Legal / Ethics

Carrots and sticks

The Stick—penalties for excess readmissions

Is your hospital on the list? Starting this month, over 2,200 hospitals are forfeiting up to 1% of their base Medicare payments as penalty for readmission rates that are higher than what the Centers for Medicare & Medicaid Services deem acceptable for patients with acute myocardial infarction, heart failure, and pneumonia. As part of the Affordable Care Act passed in 2010, Medicare will recover about $280 million, not really a lot of money. But it’s a big event for two reasons: First, it signals a major step for advancing pay for quality and second, it’s a catalyst for organizations to collaborate internally as well as externally with long-term and post-acute-care providers to promote continuity of care and achieve better care during transitions. Two hundred and seventy-eight institutions, or 8.3% of hospitals, will lose the full 1%, with another 1,933, or 57.4%, losing between 0.001% and 0.99% of their base payments. About a third (34.3%), or 1,156 hospitals, had no excess readmissions and retain their normal payments. The maximum penalty increases to 2% in 2014 and 3% in 2015, when four more conditions will be added.

When money becomes a driver, behavior usually changes. But money shouldn’t trump embracing patient-centered approaches to care and preventing unnecessary hospitalizations. Has your employer asked you to take steps to improve coordination of care? To collaborate with home caregivers? To select preferred high-quality post-acute-care providers when discharging patients? How many care practices have you implemented to follow up with patients post discharge?

Nurses know what to do. When hospital quality improves, costs go down. Costly complications that prolong stays and require additional drugs and interventions are avoided. We embrace the goals of the National Quality Strategy to improve outcomes and reduce costs by keeping patients safe and preventing complications. We are the lynchpins to successful transitional care and care coordination. For many years, a variety of incentives and penalties have encouraged or discouraged changes in care delivery. Today these changes are accomplishing a shift from paying for volume to paying for value.

The Carrot—incentives for transforming the quality of care

In the first major move away from paying for volume, the Hospital Value-Based Purchasing program for hospitals and clinicians provides incentives for demonstrated excellence in safe and effective care. The program, established in the Affordable Care Act, also became effective on October 1. The money to fund this program comes from a 1% reduction of diagnosis related group payments to participating hospitals. Performance scores are for clinical-care processes and patient experience of care. Clinical scores are based on a subset of quality measures from the Hospital Inpatient Quality Reporting Program for conditions including acute myocardial infarction, heart failure, pneumonia, health care–associated infections, and surgeries. Patient experience is measured by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) base score and that hospital’s HCAHPS Consistency score. HCAHPS addresses communication with nurses, communication with doctors, responsiveness of hospital staff, pain management, communication about medicines, cleanliness and quietness of the hospital environment, discharge information, and the overall rating of the hospital. In the ideal world, the program would cease to exist because no further improvement would be possible.


Do you know your scores? Or have you initiated process improvements to remove barriers to positive patient experiences? Clinical-care process scores make up 70% of the composite score and reflect primarily physician interventions. We have a major role affecting the 30% of the score that reflects patient satisfaction through nursing care and managing the patient environment. Nurses know what to do. We talk to our patients and families about their care, medications, discharge, and overall well-being. We provide pain relief, review the daily plan of care, and help formulate meaningful patient goals. We reduce noise and keep the environment clean and conducive to healing.

So what’s the answer: carrots or sticks?

Penalties have boosted infection-control efforts. In anticipation of readmission penalties, baseline rates gradually improved. Knowing patient satisfaction would drive HCAHPS calculations, scores rose through 2011. Additional penalties loom for fiscal year 15 for hospital-acquired conditions; progress is an imperative, as penalties continue until improvements are made.

The improvements in outcomes and patient experience are expected to spread beyond hospitals to nursing homes and other long-term and post-acute-care settings. Proponents of these programs argue incentives are needed to reward effective practices. Opponents argue there is no link between quality and patient satisfaction and the measures are unfair. Coincidentally, hospitals with higher patient satisfaction are more profitable, and more public reporting has improved rates of desired outcomes. Personally, I favor the carrots. It’s not clear that we have demonstrated reliability to do away with the sticks. Which will it be?

Pamela F. Cipriano, PhD, RN, NEA-BC, FAAN

Editor-in-Chief

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2 thoughts on “Carrots and sticks”

  1. Anonymous says:

    Why is the hospital held accountable and not the attending?

  2. jkauch says:

    Nurse sensitive indicators corralate with patient satisfaction and better outcomes. Then we have the Ohio State study that points to nurse manager/leadership accountability and how removing related berriers to implimenting evidence based practices can positively affect complication rates and cost.

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