As a part of the Value Based Purchasing Program that went into effect in 2012, certain hospitals saw their Medicare reimbursement rates cut, due in part to high patient readmission rates. The program, reported by NAHAM News in November (Curbing Medicare Spending Begins with Hospital Readmissions), reduced reimbursement rates up to a 1% this year, but could lose up to 3% in reimbursements in October of 2015.
The focus on readmissions signals a shift in mentality to cost savings, as well as patient wellbeing. On average, one in five Medicare patients returns to the hospital within 30 days of being discharged, a fact which cost the program $17.4 billion in 2004.
The reimbursement rate penalty sent hospitals looking for ways to reduce readmissions. One popular method was to set up a network of services that Medicare patients could utilize in their community, as opposed to just at the hospital.
A study on the effectiveness of the QIOs, conducted over the course of 2 years, found that the organizations reduced 30-day hospital readmissions by an average of 5.7%. The study was reported on by Kaiser Health News, and was conducted across 14 economically and demographically diverse communities that used various intervention methods.
At these rates, the average community of 50,000 Medicare beneficiaries could see a savings in $4 million on readmissions alone.