Homeless Readmissions In Los Angeles – A Community Acts

by Pepper Hamilton LLP

Originally Published in Physician Risk Management newsletter - July 22, 2013.

After years of planning and in response to the reality of cuts from Medicare due to excessive readmissions, more than 30 Southern California hospitals and health systems and other providers gathered on June 10, 2013 to kick off an initiative to reduce readmissions among the 50,000-person homeless population in that region. The Los Angeles Regional Hospital Symposium (Symposium) in which I was invited to participate, was the start of a dialogue among health care providers in that region to develop an action plan to better coordinate care and develop working relationships to better deal with the homeless patient population in the Los Angeles community.1

One of the acute health care needs of the Los Angeles homeless population is exemplified by the spread of communicable diseases. Tuberculosis (TB) is dramatically spreading among homeless patients in Los Angeles and was described at the Symposium by the Acting Director of the Los Angeles Tuberculosis Control Program.2 Efforts are underway to educate shelter operators on screening imperatives to remove patients identified with TB for treatment to avoid further infection of others. TB infection can certainly complicate the health care needs of the homeless population.

To provide background on the regulatory and financial impact of readmission rates in Los Angeles, I was invited to address the community organizations attending the Symposium. I described how the new Medicare readmission rules were already impacting “safety-net hospitals.” Safety-net hospitals are seeing a dramatic loss of revenue due to the readmission penalties (from 1 percent to 3 percent of Medicare revenue in the next two years).3 Additionally, appropriate discharge and patient satisfaction scores are included as part of Medicare’s Value-Based Purchasing (VBP) incentive payment system.4 Inadequate discharge planning will negatively impact any incentive payments to be received by these providers under VBP. I explained to the hospital and community attendees that dealing with readmissions is a financial imperative for all hospitals, but especially those primarily serving the chronic homeless population. The incurrence of penalties -- arising from readmissions that are higher than expected, coupled with poor discharge planning and follow-up care -- is certain to add to the financial stress to be felt by safety-net providers with the recent loss of disproportionate share payments from the Centers for Medicare and Medicaid Services (CMS).

Safety-net hospitals are particularly vulnerable as they review readmission data for the coming years. The Healthcare Financial Management Association (HFMA) and other health care and hospital associations continue to press for changes to the readmission rules to include adjustments for low socio-economic status, which the HFMA has linked to poor post-discharge care and increased readmissions.5 The Symposium was intended to find clinical ways to influence those readmission penalties since it is unlikely that there will be a drastic change in readmission penalty policies in the coming years without a legislative fix. Such a change in definition would require the National Quality Forum (NQF) and CMS to accept socio-economic status as a determining factor in readmissions, perhaps an uphill battle as readmission disease categories are expanded by NQF and CMS.6

These initiatives in Southern California in 2013 are in sharp contrast to the history of homeless patient discharges just a few years ago. From 2007 to 2011, the Los Angeles City Attorney sued a dozen or more hospitals in the Los Angeles region that served homeless patients through their emergency rooms. The accusations were multi-pronged, depending upon the facts and circumstances of the patients and the particular hospital. Generally, the allegations were that the hospitals charged were “dumping patients” by discharging them to shelters and the street without any way of establishing post-discharge care for patients in such environments. Aside from allegedly failing to abide by the discharge standards required under the Medicare and California Medicaid Conditions of Participation for hospitals, these patients frequently ended up back in the emergency room days later, perhaps at a different hospital. Due to the number of hospital emergency departments available to them in Los Angeles, these homeless patients were utilizing resources at an unprecedented rate. Since there was no coordination or ability to share data among providers, it also led to a duplication of tests and over-prescribing of drugs for these patients with multiple chronic conditions.

Other speakers at the Symposium provided strategies for the development of a regional plan on readmissions by the better use of technology to track patients and their care, the focus on medical homes for homeless patients, and better coordination of care provided to homeless patients.

City of Los Angeles officials at the Symposium indicated that their data demonstrated a remarkable reduction in further inpatient admissions and ER visits when homeless patients were discharged from the hospital to recuperative care.7 In Los Angeles, they found a 62% reduction in the number of expected readmissions and a 68% reduction in inpatient hospital days for homeless patients. These statistics are in line with results in other cities that have recuperative or respite health facilities. As a result, representatives of the City of Los Angeles spoke of initiatives to make more respite care facilities available to homeless patients.

At the end of the Symposium, a five-person Steering Committee of lawyers, clinicians, and those who work with the homeless population was charged with continuing to find solutions to the homeless readmission problem.8 Some of the initiatives will include:

  • establishing transfer agreements and protocols with psychiatric and substance abuse providers
  • providing for post-discharge recuperative care facilities, which has been successful in reducing readmissions in a number of urban settings
  • looking for ways to develop supportive housing for the homeless so that they can find permanent homes away from the street or shelters
  • using technology to provide for enhanced sharing of information among hospitals and other providers for more successful care coordination, and
  • generally aligning all provider interests to avoid unnecessary readmissions.

As the Steering Committee progresses with its work, financial, clinical, and governance issues will require resolution.

Many hospitals are throwing the kitchen sink at this problem, hoping something will stick. But with the Baby Boomer retirement crisis mounting, the truth is that the obstacles to reducing these readmission numbers have become greater in number and severity. Perhaps one of the reasons we are struggling so mightily with this issue is that we’re looking at it the wrong way. We’ve outgrown one-size-fits-all health strategy. Yet many hospitals still fail to differentiate high-risk patients, still overlook opportunities to individualize plans for care, and still neglect to utilize time spent with patients to better pinpoint and remedy risk factors. And the more we come to understand the needs of the Baby Boomer generation, the less rational these overlooked opportunities appear.

Recognition of the special health care needs of the homeless has definitely sparked an interest in reducing readmissions in Los Angeles. Since these patients tend to utilize expensive acute care settings for their medical care, finding solutions will also benefit providers watching out for the high cost and frequency of care including the Medicare readmission rules. The same community-wide effort is possible elsewhere. Since each region has different resources and needs, it appears that the best solutions for this patient population rest with each community working together cooperatively as Los Angeles is attempting to do.


1. See www.publiccounsel.org/stories?id=0118.

2. Presentation by Dr. Peter Kerndt, M.D., M.PH., Acting Director, Tuberculosis Control Program, L.A. County Department of Public Health.

3. Hospital Readmissions Reduction Program, Section 3025 of the Affordable Care Act.

4. See Section 1886(0) of the Social Security Act.

5. See HFMA Weekly News dated June 28, 2013.

6. Modern Healthcare, June 18, 2012, pp. 6-12.

7. Presentation by Volanda Vera, Senior Deputy for Health and Advocacy, Los Angeles County Second District, June 10, 2013.

8. The Steering Committee members are George Colman, Esq. (Chair); Michael Arnold; Marc Futernick, M.D., Paul Gregerson, M.D., M.B.A. and Carolyn Phillips, Esq.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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