Home Health & Hospice Week

Readmissions focus of Medicare's payment policy.

Medicare wants to penalize hospitals with high 30-day readmission rates starting next year, and the effect on home care could be significant.

Home care providers have hoped that the Centers for Medicare & Medicaid Services' proposal to dock hospitals' payment rates if they exceed a certain readmission ratio for three categories of patients would spur hospitals to utilize home care more to prevent such readmissions. The three categories are heart attack, heart failure, and pneumonia.

But the payment change may bring competition to home care providers instead. In Daytona Beach, Fla., Halifax Health Medical Center is looking to buy a 50 percent stake in non-profit Council on Aging Home Health, reports The Daytona Beach News-Journal. Acquiring a stake in home health will allow the hospital to better control what happens after patients are discharged, improving the odds they won't be readmitted, Halifax CEO Jeff Feasel said.

"If they don't get proper home care and follow-up care and they are back in the hospital, we are going to get dinged on our subsequent payments," Feasel said during the hospital system's May board meeting, the newspaper reports. Higher readmission rates will also show up on Medicare's Hospital Compare quality data website.

Judging from the hospital board's comments, non-profits may benefit more from the change than other home care providers. "I think it's better to belly up to the bar with someone like COA than a private firm where the bottom line is the bottom line -- not quality care," said board chair John Johnson.

If hospitals get into home care in a big way, it may fan the flames of the patient-steering controversy that divides hospital-based and freestanding agencies, observers worry. Back in 2005, CMS dropped a proposed rule to require hospitals to collect and disclose data on referral statistics to their own agencies.