Public payers have found that linking payment to healthcare outcomes an equitable and effective means to control costs
Payment policies that create incentives for reducing avoidable readmissions can deliver substantial cost savings, while at the same time providing the administrative capacity to measure and regulate the quality of care delivered to highly-vulnerable patients in acute and post-acute care (PAC) settings.
While readmission policies linking payment to outcomes are common in Medicaid programs nationwide, there remains substantial variation in the scope and structure of these policies. Generally, the most effective policies include:
This Issue Brief provides a brief history of Medicare and Medicaid readmission policies, an analysis of current Medicaid program policies, and insights for designing highly effective readmission policies.