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Readmissions: Penalties aren’t so Appealing

Readmission Rates:

Readmissions are frequent and costly.  It is estimated that there were over 3.8 million 30-day all cause adult readmissions in 2018 with the average cost of these being $15,200.  Many managed care companies are now denying payment for these readmissions, although many have not been preventable. There are estimates that 20-25% of Medicare patients are readmitted within 30 days, with about 15% of these being preventable.  CMS, over the past 10 years, has been penalizing hospitals for readmissions related to acute MI, COPD, CHF, pneumonia, CABG surgery and elective total hip or knee arthroplasty.  Despite these penalties, about 75% of hospitals received penalties for these readmissions averaging $217,000 in 2018. 


Criteria for Denied Readmissions:

 The payers are most often denying payments for all readmissions on the grounds of a premature discharge or inadequate transition of care plan.  According to the Medicare Quality Improvement Organization (QIO) Manual Chapter 4, Section 4240 “Deny for readmissions under the following circumstances:”

  • If the readmission was medically unnecessary
  • If the readmission resulted from a premature discharge from the same hospital
  • If the readmission was a result of circumvention of PPS by the same hospital (see §4255)

To Appeal or not to Appeal?

There is nothing in the manual about inadequate transition of care or inadequate follow-up.  We should however appeal these payment denials by demonstrating that discharge and follow-up was appropriate.  Patients with severe chronic diseases often have exacerbations even under the best of care. We recognize that non-adherence to medical therapy can lead to readmission, but we should demonstrate efforts were made to verify adherence and contact with the patient was attempted, even if the patient fails to respond. We need to demonstrate that the discharge was appropriate, for example in the CHF patient that weight was decreased and or the BNP had decreased by more than 50% at the time of discharge. 

We also should be aware of the exclusions that the payer may have such as discharges, which occurred against medical advice or admissions for Hospice care.  Make sure these are documented and coded appropriately to avoid this denial. As noted above, only about 15% of readmissions are preventable so we need to be prepared to appeal all those which are not preventable.

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