefGoogle ScholarPubMed
192 de Brantes et al., supra note 190, at w682.
193 Id. at w686.
194 Denise Grady, Facing End-of-Life Talks, Doctors Choose to Wait, N.Y. Times, Jan. 11, 2010, at D1, available at http://www.nytimes.com/2010/01/12/health/12seco.html. 195 Ellen-Marie Whelan & Judy Feder, Ctr. for Am. Progress, Payment Reform to Improve Health Care: Ways to Move Forward 16 (2009), http://www.americanprogress.org/issues/2009/06/health_payment_reform.html.
196 Christine E. Eibner et al., RAND Corp., Controlling Health Care Spending in Massachusetts: An Analysis of Options 12-13 (2009), http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/09/control_health_care_spending_rand_08-07-09.pdf.
197 Joseph Antos et al., Engelberg Ctr. for Health Care Reform, Bending the Curve: Effective Steps to Address Long-Term Health Care Spending Growth 3 (2009), http://www.brookings.edu/reports/2009/0901_btc.aspx.
198 Whelan & Feder, supra note 195, at 18.
199 Id.
200 Daniel Esquibel, Shift in Medicare Pay Policies Could Hit Safety Net Facilities, Cal. Healthline (Jan. 27, 2010), http://www.californiahealthline.org/road-to-reform/2010/shift-in-medicare-pay-policies-could-hit-safety-net-facilities.aspx.
201 S. Fin. Comm., 111th Cong., Report on Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs 13-16 (Comm. Print 2009).
202 Id. at 14-15.
203 Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, § 3023, 42 U.S.C. § 1395cc-4 (2010).
204 Id.
205 Id. § 3025, 42 U.S.C. § 1395ww.
206 Berenson, Robert, Implementing Health Care Reform—Why Medicare Matters, 363 New Eng. J. Med. 101, 103 (2010).CrossRefGoogle ScholarPubMed
207 David Blumenthal & James A. Morone, The Heart of Power: Health and Politics in the Oval Office 201 (2009).
208 See Duke Helfand, Healthcare Providers Experiment with Lump-Sum Pricing, L.A. Times, Apr. 24, 2010, http://articles.latimes.com/2010/apr/24/business/la-fi-healthcare-costs-20100424.
209 See Mechanic, Robert E. & Altman, Stuart H., Payment Reform Options: Episode Payment Is a Good Place to Start, 28 Health Aff. w262 (2009), http://content.healthaffairs.org/cgi/content/abstract/28/2/w262.CrossRefGoogle Scholar
210 Prospect Medical Holdings, Inc., for example, disclosed in its July 8, 2009 8-K SEC disclosure that adoption of proposed bundled payments for Medicare beneficiaries would negatively affect its bottom line. Prospect Med. Holdings, Inc., Annual Report (Form 8-K), at 13 (July 8, 2009), available at www.secinfo.com/d11MXs.s19Ea.9.htm.
211 See U.S. Gov't Accountability Office, GAO/HEHS 96-16, Report to the Chairman, Special Committee on Aging, U.S. Senate, Medicare: Home Health Utilization Expands While Program Controls Deteriorate 9-10 (1996).
212 See Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, §§ 3022, 3129, 10307.
213 See James Conway et al., Is California Ripe for Global Payment, ACOs?, Cal. Healthline, Feb. 16, 2010, http://www.californiahealthline.org/think-tank/2010/is-california-ripe-for-global-payment-acos.aspx.
214 Barbara Gage et al., RTI International, Examining Post Acute Care Relationships in an Integrated Hospital System 1-2 (2009), http://aspe.hhs.gov/health/reports/09/pacihs/index.shtml.
215 See Jeffrey R. Binder, Will Reimbursement Policies Create an Access Crisis?, AAOS Now, July 2008, http://www.aaos.org/news/aaosnow/jul08/youraaos4.asp.
216 AARP Testimony Before the Senate Finance Committee on Reforming America's Health Care Delivery System, AARP, Apr. 21, 2009, http://www.aarp.org/politics-society/government-elections/info-01-2009/senatetestimonty0421.html.
217 S. Fin. Comm., 111th Cong., Report on Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs 10-11 (Comm. Print 2009).
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