Hospital readmission transportation: selling follow-up rides to hospitals facing Medicare penalties

Why readmissions put hospital money behind follow-up rides

The Hospital Readmissions Reduction Program lets Medicare cut payments to hospitals whose patients come back too often within 30 days. Section 1886(q) of the Social Security Act created it, and cuts began with discharges on October 1, 2012. A readmission is a new admission to the same hospital or any other hospital within 30 days of the discharge.

CMS measures unplanned readmissions after six conditions and procedures:

• Heart attack (acute myocardial infarction)
• Heart failure
• Pneumonia
• Chronic obstructive pulmonary disease (COPD)
• Coronary artery bypass graft surgery
• Elective hip or knee replacement

The cut is applied to the hospital’s base operating DRG payment for every Medicare fee-for-service discharge during the fiscal year, October 1 to September 30, not only to the six conditions. It is capped at 3 percent, a payment adjustment factor of 0.97, which has been the floor since fiscal 2015 under 42 CFR 412.154.

That puts real dollars on the line. As an example, a hospital with $50 million a year in Medicare base operating DRG payments and an adjustment factor of 0.995 gives up $250,000 that year. CMS describes the program as a push for better communication and care coordination, with patients and caregivers engaged in discharge plans. The first follow-up visit is part of that plan, and a patient with no way to reach the clinic cannot be seen in person. This guide covers selling rides for that window. The ride home itself, and how case managers book it, is covered in hospital discharge transportation, and the onboarding paperwork is in becoming an approved hospital transportation vendor.

How to see which hospitals near you have excess readmissions

CMS publishes every hospital’s results in the Hospital Readmissions Reduction Program dataset on data.cms.gov. Each row is one hospital and one condition, with the number of discharges, the predicted and expected readmission rates, and the excess readmission ratio. A ratio above 1.0 means more readmissions than CMS expected for a hospital with similar patients.

The ratio is the pressure signal, not the bill. Under 42 CFR 412.152, the penalty compares each ratio with the median ratio of a peer group of hospitals with a similar share of patients who have both Medicare and full Medicaid. Conditions where a hospital sits above its peer median drive its cut.

In the fiscal 2026 file, which covers discharges from July 1, 2021 to June 30, 2024 and lists 3,055 hospitals, just under half of the hospitals with a reported ratio were above 1.0 on each condition, and 2,358 hospitals were above 1.0 on at least one.

To use the file, filter it to your state, then to the hospitals you can reach. Start with hospitals above 1.0 on several conditions, and use the discharge counts in the same rows to size the group of patients a follow-up program could serve. Download the file again for each fiscal year, since CMS publishes a new one.

The follow-up visit window after discharge

Medicare pays the patient’s physician or other practitioner a transitional care management (TCM) fee for managing the 30 days that start on the day of a hospital discharge, and the practice can bill it only if the patient is seen in time. CMS’s TCM booklet sets the rules:

• Contact within 2 business days. The practice must reach the patient or caregiver by phone, electronically, or in person within 2 business days of discharge.
• A visit within 7 or 14 calendar days. CPT 99496 (high-complexity decision making) needs a face-to-face visit within 7 calendar days of discharge. CPT 99495 (moderate complexity) allows 14 calendar days.
• No visit in time, no TCM claim. If the face-to-face visit falls outside the window, the practice cannot bill TCM.
• Medicines first. Medication reconciliation and management must happen on or before the date of the visit.

The visit may be held by telehealth, so ask the care team which patients they plan to see in person. Those are the trips to plan for. For example, a patient sent home after a heart failure admission with a 7-day visit booked and no car is exactly the rider such a program is for.

What the free-ride rule allows after discharge

A hospital may pay for these rides under the federal local transportation safe harbor, with two different distance rules. Since January 19, 2021, the ride home has no mileage limit when the patient is discharged after an inpatient admission, or released after at least 24 hours in observation, and is taken to their residence or another residence of their choice. Rides to the follow-up visit keep the standard limits: 25 miles from the clinic, or 75 miles for a patient who lives in a rural area.

OIG’s 2016 commentary on the rule settles three points a follow-up program depends on:

1. A booked visit is enough. The patient must be an established patient of the clinic at the other end, and a patient becomes established once an appointment is made.
2. The hospital can narrow the program. It may offer rides only for visits included in a discharge plan, only to primary care, or only within a set radius.
3. It cannot steer. A hospital willing to drive a patient to a cardiologist cannot make the ride depend on choosing a cardiologist affiliated with the hospital.

The same safe harbor bars advertising the rides and paying drivers or arrangers per patient carried, which is why these programs pay per mile or a flat amount. The Anti-Kickback Statute guide walks through every condition.

Building a follow-up ride program a hospital can buy

A follow-up program is a set of rides booked before the patient leaves, not a phone number the patient has to remember. Offer it in pieces the hospital can pick from:

• The ride home with a pharmacy stop. Medication reconciliation is part of TCM, so a stop to pick up new prescriptions on the way home is worth offering. Ask the hospital to write stops like this into its transportation policy.
• The follow-up visit ride, booked at discharge. Take the appointment date, time, address, and suite while the patient is still on the unit, and confirm the pickup address the patient will actually be at.
• Return trips held as will-calls. Clinic visits run long. A will-call return waits until the clinic calls instead of forcing a fixed pickup time.
• A reminder the day before. A call or text the day before the visit catches patients who are back in the hospital, staying with family, or too unwell to go.
• A missed-ride report. Every ride the patient refused, missed, or cancelled, with the reason, sent to the care team the same day.

Collect the details that keep the trip from failing: mobility level and equipment (walker, wheelchair, portable oxygen), whether a caregiver rides along, a phone number that works after discharge, and any building access codes. The hospital discharge ride checklist covers the ride home in full.

Payer matters for each rider. Patients with Medicaid book through the state’s Medicaid ride program, which the state runs itself or hands to a broker or health plans. Some Medicare Advantage plans include rides (see Medicare Advantage transportation). Original Medicare’s ambulance benefit applies only when the patient’s condition makes every other vehicle unsafe, so it does not pay for a van or sedan trip to a clinic visit. Those patients are usually the ones a hospital program is for.

Who to pitch and what to bring

Go to the people who own readmissions, not only the people who book rides. That usually means the director of case management or care transitions, the quality or population health team, and, if the hospital belongs to an accountable care organization, the ACO’s care management staff. ACO funding for rides follows its own rules, covered in value-based care transportation.

Bring a one-page proposal built around their numbers:

1. Their readmission ratios. Name the conditions where the hospital sits above 1.0 in the CMS file.
2. A defined rider group. For example, heart failure and COPD patients discharged home with a visit due within 7 days and no ride benefit.
3. Your service area and response times. Show the towns you cover against the hospital’s discharge area, and your booking cutoffs.
4. Pricing that fits the safe harbor. By the mile, by the hour, or a fixed monthly fee, never per patient.
5. Reporting. Completed, missed, and cancelled rides by week, with reasons, using the hospital’s own reference numbers instead of diagnoses.

Nonprofit hospitals also publish a community health needs assessment at least every three years. If the hospital you are pitching named transportation in its plan, tie the proposal to that commitment too (reading a hospital’s community health needs assessment).

Running follow-up rides in HealthRide

Hospital staff can book the follow-up ride from their own HealthRide portal before the patient leaves, and the return leg can be held as a flexible return that activates when the clinic says the patient is ready. HealthRide sends riders text reminders before pickup, and its trip records and reports show completed rides, no-shows, and on-time pickups for the care team. Completed rides roll into the hospital’s invoice.