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Redesigning the Medicare Inpatient PPS to Reduce Payments to Hospitals with High Readmission Rates

Redesigning the Medicare Inpatient PPS to Reduce Payments to Hospitals with High Readmission Rates,Richard F. Averill,Elizabeth C. McCullough,John S.

Redesigning the Medicare Inpatient PPS to Reduce Payments to Hospitals with High Readmission Rates   (Citations: 2)
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A redesign of the Medicare inpatient prospective payment system (IPPS) that reduces payments to hospitals that have high-risk adjusted readmission rates is pro­ posed. The redesigned IPPS uses a read­ mission performance standard from best practice hospitals to determine the risk- adjusted number of excess readmissions in a hospital and determines the payment reduction for a hospital based on its excess number of readmissions. Extrapolating from Florida Medicare 2004-2005 dis­ charge data, the redesigned IPPS is esti­ mated to reduce overall annual Medicare inpatient expenditures nationally by $1.25, 1.92, and 2.58 billion for readmission windows of 7, 15, and 30 days, respectively.
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