Teresa Waters, Chair of Preventive Medicine, Receives $749,998 Grant to Study Medicare Penalties for Hospital Readmissions

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A $749,998 grant from the Agency for Health Care Research and Quality will allow Dr. Teresa Waters, pictured with team members Dr. Cameron Kaplan (left) and Dr. Tao Li, to examine the effects of Medicare hospital readmission policies.
A $749,998 grant from the Agency for Health Care Research and Quality will allow Dr. Teresa Waters, pictured with team members Dr. Cameron Kaplan (left) and Dr. Tao Li, to examine the effects of Medicare hospital readmission policies.

Almost 20 percent of Medicare beneficiaries discharged from hospitals will be readmitted within 30 days, costing the Center for Medicare and Medicaid Services (CMS) almost $25 billion per year.
Because many readmissions may be preventable, CMS began in 2012 to penalize hospitals with unplanned readmission rates for congestive heart failure, acute myocardial infarction and pneumonia that exceeded rates expected for their patient population. Almost half of all U.S. hospitals face penalties under the Hospital Readmissions Reduction Program (HRRP), and penalties can be as high as 3 percent of a hospital’s Medicare revenues.

Teresa Waters, PhD, professor and chair of the Department of Preventive Medicine in the College of Medicine at the University of Tennessee Health Science Center (UTHSC), has received a grant totaling $749,998 from the Agency for Health Care Research and Quality, an agency within the Department of Health and Human Services, to study HRRP. The award will be used to support a project titled, “Hospital Responses to Medicare Readmission Penalties.” The award will be distributed over three years.

Dr. Waters’ co-investigators include Cameron Kaplan, PhD, assistant professor in the UTHSC Department of Preventive Medicine; Gloria Bazzoli, PhD, Bon Secours Professor of Health Administration with the Department of Health Administration at Virginia Commonwealth University; and Mike Daniels, ScD, professor in the Department of Integrative Biology and chair of the Department of Statistics & Data Sciences at the University of Texas at Austin. Tao Li, MD, PhD, postdoctoral associate in the UTHSC Department of Preventive Medicine, will also be supported by the grant.

The study will focus on three main areas: what is the impact of the penalties on hospital operations, especially for those hospitals serving large low-income and/or minority populations, safety net hospitals, and financially troubled hospitals; are penalties associated with relative improvements in readmission rates for targeted conditions; and are there any “spillover” effects of the program on non-targeted conditions or non-Medicare patients?

“We have seen payment reforms emphasize bonuses for providing good care, rather than penalties for bad outcomes, so readmission penalties represent a departure from the usual approach,” Dr. Waters said. “Even if they have the intended overall effect on readmission rates, we need to know whether they have any troubling and unintended effects on subgroups of hospitals or patients.” The results of this study will provide timely and clear information to policymakers, and any other insurance companies that decide to use readmission penalties, about whether and how the program should be changed.

The Agency for Healthcare Research and Quality works to produce evidence to make health care safer, higher quality, more accessible, equitable, and affordable. It also works within the U.S. Department of Health and Human Services and with other partners to make sure the evidence is understood and used. For more information, visit www.ahrq.gov.

The Department of Health and Human Services (HHS) is the United States government’s principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. HHS represents almost a quarter of all federal outlays, and it administers more grant dollars than all other federal agencies combined. Its Medicare program is the nation’s largest health insurer, handling more than 1 billion claims per year. Medicare and Medicaid together provide health care insurance for one in four Americans. For more information, visit www.hhs.gov.