New Federal Guidance on Reducing Medicaid Hospital Readmissions

by Foley & Lardner LLP

The Agency for Healthcare Research and Quality (AHRQ) recently issued a guide to assist hospitals in reducing Medicaid patient readmissions. The AHRQ Hospital Guide to Reducing Medicaid Readmissions is the product of a two-year study which focused on identifying evidence-based strategies to reduce hospital readmissions and better serve the transitional care needs of the adult Medicaid population. According to AHRQ, the guide is the only federal tool that is specifically tailored to reducing readmissions in the adult Medicaid population.

Reducing hospital readmissions is a national priority for payers, providers, and policymakers. Over the past several years, the Centers for Medicare & Medicaid Services and the Center for Medicare & Medicaid Innovation have created various incentive programs, instituted financial penalties, and provided technical assistance to providers and communities with the goal of reducing hospital readmissions. The majority of these programs focus on the Medicare fee-for-service population, and use geriatric health service literature as the basis for the programs.

As a result of these federal programs, many hospital readmission reduction initiatives target Medicare beneficiaries. However, Medicaid readmission rates can be equally problematic for hospitals. According to a number of AHRQ’s Healthcare Cost and Utilization Project studies, the adult, non-obstetric Medicaid population has readmission rates as high or higher than the Medicare fee-for-service population, with readmission rates for adult Medicaid patients ages 24-64 up to 24% in some cases. Given the clinical and sociological differences between the Medicare and Medicaid populations, the transitional care strategies that are effective for Medicare patients need to be modified to better meet the post-hospital needs of adult Medicaid patients.

The AHRQ guidance document is intended to assist hospitals with adapting the Medicare readmission reduction best practices in order to reduce Medicaid readmission rates. The guide is designed to help hospitals in all stages of readmission reduction initiatives identify ways to adapt or expand their existing Medicaid population efforts, by using a two-step process. The first step involves analyzing the various causes of readmissions, assessing the hospital’s current readmission reduction efforts, and examining the extent to which the current efforts meet the needs of adult Medicaid patients. The second step involves implementing strategies to improve the hospital-based process to better target and serve Medicaid patients’ needs, expanding and strengthening Medicaid-specific cross-setting partnerships, and providing enhanced services to patients at high-risk for readmission. The guide also includes a number of insightful examples from hospitals around the country that have successfully implemented the recommended practices.

In addition to the guidance document, AHRQ provided a set of customizable toolkits. The toolkits are designed to be used in conjunction with the guide, and should enable hospitals to adapt existing best practices to the hospital’s Medicaid population. AHRQ also included new tools that were developed as part of the project.

Hospitals will soon face additional pressure to reduce Medicaid readmission rates as policymakers and payers focus on the unique needs of newly enrolled and dually eligible Medicaid patients at the state and federal levels. Hospitals will need to ensure that they have effective transition and post-hospital support services in place in order to achieve the cost and quality objectives of the Medicaid program.

Originally, this article was an alert sent to the American Health Lawyers Association’s (AHLA) Regulation, Accreditation and Payment Practice Group. For more information, visit AHLA’s website.

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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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