Highmark to offer pay for performance
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Hoping to reduce costly and often preventable hospital readmissions, Pittsburgh health insurer Highmark Inc. is requiring some hospitals in its network to better monitor patients that are treated multiple times a month -- and the insurer will link annual financial incentives to the hospitals' performance.
Highmark's pay-for-performance program, called Quality Blue, is asking each of the 90 participating hospitals to "measure and reduce the number of hospital readmissions," and to also measure their post-admission procedures, beginning this month.
Describing the new requirements as more a carrot than a stick, Page Babbit, Highmark's director of provider engagement, noted that "the hospitals have been preparing for this for quite a while."
That's because, beginning Oct. 1, new Medicare regulations will measure 30-day readmission rates at each hospital that accepts federal Medicare reimbursements, and will penalize those that don't take steps to reduce those rates.
Additionally, 31 of Highmark's Quality Blue participants already have been tracking patient readmissions on a voluntary basis.
Ms. Babbit said Highmark is asking the 90 hospitals in its 10-year-old Quality Blue program to measure both inpatient and observational readmissions, within a seven-day window and a 30-day window of the original hospital encounter.
It also is asking the hospitals to track how they transmit patient records from the hospital to the patient's primary care doctor, and how effectively the hospitals communicate with patients about the next steps in their care, and the reasons for the patients' readmission, among other metrics.
Highmark, in announcing the new campaign on Wednesday, cited a 2008 PricewaterhouseCoopers' estimate that suggested preventable hospital readmissions cost the U.S. health care system $25 billion annually. Other estimates put the potential cost of avoidable readmissions at $12 billion.
Meanwhile, the Pennsylvania Health Care Cost Containment Council estimates that of the 1.5 million inpatient stays in Pennsylvania in 2010, 185,190 of them, or about 12 percent, were "potentially preventable." And the Pittsburgh region, according to Centers for Medicare & Medicaid Services, has a higher readmission rate than most when it comes to pneumonia, heart failure and acute myocardial infaction patients.
While cutting down on the number of patients who are admitted for treatment, only to return shortly after discharge, could be a money-saver for both insurers and hospitals, those hospitals that treat a higher-than-average share of Medicare patients are worried about the new regulations.
Failing to meet the Medicare standards could result in a 3 percent cut in Medicare dollars by 2015, as per the new guidelines included in the 2010 Affordable Care Act. "Critical access" hospitals -- those that serve isolated and rural communities, none of which are in Allegheny County -- are exempt from the reimbursement cuts.
First Published July 12, 2012 12:00 am