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A closer look at CMS' efforts to reduce avoidable hospitalizations

March 4, 2016
by Robert Gatty
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Robert Gatty

I read with interest a Centers for Medicare & Medicaid Services blog last month regarding the agency’s Nursing Facility Initiative Annual Report, which summarized results from CMS' "Initiative to Reduce Avoidable Hospitalizations Among Nursing Facility Residents" in 2014.

Patrick Conway, MD, CMS Principal Deputy Administrator, Chief Medical Officer, writes the initiative is designed to test ways to reduce avoidable hospitalizations among long-stay nursing facility residents, noting that an estimated 45 percent of such hospitalizations could be prevented with well-targeted interventions.

Conway wrote that the results of the report are based on experience during the second performance year of the initiative, or calendar year 2014. During that period, he said, all seven sites in the test project generally showed reductions in Medicare expenditures relative to a comparison group, with significant declines in total Medicare expenditures at two sites.

All sites, he reports, generally showed a decline in all-cause hospitalizations and potentially avoidable hospitalizations with four showing statistically significant reductions in at least one of the hospital measures.

"These early results are promising," he says.

Payment Policies

Conway writes as the agency plans for new Medicare payment incentives to reduce hospital readmissions from skilled nursing facilities, "these results provide early indications that when the right strategies are in place, they may effectively reduce hospitalization rates and reduce overall Medicare spending."

He says the agency anticipates gaining a more complete understanding of the initiative’s impacts when additional results are available. He also pointed out that the early results "come in tandem with impressive nationwide reductions in appropriate use of antipsychotics for nursing facility residents through the National Partnership to Improve Dementia Care."

"These results demonstrate additional progress on the nation’s path to a health system that achieves better care, smarter spending and healthier people," Conway says.

Recognizing Industry Progress

Conway’s blog made me wonder to what extent CMS is recognizing the results of a long-term initiative by the American Health Care Association (AHCA) to reduce hospital readmissions.

In early 2012, AHCA launched a three-year national effort to improve nursing home quality while also reducing health care costs. In 2015, the association expanded the initiative to include measurable targets, among them to safely reduce the number of hospital readmissions within 30 days during a skilled nursing center stay by an additional 15 percent, or achieve and maintain a low rate of 10 percent by March 2018.

"For nearly a decade, AHCA has supported linking payments to the quality and efficiency of care provided while shifting Medicare away from paying providers based on volume," Clifton J. Porter II, AHCA’s senior vice president of government relations told Long-Term Living. "This includes reducing hospital readmissions, which since the launch of the Association’s Quality Initiative in 2012, member centers have successfully prevented more than 42,700 individuals from returning to the hospital with 34.9 percent of members achieving the initial 15 percent reduction goal.

"Furthermore, AHCA continues to shape a payment reform policy that aligns with the trajectory of Medicare payment reform trends and builds on the IMPACT Act. Skilled nursing centers are the only PAC (post-acute care) provider type paid using a per diem system rather than a single payment for an entire PAC stay or episode of care. By ensuring a smooth transition into an effective new payment system, we can continue to improve lives by delivering solutions for quality care while aligning with payment and regulatory policy."


The bipartisan Improving Medicare Post-Acute Care Transformation (IMPACT) Act became law in October 2014 and was designed to provide consumers and government critical information regarding outcomes and cost. (An AHCA summary can be found here, and a CMS backgrounder is available here.)

The IMPACT Act supports three aims: