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By JORDAN RAU, of Kaiser Health News

Nearly half the nation’s hospitals, many of which are still wrestling with the financial fallout of the unexpected coronavirus, will get lower payments for all Medicare patients because of their history of readmitting patients, federal records show.

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The penalties are the ninth annual round of the Hospital Readmissions Reduction Program created as part of the Affordable Care Act’s broader effort to improve quality and lower costs. The latest penalties are calculated using each hospital case history between July 2016 and June 2019, so the flood of coronavirus patients that have swamped hospitals this year were not included.

The Centers for Medicare & Medicaid Services announced in September it may suspend the penalty program in the future if the chaos surrounding the pandemic, including the spring’s moratorium on elective surgeries, makes it too difficult to assess hospital performance.

For this year, the penalties remain in effect. Retroactive to the federal fiscal year that began Oct. 1, Medicare will lower a year’s worth of payments to 2,545 hospitals, the data show. The average reduction is 0.69%, with 613 hospitals receiving a penalty of 1% or more.

Out of 5,267 hospitals in the country, Congress has exempted 2,176 from the threat of penalties, either because they are critical access hospitals — defined as the only inpatient facility in an area — or hospitals that specialize in psychiatric patients, children, veterans, rehabilitation or long-term care. Of the 3,080 hospitals CMS evaluated, 83% received a penalty.

The number and severity of penalties were comparable to those of recent years, although the number of hospitals receiving the maximum penalty of 3% dropped from 56 to 39. Because the penalties are applied to new admission payments, the total dollar amount each hospital will lose will not be known until after the fiscal year ends on July 30.

“It’s unfortunate that hospitals will face readmission penalties in fiscal year 2021,” said Akin Demehin, director of policy at the American Hospital Association. “Given the financial strain that hospitals are under, every dollar counts, and the impact of any penalty is significant.”

The penalties are based on readmissions of Medicare patients who initially came to the hospital with diagnoses of congestive heart failure, heart attack, pneumonia, chronic obstructive pulmonary disease, hip or knee replacement or coronary artery bypass graft surgery. Medicare counts as a readmission any of those patients who ended up back in any hospital within 30 days of discharge, except for planned returns like a second phase of surgery.

A hospital will be penalized if its readmission rate is higher than expected given the national trends in any one of those categories.

The industry has disapproved of the program since its inception, complaining the measures aren’t precise and it unfairly punishes hospitals that treat low-income patients, who often don’t have the resources to ensure their recoveries are successful.

Michael Millenson, a health quality consultant who focuses on patient safety, said the penalties are a useful but imperfect mechanism to push hospitals to improve their care. The designers of the penalty system envisioned it as a way to neutralize the economic benefit hospitals get from readmitted patients under Medicare’s fee-for-service payment model, as they are otherwise paid for two stays instead of just one.

“Every industry complains the penalties are too harsh,” he said. “if you’re going to tell me we don’t need any economic incentives to do the right thing because we’re always doing the right thing — that’s not true.”

Jordan Rau: jrau@kff.org, @JordanRau

James W. Begun, PhD, and H. Joanna Jiang, PhD, both of the University of Minnesota, tout complexity science in presenting six cases that show how health-care leaders and clinicians can respond well to the COVID-19 pandemic with extensive communication, collaboration and innovation.

The authors conclude:

“Complexity science, with its emphasis on simple rules, open discussions, and building connections, provides an orienting framework for response to major surprise. The perspective provides an evidence-based foundation for management during disasters. During the Covid-19 crisis, health-care organizations that have emphasized communication, connection and innovation have effectively addressed the challenges to adjust capacity, redesign care models, redeploy staff and overcome financial loss.

“Complexity science also provides a framework for learning from disasters. Any future disasters will require health-care organizations to face challenges that will be different in detail, even while similar in pattern. Health-care organizations, particularly those that have entered the recovery and rebuild stage, can use the COVID-19 pandemic as an opportunity to transform into more agile and resilient learning systems.”

To read the article, please hit this link.

In the light of the COVID-19 pandemic, an article by J. Michael McWilliams, M.D., in NEJM Catalyst notes how the pace of health-care quality improvement in the United States has been slow, and so he writes: “After two decades of efforts relying largely on quality measurement and performance-linked payment incentives, we need new ideas and new conversations. As revealed by health care workers’ response to the Covid-19 pandemic, professionalism in health care may be an underused resource.”

He suggests that “Reframing quality improvement around the linchpin of care delivery — physician agency — could provide much-needed direction by elucidating strategies that address problems of information or motivation when professionals act as agents on their patients’ behalf. These strategies need not rely on measures.”

To read the article, please hit this link.

Read how a public institution, Rey Juan Carlos University Hospital, in Madrid, acted swiftly to modify spaces, staffing and responsibilities to treat both COVID-19 patients and those without the disease to provide the critical staffing and material resources, and information, that hospital leaders have needed to manage during the COVID-19 crisis in Spain, among the world’s worst.

In an article in NEJM Catalyst, four physician leaders at the hospital say:

“During the Covid-19 pandemic, we have continuously evaluated and adapted to our circumstances. This was initially done on a daily basis, enabling us to quickly adjust staff roles as of the fourth day of the state of alarm declared in Spain. For example, we managed our physician corps by adding or transforming roles, including the addition of reserve personnel, while respecting rest times.”

And:

“To most effectively organize these changes in physician roles, we defined needs (‘COVID-19 shifts’), the daily tasks to be carried out under each position, and the person assigned to that activity. This information is contained in a document available to all physicians via the hospital intranet. Updated in real time, it sets out the plan for the following week.”

“Members of our Covid teams have gradually become opinion leaders and role models of best practices.”

“Every day, a multidisciplinary crisis management team made up of hospital managers, the office of the medical director, the nursing director, preventive medicine, microbiology, and leaders in internal medicine, the ICU, and critical care gather to discuss problems and solutions around spaces and staffing. Meetings like these have helped to build the ONE TEAM concept, reminding us that we depend on each other to deliver the best possible care.”

They conclude:

“Looking back over the past two months, we have met the challenges posed by this pandemic thanks to the great capacity for coordination and plasticity shown by our health care professionals and to the leadership of our centralized hospital management team. We are now working to update all the resources we have been using in case there is a new curve.”

To read the article, please hit this link.