Falmouth-based software developer Home Care Business Services Inc. has received $225,000 from the National Science Foundation to develop an application that helps hospitals reduce costly Medicare patient readmissions.

The company’s founder, Melissa Cott, said the software her team is developing has the potential to save U.S. taxpayers billions of dollars.

The NSF grant is in support of a Medicare program known as hospital readmission reduction, Cott said. Its purpose is to reduce the number of Medicare patients who are discharged prematurely from hospitals only to be readmitted within 30 days.

Unnecessary patient readmissions are expensive, she said, costing taxpayers an estimated $17 billion each year. It would be far less expensive if the patients were simply kept in the hospital until they were physically prepared and had the proper support to recover fully at home.

That’s where Cott’s business comes in. Its task is to develop software that can analyze all the factors indicating the likelihood of a patient’s need for readmission and boil them down into a simple score of 1 to 100. A low score would mean it is very likely the patient would need to be readmitted if discharged, and a high score would indicate the patient is truly ready to recover at home.

“All of these factors will go into the algorithm that we’re writing right now,” Cott said.

One of the lesser talked-about aspects of the Affordable Care Act is that it created new requirements for transparency and accountability among health care providers, she said. Those requirements created the need for “outcome analytics” that help providers track the quality of care in real time.

Under the ACA, hospitals are actually assessed a fine for discharging Medicare patients too soon, only to have them readmitted within 30 days.

With the proper technology tools, hospitals can reduce the likelihood of being fined, improve patient outcomes and reduce the public cost of unnecessary readmissions, Cott said.

“We believe it will be contributing to a huge savings for all taxpayers,” she said.

Cott is a 20-year veteran of software development in the health care arena, having developed applications dealing with electronic medical records and home health care, among other products. Her goal is to have a prototype version of the readmission reduction software ready by this summer, at which time her company would move on to the commercialization phase.

NSF offers grants for both the development and commercialization of certain cutting-edge technologies that have market potential but involve so much up-front development risk that most companies would not get involved without an investment by the government, Cott said. Her company plans to apply for a commercialization grant when the time comes, which would help with marketing and sales.

Cott said her company has received tremendous support from organizations in the state such as the Maine Technology Institute, which helped it with the successful NSF development grant proposal.

“The state of Maine completely helped me make it happen,” she said.