What Does the U.S. House Bill Say About Hospital Complications and Payment?

• 7/23/2009
• Author: Steven Berman
• Category: The Journal Blog
• 24448 Views
• 0 Comments
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This week, Richard Averill, the lead author of Forum, “Hospital Complications: Linking Payment Reduction to Preventability,” which appeared in the May 2009 issue, guests on the Journal blog. As you’ll recall, in the article, Mr. Averill and his colleagues proposed that the Center for Medicare & Medicaid Services (CMS) policy of denying payment for certain in-hospital complications should be modified, given that complications are not always preventable. I was curious about the implications of the current U.S. House of Representatives health care reform bill, America’s Affordable Health Choices Act, released on July 14, 2009, in terms of  provisions for payment reductions for hospital readmissions. So I asked Mr. Averill. He and I welcome your reactions or questions.

The current House bill that contains payment reform relating to the payment for readmissions states that payment adjustments for readmissions shall not apply to readmissions that are "unrelated to the prior admission." This is a definition stated in the negative but by implication any readmission for which there is a payment reduction must be related to the prior admission. The equivalent language in the Deficit Reduction Act of 2005 (P.L. 109-171) related to payment reductions for inpatient complications states that payment reductions should apply only to those complications that could "reasonably have been prevented." Although the wording is different, it is clear that the intent is the same. Congress wants pay for performance–related payment reductions for complications and readmissions to apply only in those circumstances in which there is a  clinically reasonable presumption that the complication or readmission could have been prevented.

As we discussed in “Hospital Complications: Linking Payment Reduction to Preventability,” the method of implementing the payment reductions is critical to the success of the payment reform. The payment adjustment for complications has been implemented on a case-by-case basis, which essentially limited the complications included to those complications that were virtually always preventable. As a result, the payment reductions for complications have had a negligible financial impact on Medicare expenditures. Fortunately, the proposed payment adjustments for readmissions in the current House Bill are based on the number of excess readmissions in a hospital and are not implemented on a case-by-case basis. A case-by-case payment reduction would have an inherent implied accusation that care provided to an individual patient was substandard. Focusing on risk-adjusted hospital readmission rates as the basis of determining pay-for-performance payment reductions has avoided the defensive responses evoked by a case-by-case approach.  Because readmissions are often the result of problems in the care processes relating to coordination and communication between the hospital and postdischarge care providers, a focus on systematic differences in readmission rates across hospitals is appropriate.
(You can find the complete House Bill at http://edlabor.house.gov/blog/2009/07/americas-affordable-health-choices-act.shtml).