Strategies for Reducing Readmission Penalties Through Improved Billing Practices

Undoubtedly, hospital readmissions are costly for both healthcare providers and patients. However, many readmissions can be avoided through better care coordination, patient education, and discharge planning. To address this, the Centers for Medicare and Medicaid Services (CMS) introduced the Hospital Readmissions Reduction Program (HRRP). Under this program, hospitals with high readmission rates face penalties, impacting their revenues. This has led many hospitals to adopt strategies to reduce readmissions and avoid penalties.

Impact of Readmissions on Providers

When patients are readmitted to the hospital within 30 days of discharge, it often signals a breakdown in care or communication. Although some readmissions are unavoidable, many result from inadequate follow-up, poor discharge instructions, or patient confusion over medications.

In fact, high readmission rates can lead to significant financial penalties for healthcare providers under HRRP. The penalties can be as high as 3% of a hospital's Medicare reimbursement, which is substantial for many hospitals. These penalties can also affect a hospital’s reputation, as the readmission rates are publicly reported. As a result, hospitals are increasingly focused on reducing readmissions by improving patient care and ensuring that patients leave the hospital fully prepared to continue their recovery at home.

Medical Billing Strategies to be Followed

1. Improving Care Transitions

One of the key ways to reduce readmissions is by improving care transitions. This means ensuring patients transition smoothly from the hospital to their home or another care facility. In fact, effective coordination between care teams, follow-up visits, and clear communication with patients can help prevent unnecessary readmissions. Also, billing processes can be optimized to track and coordinate these care transitions, ensuring that providers are reimbursed for post-discharge care and that patients are supported during this critical time.

2. Early Discharge Planning

Starting discharge planning early is another strategy to reduce readmissions. Hospitals can use case managers or care coordinators to begin discharge planning as soon as the patient is admitted. This allows time to assess the patient’s needs, arrange necessary services like home health care or follow-up appointments, and ensure they understand their care plan. Proper documentation and billing for these services can also ensure that hospitals are reimbursed appropriately for the care they provide after discharge.

3. Enhancing Patient Education

Educating patients about their medications, care instructions, and follow-up appointments reduces readmissions. Hospitals can use billing codes for patient education services, ensuring that this important aspect of care is not overlooked. Using the teach-back method, where patients repeat back instructions to confirm their understanding, can further improve outcomes and reduce the risk of readmissions.

4. Medication Reconciliation

Medication errors are a common cause of hospital readmissions. Medication reconciliation, which involves reviewing and updating a patient’s medication list at every transition of care, can help prevent these errors. This strategy ensures the patient’s medications are accurate and any potential issues are addressed before discharge. Proper billing for medication reconciliation services can also ensure that hospitals are compensated for this crucial step in patient care.

5. Identifying High-Risk Patients

Some patients are at higher risk of readmission than others. Hospitals can use predictive analytics or other tools to identify these patients and enroll them in programs like telehealth or remote patient monitoring (RPM). These programs allow healthcare providers to track patients’ conditions more closely and intervene before a readmission is necessary. Billing for telehealth and RPM services can help hospitals offset the cost of these programs while reducing readmissions.

6. Understanding HRRP Policy

Hospitals must clearly understand the Hospital Readmissions Reduction Program (HRRP) to manage their readmission rates effectively. This includes knowing which conditions are included in the program, such as heart failure, pneumonia, and chronic obstructive pulmonary disease (COPD). Hospitals can use this information to target their readmission reduction efforts and ensure they comply with CMS guidelines. Accurate billing for the care provided to these patients is essential to avoiding penalties.

7. Using Case Managers

Case managers play a crucial role in reducing readmissions by coordinating care and ensuring that patients have everything they need before leaving the hospital. This includes arranging for equipment, follow-up appointments, and transportation. Hospitals can bill for the services provided by case managers, ensuring that this essential role is financially supported while improving patient outcomes.

Outsourcing to 24/7 Medical Billing Services

One of the other effective strategies for reducing readmission penalties is outsourcing medical billing to a company like 24/7 Medical Billing Services. Such a company is an expert in managing the complex billing processes involved in post-discharge care, medication reconciliation, and telehealth services. In fact, their team can help hospitals ensure that all services related to reducing readmissions are accurately documented and billed, maximizing reimbursement and reducing the financial impact of readmission penalties.

Moreover, 24/7 Medical Billing Services can also help hospitals stay updated with changes in CMS regulations, ensuring compliance and reducing the risk of penalties. Additionally, outsourcing can improve billing accuracy, reduce claim denials, and help hospitals recover lost revenue. This makes outsourcing to such a company an effective strategy for hospitals looking to reduce readmissions and maintain financial stability.