Increased use of observation services not behind drop in readmissions

The readmission rate is dropping, but are hospitals just doing a quick shuffle--shifting patients from inpatient status to observation services--to make that change happen?

The study "Readmissions, Observation, and the Hospital Readmissions Reduction Program" published in the February 24 issue of the New England Journal of Medicine says that is not the case. The decline in readmissions is real, says the study, and likely in response to the Hospital Readmissions Reduction Program (HRRP), which fines hospitals for excessive readmissions.

CMS implemented the HRRP in 2010 in an effort to save the government money on the $17 million in estimated avoidable costs incurred each year from unnecessary hospital readmissions and to spare patients the poor outcomes that send them back to the hospital after they are discharged home.

The readmission rate has declined since the implementation of HRRP. But at the same time, some pointed to the fact that use of observation services was increasing and wondered if the two were connected. Others questioned whether the HRRP was actually making a difference in readmission rates, which were already on the decline before the program went into place.

The findings of this study validate what some case managers say they knew all along.

"Personally, as a director of case management I have never seen observation status used to avoid the readmission penalty," says June Stark, RN, BSN, MEd, director of care coordination at St. Elizabeth's Medical Center, Steward Healthcare in Boston.

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