Purpose
The purpose of this bulletin is to communicate a new payment policy by the state Health Care Authority (HCA) impacting Medicaid readmissions within 14 days after discharge. This new readmissions policy takes effect on January 1, 2018 and replaces the current policy that penalizes hospitals with higher than average readmission rates. The policy places much more emphasis on the hospital’s role in discharging patients to decrease potentially preventable readmissions.
Applicability/Scope
The new policy will allow Managed Care Organizations (MCO) and HCA, for fee-for-services enrollees, to recoup payment for a readmission if the hospital is found to not have followed its duties identified in the policy. MCOs and HCA must also be able to show that the hospital’s error caused the patient to be readmitted.
Effective January 1, 2018, HCA will be increasing Medicaid payment rates for those facilities that were previously penalized under the current policy for having higher than average readmissions rates according to the algorithm. Critical access hospitals are excluded from this policy change, consistent with the HCA’s current policy.
Overview
In late August HCA announced it was working on a new policy for readmissions. WSHA worked closely with a handful of key hospital leaders and HCA in this process. We believe the policy will help advance best practices for better patient care and support hospitals’ efforts to reduce readmissions. The latest version shows vast improvement from the initial drafts. In the discussions, we successfully advocated to:
- limit the numbers of readmissions that could be considered through clear exclusion criteria for psychiatric and substance use disorders, cancer related care, and other conditions;
- remove a very problematic provision to combine Diagnostic Related Groups and permit insurers to not pay for obstetrical readmissions and other planned or staged services with multiple and necessary admissions within 14 days;
- require the MCOs to pay the claim and to then show that the patient’s readmission was a result of a hospital’s action or inaction (the initial policy would have allowed blanket denials of claims);
- involve HCA in the dispute process and allow a hospital to trigger an audit; and
- clarify hospital/provider role in discharge planning.
WSHA appreciates HCA’s willingness to engage in important policy and quality discussions around this work.
Recommendation
- Review and understand the changes in the 2018 policy.
- Identify new ways to standardize the discharge process. Documentation in each patient’s chart of the discharge process and contact with the MCOs will be much more important for Medicaid patients moving forward.
- Participate in the WSHA/HCA webinar on Tuesday, November 28 from noon to 1 pm.
Connection information: https://attendee.gototraining.com/r/5070823769091941121
Next Steps
WSHA will be actively engaging with HCA during 2018 as this policy is implemented. The Washington Administrative Code will also be updated to reference this new payment policy. We are also interested in hearing from hospitals if problems arise after implementation.
HCA is interested in continuing the discussions about combining DRGs for certain conditions. WSHA will be actively engaged in that discussion moving forward.
