MedPAC March 2010 Report to the Congress: Readmissions Next Steps

on Tuesday, 16 March 2010. All News Items

MedPAC has released its March 2010 Report to the Congress.  The Executive Summary reports these findings for Hospital inpatient and outpatient services: 

  • Medicare FFS payments for both settings grew by 3.7% from 2007 to 2008.
  • Hospitals received approximately $139 billion for services rendered.
  • For the seventh straight year capacity grew with more hospitals opening than closing.
  • Hospital outpatient services volume has grown more than 4% a year from 2003 to 2008.  This is due in part to an ever increasing shift of services from the inpatient setting to the outpatient setting.
  • During the same time that outpatient volume grew inpatient services declined only 0.1% annually. 

The Executive Summary goes on to report that there has been improvement in most quality measures, 30-day mortality rates are reducing and patient satisfaction is improving.  However, 30 day readmissions rates have remained flat.  In 2005 the cost to Medicare for potentially preventable readmissions was $12 billion.  Chapter 3 of the report focuses on Post-acute providers (PAC) and two possible next steps for CMS to “match patients who use PAC with the set of services than can provide the best outcomes at the lowest cost.”  The two possible next steps are:

  • “CMS could implement readmission policies for all PAC settings so that providers’ incentives are aligned and they share responsibility for avoiding unnecessary rehospitalizations.”
               o More than 18% of Skilled Nursing Facility (SNF) stays had a potentially preventable readmission in 2007.
  • “CMS could establish a pilot to test the concept of bundling payments around a hospitalization for select conditions and include PAC in those bundles.  By affecting all aspects of care (not just readmissions), bundling payments represents a bigger step toward aligning financial incentives and provider responsibility for patient outcomes across settings.”

MedPAC concludes that “as beneficiaries are living longer with multiple chronic conditions, the use of PAC will continue to increase. It is imperative therefore that Medicare better define post-acute services and their use to ensure beneficiaries have access to high-quality, high-value care most appropriate to their care needs.  Bundling and readmission policies are ways to force some of this decision making onto providers so that they consider beneficiaries’ care over longer episodes of care and begin to assume responsibility for managing beneficiary care during the transitions between settings.”

To access the full report go to:

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