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1. Understanding the Readmissions Reduction Program Kimberly Rask, MD PhD Medical Director Alliant | GMCF cover

2. Coordinated Federal Focus on Quality • National Quality Strategy • DHHS Action Plan • Partnership for Patients • CMS Quality Improvement Organizations (QIO) program priorities

3. Partnership for Patients National Campaign to Align Priorities and Resources Two Goals • Decrease by 40% preventable hospital-acquired conditions (HACs) by 2013  60,000 lives saved, 1.8 million fewer injuries to patients and $20 billion in health care costs avoided • Reduce 30-day hospital readmissions by 20% by 2013  1.6 million fewer readmissions and $15 billion in health care costs avoided

4. Impact of reporting on bottom-line

5. Quality Reporting

6. Hospital Readmissions Reduction Program • Authorized under Section 3025 of the 2010 Affordable Care Act • Reduce IPPS payments to hospitals for excess readmissions after October 1, 2012 • 2 years of rule-making

7. CMS implementation • Selected 3 conditions • Acute Myocardial Infarction (AMI) • Heart Failure (HF) • Pneumonia (PN) • Calculated “Excess Readmission Ratios” using the National Quality Forum (NQF)-endorsed 30-day risk-standardized readmission methodology • Set a 3-year rolling time period for measurement with a minimum of 25 discharges • For October 1, 2012 penalty determination, the measurement period was July 2008 to June 2011

8. Excess Readmission Ratio • The ratio compares Actual number of risk-adjusted readmissions from Hospital XX to the Expected number of risk-adjusted admissions from Hospital XX based upon the national averages for similar patients • Ratio > 1 means more than expected readmissions < 1 means fewer than expected readmissions

9. Risk adjustment The number of readmissions IS adjusted for • Age • Gender • Coexisting diseases based upon 1-year review of all inpatient and outpatient Medicare claims for that patient The number of readmissions is NOT adjusted for • Poverty level in surrounding community • Proportion of uninsured patients • Racial/ethnic mix of patients “many safety-net providers and teaching hospitals do as well or better on the measures than hospitals without substantial numbers of patients of low socioeconomic status”

10. Review and public reporting 30-day review and correction period (June 2012) • Will only recalculate if errors result from CMS calculation or programming error • Cannot submit additional claims Posted on Hospital Compare in October 2012 • Performance categories will not be reported • Excess Readmission Ratios (<1, 1, >1) for individual hospitals will be reported along with the numerator and denominator • The compare feature will not be available • Hospitals will not be able to suppress

11. Triggering the penalty An Excess Readmission Ratio of >1 for any of the 3 measures (AMI, HF, PN) triggers a penalty Size of penalty is intended to reflect the relative cost of excess readmissions from Hospital XX • Claims data used to calculate aggregate Medicare payments for those 3 conditions and total Medicare payments for all cases at Hospital XX • Calculated over same time period as the readmission ratio • Calculate percentage of Hospital XX’s total Medicare payments that result from excess readmissions for the 3 conditions • Final penalty is that raw % or 1%, which ever is smaller

12. Applying the penalty • Penalty is applied to the base-DRG payment for all fee-for-service Medicare discharges during the Fiscal Year (FY) • Wage-adjusted DRG payment amount including transfer adjustment plus new technology payment if applicable • Add-on payments not reduced (IME, DSH, outlier, low volume) • Not revenue neutral, no bonus for excellent performance • For FY 2013, maximum penalty is 1% • Impacting over 2000 hospitals nationally • Expected to cost hospitals $280 million or 0.3% of the total Medicare revenue to hospitals • Excess Standardized Readmission Ratio (SRR) will be public

13. Readmission Rates

14. Similar but not identical to IQR public reporting Similarities • Same NQF-endorsed 3 risk adjusted condition-specific measures • Same data source • Same types of discharges and exclusions Differences • How the measures are displayed and reported • SRR calculated on a subset of readmissions

15. What’s Next? FY 2014 (anticipated) • Look back period = July 2009-June 2012 • Maximum penalty of 2 % FY 2015 (anticipated) • Look back period = July 2010-June 2013 • Maximum penalty of 3 % Ratio compares own hospital performance to national rates

16. Driving Improvement • CMS contracts with QIOs to improve health and health care for Medicare beneficiaries • Largest federal network dedicated to improving health quality at the community level • QIOs based in all 50 states BETTER CARE AFFORDABLECARE BETTER HEALTH FOR POPULATIONS

17. Joint Letter of Cooperation

18. QIO Support for Quality Reporting Quality Reporting and Improvement • Hospital Inpatient Quality Reporting Program • Hospital Outpatient Quality Reporting Program • Promote and support hospitals with feedback, technical assistance, training Diana Smith, Technical Advisor Diana.Smith@gmcf.org

19. QIO support for reducing readmissions • Community coalition formation • Community-specific Root Cause Analysis • Intervention selection and implementation • Application for a Formal Care Transitions Program www.GeorgiaDoYourPART.org This material was prepared by Alliant | GMCF, the Medicare Quality Improvement Organization for Georgia, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. 10SOW-GA-ICPC-12-100