Aligning Providers to Reduce Readmissions for Medicare’s HRRP, ACOs, & BPCI



Medicare’s pay-for-performance reimbursement systems, and similar commercial payor systems, are financially hurting hospitals, health systems, and ACOs that can’t get readmissions under control. There are litanies of programs and structures for aligning acute care facilities, physicians, and post-acute providers to reduce readmissions. However, the process of feasibility, program selection, program design, and implementation is a challenging endeavor.


Unless you’ve been hiding under a rock for the last four years, you’ve heard about at least one of the pay-for-performance reimbursement programs that Medicare has implemented.  These include the Hospital Readmission Reduction Program (HRRP), Accountable Care Organizations (ACOs), and the Bundled Payment for Care Improvement initiative (BPCI), among others. To make a long story short, under these programs hospitals and health systems with excessive readmissions are either being directly penalized with payment reductions (HHRP), losing capitated bonus money (ACOs), or eating the cost for readmissions altogether (BPCI).

Over 2,200 hospitals were penalized each year during 2012 and 2013 under HRRP.  The total penalties under HRRP alone were $280 million in 2012 and $227.0 million in 2013.


There is not a lack of programs or models for reducing excessive readmissions.  In addition to P4P-focused joint ventures and contractual service arrangements with physicians and post-acute provider organizations, there are dozens of credible commercial, and in-house programs, for reducing readmissions for heart failure, COPD, diabetes, and post-surgical patients.  Below is a sample of 10 such successful programs.

# Program Summary
1 Project BOOST The Society of Hospitalist Medicine’s program improves the care of patients as they transition from hospital to home. A study of 11 hospitals that implemented Project BOOST tools experienced an average 13.6 percent reduction in 30-day readmissions.
2 Project RED The Agency for Healthcare Research and Quality contracted with Boston University Medicine Center to develop the Project RED toolkit to assist hospitals in reducing readmissions and posthospital emergency department (ED) visits.
3 Dr. Ornish Program for Reversing Heart Disease Dr. Ornish’s Program for Reversing Heart Disease and the Pritkin Program both receive positive National Coverage Determinations (NCDs) for payment under the Medicare program under the intensive cardiac rehab benefit for lifestyle behavior modification programs. The Benson-Henry Cardiac Wellness Institute Program will likely receive a positive NCD in the near future for Medicare coverage.
4 The Pritkin Program
5 Benson-Henry Cardiac Wellness Institute Program
6 Health Quality Partners HQP has been lauded as the fountain of youth by reducing Medicare hospitalizations by 33% and cutting Medicare costs by 22%.
7 The Care Management Company of Montefiore Montefiore reduced inpatient admissions 25% for diabetes patients and 28% for Medicare patients with diabetes. ED visits for patients with CHF decreased 10%. Total healthcare expenses decreased 7% from 2007 to 2010 compared to aggregate healthcare growth of 16% during the same period.
8 Sharp Rees-Stealy Medical Centers Reduced heart failure readmissions 49% simply by formally implementing the Chronic Care Milliman Care Guidelines.
9 Carolinas HealthCare System Developed a process improvement program that decreased its COPD readmission rate from 21.8% to 13%.
10 North Bay Regional Health Centre Developed its own program to reduce COPD hospital readmissions and ED visits.

Feasibility & Development

Since there is no shortage of solutions (or opinions) for reducing readmissions, the challenge is four fold.

1) Identifying which areas to focus: There is a multitude of diseases and settings for readmission reduction programs.  Of course inpatient care, the discharge process, and post-acute setting (home health, SNF) are all possible settings while diseases such as CHF, COPD, diabetes, and hip/knee surgeries are all high priority targets.


2) Identifying willing and able providers with which to align: Cardiologists, internists, hospitalists, pulmonologists, and orthopedists are all possible physician partners, as well as post-acute providers such as home health agencies and SNFs.

3) Selecting, tailoring, and/or designing a program: Once participants are identified the group has to decide whether they want to adopt an entire existing program, adopt elements of existing programs, or design their own program. Additionally, the group has to decide whether to formally initiate the program through joint ventures or contractual arrangements with peer providers.  In any case, the providers must agree on the program focus, goals, compensation, and assignment of duties among the parties.

4) Implementing systems and processes for monitoring and management: Certainly there is considerable work in defining processes and automating as many functions as possible.  Regular meetings may be very frequent during the onset of programs and gradually become less frequent as time passes.

Charts and diagrams


It is a major challenge to effectively align providers to reduce hospital readmissions under the new wave of pay-for-performance reimbursement systems.  Part of the challenge is that there are too many options and decisions on how to proceed.  For each hospital, considerable feasibility, development, and project management work is necessary to identify the best alignment opportunities and advance them to fruition.