FutureFocus January 24, 2018 Policy Insights

Lisa Remington

In this week’s FutureFocus, we discuss recommendations for future Medicare payments for home health, hospice and SNF. It is recommended that therapy payments be eliminated in home health. In another article, we provide key findings related to ACOs and the importance of discharge planning. In a related article, improper discharges from SNFs may start receiving civil penalties. Don’t miss the most common reasons for discharges from SNFs.

Lisa Remington, President, Remington Health Strategy Group

A study of hospitals in U.S. metropolitan areas found those affiliated with accountable care organizations (ACOs) were able to more quickly reduce the rate at which patients discharged to skilled nursing facilities needed to be readmitted within 30 days. We provide the key findings.

 A Commonwealth Fund–supported study in Health Affairs examined whether ACO-affiliated hospitals in metropolitan areas are more effective in reducing readmissions from skilled nursing facilities than other hospitals are. Fewer readmissions would generate significant health system savings while improving quality of life for the elderly.

The study focused exclusively on non-commercial ACOs participating in Medicare’s Shared Savings Program and Pioneer ACO demonstration, both authorized by the Affordable Care Act.

Key Findings

  • Looking at readmissions data across nearly 8,000 diagnoses, the researchers found that, from 2010 to 2013, all hospitals reduced readmissions of those patients discharged to skilled nursing facilities. This suggests that all hospitals had focused on decreasing readmissions, likely motivated by a new Medicare regulation that penalized hospitals with relatively high readmission rates. However, ACO-affiliated hospitals reduced readmissions more quickly than other hospitals.


  • From 2007 to 2013, Pioneer ACO hospitals reduced their 30-day readmissions by 3.1 percentage points, Medicare Shared Savings hospitals reduced readmissions by 4.0 points, and non-ACO hospitals decreased readmissions by 2.9 points.


  • When adjusting the data for clinical and demographic characteristics, the researchers found that from 2007 to 2013 there was a relative reduction in all-cause readmissions of 17.7 percent for Shared Savings hospitals, 14.9 percent for Pioneer ACO hospitals, and 13.1 percent for non-ACO hospitals.


  • Pioneer ACO hospitals had lower 30-day readmission rates than both non-ACO and Shared Savings hospitals.

Careful attention should be paid to the discharge planning methods and information exchange practices used by ACO-affiliated hospitals, which could contribute to the difference in reduced readmission rates.