News / Department widens exclusions but stands by readmissions rule
The Department of Health has widened the exclusions from its policy penalising emergency readmissions within 30 days of discharge in its final guidance on payment by results (PBR) in 2011/12.
The Department confirmed it would go ahead with the penalties despite a claim by the NHS Confederation and Foundation Trust Network (FTN) that it would cost trusts £790m a year.
The final arrangements remain largely unchanged from the draft guidance published in December to inform January’s road test. From April, hospitals will not receive payment for emergency readmissions within 30 days of discharge following an elective admission. All other readmissions within 30 days of discharge will be subject to locally agreed thresholds, which should at least deliver a 25% reduction on readmissions on the previous year.
The Department aims to ensure that, where possible, hospitals have good discharge arrangements in place to avoid readmissions. Primary care trusts must work with providers, GPs and local authorities to reinvest savings in reablement and post-discharge support.
The draft guidance included a number of exclusions from these penalties, including any readmission that does not have a national tariff and those in maternity and cancer, chemotherapy and radiotherapy.
Following feedback from the road test, the Department has added a few more exclusions. These include some multiple trauma – where the root healthcare resource group (HRG) code is VA14 or VA15 in the readmission; where patients are admitted in an emergency due to a transport accident (where the readmission secondary ICD-10 codes begins with V); and for cross-border activity – where the initial admission or readmission is in the devolved administrations.
The final guidance also includes a number of clarifications. The draft had said that where multiple admissions precede a readmission, the admission immediately before the readmission should be considered the initial admission. The final version adds: ‘The amount that will not be paid is the total price associated with the continuous inpatient readmission spell, including any associated unbundled costs – for example, critical care or high-cost drugs.’
The Department added that it intends to revisit and limit the exclusion on cancer, chemotherapy and radiotherapy in future years.
In a letter to the service, NHS deputy chief executive David Flory explained the Department’s thinking on emergency readmissions.
‘We have taken advice from our clinical and managerial governance groups and have been persuaded that it is not possible to have certainty about which readmissions will or will not be related to the original admission,’ he said.
‘As part of these discussions we were, however, able to identify services that could be excluded from the policy. Following feedback at road test, a small number of further exclusions have been added to the list and these are set out in the final guidance. Unless an emergency readmission falls into these categories, the new policy will apply.’
The NHS Confederation and FTN said non-payment for acute admissions would reduce trusts’ annual income by £790m. A report on emergency readmissions for
all hospitals in England between July 2009 and June 2010 said emergency admissions made up about 8% of all admissions. Half the emergency readmissions related to the original admission.
The report said a wider set of exclusions would reduce the impact on trusts’ income to £490m. It suggested these new exclusions should include: children under 17; a readmission where the patient dies; and all cancer patients. (Even with the exclusions in the original draft guidance, the report said that some patients with cancer-related readmissions would be subject to the policy.)
FTN director Sue Slipman, said there were good reasons to reduce readmission rates, but there was a danger the penalties could destabilise some NHS services.
‘The FTN strongly believes that the current blanket policy will unnecessarily compound the risks provider organisations are facing and should be reviewed to make sure it is better targeted to meet the policy objectives,’ she said.
HOW IT WILL WORK
The final PBR guidance includes worked examples on how the readmissions policy will work. In a straightforward example, an elective patient spends a day in hospital at a tariff of £500. But nine days after discharge they are readmitted to the same provider as an emergency.
They are discharged after two days and the new tariff is £500. In this case, rather than paying £1,000, as under the current system, the PCT would withhold £500 from the readmission within the Secondary Uses Service PBR reconciliation dates and add £500 to the PCT’s post-discharge fund.
In a second example, following an elective admission with a £500 tariff, the patient is admitted as an emergency to a different provider. They are discharged after two weeks and the new tariff is £1,000. Ordinarily, the PCT would pay the second provider £1,000, but the provider is above its marginal rate baseline for emergency admissions, so the PCT pays 30% (£300) and places £700 in its SHA transformation fund. The PCT also recovers the full cost of emergency readmission (£1,000) from the initial provider and commits this £1,000 to its post-discharge fund.
PRIMARY FINANCE
The HFMA has published the second in its series of briefings for GPs. This follow-up to last year’s funding flows briefing provides an introduction to budgeting and budgetary control – explaining how it operates at the moment in primary care and how it might work for GP practices and consortia in the future.
The briefing can be downloaded from the HFMA website at www.hfma.org.uk.
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