Established under the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services’ (CMS) Hospital Readmissions Reduction Program (HRRP) reduces Medicare payments to hospitals, which can significantly affect their bottom line. Since the program’s inception in 2012, hospitals have been diligent in reducing preventable readmissions, yet penalties have increased. And since fiscal year 2017, withheld reimbursements have totalled more than one half billion dollars annually. With CMS reimbursements making up more than half of the average payer mix, a means to mitigate the cost of readmissions penalties is essential.
Recognizing the need for a financial backstop to provide coverage for this significant exposure, Marsh and Ironshore developed Medicare Readmissions Reduction (MRR) coverage. The only risk transfer solution in the marketplace and available exclusively through Marsh’s HealthCare Practice, MRR provides limits of up to a 3% (the maximum) reduction in annual total inpatient Medicare revenue, creating a measure of cash-flow certainty to already compressed margins.